Showing posts with label Nokia. Show all posts
Showing posts with label Nokia. Show all posts

Monday, August 13, 2012

Marketing Funda : Marketing and Osborne Effect

Osborne effect is a phenomenon where the sales of an existing product gets affected because of the announcement of future products. Osborne Effect's story goes like this :- During 1980s, Osborne computer corporation was a highly successful computer manufacturing firm which marketed the personal computer named Osborne 1. The chairman of the corporation Mr. Adam Osborne during 1983 announced several future models promising consumers highly efficient and fast machines. When he made the announcements, none of these machines were in the pipeline.

The announcement prompted a heavy cancellation of orders of Osborne 1 because consumers and trade expected the arrival of advanced machines. This event have virtually driven the company to bankruptcy ( although many other reasons also contributed to it ). Source : Wiki , Report

The same effect is now played out in the case of Nokia- a brand which is struggling at the onset of competition from Apple and affordable Chinese brands. Nokia in 2011 announced with much fanfare, its tie-up with Microsoft for the mobile O/S. Nokia announced the shift in the OS from Symbian to Windows much before the actual shift. The first shock for existing Symbian users who began to ditch the existing Symbian models in favor of other platforms like Android. 

Then came the much touted Nokia Lumia with the hyped Windows Mango ( 7.5). The well designed Lumia range was expected to lift the fortunes of Nokia in the smartphone category. The company also launched an affordable version of Lumia in the Indian market thus effectively covering various price-points. 
Then came the announcement of Microsoft about the Windows 8 and the shock that the existing Lumia phones will not be upgradable to the new much talked about Windows 8 platform. No wonder, many of the prospective Lumia buyers will be postponing their purchase.

The trouble is not with Nokia alone. Even Android based mobiles also are facing the issue of frequent upgrades and the existing phones not being able to be upgraded to the new platforms. Google has rapidly introduced upgrades from Froyo to Gingerbread to Icecream Sandwich within a short span of time much to the confusion of  consumers and marketers.
One needs to learn from Apple on how to handle this rapid changes in the technology and specifications. Apple has an advantage since it is tightly controlling the eco-system. It makes the entire upgradation process highly secretive and this prevents any shocks on the existing inventory and product line. 

Android based phone marketers have a huge issue since the platform upgrades are beyond their control. So how can a marketer prevent Osborne effect when they do not have control over the platform changes.? The million dollar question is whether the consumer buy a Ginger Bread Android Phone even after the launch of Icecream Sandwich ? 

The only way is to build a powerful brand having value more than the platform. So till now, the Android makers were riding the equity of Google and Android ingredient brand. But to insulate the after-effects of platform changes, one needs to build their own brand showing more value so that consumers doesn't ditch the brand because of future version announcements. 

Another method is to customize the product so that consumers are lured by the customization rather than the platform itself . Amazon has tried to do that in the Kindle Fire where  the version is customized and hence the user experience is owned by Amazon rather than Android.
Brands can also insulate itself by building a comprehensive package of features and attributes rather than just depending on one single platform.

In the new fight over the platforms, the key to success is the user experience. Firms are now forgetting this and running after platforms. Although platforms are important, it will be the unique user experience that will be luring your customers to your product

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.

Monday, January 05, 2009

Best Marketing Practice : Take- Back Campaign by Nokia

Nokia recently announced a green marketing initiative in India. From January 1, the company is taking back used mobiles and chargers from the customers for recycling. The campaign titled as Take-Back campaign is a unique social responsibility initiative by this market leader.

Under this campaign, the company is encouraging the mobile users to give their old, unused, broken mobiles and chargers for recycling. The campaign is initially launched in Bangalore, Delhi, Gurgaon and Ludhiana and will be expanded to national level in coming months.

Nokia has installed 1300 recycled bins at the Nokia Priority dealers across these pilot markets. Nokia also promises to plant one tree for every mobiles dumped. Another interesting fact is that the company accepts mobiles of any make.

This is a best practice because the brand is addressing an issue proactively. E-waste is going to be one of the worst environmental hazards in years to come. Mobiles contribute heavily towards this waste. India being the fastest growing mobile market in the world, this issue is going to be of mammoth size in the future.

The Take-Back campaign is aimed at educating people on the necessity of reducing e-waste through recycling. The concept of recycling is not popular in India and Nokia wants to set an example.

The campaign is also proactive because Nokia is the indisputable market leader in India with a share of 70 % in the mobile phone market. So the brand is responsible for contributing to the piling e-waste with regard to mobile phones.
Although Nokia says that the recycling will help the company in acquiring fresh raw materials, the new campaign is more of a social responsibility initiative rather than a business one.

By launching such an initiative, the brand is also giving an important lesson to other marketers. The lesson is about long term investment on brands. This take-back campaign is not going to generate any short -term benefits for the brand. Ofcourse it had given some positive PR for the brand but nothing more and nothing less. Indian consumers are not very thrilled by green marketing initiatives because of lack of awareness/concern. Second this campaign is also expensive because Nokia has to built an infrastructure to support this take-back. The benefits will come may be in future when consumers realize that the brand have foreseen such an environmental crisis and took proactive measures to reduce that . Now, How many brands will ever think of such an investment ?

In future companies will be made responsible for such accumulation of wastes . In developed countries, strict rules are now in force to check the proliferation of such wastes. India too will move to such a regulated regime in near future.

Hence it makes sense for a market leader to initiate such a campaign. It increases the brand equity ( in future) and also prepares a robust green logistics infrastructure for the future. Green logistics is denotes the logistical infrastructure to collect back the products from the customers for recycling or repair.