Tuesday, March 16, 2010

Micromax : Nothing Like Anything

Corporate Brand : Micromax
Ad Agency : Lowe Lintas

Brand Analysis Count #447

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

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

Micromax launched its first phone in the rural market with a very unique USP- 30 days battery standby time. The brand was launched from a consumer insight that most of the rural households do not get enough electricity to recharge phones on a daily basis . Hence a phone with a 30 day battery standby would be a worthwhile differentiation. The first product was a big success. The first product Micromax X1i priced at Rs 2150 was lapped up by rural market.

The success of X1i enthused the company to go aggressively into the market. But tapping the rural market is not an easy task. There is severe logistics pressure in servicing these markets. One of the first things that Micromax did was to establish the distribution network . According to a report in Forbes India ( March 5,2010), Micromax created a distribution network comprising of 34 super distributors, 450 distributors and around 55,000 retailers. The brand could also take advantage of the inroads made by other brands into advantage.

One of the highlight of their distribution strategy was that Micromax managed to make these dealers pay in advance by offering them more margins. Marketers will vouch that the most difficult part in managing distribution is the payment collection part. According to the news report, Micromax managed this hurdle through this strategy of more margins for advance payment. It is not a new strategy to offer such kind of discounts for advance payments (cash discounts), but to make a retailer accept such an offer is indeed a remarkable feat (if the Forbes report is true).

Unlike many challenger brands, Micromax was careful in its product strategy. Although all Micromax products were towards the lower end of the pricing spectrum, the brand was focusing on adding more features at a reasonable price . The focus was more on value than price. What I have noticed while going through their product range was that there was some USP in their products which offered more value. I think , that value orientation with a clear differentiation was a significant factor that aided the significant growth of this brand in Indian market.

The company in their website claims to have invested heavily in the product development. The brand boast of launching many firsts in the market like
30 day battery life
Affordable QWERTY phones
Affordable Double Sim etc

Besides the focus on product development, Micromax has invested heavily in brand building. The brand is one of the big spenders in the current IPL. Micromax has centered much of its brand building exercise around cricket. It was one of the principal sponsors of the South Africa VS India ODI series in 2010.

Most of the brand promotion for Macromax is centered around products. I havn't seen a corporate brand building campaign from Micromax. The ads are for individual products highlighting the product features and USPs.

Micromax has the tagline " Nothing Like Anything " which initially appeared confusing to me. Perhaps the brand wants to convey that every product from Micromax has something unique. It is not just like any other product.( I need to have more clarification on this regard).

The brand's promotions , although heavy, is a big let down. Some of the campaigns are good but most are below par. For example , the Micromax Facebook ad was outright disgusting. Most of the campaigns like Gravity, MTV , EEZPad was very ordinary basic ads. There was no brand building theme behind those ads. They talked about the product and that is it. I feel a visible lack of creativity behind those ads.

In a big marketing move, Micromax roped in the Bollywood Action hero Akshay Kumar as the brand ambassador. This move is going to boost the brand recall of Micromax to new heights. Akshay Kumar has strong equity both in urban and rural markets. The association with such a big star will also have a positive impact on the image of Micromax. The brand can now overcome the perception of a low price product.
But the first campaign featuring Akshay Kumar was nothing but pure noise. I couldn't believe that Lowe Lintas could come out with such a pathetic ad. Watch it here.

The new Gamolution handset was supposed to be a game changer for Micromax. But the campaign was a big let down. With a star like Akshay, the brand could have done much much more rather than some funny noises and acrobatics. I think the agency was stuck in a stereotype as to how to use Akshay Kumar.

The new game handset uses the motion- sensor technology with bluetooth ( as I understand). So one can play games using the computer and handset. I don't think that the ads were in anyway doing justice to the brand's intention. Motion Sensor games are not new to the Indian markets but playing games on a PC using mobile is something new. I am not sure whether the ad essentially communicated the innovation.

A very poorly made ad like this will do more harm to the image of Micromax. The brand may get lot of eyeballs due to the ' noise ' and celebrity power, but a low quality ad will reflect in the image perception of Micromax. A lot of my students said to me " Have you seen that Akshay ad, its crap !!" . Micromax has lot of powerful positives that many consumers doesn't know. I came to know more about this brand only after I digged for information to write this post.

There is a risk of the brand perceived not as an aspirational brand but a ordinary price warrior if it does not focus on the quality of the communication.

Micromax now have a wonderful chance of moving up the ladder. With a good product range, reasonable pricing base and a high profile celebrity, the brand could have positioned itself as an aspirational brand. Instead of also ran ads that lack any brand vision, Micromax would do well if it could bring in some class in their campaigns.

The brand should also move from a product oriented ad campaign to a brand building mode. Micromax as a brand should be developed focusing on the core brand values like innovation and value orientation. When the product range widens, it may not be practical to sustain individual campaigns. So it is time for Micromax to position the Family Brand and develop a brand identity.

17 comments:

  1. There are several new players in India we have seen in recent times... E.g.: Lava, Karbon ,Maxx, Lemon, Spice etc.... they have to fight among them and to big players also...
    First of all, one nice move by Micromax is.. They have chosen brand ambassador to establish credibility... because of poor communication and lower price offering creates perception of lower quality in consumer minds.. Choosing Akshay Kumar as an endorser will help the brand in many ways and among new entrants..
    Now as you have mentioned brand should focus on brand building but also keeping in mind quality of communication to target audience….

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  2. A very well compiled analysis... U have left vast knowledge on ur blog for the marketers like me...

    Cheers
    http://marketerparadise.blogspot.com/

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  3. Your analysis is very correct, when i went to Ranchi last year i could see Micromax is a known brand among the people there, and i could see Micromax starting with ads on regional language channels. it has moved a lot from there to the current ipl.

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  4. I do agree with the post. Micromax wasnt able to leverage its USP's. And as correctly mentioned all the commmunication of Micromax is very much cluttered and not clear.
    The poor ad campaigns may have a rub off on the brand image as well.

    They are spending a lot on promotions and brand building, but the way are doing it is not pretty efficient.

    Way to go for Micromax, as other challenger companies like Karbonn, Lemon, Spice etc are catering to the same segment.

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  5. @ priyank, sujoy,gaurav,nayan, there is lot of negative noise abt the ad in the social media. lot of money wasted by the brand in that campaign.

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  6. It is a bit insane the way brands have now commoditised the use of celebs, and Lava does represent this starkly! Was just seeing the Adex report that summarises the Celeb endorsements for 2009. Top 5 celebs endorse 68 brands between them. Link and some more views at - http://marketingreactor.wordpress.com/

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  7. The analysis is very true, especially in light of the brand building exercise which they ideally have not undertaken.
    I feel that the tagline ' Nothing like anything' could be suggesting that this mobile is 'nothing like any other mobile' or any other competitor in the same category.(considering the USP's)

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  8. Micromax is a good company and produced better moblie devices for all over the worlds and better operating facilities. thanks for this type of important posting.

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  9. Very true analysis! I for that matter never understood that it was a new technology( Pc gaming using mobile) being highlighted!

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  10. Hi,

    I am a great fan of your writing. Its great to read in such details about so many brands. Keep up the good work.

    -TW

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  11. tushar5:20 PM

    The way micromax positioned its market among the big players nokia,samsung,Lg,sony is remarkable.To find a consumer space in such a stiff competetion is unbelievable.

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  12. Anonymous4:38 PM

    First of all they need a good logo.
    The present one makes it look so horrible.

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  13. Here i can see that many of you are discus and criticize about advertisement. None of you are not sure what was the thought about their advertisement. But what I think their aim is clear through every single advertisement. Micromax has the tagline " Nothing Like Anything"
    that means only their every product is unique from every thing else. and thats what they show in their every advertisement. And they also presented it so uniquely.
    i don't know you are agree with me or not but for me their advertisements are just perfect with their tagline.
    any wanna contact me plz mail me at " jaymkrj@yahoo.co.in"

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  14. Market share of Micromax grew from 4 % to 10% in almost a years time. this has been possible to a great extent by the 360 degree marketing communications (including TV commercials) adopted by Micromax. but since Micromax is an established brand now, it should focus on brand building now, as it is still perceived as a chinese brand

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  15. New competitor of micromax is Genus Mobiles, its the product of Genus Electrotech. Because of its background of Electrotech it has better experience for become a big player. Genus Electrotech EMS Company, it makes Frizz, Washing machin, Color TV, etc for Samsung, LG, Onida etc, I think Genus comes with featured mobile handsets and capture the market very soon.

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  16. Anonymous11:17 AM

    wow,great analysis.i now know that micromax offers a lot of features at an affordable price,but are its phones reliable?people say that they get all damaged after some time of usage.i am planning to buy an a90 or a100.please comment

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