1.1 INTRODUCTION 1.1.

1 Introduction to the functional area

Marketing is the wide range of activities involved in making sure that you're continuing to meet the needs of your customers and are getting appropriate value in return. It means different things to different kinds of business. For business to consumer marketing, it is the process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return. For business-to-business marketing it is creating value, solutions, and relationships either short term or long term with a company or brand. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries. The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. 1

The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions, whose methods can be improved using a variety of relatively new approaches."

Experienced organizations have learned that it is not their opinion that matters most regarding whether their product is needed or not. The opinion that matters most is that of the customers. These organizations have learned that they might not know what they don't know about their customers. That precious knowledge about the customers comes from "inbound" marketing through market research to clarify customers' needs and what they are willing to do to get those needs met. If the inbound marketing is done well, the outbound marketing is particularly easy and effective. An important concept in marketing is the marketing mix and its elements. The following are the 4Ps of marketing and the 4Cs of marketing by Lauterborn and Shimizu. The marketing mix is a business tool used in marketing and by marketing professionals. The marketing mix is often crucial when determining a product or brand's offering, and is often synonymous with the four Ps: price, product, promotion, and place; in service marketing, the four Ps have been expanded to the eight Ps to address the different nature of services. In recent times, the concept of four Cs has been introduced as a more customer-driven replacement of four Ps. And there are two four Cs theories today. One is Lauterborn's four Cs (consumer, cost, communication, convenience), another is Shimizu's four Cs 2

(commodity, cost, communication, channel).

Product - A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Every product is subject to a life cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies.

Price - The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing 3

mix. When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account.

Promotion - represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Wordof-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see 'product' above).

Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

Lately three more Ps have been added to the marketing mix. They are as follows: People - The individuals involved in the sale and purchase of products or services come under people. Process - Process includes the various mechanisms and procedures which help the product to finally reach its target market Physical Evidence - With the help of physical evidence, a marketer tries to communicate the USPs and benefits of a product to the end users. Lauterborns 4 Cs are as follows: Robert F. Lauterborn proposed a four Cs classification in 1993 which is a more consumer-oriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing: Product part of the four Ps model is replaced by "Consumer", shifting the focus to satisfying the consumer needs. By defining offerings as individual capabilities that are combined and focused to a specific industry, the result is a custom solution rather than the pigeon-holing of a customer into a product. Price is replaced by "Cost", reflecting the total cost of ownership. Many factors affect Cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service. Promotion is replaced by "Communication", which represents a broader focus. Communications can include advertising, public relations, personal selling, viral 5

advertising, and any form of communication between the organization and the consumer.

Place is replaced by "convenience". With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors Now days, organizations treat their customers like kings. In the current scenario, the four Cs has thus replaced the four Ps of marketing making it a more customeroriented model. Koichi Shimizu in the year 1973 proposed a four Cs classification. 1. Commodity - (Replaces Products) 2. Cost - (Replaces Price) involves manufacturing cost, buying cost and selling cost 3. Channel - The various channels which help the product reach the target market. 4. Communication - (Replaces Promotion) Strategy is a word that generates much confusion because different people use it in different ways. And of course, there are different levels of strategy. For example: Corporate Strategy, Marketing Strategy, Advertising Strategy, Creative Strategy, and Media Strategy. Regardless of level, strategy can be defined as the overall direction, which summarizes how all the detailed tactics achieve a specific objective. You can of course have more than one strategy. Here's Microsoft's European Marketing Director. "If our goal is to achieve a certain level of market share within a product category we could decide that, let's say we needed to achieve 50% market share. We could 6

determine that our strategy would be to get 25% of that market share by encouraging new people to buy spreadsheets. So we would grow the overall market and consequently achieve 25% market share. To secure the other 25% market share our strategy could be to progressively attack one of our competitors customer bases and encourage them to move from their product to our own. So, you can build up therefore two different strategies. One of market expansion and creation of demand and the other of a competitive stand point encouraging brands which are within a competitors' base." John Leftwich, European Marketing Director, Microsoft There is one important question that influences the choice of strategies: 'Does it develop and exploit our sustainable competitive advantage? Which strategy exploits our competitive strengths, or our competitive advantage? Is this advantage sustainable in the future or will competition eat away at this temporary advantage. The key term here is sustainable competitive advantage. Do we know what it is and do we know the strategies to exploit it? A typical competitive advantage might be better-designed products, or perhaps more cost efficient production, or better customer service, or brand imagery. Perhaps the easiest way of understanding strategy is: it's a summary of how you are going to achieve the objectives; it drives and summarizes the tactics. It's 'the big picture'. It often pans over a longer period of time than shorter-term tactical activities The choice of strategy is influenced firstly by objectives, and secondly by the resources available. For example: developing superior products depends on having excellent research and development facilities and people - or at least it depends on having the money to buy the facilitates and also the time to recruit and build a 7

Research and Development team. So the dimensions of marketing strategy can include: objectives and resources, the scale of operation, a summary of marketing mixes, positioning, target markets and timing - do we want to be 'first to market' or come in later with a 'Me Too' product? Finally, strategies, and tactics, have military meanings. It's no coincidence that there are several books written on marketing warfare. The ultimate, for me at least, is Tsung Szu's ancient Chinese 'Art of War'. Although it was written in 500BC it provides a rich source of reading for any budding marketing strategists - and maybe some very successful global companies have used it extensively already.

1.1.2 RELATIONSHIP BETWEEN MARKETING AND HR

Marketing and human resources aren't as separate. A company needs to attract profitable customers to achieve decent sales numbers, but getting top talent interested in your company is also critical to long-term success. Whenever you're trying to convince people to help , whether you're after their money or their working hours, you need to position and market your proposition so it looks attractive. Marketing and HR are similar or inter-related in the following way

Employer Branding The word "branding" conjures up visions of market research reports, company logos and product positioning meetings. Your products and services aren't the only part of your company in need of promotion, though, especially if you want to attract and retain top talent. People want to work with a company that boasts a good reputation 8

that has a strong mission and vision. Showing people your company's personality is important, especially in the current economic climate. Lara Moroko and Mark D. Uncles, writers for The Wall Street Journal, point out that budget squeezes make hiring the right people more important than ever, since you don't have the funds to employ workers who don't pull their weight.

Attracting the Right Talent Since small businesses almost always have tight budgets, even when times are good, it's even more critical for you to get your staffing decisions right the first time. The secret to attracting the people you want and need: align your HR strategy with your business plan. If you want to be a top application developer for smartphones, you need creative and educated talent. Start blogging about trends in the smartphone industry. Attend developer conferences. Hold information sessions at local colleges, and advertise HR policies that cater to young professionals, like flex time and the chance to brainstorm new ideas on company time.

Keeping People Happy One rule of marketing is that you should only promise what you can deliver. If your product fails to live up to customer standards, loyalty and trust wane and your brand collapses. Similarly, if you promise a work environment that you can't offer, you'll hurt employee morale. While creating an image to attract top talent is important, you also need to sustain it. If your business can't afford to promise tuition reimbursements, but you do want to attract employees committed to learning, work lower-cost education opportunities into your company culture. Have weekly lunch-and-learn sessions where employees take turns presenting to the group. Promise education 9

funding on a smaller scale, agreeing to pay for one relevant conference each year.

Keeping Up With Change Markets change, and so do employee expectations. Just like brands have to evolve to stay competitive, your employer brand has to change with employee expectations. You need to stay on top of basic trends, like salary data, but you also need to know what benefits your competitors are providing. Keep on top of news about the top places to work in your field. You may be too small to provide a gym in-house like a major corporate competitor, but maybe you could afford to offer fitness allowances.

1.1.3 RELATIONSHIP BETWEEN MARKETING AND FINANCE

Global competition, commoditization, market fragmentation, have all converged to create an environment requiring companies to create better processes, address controls, and assess risk. In addition, zero-based budgeting has become the norm. This convergence marks a new age for marketing in the 21st century; The Age of Accountability.

This new age forces marketers to change focus from awareness and image to business outcomes such as increasing revenue, customer acquisition and value, cash flow and shareholder value. Marketers are sitting squarely inside the trigger hairs of the finance organization. In order to dodge the bullet, they need new skills, tools and perspective and finances help.

While marketing and finance have tended to have an adversarial relationship, with some work its possible to transform finance into an ally, and turn marketing into a 10

performance-driven unit at the same time.

Marketing and finance are related in the following ways:

Talk the Language of Business: Cash FlowTo change the relationship, marketing needs to understand the finance mindset. Basically, finance people are risk averse. They need marketing to show them why what it wants to do is the right thing to do -not by saying its strategic, but by being able to communicate how much money will come back, and when.

Finance is focused on revenue, expenses, profit and shareholder value. For most companies, the old adage cash is king, still reigns. Its not that financial people arent interested in the brand, its that they want the ability to link brand image and loyalty to cash flow. It isnt a coincidence that there is a strong correlation between cash flow and marketing's responsibilities.

Marketing is responsible for helping the organization acquire and keep profitable customers and therefore relate its functions directly to cash flow. The more marketing's initiatives address customer lifetime value, improve the rate of product adoption, reduce customer churn and lower acquisition costs, the better the companys cash flow.

When marketing talks in these terms, it is talking in the language of business and the language of the CFO. If marketing understands the CFOs expectations and learns to speak their language, it will be well on its way to creating an ally. If marketers dont understand the CFOs language, its time to learn.

There are four key concepts important to most CFOs. Weve already talked about 11

cash. The other three are: EPS (earnings per share), Net Contribution, and Payback (the time frame for when the investment pays off).

When the leadership team asks about marketing ROI, it is really asking about payback. Leaders want to understand how and when the investment marketing is making on behalf of the company will pay off. Its not that they dont want to give marketing the money; its that they want to be able to analyze the tradeoffs between one investment and another. The company has only so many resources and therefore can only make only so many investments.

Treat Marketing Like A Small Business UnitHopefully the CMO and the marketing team understand that finance executives expect marketers to manage risk, improve efficiencies and be financially accountable. What theyre really asking is for marketing to act like a strategic business unit (SBU) owner. They want marketers to know their numbers, to show they have a plan, and to demonstrate they care about the companys success, not just marketing's own piece.

If marketers accept this role, then just like any SBU owner they need to demonstrate due diligence and accountability by focusing on incremental sales and gross margin contribution. SBU owners know their business and the key operational indicators. The CFO wants to know that marketing knows its business, too.

What kind of operational indicators communicate to this to the CFO? For marketing, the key operational indicators are the average purchase per customer, the upgrade/cross-sell conversion ratio, the customer lifetime value, the average customer acquisition cost, the average customer retention rate and cost, the share the brand has in each segment and geography, and the rate of new product acceptance. 12

Jeremy Adamson, Global Controller for Consumer Products and Services at Symantec, once said that he expects marketing executives to keep the following numbers in their head, headcount, the revenue target for the quarter, the cost per revenue dollar, the cost per booking dollar, and your program-to-people ratio. If you dont know what numbers your CFO expects you to know at the drop of a hat, ask him or her.

If you are part of the marketing leadership team and you arent acting like an SBU owner, its time to change. In most companies, the SBU owner collaborates with finance to develop performance metrics for their business. For marketing this means they need to engage finance in the marketing planning and measurement process just like any other SBU owner.

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1.1.4 DOMINANT ECONOMIC INDICATORS

Market Size: The cell phone industry is one of the fastest growths besides the Internet. Cell phones have gone through a huge change and its market has expanded globally. Since 1994, the cell phone industry has increased from 24 million to about 182 million in wireless phone and related devices operating in the United States with some 162-million mobile-phone users in the United States alone. The cell phone market is increasing very fast with todays ever-emerging technology and innovation in improving cell phones. Today, society is living with advance technology and everyone wants to keep pace with the new technologies. Cell phone industry is growing larger because it has become a necessity. Parents are getting mobile phones for their teens because they want to communicate in case of an emergency and the wireless carriers have made it easy to add users to their existing plans. And carriers are becoming successful in getting parents to expand their plans to include their teens. This increases buyers and increases market size worldwide.

Scope of Competitive Rivalry: The cell phone industry has become increasingly larger within the last three years as a result of more affordable cellular phones as well as lower service costs. Companies are competing in an advance technology and communication sector in which success attracts customers to buy their products and services. The market is very competitive because they offer the same products and services, but has different physical attributes to the phones and different costs, which buyers have choices to choose from. Companies want to provide the best products and services to attract buyers by

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lowering cost and improving products, which makes the cell phone industry very competitive. Here are the main factors of competitive rivalry: Cell phone cost: Customers wants better services and products at a lower cost. Bundle functions into just one cell phone: messaging, internet New technology improvement: For example camera phones Better landline services For example E-mail, text

Stage in Life Cycle: The cell phone industry is in the Mature Life Cycle Stage, where nearly all-potential customers are already users of the industrys product. The cell phone industrys growth and profitability depends entirely on its ability to attract new customers. By increasing and improving the cell phones and services, it will attract more potential buyers, because technology alone will not attract buyers, instead companies want value-added services for mobile-phone securities. Cell Phone companies attract buyers in two ways during the Mature Life Cycle State: Service: Making cell phone more affordable will attract buyers to buy more cell phones and increase competition between companies to lower service fee. Innovative Phone Style: The new designs and improvement in the physical appearance of the cell phones, and more add-on features attracts customers to buy it at a higher rate.

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Numbers of Companies in the Industry: There are over 50 companies with only five top companies in the cell phone industry that controls 80 percent of the market. Even though there are emerging new companies into the market, they are relatively small. The five top companies are rank as follow as the largest to the smallest cell phone company: 1. Nokia 2. Samsung 3. Micromax 4. Blackberry 5. Karbonn

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1.2 LITERATURE REVIEW

Earnst. C, (2001) says that ITSMA is a trusted advisor on services marketing, branding and sales practices in the information technology industry. ITSMA is dedicated to helping its members achieve measurable results in terms of growth, profitability and customer loyalty. ITSMA research, events, custom education and advisory services help client organizations improve the impact of their marketing and sales functions and provide opportunities for professional development of their services personnel. Founded in 1994, ITSMA clients include both well-established companies such as Accenture, Cisco Systems, EMC, IBM, Oracle and SAP as well as emerging firms such as Diamond Cluster International, Evolve and Juniper Networks.

Cebrzynski. G (2004) says that Portillo's Hot Dogs launched its first-ever image campaign in response to lower-than-expected brand awareness when the chain opened a unit in a new market. The campaign includes 30- and 10-second television spots and eight radio spots that take a humorous approach in telling the history of Portillo's. The television spots Chicken in a Mug and Liver on a stick are designed to show how some harebrained marketing schemes failed while Portillo's marketing innovation succeeded.

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Andersen, A. (2000, Sept 26) says that IBM continues to increase its level of awareness as an E-Business solutions provider among decision makers at Fortune 1000 companies, reports leading brand researcher ITSMA in its third Professional Services and E- Business Solutions Brand Awareness Study. The study also shows Andersen Consulting making the most significant improvement by more than doubling its awareness over the last six months. Nevertheless, the market remains fragmented, with many E-Business professional services firms receiving surprisingly low awareness levels.

Lindqvist, J. (1994) says that the results are presented of a study conducted by the SIFO opinion survey organization for Supermarket magazine, following a poll of the attitudes of 1,000 Swedish consumers toward some 60 groups of fast-moving consumer products. The only product group in which brand name criteria increased more than price in importance was that of dish-washing detergent. For toothpaste, there was a dead heat between price and brand name, while for tobacco, 13% of the respondents said price had increased in importance but none specified brand . The research shows that, in broad terms, consumers now make more conscious choices than they did earlier. In most cases, they are trying to save money by paying attention to prices. But brand names can increase in importance, even in tough economic times.

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Yaseen, N., Tahira, M., Gulzar, A., & Anwar, A. (2011) say that the study is to investigate resellers' point of view about the impact of brand awareness , perceived quality and customer loyalty on brand profitability and purchase intention. Further the study is also focused on finding out the mediating role of purchase intension on the relationship of brand awareness and profitability, perceived quality and profitability and brand loyalty and profitability. The study was causal in nature and data was collected from 200 resellers. The results showed insignificant impact of brand awareness and loyalty whereas significant impact of perceived quality on profitability. Further the results revealed significant impact of brand awareness , perceived quality and loyalty on purchase intention. Sobel test for mediation showed that purchase intension mediates the relationship of the perceived quality and profitability only.

Zakaria, Z., Jusoff, K., Halim, M. A., & Aziz, W. A. (2009) say that the state government of Terengganu, Malaysia is encouraging small scale entrepreneurs to get involve in the promotion, packaging, labeling and branding of their products. However, the number of entrepreneurs in the state who are presently involved in branding is still small. A survey was conducted using questionnaire in order to discover the influence of the entrepreneurs' business profiles on their knowledge, awareness and involvement towards brand equity. Six elements of business profiles have been identified which include Size of Business, Type of Ownership, Types of Products Sold, Source of Funding, Business Zone and Market Size. These entrepreneurs are registered under Yayasan Pembangunan Usahawan Terengganu (YPUT) and involved in the production or selling of food products in the state. Statistical analysis such as the Chi Square and Cramer's V were used to determine the 19

relationship between the entrepreneurs' level of brand equity awareness with their business profile. Result shows that the entrepreneurs' business profiles were found to have significant and moderately strong relationships with their level of brand equity awareness. Future researchers would benefit from this study and use it as a platform to further investigate other factors such as organizational culture, government support and style of management in influencing the entrepreneurs' knowledge, awareness and involvement in branding.

Slavens, R. (2007) say that one of the biggest hot buttons for IT departments these days is network security -- the ability to both safeguard corporate and customer information from prying eyes and maintain computer system operability against malicious virus attacks. Arbor Networks wanted to deepen its brand awareness and stature with corporate enterprises and Web service providers -- its two-core target markets -- as well as demonstrates its unique vision for warding off security threats with its Peakflow X technology platform. By integrating social networks and traditional media such as print, events, e-mail, search engine marketing and sponsorships, the "Once They have Found Your Network, You have Lost" campaign helped Arbor create a connected conversation community well ahead of its competitors, said Tina Stewart, VP-marketing at Arbor.

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Friedmann, S. A. (2002, Dec) say that three important points to consider when planning to integrate brand awareness into a trade-show program are: 1. Consistency and repetition are vital in creating brand awareness . 2. Ensure that all marketing and promotions are consistent and that they have brand logo, colors, typeface, slogans, and characters. 3. Peoples' perceptions about a company, products, and services is a major factor in their choice of brand preferences and their buying behavior. A 10point checklist of questions to help plan brand integration into an exhibit program is offered.

Greenbaum, M. (2006, Feb) say that franchising was built upon the premise of branding and its effectiveness in driving consumer demand. Creating a national brand takes years and for most franchise brands , it often takes decades. To build that worldclass franchise brand , there are three primary tasks essential to effective brand building: 1. Create a unique character or personality for the brand . 2. Build a relationship with the target market. 3. Create visual impact through a well-conceived logo and brand identity. Building upon a primary principle of marketing, it is a given that a brand should remain consistent. With the right tools and franchise support, franchisees can become highly effective in promoting the brand . A brand 's Web site should first and foremost be a consumer marketing tool for franchisees, but also offer information about franchise opportunity. When it comes to branding, public relations is an extremely vital component of a successful branding campaign. 21

Howard, L. S. (2000, Jan 10) say that insurers have failed to build brand awareness , which may hurt them competitively as new non-traditional entrants with betterknown brands enter the financial services arena, warned Andy Homer, CEO of Axa Insurance in London. He said that financial service brands do not feature strongly in the top global brands in terms of awareness because in a business where companies are trying to build trust, customers mistrust them. In addition, Homer said, the industry is largely perceived as antiquated and bureaucratic. And, there is a proliferation of choices, which is very confusing to consumers.

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2.1 INTRODUCTION A lot of people think that the new economy is all about the internet. I think that it's being fuelled by the Internet - as well as by cell phones, digital assistants, and the like - but that it's really about customers. Patricia Seybold Today mobile phones have moved beyond their primary role of voice communications and have graduated to become an essential entertaining device for mobile users. We are in an era where users buy mobile phones not just to be in touch, todays youth use it to express their thoughts, for social networking, to show their interests, play games, read news, surf on the internet, listen to music, chat instantly with friends & families and even check their bank balances. There are various phone manufacturers providing handsets. The Indian mobile industry is the fastest growing in the world and India continues to add more mobile connections every month than any other country in the world. The telecom boom in the country provides great opportunity to handset manufacturers and the hottest segment for these manufacturers is the entry-level segment. Among the fastest growing sectors in the country, telecom has been zooming up the growth curve at a fiery pace. The last few years saw India adding many firsts to its list of achievements. Some of these are-the world's lowest call rates (1 paisa/sec), fastest growth in the number of subscribers (15-20 million per month), fastest sale of a million mobile phones (1 week), the world's cheapest mobile handset (777), and the world's most affordable 3G phone (4,999). The market in India is dominated by mobile. For mobile we have 840 million-plus 23

users, unlike many other markets, mobile is becoming the dominant device for voice, for value-added services, and increasingly for mobile Internet also. Its somewhat similar to what we saw in Japan in 1999 where, because of the limitation of broadband and computing. Theres a whole host of services being created around mobile. An effective management of mobile services requires an understanding of the factors that underlie the evolution of the market. Factors such as market potential and timing and speed of adoption are of great importance for telecom operators for capacity planning. Understanding the evolution of mobile phone market and its likely future trend is equally important for policy makers. India is currently facing the onslaught of cheap sub-standard Chinese phones, which occupy as much as 25 per cent of the market, thanks to the liberal import policies of India. The boost to exports to mobile phones and their parts will encourage local manufacturing, which is the best answer to compete with the cheap sub-standard Chinese phones imports. Mobile phone exports from India could double as a result of Commerce Ministry granting 2 per cent Focus Product Scheme (FPS) on mobile phone exports in the Foreign Trade President of Indian Cellular Association said that the special incentive accorded to mobile phone exports could result in the doubling of exports in the next 3-5 years from the annual level of 13,000 crore to 14,000 crore if other enabling policies are put in place. India is already a base for worldwide quality manufacturing of mobile phones. The sale of mobile handset have increased from a minor 17.5 million in 2003-04 to 223 millions in 2010-11. Major increase being in the year 2010-11 followed by 200910 with the sale of about 55 million handset. The major amount of FDI (Foreign Direct Investment) being in telecom industry in 24

years from 2007-09 of about $5000 millions, which provided the major opportunities for different companies to come in Indian market. The results of which can be seen in the following years with the increase in number of sale of mobile handset. The FDI limit being increased from 49% to 74% being the major reason for the increase in FDI. This inflow of FDI provided in roads for many companies which started their production in India. Only 5 local manufacturers in 2008 and the number stands at 28 now! Fall in the market share of Nokia, L.G., and Motorola. Samsung Electronics Co. Ltds share rose marginally to 9.7% from 9.5%. LGs share dropped from 7.2% to 6.4%, Of the local manufacturers, Micromax leads the race. There are many mobile players like Nokia, Motorola, Samsung, Sony Erission, L.G, HTC, Apple.

2.1.1 MOBILE TELE-DENSITY Tele-density According to TRAIs Telecom Subscription Data for the month ending May 2011, the Total Telephone Subscribers in India reached 874.68 Million, thereby making the overall Tele-density in India 73.11 at the end of May, 2011. 25

Total Wireless subscriber base (GSM, CDMA & FWP) increased from 826.93 Million in April 2011 to 840.28 Million at the end of May 2011, registering a growth of 1.61%. The main objective of the graph is the diffusion of mobile phones in India to inform the larger discussion of managing the communication services as well as to assist analysts concerned about assessing the impact of public policies in the evolution of telecom sector. There has been 25-fold increase in mobile subscriber base in a span of just five years from 2000-01 to 2005-06. During the same period, mobile-density has increased more than 23-fold from 0.35 in 2000-01 to 8.12 in 2005-06. An effective management of mobile services requires an understanding of the factors that underlie the evolution of the market. Factors such as market potential and timing and speed of adoption are of great importance for telecom operators for capacity planning. Understanding the evolution of mobile phone market and its likely future trend is equally important for policy makers. The saturation level of mobile-density for a country is likely to depend on whether it is an early adopter or a late adopter of telephones. Early adopters (developed countries) are expected to have lesser reliance on mobile phones (due to high switching cost) whereas late adopters (developing countries) are expected to have lesser reliance on main line telephones (due to high infrastructure cost).

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Rate of growth of mobile-density The analysis reveals that the inflection point (the maximum growth rate point) of the curve will occur between 2011-12 and 2012-13 (when mobile-density is around 70). During the year 2015-16, there will be 90 mobile phones for 100 people in the country. Analysis shows that the numbers of mobile phones will exceed the number of people in the country by 2019-20 In this study, the growth of the mobile phone and mobile-density in India has been analyzed using S- shaped growth curve models. The analysis shows that the high growth phase of the diffusion of mobile phones will continue till 2015-16. It is estimated that there will be 90 mobile phones per 100 inhabitants in India at the end of year 2015-16. The number of mobile phones will exceed the number of people in the country by 2019-20. Total mobile phone demand is projected to increase from 800 million in 2010-11 to 1 billion by 2012-13. Growth, which is not expected to slow down anytime, soon is now moving to the rural areas.

2.1.2 PRODUCTION AND EXPORTS Mobile phone production in India increased to 512 million from a mere 144 million in 2002-03 at a compound annual growth rate (CAGR) of 28.3 percent. Mobile phone production revenue reaches $13.6 billion by 2011 from $4.9 billion in 2006, a CAGR of 26.6 percent. Mainly the expanding mobile subscriber base in India and favorable local government policies promoting local electronics manufacturing in India drives the growth in production. India is the world's second-largest telecom market after China, with the total wireless 27

subscriber base crossing 850 million at the end of June, 2011. By 2020, the handset demand is projected to reach 350 million a year. At present, Indian mobile handset market is estimated to be in around 130 million handsets per annum. It added that 510 million handsets are estimated to be manufactured in India, during the same year. In India, handsets are categorised as high, medium, low, and ultra low cost ASP devices. The medium ASP segment is likely to be the fastest growing segment in terms of volume, affordability of feature-rich handsets is also expected to be a key enabler of handset adoption. The government should create a sizeable export promotion fund for the telecom equipment and services export and handset exports from India may be included in bilateral trade agreements with emerging markets in regions such as South Asia, Africa, Latin America, Russia and Eastern Europe.

2.1.3 DRIVERS AND TRENDS Drivers The mobile phone phenomenon is unique in the histories of both the telecommunication and consumer electronics markets. In less than a decade, people have adopted mobile phones on a massive scale. This is about three times the size of the television or PC markets. Growth has been fuelled by the spectacular evolution of mobile phone technologies, both in terms of performance and miniaturization. As a result, unlike many other appliances, users change their mobile phones on average every two years. Consequently, replacement handsets today represent about 80% of all mobile phone purchase. This rapid growth has been possible due to various proactive and positive decisions of 28

the Government and contribution of both by the public and the private sector. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. Policy and Initiatives 1.Regulatory Framework: The Telecom Regulatory Authority of India (TRAI) was set up in March 1997 as a regulator for Telecom sector. The TRAIs functions are recommendatory, regulatory and tariff setting in telecom sector. Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in May, 2000. TDSAT has been empowered to adjudicate any dispute Between a licensor and a licensee Between two or more service providers Between a service provider and a group of consumers hear and dispose of appeal against any direction, decision or order of TRAI Tariffs for telecommunication services have evolved from a regime where tariffs were determined by Telecom Regulatory Authority of India to a regime where tariffs are largely under forbearance. TRAI intervenes by regulating the tariffs for only those services, the markets of which are not competitive. Universal Service Obligation Fund (USOF) exclusively for meeting the Universal Service Obligation was established in April, 2002. The Universal Service Levy is presently 5 per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers except the pure value added service providers like Internet, Voice Mail, EMail service providers etc. Indian Telegraph Act has been amended in October2006 29

to provide support for all telegraph services including mobile and broadband to bridge the digital divide. With the introduction of the Unified Access Licensing Regime, operators can offer telecom access services to consumers in a technology neutral manner, subject to fulfilling certain conditions. Introduction of this regime has also broken the legal/regulatory impasse between the cellular and basic service providers. Issuance of Intra-Circle Merger and Acquisition. Guidelines provide investors an opportunity to take stakes in existing telecom operations. 2.Government Initiatives : The Government has taken the following main initiatives for the growth of the Telecom Sector; All telecom services have been opened up for free competition for unprecedented growth 217 (Information Technology Agreement) ITA-I items are at zero Customs Duty. Specified capital goods and all inputs required to manufacture ITA-I, items are at zero Customs Duty Availability of low cost mobile handsets The international Long Distance Services (ILDS) opened with effect from April 2002. Calling Party Pays (CPP) regime was implemented with effect from 1st May Guidelines for Unified Access Service License regime were issued in November 2003, 27 licenses out of 31 Basic Service Licenses were converted to Unified Access Service Licenses In April 2004, license fee for Unified Access Service Providers (UAS) was reduced 30

by 2 per cent License fee for infrastructure Provider-II reduced from 15 per cent to 6 per cent of the Adjusted Gross Revenue and spectrum charges between 2 to 4 per cent in June 2004 Entry fee for NLD licenses was reduced to 2.5 Crore from 100 Crore. Entry fee for ILD reduced to 2.5 Crore from 25 Crore Lease line charges have been reduced to make the bandwidth available at competitive prices to facilitate growth in IT enabled services One India plan i.e. single tariff of 1/-per minute to anywhere in India was

introduced from 1st March 2006 by the Public Sector Undertakings. This tariff was emulated by most of the private service providers also. This scheme has led to death of distance in telecommunication and is going to be instrumental in promoting National Integration further. The robust telecom network has also facilitated the expansion of BPO industry that is having 500,000 employees now and adding 400 employees per day. Annual license fee for National Long Distance (NLD), International Long Distance (ILD), Infrastructure Provider-II, VSAT commercial and Internet Service Provider (ISP) with internet telephony (restricted) licenses was reduced to 6 per cent of Adjusted Gross Revenue (AGR) with effort from Jan 2006. The Governments policy is neutral on use of technology by telecom service providers subject to availability of scarce resources such as spectrum etc. License Fees 6-10 per cent of Adjusted Gross Revenue (AGR) 31

3. Foreign Direct Investment Policy: Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with the telecom-manufacturing segment in 1991 - when India embarked on economic liberalization. FDI is defined as investment made by non-residents in the equity capital of a company. For the telecom sector, FDI includes investment made by Non-Resident Indians (NRIs), Overseas Corporate Bodies (OCBs), foreign entities, Foreign Institutional Investors (FIIs), American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) etc. Present FDI Policy for the Telecom sector: In Basic, Cellular Mobile, National Long Distance, International Long Distance, Value Added Services and Global Mobile Personal Communications by Satellite, FDI is limited to 49 per cent (under automatic route) subject to grant of licence from the Department of Telecommunications and adherence by the companies (who are investing and the companies in which investment is being made) to the licence conditions for foreign equity cap and lock-in period for transfer and addition of equity and other license provisions. Foreign Direct Investment up to 74 per cent permitted, subject to licensing and security requirements for the following: - Internet Service (with gateways)- Infrastructure Providers (Category II)- Radio Paging Service FDI up to 100 per cent permitted in respect to the following telecom services: - ISPs not providing gateways (Both for satellite and submarine cables)Infrastructure Providers providing dark fibre (IP Category I)- Electronic Mail- Voice 32

MailThe above is subject to the following conditions: - FDI up to 100 per cent is allowed subject to the condition that such companies would divest 26 per cent of their equity in favour of Indian public within 5 years, if these companies are listed in other parts of the world. - The above services would be subject to licensing and security requirements, wherever required. - Proposals for FDI beyond 49 per cent shall be considered by ForeignInvestment Promotion Board (FIPB) on a case-to-case basis. In the manufacturing sector 100 per cent FDI is permitted under the automatic route. In Basic, Cellular Mobile, paging and Value Added service, and Global Mobile Personal Communications by Satellite, FDI is permitted up to 49 per cent (under automatic route) subject to grant of license from Department of Telecommunications Foreign direct investment up to 74 per cent permitted, subject to licensing and security requirements for the Internet Service (with gateways), Infrastructure Providers (category-II), and Radio Paging Service FDI up to 100 per cent permitted in respect of- ISPs not providing gateways (both for satellite and submarine cables), - Infrastructure Providers providing dark fibre (IP Category I);- Electronic Mail; and- Voice Mail FDI up to 49 per cent is also permitted in an investment company, set up for making investment in the telecom companies licensed to operate telecom services. Investment by these investment companies in a telecom service company is treated as part of domestic equity and is not set of against the foreign equity cap. Manufacturing - 100 per cent FDI is permitted under automatic route. 33

FDI is subject to the following conditions: FDI up to 100 per cent is allowed subject to the conditions that such companies would divest 26 per cent of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. The above services would be subject to licensing and security requirements, Wherever required. Proposals for FDI beyond 49 per cent shall be considered by FIPB on case to case basis.

2.1.4 DIFFERENT TIERS OF MOBILE PHONES Different Tiers of Mobile Phone 1. Ultra Low-cost Mobile : Price range: Less than 1,500 Key features include: B&W screen, messaging, phonebook 2. Low- to Medium-cost : Price range: Less than 1,500 to 2,500 Key features include: coloured screen, FM radio, VGA camera 3. High-cost Mobile: Price range: Less than 2,500 to 4,000 K  ey features include: extendible memory, digital camera, GPRS, MP3 player4. Smart Phones Handset: Greater than 4,000 K  ey features include: QWERTY keypad/touch screen, dual SIM, Wi-Fi, and 3G Switching propensity from lower level segment to the mid tier segment is expected to increase with the increase of income level and technology development. The India mobile handsets market has got even more crowded and fragmented in the 34

lower- and mid- market segments with the entry of new players offering innovative models at attractive price points to lure buyers. There is huge demand for feature-rich, low-cost handsets. Of the total handset sales, the majority of sales fall in the price band of below $75. That is where the majority of the volume is and that is where you will see the majority of the Indian and Chinese manufacturers playing. Going forward, the market is going to grow at a rate of 15-20% year-on-year. Low-cost devices will grab 60% of the market over the next three to four years. People are looking for devices with greater value. That value could be in terms of features like QWERTY keypad or touch screen etc. One can get a handset for Rs.2,000-3,000 with features like good memory, touch screen, QWERTY, camera, dual-SIM, longer battery life etc. The majority of Indian manufacturers are in the low-price band and that is why market is looking quite competitive. However, if they move up the price band, then they will face competition from global players. When the low-end segment customers go for repeat purchases, they go for low cost mobile phones with extra features. In fact, many of them are ready to pay higher prices for these new features and vendors are taking advantage of the psyche of the customers by adding these features. Tapping a global opportunity and bridging the mobile gender gap There are 300 Million Fewer Female than Male Subscribers who have mobile phone coverage but dont have a handset in the world, which amounts to a US$13 Billion Opportunity as well as social welfare. Cost and perception that it isnt necessary to own a mobile phone and fear of being able to master the technology are the biggest barriers to connecting more women in developing countries. By using mobile phones women can unlock economic opportunities, save time and money, increase return on 35

investment and maximize household resources. 2.1.5 MARKET SHARE

Fall in India-specific revenues of mobile handset makers including Nokia, RIM and LG, led by de-growth in feature phone sales and lower average selling values pulled down industry-wide sales by five per cent to Rs. 31,215 crore in 2011-12, says a Voice Data survey. The survey said the mobile handset sales in India stood at Rs. 33,031 crore in the previous fiscal. It also said the main stay of domestic handset makers like Micromax and Spice (feature phones) saw negative growth, while the entry-level smartphones of various companies saw a marginal rise. The annual survey on Indian Telecom industry by Cyber Media group's journal Voice Data attributes the total revenue drop to lower average selling values (ASVs) as well. "Indian mobile phone brands that had hoped to make a mark by sourcing Chinese handsets and selling them only on the price plank were in for a big surprise. These players will have to quickly rethink their product, marketing and service strategy afresh to put their house in order," Voice Data Group Editor Ibrahim Ahmad said. India is one of the fastest growing telecom markets in the world. However, in the last few months, the growth rate has slowed down from monthly additions of 12-15 million to 7.99 million in May 2012. As per the survey, Nokia retained its leadership with 38.2 percent share. However, its revenues have fallen 7.7 percent to Rs. 11,925 crore in 2011-12 from Rs. 12,929 crore in 2010-11. The Finnish company lost market share in smartphones and multi-media segment to Samsung, HTC and Apple, among others, but made headway in the dual SIM phones 36

category, it said.

Table 2.1 Showing the top mobile handset companies.

Korean handset giant Samsung, on the other hand, saw its revenues growing 38 percent to Rs. 7,891 crore in 2011-12 from Rs. 5,720 crore in the previous fiscal. It had a market share of 25.3 percent, thanks to its rich product portfolio based on Windows, Android and Bada operating systems, as per Voice Data. Samsung's Galaxy Note, a hybrid between smartphone and tablet was a trailblazer, selling 40,000 units each month since the launch in late 2011, the survey said. "As consumers look for applications beyond voice and SMS the market will see fight for high end feature phones and smart phones intensify further. Consumers can also look forward to steeper price drops and more features in the same price," Ahmad said. 37

Homegrown Handset Company Micromax ranked third on the list with revenues of Rs. 1,978 crore with a market share of 6.3 percent. Its revenues dipped 13 percent compared to the previous fiscal. BlackBerry maker Research in Motion's (RIM) revenues dropped 25 percent to Rs. 1,460 crore. With a market share of 4.7 per cent, it ranked fourth in the list. The steepest fall was seen in the revenues of LG, which fell by 57 per cent to Rs. 780 crore in 2011-12 from Rs 1,834 crore in 2010-11. Taiwanese handset maker HTC, on the other hand, saw its revenues more than doubling to Rs. 923 crore in 2011-12 from Rs. 450 crore. Its market share stood at three percent. Other key players in the Top 10 list include Spice (Rs. 790 crore), Huawei (Rs 760 crore) and G'Five (Rs 670 crore). It surveyed over 30 mobile handset firms -- both multi- national and Indian -- selling feature phones, multimedia phones, enterprise phones and smartphones in India.

2.1.6 MARKET GROWTH

Matt Walker, senior analyst at research firm Ovum, said India's telecommunications landscape saw rapid growth over the last few years, as the regulatory climate has improved and private carriers have invested aggressively in nationwide network deployments.

"Most of the effort has been on mobile networks because these roll out faster, fill a 38

gap in connectivity left by poor fixed-line networks, and allow for very low-priced entry points for end users," Walker told ZDNet Asia in an e-mail interview.

Long-haul fiber transport networks have also spread in the country, he said, adding that this market has become more competitive.

Figure 2.1 Showing rise in mobile handset users.

Kamlesh Kalwar, a Frost & Sullivan industry analyst, said the expansion of India's telecom industry has led to an "all-inclusive growth" of the Indian economy in terms of GDP (gross domestic product) growth, employment and government revenues, among others.

He added that telecommunications, together with the IT sector, have created jobs for India's knowledge professionals and skilled workforce. High growth in the IT and ITES (IT-enabled services) sectors is dependent on the sound connectivity infrastructure in India's metro areas, Kalwar told ZDNet Asia in an e-mail interview.

During the fiscal years of 2003/2004 and 2006/2007, the Indian economy enjoyed an 39

average growth rate of 8.8 percent. In the 2006/07 period, the analyst said, the country saw the growth rate hit 9.6 percent--India's highest economic expansion in 18 years.

The advent of the digital age, coupled with India's large number of young and educated people who are fluent in English, are transforming India into an important global outsourcing destination for customer services and technical support.

"This would not have been possible without the growth of the telecom sector," Kalwar said.

Walker agreed: "Clearly, India's business process outsourcing (BPO), software, design and financial industry segments rely heavily on the good network connectivity, especially international [connectivity]."

This year, he said, Ovum estimates that fixed line and mobile revenues in India will hit US$10.5 billion and US$23.4 billion, respectively. Fixed line capital expenditure (capex) is estimated at US$2.2 billion, while mobile capex will ring in at US$6.5 billion.

By 2012, fixed line revenues will reach US$12.2 billion and mobile revenues will hit US$39.8 billion. Fixed line capex is expected to be US$3.2 billion, while mobile capex will be US$9.4 billion.

Kalwar noted that India's mobile sector continued its growth momentum throughout 2007, achieving net additions of over 84 million users, ending the year with a total mobile subscriber base of 233.6 million.

40

Between 2006 and 2007, mobile telephony grew at an annual rate of over 90 percent. On average, the market saw over 8 million new subscribers every month.

Kalwar said: "Apart from the basic telephone services, there is an enormous potential for various value-added services (VAS). In fact, the real potential for growth in telecom services is still largely untapped."

India's mobile subscriber base is expected to grow at a compound annual growth rate (CAGR) of 18.3 percent, from 2007 to 2013, reaching a penetration rate of 53.4 percent by end-2013.

"While subscriber growth would gradually slow down as the market saturates, we expect a combination of factors such as acceleration of fixed-to-mobile substitution, expansion of rural market coverage, increasing competition resulting in the introduction of innovative cellular service packages, and the cheaper entry-level handsets to stimulate future growth," Kalwar said.

Achieving over 500 million telephone connections by 2011 appears very attainable, he added, with total investments in the sector projected at a whopping US$76.6 billion throughout the period of India's Eleventh Five Year Plan, stretching from 2007 to 2012.

Reaching all of India: Under its Bharat Nirman Program, the government has also set a target to connect all villages with a village public telephone (VPT) by 2008. Connectivity with remote and far-flung villages, which number over 14,000 in the country, will be provided through digital satellite phone terminals.

The government will also invest US$2 billion, from 2008 to 2009, to set up some 41

100,000 community service centers in rural India to provide broadband connectivity.

Kalwar believes India's rural market is going to be the next big thing for wireless service providers.

"With the tele-density in rural areas at less than 10 percent against the national average of about 21 percent, there seems to be huge untapped potential for mobile phone penetration in rural India," he said.

In India, GSM and CDMA are currently the key mobile technologies. According to the Telecom Regulatory Authority of India (TRAI), there were 68.4 million CDMA subscribers--26.2 percent of overall market--and 192.7 million GSM subscribers (73.8 percent) as of end-March 2008.

Kalwar said xDSL and ISDN are the most common means of Internet access in the country. "New technologies like WiMax for the Internet, and 3G for mobile and the Internet are on the anvil," he added.

In the realm of broadband wireless access, companies such as Tata, Reliance and Bharti, have committed huge investments on WiMax and are conducting trials. By mid-2009, this would help connect rural areas, thus providing connectivity to the masses and fueling further economic growth, Kalwar said.

Regulator TRAI, recently also made policy recommendations on VoIP (voice over Internet Protocol) and mobile number portability (MNP), and will be holding the 3G spectrum auction due later this year.

Ovum analyst Charice Wang, wrote in a recent research note that these policies will 42

encourage the development of India's telecoms industry and strengthen competition in the fixed and mobile markets.

Table 2.2 Showing revenue in the mobile industry.

Helped by market reforms: The TRAI also lifted a ban that prevented Internet service providers (ISPs) to provide VoIP services to and from telephones connected to voice-oriented public switched telephone networks (PSTN). Removal of these restrictions means IP calls can now be connected to traditional PSTN phones, and not just to PCs, Wang explained.

"We expect the new measures to encourage VoIP take-up," she wrote. "In fact, we think VoIP will experience strong growth over the next few years, with the combined effects of deregulation and growing broadband penetration. 43

There are currently 4.4 million broadband subscribers in India, she added, noting that the government is targeting to increase this base to 20 million broadband users by 2010.

The TRAI also announced that MNP will be available in four metropolitan areas within the next two months, and will be implemented countrywide by June 2009.

Kalwar said MNP, which lets customers switch telcos without changing their numbers, will also help consumers achieve significant savings through operators' bundled offerings including VAS at lower charges and cheaper voice and broadband services.

"MNP also attracts business users as it helps them retain contact numbers and change service providers with no extra time, effort and cost required to communicate these changes," he noted.

According to Wang, India's government will finalize a 3G spectrum auction process by the end of this month. "Depending on the spectrum available, the number of licenses could grow to 12," she said.

Kalwar said, 3G would increase the availability and affordability of VAS on offer and is also expected to significantly improve the call quality in India.

"Newer business models for voice and data are expected," he said. "Industries like mobile content and advertising will flourish over the next five to six years."

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2.2 COMPANY PROFILE

2.2.1 History Of Micromax Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across the country and international offices in Hong Kong, USA, Dubai and now in Nepal. With a futuristic vision and an exhaustive R&D at its helm, Micromax has successfully generated innovative technologies that have revolutionized the telecom consumer space.

Micromax is on a mission to successfully overcome the technological barriers and constantly engender life enhancing solutions. 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.

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 45

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

Micromax is now progressively moving towards establishing its foothold in the competitive urban towns as well.

With young enthusiasts as its anchor, Micromax Informatics Limited created a niche for itself in the telecommunication industry. Micromax ventured into the telecommunication industry with an end-to-end solution of Fixed Wireless Devices and Wireless Data Cards. In the year 2008, after delivering upon the technology of fixed wireless-powering desired products, the company forayed into one of the most predominant genres of telecommunication Mobile handsets. Since then Micromax has received commendable response for its unique and interesting handsets.

Innovation, Cost-Effective, Credible and an Insightful R&D, have now become synonymous to Micromax in the telecom vertical. Today Micromax has become a brand which people relate and look up to for realizing 46

their individual device preferences and other out-of-the-box solutions.

2.2.2 INFORMATION ABOUT THE COMPANY Micromax is an Indian consumer electronics manufacturer located at Gurgaon, Haryana, India. It focuses on the manufacturing of mobile telephones and LED Televisions. It has 23 domestic offices across the country and international offices in Hong Kong, USA and Dubai. Presently, the company has about 1400 employees. Micromax Informatics Limited has announced its foray into Maldivian telecom space through an exclusive partnership with Sense Wood Maldives (Pvt) Ltd. Micromax is the 3rd largest manufacturer in India and 12th largest handset manufacturer in the world. According to industry analysts, as of 2012, micromax leads the Indian tablet market with a share of 18.4%, ahead of Samsung and Apple, and is the third largest mobile phone vendor in terms of volume. The company's rapid market share growth since it entered the Indian mobile devices market in 2008 is primarily attributed to its strategy of aggressive low pricing in the entry-level segments of its products and its wide distribution setup. The company includes 14 locations: Hong Kong, Bangladesh, Nepal, Sri-Lanka, Maldives, UAE, Kingdom of Saudi Arabia, Kuwait, Qatar, Oman, Afghanistan and Brazil.

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Table 2.3 Showing a brief profile of micromax.

Type Industry Founded Founder(s)

Private Consumer electronics 1991[1] Rajesh Agarwal, Sumeet Arora, Rahul Sharma, Vikas Jain

Headquarters Area served Key people

Gurgaon,India[2] India Deepak Mehrotra (CEO) Rahul Sharma (Co-Founder)

Products

Mobile

phone,

smartphone,

tablet

computers,

datacards, televisions Revenue Employees Website US$ 368 million (2012)[3] ~1,400 (2012) Micromaxinfo.com

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2.2.3 CURRENT POSITION

Four years after it was first recommended, mobile number portability still remains a paper concept. Yet for over nine months, Saurabh Raina, a 43-year-old employee with a switchgear manufacturer from Bhopal, is choosing the best monthly plans on offer across six different GSM operators while he can be reached on the same number he has had for over seven years.

The key lies inside his mobile phone a full-keyboard (QWERTY) model called the Q3 that supports two active GSM SIM cards at the same time. One of these he keeps constant as his incoming number to receive calls, while the other, he changes at will depending on which operator offers him the best tariffs.

This dual-SIM feature is today present in 20 to 30 percent of all mobile handsets sold in India, estimate experts. Yet market leader Nokia does not have a single dualSIM handset in its vast repertoire of phone models for India. And the company that made Rainas Q3 Micromax Mobiles offers this feature on 22 out of the 26 phone models it sells in India. The Q3 itself, though fancy looking, costs only Rs. 3,700.

Micromax is now Indias third-largest GSM mobile phone vendor with a market share of 6 percent after Nokia (62 percent) and Samsung (8 percent), according to research firm IDC. It sells anywhere from 700,000 to one million mobile phones every month. And by its own estimates it is now selling nearly Rs.1,500 crore worth of phones annually. 49

We are not the poor cousins of Nokia, says Vikas Jain, one of the four friends who together started and grew Micromax to its present position. Instead we will force Nokia to launch newer products to compete with us.

The guys at Micromax have two aces up their sleeve a keen eye for what the customer needs, and the ability to swing their supply chain.

Though the company started making mobile phones only in 2008, it was founded in 1991 by Rajesh Agarwal as a distributor of computer hardware for brands like Dell, HP and Sony. In 1999 three of his friends Sumeet Arora, Rahul Sharma and Vikas Jain joined him as equal partners in the company.Agarwal, the eldest of the four, keeps a handle on the companys finances. The quieter Arora, a class topper, is the companys chief technology officer. Jain manages Micromaxs alliances and partnerships with other companies. And the tall and fashionable Sharma is the risk taker with the big ideas.

It was Sharma who convinced the others, after nine years of selling computers, software courses and fixed wireless public phones (PCOs), to enter the crowded mobile phone market. The companys first phone, the X1i, was born from the realisation that many Indian villages and towns didnt get enough electricity to even recharge a phone daily.

50

Catering to a Need: By increasing the size of the battery to 1800 mAh, Micromax was able to tout a standby time of 30 days for the X1i. And at the rather affordable price of Rs. 2,150, the phone was a big success in rural India.

The unexpected success of Micromaxs first mobile phone taught the four friends two key lessons. One, If you give people something that helps them in their day to day lives, they will buy it, says Sharma. Two, even though there were over 50 companies selling mobile phones in India, with Nokia alone dominating over 60 percent of the market, there were features, niches and categories that could be carved out by a new entrant.

We knew that competing on price along with Nokia, Samsung or LG would not get us anywhere. Instead we wanted to create, and own, categories, says Agarwal.

The friends realised that intense competition among mobile operators for subscribers would inevitably lead to multiple connections per user. But carrying two phones around in your pockets wasnt something most people fancied.

2.2.4 Market Share Micromax is currently the third-largest GSM vendor in the Indian market, A share of 8.1%, perhaps just a few marks 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 51

2.2.5 4 P of Marketing

Table 2.4 Showing the 4Ps

Price variables Allowances and deals Distribution and retailer mark-ups Discount structure

Promotion variables Advertising Sales promotion Publicity

Product variables Quality Models and sizes Packaging

Place variables Channels of distribution Outlet location Sales territories

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2.2.6 MICROMAX STRATEGY

Corporate Level strategies: Expansion strategy

Resource 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.

Pricing Strategy Micromax specialized in entry-level and mid-segment handsets priced between Rs1,800 and Rs2,400 when it started selling the devices in 2008, confining itself to small towns and rural areas in the first 12-18 months. Encouraged by its success, the firm expanded to larger cities and now has a distribution network of 55,000 retailers, which it plans to scale up to 70,000 by the end of March as part of its strategy to raise sales to 1.5 million handsets a month.

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Table 2.5 Showing the price of micromax mobiles.

H360 Rs. 5500/ Q1 Rs. 2400/ G4 Gamolution Rs. 4600/ C112 CDMA Rs. 1600/ C2i CDMA Rs. 2600/ GC255 Rs. 4500/ GC700 Rs. 11900/ Q2 Rs. 2900/ Q3 (Ezpad) Rs. 3600/ Q5 Rs. 4390/ Q55 bling Rs. 5500/ W900 Rs. 7900/ X113 Rs. 2399/ X1U Rs. 2598/ X211 Rs. 2750/ X215 Rs. 2900/ X220 Rs. 2300/

X225 Rs. 3399/ X250 Rs. 3250/ X260 Rs. 3500/ X280 Rs. 3999/ X2i Rs. 2350/ X310 Rs. 4099/ X332 Rs. 3499/ X414 Rs. 5500/ X500 Rs. 5700/ X114 Rs. 1650/ X115 Rs. 1699/ X116 Rs. 2150/ X118 Rs. 2200/ X1i Rs. 2299/ X511 Rs. 6499/ X555 Rs. 7499/ X800 Rs. 15000/

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Product Strategy 30-DAY BATTERY PHONES April 2008: Rs 2,249; Now: Rs 1,999 The X1i, Micromaxs 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-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.

PHONE-CUM-REMOTE May 2010: Rs 2,999 A mobile that can switch TV channels and even change the AC Temperature. IN THE WORKS A phone that can be used as a computer mouse IN THE TOUCH A touch screen phone with all Smartness & Economic price.

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Micromax deliberately made an attempt to tap the Rural interiors of the country, since this is THE segment, where the larger pie of the cake share is.and at an affordable price.

The limited supply of electricity was a big roadblock to the growth. And there evolved the Technology. This led to guarantee 30-day stand-by Battery (No other handset to compete?)

To cater to the wants of the customers to carry two handsets (to make most of the existing on-going tariff wars amongst service operators), Micromax started offering Dual SIM phones. Infect, existing product line consists of 27 phones, out of which 23 are Dual SIM.

A clear differentiation was a significant factor that aided the significant growth of Micromax brand in Indian market. In the versatile product portfolio Handsets with Dual SIM / Dual Standby. Handsets Switching Networks (GSM - CDMA) using gravity sensors. Aspiration QWETRY Keypad Handsets. Operator Branded 3G Handsets. Changing the phase of entry level.

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Many ideas poured in during the umpteen brainstorming sessions that the four conducted amongst themselves. Finally, they decided to marry mobile handsets and rural and price-sensitive India.

Thus, the companys first phone (the X1i in the pic priced only @ ` 2150/-), was born in an environment that would transform into what would be proudly called the second-largest mobile market in the world, next only to US, with about 10-12 million subscribers being added every month.

And now the Company has 23 Domestic Offices coupled with International Offices in USA, Hongkong, Dubai etc with 40,000 Stores operational & is being aggressive to reach 70,000 Stores.

To increase penetration in the Indian telecom market, Micromax is bundling with telecom operators such as Aircel. "Soon, we will launch a project where SIM cards of different telecom providers will be available with different Micromax handsets. Unless a consumer has personal apathy towards a particular service provider, chances are he will use the SIM provided to him with the handset. This will benefit both our brand and the service provider we tie up with," explains Jain.

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Promotion Strategy The brand was one of the big spenders in the latest edition of IPL .

Micromax has centered much of its brand building exercise around cricket.

Micromax has taken up the title sponsorship for the entire Indian cricketing season from May 2010.

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

Audio Visual Strategies We intend to highlight the existing need of the Cell - phone usage as a need & not Luxury since this segment thrives with Parental involvement & lots of concerns & wrinkled foreheads amongst them due to the high frequency of their Children being traveling to-n-fro from college to tuition classes or for Competitive Exams. Hence, we strongly feel the reality to be presented to the Segment. In-addition, its also plays a significant role of communication with the rising unpredictable scenarios on the rise. With the Student Fraternity, we intend to boomerang the segment with customized strategy of presenting your ID card to the Outlet listed near your college (no hassle of running near your homes) and avail of the x % discount And extended to the All levels of Faculty of the college/school).

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Women Segment strategy

While there is no gender bias.. But Women at all ages are on the higher %age of cellphone usage in the way of a Worried Daughter, Girlfriend, Wife, Parent. We arent alien to Cosmopolitan Segment either. Hence there is Q55 Bling the limited IIFA edition & also the Swaroskvi Elements launched by Twinkle khanna with line it Twinkles.

With this, we intend to bring a wave of change amongst the Gen X with apps like Twitter, Facebook and all social networking sites with extravagant features for the Who-is-who in the Industry.

Tie-up with Service Providers is essentially to make a one-stop shop to effect the 1st time users with Phone + Best Service Provider concept and with freebies & discount in the offering.

Distribution Strategy

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.

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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 now using three tier distribution channel as now it has no brand store yet it uses this channel as distribution :

| Manufacture |-----To----| Wholsaler |-----To----| Retailor |-----To----| Customer |

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2.2.7 STP ANALYSIS The strategic marketing planning process flows from a mission and vision statement to the selection of target markets, and the formulation of specific marketing mix and positioning objective for each product or service the organization will offer. Leading authors like Kotler present the organization as a value creation and delivery sequence. In its first phase, choosing the value, the strategist "proceeds to segment the market, select the appropriate market target, and develop the offer's value positioning. The formula segmentation, targeting, positioning (STP) - is the essence of strategic marketing." (Kotler, 1994, p. 93).

SEGMENTATION Market segmentation is an adaptive strategy. It consists of the partition of the market with the purpose of selecting one or more market segments which the organization can target through the development of specific marketing mixes that adapt to particular market needs.

Micromax segmented on itself geographically and demographically. Geographic: Micromax immediate geographic target is Non Urban and rural segment of India. With handsets with battery backup of thirty days and with the mobiles having high features and low cost.

Demographic: Under Demographic segmentation Micromax segmented itself on the basis Gender by launching handsets like Q55(Bling) which had features like mirror screen and again Micromax segmented on the basis of Age by focusing on age group

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of 18-25,who are the approx 80% users of the Micromax mobiles.

Women Segment: While there is no gender bias.. But Women at all ages are on the higher %age of cellphone usage in the way of a Worried Daughter, Girlfriend, Wife, Parent. We arent alien to Cosmopolitan Segment either. Hence there is Q55 Bling the limited IIFA edition & also the Swaroskvi Elements launched by Twinkle khanna with line it Twinkles.

TARGETING A target market or target audience is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy. The target market and the marketing mix variables of product, place (distribution), promotion and price are the two elements of a marketing mix strategy that determine the success of a product in the marketplace. Micromax targeted the non urban market and the age group of 18-25. 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

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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.

At the entry level, Micromax will play the 'variety' card. Today, at the entry level, not much variety is available. Handsets of all companies, available at Rs 1,200-1,300, look equally unimpressive. Micromax plan to change the face of the entry level phones while keeping the price more or less same.

On basis of Target Audience Micromax has divided its target audience into three categories - the rural sector, the urban youth and the high profile users. Micromax is solely targeting the rural segment right now - and why not? After all, it promises the maximum number of consumers and all they demand from a handset is regular features at an affordable price. The youth segment is the second most important segment, whom the brand will appease with innovative features such as a memory card with more capacity, better music and camera quality and a trendy face value. For the third segment or the premium class 'technological innovation' will be the catchword.

POSITIONING Micromax, a leading mobile phone firm in India is going ahead to healthy competition with other mobile manufactures. In this row, first name come of Nokia, world popular mobile brand name and big market share holder of domestic mobile market. Micromax is getting popularity as cheap, long battery backup and quality mobile manufacture that was Nokia in India. Nokia that was popular in India for its

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stylish and durability mobile phones is loosing place from Indian market as well as from Indian heart. This is done by Micromax, which understands real needs of Indian. 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. The most importance fact about Micromax rise is that micromax mobile phones are accepting as the best alternative of Nokia phones available at the cheapest prices. Micromax, located in Gurgoan launched 37 mobile handsets within one and half year that are good competitor of Nokia CDMA, GSM and smart phones. Micromax Company sells approximate one million handsets each month through 70,000 mobile stores and due to this Nokia mobiles are down to earth.

Micromax, an Indian mobile production house is beating world Finnish mobile giant in each and every field from mobile production, mobile outlets to advertising. Micromax is marketing its smart phones and branded handset on TV commercials, Sports event and games. Micromax was one of the top sponsors of IPL (Indian Premier League). It sponsored Asia cup as well and on the way to promote its mobiles through heavily endorsement. But Nokia is loosing pace in marketing manner as well. Nokia, which is known for its strong marketing strategies, is not able to dominant Micromax in domestic mobile market.

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Micromax is leading in the world second biggest mobile market while Nokia is loosing its market share in India. Company QWERTY mobile handsets choose as the best alternative of Nokia N-series models. 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 new Finnish mobile giant in Indian domestic market now beating Nokia.

2.2.8 OBJECTIVES For 2012-2013:

Focus on urban market at large: On capturing major share of urban youth market, for next two years Micromax needs to focus on urban market at large like seiner citizens, physically handicapped etc.

Focus on smart phones as well as tablets: Micromax needs to continue focus on smart phones and launch more products and also it needs to focus on tablet market.

For 2014:

To start new plant and reach market share of 20% : To increase market share, it is essential to increase production capacity. Micromax has plans to start a new plant in Tamil Nadu. With the help of this new plant, it will be able to reach a market share of 20%.

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Focus on international markets : On making strong focus on rural market and urban market in India, Micromax needs to expand to international markets and enter into neighbouring Indian countries, south African countries etc.

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3.1 TITLE OF THE PROJECT

A Study of Consumer Perception towards Micromax mobiles

3.2 RESEARCH OBJECTIVES

OBJECTIVES

To study the satisfaction level of cellular users in Bangalore. To study the buying behavior of the customers. To understand the price sensitivity of the market in respect to the telecom services.

To identify customers opinion about Micromax Handsets. To identify the key buying factors, which are used in hiring the telecom, services.

To understand the various sales promotional schemes being offered by various mobile handsets providers.

To see how micromax convinced customers to switch to their brand even though there were companies like nokia, sansung, blackberry that had completely earned the trust of the Indian market.

What they did to penetrate the Indian market. To understand the over all perception of the customers regarding reliability of the company

To come out with conclusions and suggestions based on analysis and interpretation of data.

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The perceived quality of brands in the cell phone market. To know the sources of brand awareness in general. To know factors which influenced to purchase of cell phones? To know the opinion about the price of cell phones and the preferred brands. To analyze the satisfaction level of the customer with respect to selling process.

To know customer level of satisfaction with respect to service after sale.

3.3 SCOPE OF STUDY: Finding the awareness of brands in the cell phone market. Finding the position of the product among the competitors. Finding the customer satisfaction about micromax. Finding out the strength and weakness of attributed of micromax where it can correct its faulty facts. Finding the number of future purchases of products of micromax.

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3.4 THE RESEARCH METHODOLOGY

Steps followed for this research was:

Problem Formulation: This refers to transferring of the management problem into a research problem. The management was to gauge the behavior of consumer in respect of micromax

Research Method: It involves choosing either experimental or nonexperimental research. This research was non-experimental.

Research Design: It is the specification of the methods and procedures for acquiring he information needed. It is overall operational pattern or framework of the project that stimulates what information is to be collected, from which source and by what procedure. The three types of design used are exploratory, descriptive and causal for this research the descriptive design was used. This is because it is marked by the prior formulation of specific research questions. It has a preplanned and structure design. For descriptive study proposed data analysis and project output are critical aspects. It was decided that the users of various mobile companies would be used as the primary source of data.

Selection of data collection techniques: For this research the data was to be collected was of primary as well as secondary nature. The source of primary data was the user of micromax. Thus the data collection was done through a survey by using questionnaire technique. This consisted of an interview and questionnaire. The questionnaire contained the questions relating hiring and uses of different micromax customers. The questionnaire was first pre tested and later making certain necessary changes in modified it.

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Sample Design: A sample chosen has to be representative of the population. For this survey cluster and stratified sampling was used. The sample size was 50 users.

Data collection: At this stage the data is actually collected according to the decided technique of data collection. The questionnaire is main source for the collection of data.

Analysis and interpretation: Data, which has been obtained, are seldom useful to anyone, if it is not analyzed and interpreted in order, the breaking down of constituent parts and the manipulating of the data and to obtain answer to the research questions. Interpretations involve taking the result of analysis, making inferences relevant to the research relationship studied and drawing conclusions about these relationships.

Research report: The culmination of the research process is research report. Methodology, report and recommendations for course of action are presented. The two critical attribute of report are completeness and conciseness. Therefore these attributes are conflicting; a balance has to be stuck between the two. On presenting the research report to the management. The management should be able to take decision on recommendations and conclusions of research.

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3.5 METHODS OF DATA COLLECTION

The task of the data collection begins after research problem has been defined and research design/plan chalked out. While deciding about the method of the data collection to be used for study, the researcher should keep in mind two types of data primary and secondary.

1) Sources of Data: a) Primary Data: We collect primary data during the course of experiments in an experimental research but in case do research of the descriptive type and perform surveys, then we can obtain primary data either through observation or through direct communication with the respondents in one form or another or through personal interview. Since the research is of descriptive type in witch data is collected through direct communication with respondents. Sample survey is carried out during this project. The survey was performed through a structured questionnaire.

b) Secondary Data: secondary data means data that are already available i.e. they refer to the data which have already been collected by someone else. The sources of secondary data in this project were the websites of various mobile providers, catalogues of various mobiles, newspapers, magazines etc.

1. Method adopted in research:

A general survey was conducted together the required data.

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2. Research tool used: Questionnaire was used to collect the data from the users of various mobile handsets.

a) Method of population Selection:

The population for this survey was selected with the help of cluster and stratified random techniques. In cluster, we divided the Bangalore regionl wise then we applied stratified.

b) Method of Interaction with the population:

Personal visit method is used for this research project. The respondents were the users of various mobiles. These respondents were approached and requested to give their opinion on the mobile handsets providers by answering in the questionnaire.

3.6 LIMITATIONS OF THE STUDY:

Though the present study aims to achieve the above-mentioned objectives in full earnest and accuracy, it may be hampered due to certain limitations. Some of the limitations of the study may be summarized as follows.

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Difficulties faced during collection of data due to non-familiar of the respondents.

Getting correct information from the customers is very difficult due to their inherent problems and busy schedule.

Getting biased responses from the respondents. The selection of customers to cover the various strata of the society is tedious and time consuming.

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4.1 ANALYSIS AND INTERPRETATION OF DATA

Table 4.1 Showing the age group of people. Particulars 18 to 25 26 to 35 36 to 50 50+ Percentage 34 29 21 16

AGE GROUP

16% 34% a) 18 to 25 b) 26 to 35 21% c) 36 to 50 d) 50+

29%

Figure 4.1 Showing the age group of people. Inference: Hence inferred that 34% of the people surveyed belong to the age group of 18 to 25, 29% belong to the age group of 26 to 35, 21% belong to the age group of 36 to 50 and 16% belong to the age group of 50+. 74

Table 4.2 Showing the work status of the people surveyed. Particulars Students Employed Own business Retired Percentage 37 33 24 6

WORK STATUS

6%

24%

37%

a) Student b) Employed c) Own business d) Retired

33%

Figure 4.2 Showing the work status of the people surveyed. Inference: Hence inferred that 37% of the people were students, 33% of the people were employed, 24% of the people had their own business and 6 percent were retired.

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Table 4.3 Showing the salary of the people surveyed. Particulars 20,000 or below. 20,000 to 50,000 50,000 to 2,00,000 Above 2,00,000
0% 4%

Percentage 64 31 5 0

SALARY

31%

a) Upto 20,000 b) 20,000 to 50,000 c) 50,000 to 2,00,000 65% d) above 2,00,000

Figure 4.3 Showing the salary of the people surveyed Inference: Hence inferred that 37% of the people earn upto 20,000, 30% of the people earn from 20,000 to 50,000, 24% of the people earn from 50,000 to 2,00,000 and 9% of the people earn above 2,00,000.

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Table 4.4 Showing which part of the city people belong to. Particulars Central Bangalore Bangalore north Bangalore south Rural Bangalore Percentage 16 30 19 35

LOCATION

16% 35% a) Central Bangalore b) Bangalore north 30% c) Bangalore south d) Rural Bangalore

19%

Figure 4.4 Showing which part of the city people belong to. Inference: Hence inferred that 16% of the people belong to Central Bangalore, 30% of the people belong to Bangalore North, 19% of the people belong to Bangalore South and 35% of the people belong to Rural Bangalore.

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Table 4.5 Showing where they herd about micromax. Particulars Family and friends TV and paper ands At work Through the shows we sponsored
HERD FROM

8% 12% 26% a) Family and friends b) TV and paper ands c) At work d) Through the shows we sponsored

Percentage 26 54 12 8

54%

Figure 4.5 Showing where they herd about micromax. Inference: Hence inferred that 26% of the people herd about micromax from family and friends, 54% herd about it from tv and paper ads, 12% herd about it at work and 8% of the people herd about it from shows sponsored.

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Table 4.6 Showing which phone they used earlier. Particulars Samsung Nokia Sony Ericsson Others Percentage 24 42 15 19

PREVIOUS PHONE

19%

24% a) Sansung b) Nokia

15%

c) Sony Ericsson d) Others 42%

Figure 4.6 Showing which phone they used earlier. Inference: Hence inferred that 24% of the people used Samsung before, 42% of the people used Nokia before, 15 % of the people used Sony Ericsson before and 19% of the people used other phones before.

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Table 4.7 Showing the features they liked the most. Particulars Price Looks Durability Performance Percentage 35 19 22 24

FEATURES

24% 35% a) Price b) Looks c) Durability 22% 19% d) Performance

Figure 4.7 Showing the features they liked the most. Inference: Hence inferred that 35% of the people bought it because of the price, 19% of the people got it because of the looks, 22% of the people got it because of the durability, 24% got it because performance.

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Table 4.8 Showing the feature in the handset they like the most. Particulars Battery back up Camera Operating system User friendliness Percentage 34 12 28 26

HANDSET FEATURES

26%

34%

a) Battery back up b) Camera c) Operating system d) User friendliness

28%

12%

Figure 4.8. Showing the feature in the handset they liked the most. Inference: Hence inferred that 34% of the people though that battery back up was the best feature, 12% though that camera was the best feature, 28% though that the operating system was the best feature and 26% though it was the user friendliness.

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Table 4.9 Showing their main purpose of the phone. Particulars Only calling and texting Mail Social networking Games and applications Percentage 19 12 42 27

USE OF THE HANDSET

19% 27% a) Only calling and texting 12% b) Mail c) Social networking d) Games and application 42%

Figure 4.9 Showing their main purpose of the phone. Inference: Hence inferred that main reason people used the handset was 19% because of texting and calling, 12% for mailing, 42% social networking and 27% for games and applications. 82

Table 4.10 Showing how long they have been using the phone. Particulars Below 6 months 6 months to 1 year Above 1 year and less than 2 years Above 2 years
PERIOD OF USAGE

14% 22% a) Below 6 months b) 6 months to 1 year c) Above 1 year and less than 2 years 31% d) Above 2 years

Percentage 22 31 33 14

33%

Figure 4.10 Showing how long they have been using the phone. Inference: Hence inferred that 22% have been using it for a period of below 6 months, 31% have been using it for a period of 6 months to 1 year, 33% have been using it for a period of 1 to 2 years and 14% above 2 years.

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Table 4.11 Showing the value for money of the handset. Particulars Yes No Percentage 69 31

VALUE FOR MONEY

31% a) Yes b) No 69%

Figure 4.11 Showing the value for money of the handset. Inference: Hence inferred that 69% of the people though it was worth the value and 31% of the people think it wasnt worth the value.

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Table 4.12 Showing if they would buy micomax again. Particulars Yes No Percentage 84 16

REPURCHASE

16%

a) Yes b) No

84%

Figure 4.12 Showing if they would buy micromax again. Inference: Hence inferred that 84% of the people said they would buy micromax again and 16% said no.

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Table 4.13 Showing if they had problems with the phone. Particulars Yes No Percentage 23 77

PROBLEMS

23%

a) Yes b) No

77%

Figure 4.13 Showing the if they had problems with the phone. Inference: Hence inferred that 23% of the had a problem with the handset and 77% of the people dint have a problem with the handset. 86

Table 4.14 Showing the customer service of micromax. Particulars Excellent Good Average Bad
CUSTOMER SERVICE

7% 25% 26% a) Excellent b) Good c) Average d) Bad

Percentage 60 42 45 7

42%

Figure 4.15 Showing the customer service of micromax. Inference: Hence inferred that 25% of the people surveyed thought that the customer service was excellent, 42% though it was good, 26% of the people thought I was average and 7% thought it was bad.

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Table 4.15 Showing the features other companies dint have. Particulars Battery backup User friendliness Durability Price
OUTSTANDING FEATURES

Percentage 36 6 16 42

42%

36%

a) Battery backup b) User friendliness c) Durability d) Price

6% 16%

Figure 4.15 Showing the features other companies dint have. Inference: Hence inferred that the features other phones dint have were, 36% though it was the battery back up, 6% thought I was the user friendliness, 16% though it was durability and 42% though it was price.

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5.1 FINDINGS FROM INTERPRETATION

The main customers of micromax are the youth and young working people. The people who prefer micromax are students and people who are paid salaries.

Micromax has completely grabbed the lower and middle class. It hasnt showed much of its presence on the upper class.

Most of the customers are from rural Bangalore and Bangalore north. Bangalore north doesnt cover very rich localities like Bangalore south and central. So this shows the phone is popular among the middle class.

The main way micromax reaches out to the customers is through tv ads and since its penetrated the market so well its even through word of mouth.

A lot of people shifted from nokia to micromax compared to any other brand. The main reason people bought micromax was because of the price. The battery backup and the operating system is one of the main reasons people buy the phone.

The reason people use the phone is mainly because of games, application and social networking.

People usually use the phone for a span of 6months to less than 2 years. Most of the people feel the phone is value for money. Most of the people wouldnt mind buying phone from the same company. Most of the people have no problems with the phone at all. The customers are pretty satisfied with the customer service. The main feature where micromax beat other companies are price and battery back up. 89

5.2 SUGESSIONS AND RECOMMENDATIONS

They should work on a business type phone. They should have features, which can match up features of blackberry and the office uses of Samsung and apple phones.

They should come up with a few high-end phones and work on building a brand image so they can get a grasp of upper class customers.

They need more people shifting from Samsung, HTC and apple then they will know that they are making progress.

They should work on their looks. They should make sure the phone doesnt look like cheap plastic.

They need good cameras. Recently Apple and HTC have come out with brilliant cameras.

5.3 CONCLUSION After going through the data collected from all the customers carefully, going through the data collected we understood how micromax made a place for itself in the Indian market. Even though there were companies that were well known and trusted brand it still it manage to make a place for itself. They entered the market exactly when Nokia was going down. So they had a big opening to reach out to the lower and middle class. They provided really good features at a really low price. The features they could give at their price no company could match that. They worked really well on the basic features like battery, operating system and durability. So this basically sums up the reason for their success.

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