An interview with Shubhajit Sen, chief marketing officer, Micromax Informatics, about the recent shift from Lowe Lintas to Creativeland Asia, the competitive landscape and his marketing challenges.
Lowe has been an integral part of the brand's journey. That's at one level. But as we started to look into the market and the environment today, we realised that there have been quite a few fundamental changes - in the business, the category and the brand - as compared to the situation two to three years back.
Micromax has been the perfect 'challenger brand'. But we've pulled ourselves out of the fray; today, we define many of the market characteristics. The brand that Lintas helped us create was the archetype of 'the challenger brand'. It was about showing the consumer how we could do things differently from the market leaders. So our frame of reference has always been about showing how we're different from the Samsungs of the world. Lintas did a great job there.
But today, we are the establishment. Now, it is important for us to define our own way forward, our own brand personality and our take on the category. Our communication, now onwards, has to reflect this reality. That is the fundamental difference.
As we kept having conversations with Lowe Lintas, we got the sense that they needed to move on from this history, and move to a very different space. That's where we felt they were not quite taking that leap.
The single biggest (issue) we have been facing is - our advertising has tended to focus a lot on individual models; we need to pull back on that and focus on defining our brand narrative, one that individual campaigns can then fit into.
Competition is coming in dramatically, especially from the folks from China. Let's be honest - at a global level, the technology part is flattening out; everyone has access to a lot of new technology. This hunt to be 'different' and 'innovative' is becoming very difficult to sustain on an ongoing basis. Previously, we had the opportunity to do something different almost every month, but now, everyone's playing the same game.
The smartphone category is maturing. Earlier, there were one or two big guys and a lot of smaller Indian and Chinese players. But today, there's a clear gradation of mid-sized companies, of which some play only on the online platform.
Previously, we'd see one breakout Indian company every 18 months - whether it was Lava, Karbonn or Intex. In this category, if you have a disproportionate level of investment, it's relatively easy to gain momentum and market share in the short term. Whenever we see a breakout competitor out-spending or out-shouting us, our view is - that's not sustainable in the long term. Obviously, at a tactical level, we will respond in individual markets.
Even in terms of the operating environment, earlier there were the 'really expensive phones', and then there were 'the cheap, feature phones'. There were gaps in the marketplace. Today, all the gaps have gone.
In 2016, 4G will be a key driver in our category. Given the rise in mobile video consumption, the demand for bigger/better quality screens and bigger batteries will grow. Component prices will drop.
Broadly speaking, I'd say about 60 per cent of our strategy is predictive and about 30-40 per cent will be reactive.
Regardless of what happens with technology and competition, we should be able to predict certain 'consumer need states'; they don't change that dramatically. Sure, the way to fulfill those need states through technology may change but the need states themselves don't change.
Making the brand less 'technology-out' and more 'consumer-in' is one way to stay proactive and stable on the marketing front. Articulating that through our communication is more important than speaking about specific models and features.
Online brings transparency to the whole 'specifications to price' ratio comparison. It makes comparisons across brands easy. In terms of online sales, 2015 was a phenomenal year. What we don't know is whether that trajectory will carry on in 2016.
Our sense is, for this category, we might be approaching a plateau, with somewhere between 25 to 30 per cent of the category sales going through online.
The implication here is - participating in the whole 'search' process. The purchase funnel is very different online. We do a lot of performance, analytics-based marketing online.
Story-telling is important online. The brand must carry the story from offline to online and hand-hold the customer right up to the purchase decision.
Given the surge in online sales and the whole 'search battle', we have, fundamentally, already re-allocated a lot of our marketing investments from traditional to digital media.
But we believe media allocation should follow the creative platform. The philosophy at Micromax is - if we have a great creative, we'll put money behind it.