micromax yo

8/8/2019 Micromax Yo

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RURAL MARKETINGRURAL MARKETING

PRESENTED BY

VAIBHAV KOTHARE 39 VINIT SANZGIRI 87


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The Number Game of rural india The Number Game of rural india

12.2% of the world's consumers live in India

Rural households form 72% of the total households

This puts the rural market at roughly 720 millioncustomers

Total income in rural IndiaContributes about 43% of total national incomeIs expected to increase from around US$220 billion in 2004-

2005 to US$425 billion by 2010-2011, a CAGR of 12%

The new investments are expected to enhance wirelesscoverage in the countryside from just 30 percent atpresent to 85 percent in 2011


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The durables & automobile sectors contribute US$2.5billion each, and agri-inputs (including tractors) aboutUS$1 billion

Some 42 million rural households use banking servicesagainst 27 million urban households

There are 41 million Kisan credit cardholders againstsome 22 million card users in urban markets

Be it automobile, telecom, insurance, retail, real estateor banking, the future drivers of growth are rural

No marketer can afford to ignore the possibilities of rural India


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The FMCG the market has grown at a robust rateof 23%

As durables shrink in urban India, the rural

market is witnessing a 15% growth rateSome 60% of the durables market lies in rural

India

Telecom in rural India is growing at 31%It depends on the product, just the sheer

population numbers don't mean very muchfrom a marketing point of view


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In telecom, service providers are growing rapidly invillages. That's where the growth in what is now theworld's fastest growing mobile market lies

According to industry estimates, 70% of all newsubscribers would be coming from rural areas

According to a latest study on telecom sector called,Emerging Rural Mobile Market in India, the mobile

market in rural India has significant potential withnumber of subscribers anticipated to grow at a CAGRof around 32% during 2009 to 2012

:Source RNCOS


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Mobile device manufacturers are also tailoring their productsto this market

Nokia had earlier launched a basic handset with a torch (largeparts of rural India don't have electricity) and an alarm

clock

In December 2008, it went one step further with the launch of Nokia Life Tools

Nokia Life Tools is a range of agriculture, education andentertainment services designed especially for theconsumers in small towns and rural areas of emergingmarkets

Aimed at providing timely and relevant informationcustomized to the user's location and personal preferencesdirectly on their mobile devices, Nokia Life Tools was thefirst step towards bridging the digital divide


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MICROMAX

NOTHING LIKE ANYTHING


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ABOUT MICROMAX ABOUT MICROMAX

Micromax was founded in 1991 by RajeshAgarwal

Micromax in its original avatar was a distributorof computer hardwares

In 1998, three more people Sumit Arora, RahulSharma and Vikas Jain joined Micromax as co-founders

The company branched out from a meredistributor to a marketer of telecommunication equipments


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2008 A BREAKTHROUGH 2008 A BREAKTHROUGH

In 2008 that Micromax ventured into the mobilehandset market

The brand wanted to create a base before takingon the large players

Adopted a go-to- market strategy

Micromax concentrated on the rural market

It was a different move altogetherAs most of the marketers tend to concentrate on

the urban markets then move to the ruralmarkets


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LAUNCH OF Micromax X1 LAUNCH OF Micromax X1ii Micromax launched its first phone in the rural market with a very unique USP

-30 days battery standby time

By increasing the size of the battery to 1800 mAh, Micromax was able to touta standby time of 30 days for the X1i

The brand was launched from a consumer insight that

Most of the rural households do not get enough electricity to rechargephones on a daily basis

They got the inspiration from a group of villagers standing in theafternoon heat waiting to get their cell phones charged from a car

battery that was mounted on a bicycle

Hence a phone with a 30 day battery standby would be a worthwhiledifferentiation

The first product was a big success, Micromax X1i priced at Rs 2150 waslapped up by rural market


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LATCHING ON THE OPPORTUNITY LATCHING ON THE OPPORTUNITY

The success of X1i enthused the company to goaggressively into the market

But tapping the rural market is not an easy task

There was severe logistics pressure in servicing thesemarkets

First thing that Micromax did was to leverage thealready developed powerful distribution network theypossessed

According to a report in Forbes India ( March 5,2010),Micromax created a distribution network comprisingof,

34 super distributors450 distributors

Around 55,000 retailers


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Dealing with the dealers Dealing with the dealers

One of the highlight of their distribution strategy,Micromax managed to make these dealers pay in advance

by offering them more margins

The most difficult part in managing distribution is thepayment collection part

According to the news report, Micromax managed thishurdle through this strategy of more margins foradvance payment

It is not a new strategy to offer such kind of discountsfor advance payments (cash discounts), but to make aretailer accept such an offer is indeed a remarkablefeat (if the Forbes report is true)


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Nokia usually gives a channel margin of 2 percent,of which 1 percent is usually given away asdiscounts

The remaining 1 percent cannot sustain anybusiness

So Micromax decided to give a 5 percentcommission to each of its distribution chainpartners which included,

34 super distributors450 distributors

Around 55,000 retailers


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But there was a catch,

It would not offer any credit

Instead distributors are expected to complete anonline bank transfer to Micromax before gettingany of its phones to sell further on

As a result they were not plagued with deadinventory

The retailer only picks up what he sees demand for

And as their money is involved, (distribution)partners tend to work harder


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PRICING AT MICROMAX PRICING AT MICROMAX

Micromax specialized in entry-level and mid-segment handsets which are suitable for ruralmarkets

Price ranged between Rs1,800 & Rs2,400 whenthey started selling the devices in 2008

Confining itself to small towns and specificallyfocusing on rural areas in the first 12-18 months

Although all Micromax products were towards thelower end of the pricing spectrum, the brand wasfocusing on adding more features at a reasonableprice . The focus was more on value than price.


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+ =COST INNOVATION MICROMA+ =COST INNOVATION MICROMA

Micromax was careful in its product strategy

Although all Micromax products were towards the lowerend of the pricing spectrum ( Focusing on COST )

The brand was focusing on adding more features at areasonable price ( Focusing on Innovation)

The focus was more on value than price

There was some USP in their products which offered

more valueMantra for Micromax

Value orientation with a clear differentiation


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Variety is the spice of Micromax Variety is the spice of Micromax

The company in their website claims to haveinvested heavily in the product development

The brand boast of launching many firsts in the

rural market like,30 day battery lifeAffordable Dual SimMobiles with Mosquito repellants

Universal remote


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Apt for rural marketS Apt for rural marketS

According to Vikas Jain the business director at. Micromax Informatics Ltd the company s main customer

base is in rural India

Six in every 10 handsets that it sells are sold inIndia s villages

% 80 of companies sales is driven by Rural India


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Radio without enhancements

In any mobile phones if you have to access the radio/FM it hasto be connected with the headphones i.e. enhancement

But in case of Micromax the enhancement was not required

The music output is also very powerful even in entry levelhandsets

Workers while working in factories or farms can enjoy themusic while they are on the go and use the phone like amobile cum radio


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Mobile as a Universal Remote

Also have a handset which acts as a universalremote

It is no more a luxury but has become a need

In rural areas these days each & everyhousehold has a remote control operated TV

In this case as well the Handset servesmultiple uses

In urban areas the same handset has evenmore uses


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The way ahead The way ahead

MOBILES WITH MOSQUITO REPELLANTS

Planning to come up with a entry levelhandset in which a mobile phone and a

mosquito repellant are integratedIn rural areas without any doubt mosquito

repellants would be required

It would serve dual needs of the rural people

Therefore would turn out to be a multi utilityproduct


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Mobiles bundled with Insurance Services

the concept

Once a person buys a handset, he can getinsurance for the handset and for himself

In rural areas, people are not inclined to insurethemselves

But if it is available free of cost, they are veryinterested

Large sales volumes make it easier to negotiatewith insurance providers


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MICROMAX VERY WELL UNDERST MICROMAX VERY WELL UNDERST,THAT,THAT

If you give people something that

,helps them in their day to day lives

,they will buy it


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MICROMAX VERY WELL UNDERST MICROMAX VERY WELL UNDERST,THAT,THAT

,competing on price along with Nokia Samsung or LG would not get them

anywhere

,Instead they wanted to create and own categories and did that with

perfection


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VISTAAR SE SUNNE KE LIYE AAP SABHI KA BAHUT BAHUT SHUKRIYA

- 87

- 39

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