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Micromax - Creating History

By Anushree Bhattacharyya, Devina Joshi and Ashwini Gangal , afaqs!, New Delhi and Mumbai | In Advertising | February 07, 2011
From being the business of distributing hardware solutions to manufacturing mobile handsets, Micromax has come a long way ever since its inception in just two years.

From being the business of distributing hardware solutions to manufacturing mobile handsets, Micromax has come a long way ever since its inception in just two years. There was a time, when buying a mobile handset meant entering a store and purchasing a Nokia handset, for a large portion of the consumer base.

However, the scene changed fast with the entry of Micromax in March 2008. The new kid shook up the market. In India, about 100-120 million handsets are sold annually, 80 million handsets are imported and the size of the handset business is valued at Rs 27,000 crore. In two years, Micromax increased its market share from 0.59 per cent in 2008 to about 5 per cent (IDC report) in 2010.

So how did this 'desi' brand created a dent in a business dominated by the likes of Nokia, LG, Samsung and Sony Ericsson. According to brand consultant Cajetan Vaz the main reason for Micromax doing well in the handset business is because it focused on handsets with special features. Then the company kept a very sensible pricing strategy that also worked for it. Communication strategy and distribution rounded off a successful approach. He adds, "Another factor which worked for the company is that Nokia has lost its connect with the consumer."

Interestingly, the company focused on rural markets initially, a strategy that was quite opposite to the route followed by marketers. Micromax concentrated on identifying the unmet needs of rural people and introduced products that fitted well with the rural consumer need. The handset manufacture was the first one to launch many innovative products such as handsets with 30 days battery backup, dual SIM/dual standby, handsets that could switch between networks (GSM to CDMA and vice versa), QWERTY keypads and universal remote controls.

The company realised that the Indian customer always looks at products that deliver value for money. For example it's QWERTY phones is available at the sub-Rs 5000 band. To communicate its strategy, Micromax started with an investment of Rs 50 crore. That increased to Rs 100 crore as it mixed television and below-the-line activities and roped in actor Akshay Kumar as its brand ambassador.

What also helped Micromax was a readymade distribution setup that was running when it launched. The company was founded in 1991 by Rajesh Agarwal to distribute computer hardware for brands such as Dell, HP and Sony.

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