Project on Micromax Mobile

A PROJECT REPORT ON

“MICROMAX MOBILE COMPANY” SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR

MASTER OF COMMERCE (M. COM) MANAGEMENT GROUP SEMESTER-I IN STRATEGIC MANAGEMENT TO UNIVERSITY OF MUMBAI

BY HANEEN SHEHBAZ KHAN ROLL NO.: 04

UNDER THE GUIDANCE OF PROF. SWATI VORA

RIZVI EDUCATION SOCIETY’S RIZVI COLLEGE OF ARTS, COMMERCE & SCIENCE RIZVI COMPLEX, BANDRA (W), MUMBAI-50

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DECLARATION

I, HANEEN SHEHBAZ KHAN, student of Master of Commerce (M.Com) in Management Group Semester-I, Rizvi College of Arts, Commerce and Science, hereby declare that I have completed the project entitled “MICROMAX MOBILE COMPANY” in the subject Strategic Management for the academic year 2012-2013.

_________________ (HANEEN SHEHBAZ KHAN) Roll No.: 04 Date: 20th October, 2012.

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CERTIFICATE I, Prof. Swati Vora hereby certify that Ms. HANEEN SHEHBAZ KHAN , Roll No. - 04 of M.Com. Semester-I of Rizvi College of Arts, Commerce and Science , has successfully completed project on “MICROMAX MOBILE COMPANY” in the subject Strategic Management for the academic year 2012-2013.

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_____________

Internal Guide

External Guide

_____________ Co-ordinator

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ACKNOWLEDGEMENT I, HANEEN SHEHBAZ KHAN student of RIZVI COLLEGE OF ARTS, COMMERCE & SCIENCE. RIZVI COMPLEX, BANDRA (W), MUMBAI-50 studying in Master of Commerce (M.Com) in Management Group Semester-I, hereby declare that I have completed the project on “MICROMAX MOBILE COMPANY”, Academic Year 2012 – 2013, under the guidance of Prof. Swati Vora, as a partial fulfillment of the course curriculum in Master Of Commerce (M. Com.)

The information submitted is true and original to the best of my knowledge.

DATE: ________________

_______________________ SIGNATURE OF STUDENT

PLACE: MUMBAI

(HANEEN SHEHBAZ KHAN)

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CONTENTS Topic

Pg. No.

Chapter I 1.Introduction…………………………………………………………………….......6 2. History Of MICROMAX MOBILE COMPANY…………………………………7 3. Objectives & Rationale of the study……………………………………………….9. 4. Research Problems…………………………………………………………………10 5.Research Methodology……………………………………………………………..11 Chapter II 1. Review of Micromax Mobile Company……………………………………………12 Chapter III 1. Data Analysis .………………………………………………………………………13 2. Revenue…………………………………………………………………….……….15 3. Situation Analysis…………………………………………………………………..16 4. Objectives…………………………………………………………………………..20 5. S.W.O.T. Analysis…………………………………………………………...……...22 6. Marketing Strategies………………………………………………………………...24 Chapter IV 1. Complications Of Data………………………………………………..……….……29 Chapter V 1. Findings………………………………………………………………………….….30 2.Conclusions …………………………………………………………………………33 3. Recommendations…………………………………………………………...………34 CONSUMER QUESTIONAIRE

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BIBLIOGRAPHY

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CHAPTER I 1. Introduction Of Micromax Mobile Company Micromax is a telecommunications company based in Gurgaon, Haryana, India. It focuses on the manufacturing of mobile telephones. 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 12th largest handset manufacturer in the world and 3rd largest manufacturer in India. World (According to Global Handset Vendor Market share report from Strategy Analytics). The Indian brand is reaching out to the global frontiers with innovative products that challenge the status quo that Innovation comes with a price. With an in-depth understanding of rapidly changing consumer preferences, coupled with the use of advanced technologies, Micromax has been able to differentiate itself from the competitors through innovation and design. 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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2. History

It was in 2008 that four friends, Rajesh Agarwal, Sumeet Arora, Rahul Sharmaand Vikas Jain, came together and decided to diversify their IT hardware distribution business and start making mobile phones. The move towards selling handsets was a natural progression. With a Cost Leadership Business strategy Micromax entered into Indian rural market . And within 3years of operation they have become the 3rd largest selling company in India. Micromax is planning to launch an IPO of 2.15 crores hares to raise around Rs 2260 million. The major part of the money raised will be used in setting a new manufacturing plant in Tamil Nadu and the rest in acquiring additional market share. While wireless penetration in urban areas has increased significantly over the last few years, rural and semi-urban areas continue to be under-penetrated. The medium ASP segment is likely to be the fastest growing with 240 million handsets in 2014 (Source: Analysys Mason)

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Micromax made its debut in 1991, but it has only become well known in the past few years. The company entered the Indian cell phone handset market in March 2008. Within six months, it had won a market share of 0.59%. Micromax has seen a continued rise in market share since that time and is now the largest Indian domestic mobile handsets company, in terms of units shipped during the quarter ended March 31, 2010 and the third largest mobile handset seller in India as of March 31, 2010. On March 31, 2010, the company registered the market share of 6.24% for that quarter, which grew from 0.59% in September 2008. On July 28, 2011, Micromax had withdrawn its 4.66 billion rupees (about $106 million) initial public offering due to volatile market conditions. The withdrawal was recommended by its board to allow the company to focus on new product launches and product development. Our product portfolio embraces more than 60 models today, ranging from feature rich, dual-SIM phones to QWERTY, touch-enabled smart-feature phones and 3G Android Smartphone's. We also lay special focus on the products to enhance the customer's overall experience with the device. Most of our products come with innovative packaging and bundled accessories.

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3. Objective & Rationale Behind The Study 

Analysis of current market scenario of mobile market with special reference to MICROMAX MOBILES.

SUB OBJECTIVES 

To study the satisfaction level of cellular users.

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To study the buying behavior of the customers.

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To understand the price sensitivity of the market in respect to the telecom services.

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To identify customers opinion about Micromax Handsets.

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

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4. Research Problems There were many problems faced during the research process, some are as follows: 

Limited time and cost for surveys and research.

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Confidential details could not be collected due to privacy policies of the company such as sales and revenue, current turnover details etc.

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The survey results may vary due to less privacy will answering the questioner.

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5. Research Methodology The data was collected through both the primary as well as secondary sources.

The primary sources of the data are the users of various mobile handset users.

The sources of secondary data are the websites and company websites

Method of Data Collection & Sources of Data:  Primary Data: Primary data was collected through direct communication with the respondents. The survey was performed through a structured questionnaire. We approached local people of the city.  Secondary Data: Secondary data was collected through online search engines, news articles etc.

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CHAPTER II 1.Review The study shows that now-a-days people are aware of micromax mobiles and are switching from their regular and popular brands such as nokia, samaung, motorola etc. In some ways we can say people have become brand conscious but more that brand they are looking at other factors as well like features, price, etc.

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CHAPTER III 1.Data Analysis Voice & Data Survey: Indian Mobile Handset Revenue Rs. 33,171 Cr, Up 15% A survey conducted by Voice and Data states that the revenues of Indian mobile handset manufacturers grew by 15% to Rs. 33,171 crore in FY 2011, and the leading players in the sector are, in order, Nokia, Samsung, Micromax, Blackberry and LG. Most other Indian brands including Lava, Intex and Zen have shown almost flat growth.

The survey indicates:

Please note that Media Nama is not in a position to verify the contents of this survey.

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Nokia: Nokia is at the number one spot for FY 2010-2011 with revenues of Rs 12,929 crore showing a growth of 0.2% over Rs 12,900 crore it did in FY2009-10. Nokia is facing stiff competition from domestic brands such as Karbonn, Micromax, and Spice where as its high end phones are competing with the likes of HTC, BlackBerry and Samsung. Nokia has a market share of 39%

Samsung: Nokia is followed by Samsung which has posted revenues of Rs 5,720 crore . The company grew by 21.7% from FY 2009-2010. Currently Samsung enjoys a market share of 17.2%. Samsung’s cross platform products run on Windows, Android and Bada. Its 3G enabled phones contributed 5% to the entire sales and its smart phones, Galaxy S and Wave also fared well in the market.

Micromax: Micromax holds the number three spot among the top 10 handset manufacturers. The company saw a revenue of Rs 2,289 crore for FY-11 as compared to Rs 1,602 crore a year before, a growth of 43%. It has market share of 6.9%. Blackberry: Research In Motion’s BlackBerry ranks fourth in the Indian market. The company witnessed a revenue of Rs 1,950 in FY2010-11, a growth of 61.2% from Rs 1,210 in FY2009-10. The company has a market share of 5.9%. The report suggest that its entry level smartphones have registered more sales in fourth quarter than all the three quarters combined.

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2. Revenue Micromax which is one of the growing domestic mobile maker in the country has recently stated that they aim to earn a revenue of Rs. 2500 crore in this fiscal. The company stated that they have expanded the portfolio of their product and has also expanded its reach globally and these factors will surely help them to get the desired profits.

The Business Director of Micromax Informatics, Vikas Jain stated that their company was successful in getting a revenue of Rs. 1600 crore in this year and now they are eyeing for RS. 2500 crore. Besides India, Micromax is also exporting its mobile phones in the countries of Bangladesh, Middle East, Nepal and Sri Lanka. Micromax will soon launch its mobile phones in Brazil as well. In order to further expand its business, Micromax has also submitted its prospectus with SEBI for raising funds so as to set up a new manufacturing plant and enter into new initiatives.

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3. Situation Analysis Let us now study the current situation of micromax’s market competitors

Competitors: Micromax knows that there are many established brands in Mobile Phones ’industry like Nokia, Samsung, LG and several other local as well as Chinese manufacturers. Some major competitors and their strategy and strengths are identified as below: NOKIA Nokia is the leader in the mobile phone industry in India (38%marketshare). It is dominating the Indian market from years. Recently it is facing problems to retain its growth and sales. But the pioneer is working hard

to get out of this. For the same reason Nokia is going to use operating

system of software biggie Microsoft. So it is expected that Nokia will try to regain its lost market share SAMSUNG Samsung has emerged as a very healthy and prominent competitor in the market. Samsung is backed with the high quality and professional team In the R&D area. Innovative products specially smartphones and Galaxy series from Samsung are ruling in the market. So it is expected that with the increasing demand of mobile phones Samsung will try to retain and increase its market share.

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APPLE Apple is one of the most major competitors in this industry. Slick, stylish and innovative phones of Apple are driving crazy to its users. Apple is aggressively entering Indian market with its amazing iPhone series. Other Domestic Players. Other players like Karbon, Spice, Lava etc. have more or less the same market strategy. Chinese Manufacturers. Some of the Chinese manufacturers have already entered the Indian market. These manufacturers have priced their mobiles very low. So these manufacturers are expected to grow as with the demand. Various comparative analyses how that the market shares of Nokia fell l drastically while that of Samsung rose impressively. Besides Samsung’s growth, market also witnessed the growth of the local manufacturers (36%ofthemarketshare). The most prominent local manufacturer with a market share of 7% is Micromax

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Market Opportunities And Issues: The Indian mobile hand set market is expected to grow from a total of 151 million handsets for the twelve month period ended December31,2009 to 402 million handsets for the twelve month period ended December31,2014. The growth in the Indian mobile handset market is likely to be driven by their placement handset market rather than new user additions. Within the replacement handset market, the medium ASP device market is likely to grow the fastest. (Source:Analysys Mason) Replacement cycle: The growth in the Indian mobile handset market is likely to be driven by the replacement handset market rather than new user additions. The replacement market is expected to grow from 118 million handsets for the twelve month period ended December31,2010, constituting 62.77% of over all Indian mobile handset market, to 359 million handsets for the twelve month period ended December31,2014, constituting 89.30% of overall Indian mobile handset market.

3Gbusiness: 3G service is an emerging technology in India. 3G technology provides growth opportunities through multiple avenues including upgradation to 3G compatible mobile handsets and mobile data cards .

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Value added services: Going forward, the demand for more sophisticated and innovative mail and multimedia based services, as well as gaming, music and video related offerings is likely to fuel growth in VAS. We believe the advent of 3G will also add to the growth of the VAS market due to 3G's faster net work capabilities.

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4. Objectives Present Objectives

For 2012 1.Focus on urban market specially youth18-25years:

To increase presence in urban market, Micromax is focusing on urban youth of age group 1825years.

2.Focus on smartphones: As smart phone is going to be the future of mobile market, Micromax has started focusing on smartphones. It has decided to launch more smart phones in the market this year

For 2013 1.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 senior citizens, physically handicapped etc.

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

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For 2014 1. 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 anew plant in Tamil Nadu. With the help of this new plant, it will be able to reach a market share of 20%.

2. 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 in to neighboring Indian countries such as South African countries etc.

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5. S.W.O.T. Analysis Strengths: *Innovative products and features

Marathon battery mobile phones with a 30-day battery life, phone which is programmable as a universal remote control, gravity phones are some of the features which have increased the popularity of the product.

*Low cost of production:

With it s plants located in China, Micromax bears a low cost in production due to availability of labor at cheaper rates.

*Effective promotion campaigns:

MicromaxhasbeenpromotingitsproductsthroughfamouscelebritiesandhasalsohadtieupswithMTV

.Weaknesses:

*Weak brand image in urban areas:

Micromax has still not been able to establish itself well in the urban market as it s main concentration had been on the rural population.

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*Perception of low-quality Chinese brand:

Micromax has a manufacturing unit setup in china which has strengthened this perception among people.

Opportunities: *Increase penetration in urban market:

Since Micromax has not yet entered this market; it has a very huge opportunity to establish itself in this market.

*Entry into international markets:

Micromax has the potential to make its presence felt on global scale eventually as it establishes itself in the domestic market.

Threats: *Increasing competition from local and international players:

With well established players like Nokia, Samsung, etc Micromax faces a tough competition from these players.

*Replication of business model by competitors: Micromax’s business model has been replicated by many new players which again pose a threat to Micromax

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6. Marketing Strategy Their marketing strategy is to improve the visibility in the urban markets by improving awareness of customers for our products and also building brand image.

Product Strategy On the product side, Micromax has a wide range of phones with different features and thus offering variety to the customers. Micromax has a lot of interesting and thoughtful products. Micromax has been able to successfully identify the needs of customers and design products appropriately. Micromax believes that consumers in India have unique preferences with respect to mobile handsets such as long battery life, dual GSM capability, low cost QWERTY phones, universal remote control and gaming phones . Also, the company has invested heavily in the product development as of now to capture market share in urban market it is coming out with new models.

Micromax realized that intense competition between telecom service providers forced customers to maintain two connections, and hence it launched a wide range of dual-SIM phones, which forms almost 85% of its product portfolio as compared to market leader Nokia which introduced one only recently. Because people are generally used to carrying two mobiles–one for professional work and other for personal use. So dual sim phones can serve the both the purpose in a single phone. Android based operating system phone s are approving to be a huge success and a craze in youth market and professionals because of its vast applications and new applications which are developed on an everyday basis. And also office documents support, push mail, etc also help in satisfying the needs of professionals in a handy way. So coming out with 24

these phones, we have a huge potential market to work upon. Introduction of Tablets by 2013 will again help in serving the advanced technology needs of professional as it is considered to be almost a substitute of laptop with big screen, advanced features, etc. Large buttons based easy to use phones which do not have high features but are useful to serve the elder age segment as they want ease of use and are at a very low price.

Pricing Strategy: It’s at the core of Micromax to serve the customers by proving them with lower cost, value form one products. Thus Micromax will adopt penetration pricing in the urban market because placing our product at a lower cost will serve our purpose and make the customer rethink before buying other competitors product such as Nokia, Samsung, etc which are at a high price segment. So with a lower price we will be providing with almost same functionality which in turn will help us in gaining a better share in the e urban market as they also want lower prices phones with higher functionalities which has been proved by our marketing survey.

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Promotion Strategy: The motive of our strategy is to increase our visibility in the urban markets .So making people aware about Micromax we will incur high promotional expenses and these will be in terms of:  Hoardings and banners outside colleges, in public places, corporate places and malls with latest products and updates .  Advertising online which include buying up space in highly browsed sites such as rediff , yahoo, etc. Also, It has planned to be more active online on Facebook, Twitter and other social networking sites as it’s a low cost promotion making global presence and too l having international market. It has planned to improve it s visibility by blogs sites and also on the sites dedicated to reviews and comments of mobile phones. It is aiming at bundling with telecom providers like Vodafone and Airtel which will serve as a base in building brand image by associating our names with them.  They have also aimed at higher advertisements through TV, radios, etc which serve large number of customers. Better after sales service by providing increased warranty on sales of mobile phones from 1 year to 2 years .  Currently competitors are proving with only 1 year warranty so this will provide us first mover advantage and also create brand image into the minds of customers.  Sponsoring in the social cause events as customers in urban areas are more aware and inclined towards companies fulfilling social responsibilities and also it will make the aware of us and finally building brand image.

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 Introducing exchange schemes where a buyer can bring in his old mobile phone and get an additional discount of 5%-10% on new Micromax mobile phones which would help us in gaining market share of our competitors.

Place Strategy  We can place our products in some popular mobile phone retail stores such as The Mobile Store, reliance digital, Croma, etc.  We will tie up with local distributors for easy availability for those who don’t visit popular retail stores or find it easy to purchase it from nearby stores. We can also sell our phones online by collaborating with Future Bazaar which is an initiative by Big Bazaar, etc.

Distribution Strategy  Improved incentives to dealers and distributors will help us in penetrating deeper in to the urban markets. Thus, making it easily available so as wherever customer goes to buy mobile phone he will also be introduced and offered Micromax phones or he will have a look of it.  Secondly, we have business to business (B2B) model in which we will have corporate selling through corporate tie ups with major corporate and will be providing them at a

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less than market price as we will be saving on the commission to dealers and distributors. Thus, helping us to reach our target market of professional

Customer Acquisition and Retention  Providing better after sales services through increased warranty of 2 years, thereby making the customer think of reliability of our product.  Exchange offers will also be a major too l for customer retention as the customer will be getting additional discount on the new Micromax phone he buys by exchanging the older one .Thus this will help create a chain of transactions with customers.

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CHAPTER IV 1. Complications Of Data Collection This research was subjected to following limitation:  The survey cannot be termed 100% accurate due to lack of time and time and cost only 30 users and retailers has been studied. Thus the scope of study is limited in terms of no. of respondent.  The lack of candidness of respondent towards answering the questionnaire in few cases may have reduced the accuracy of survey to some extent.  The survey was limited only to certain areas of the city and does not cover all the opinion of all people of other areas.

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CHAPTER V 1. Findings The company’s thrust on Product Innovation and R&D have given the company a competitive edge in the marketplace. Micromax India is also carrying out Hardware R&D at its Noida R&D Centre. The focus of the R&D Centre is to customize both Consumer Electronics and Home Appliance products to better meet the needs of Indian consumers. From color televisions designed for higher sound output. 

Mostly people are attracted towards Micromax mobiles due to good reputation and low initial investment in color and flip handsets

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One feature that most of the users probably prefer more than anything else is lightweight of these handsets.

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Many people are still are not willing to buy micromax mobiles due to less popularity.

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Consumers who are looking for mobiles with good features at a lower price would happily buy micromax mobiles.

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I.

Following are the percent of users who were the survey participants

Users Nokia

Samsung

Micromax

Sony Erricson

BlackBerry

20% 44% 13% 3%

20%

survey has only been conducted on a group of 30 people, hence results may vary if conducted on a larger group of people

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We can see that the maximum users were Nokia users

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After nokia, Samsung & Blackberry users were in second place.

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The pie diagram show that the Micromax users were the least.

This shows that even though Micromax has become popular brand, people are still opting for the usual mobile brands that they always did.

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II.

Factors for Consumers Purchasing Decision

90 80 70 60 50 40 Percent

30 20 10 0 Price

Features

Adv. Features

Battery Life

Warranty Dual Sim & Gaurantee

The survey has only been conducted on a group of 30 people, hence results may vary if conducted on a larger group of people.

The above graph shows what people keep in mind while buying a new mobile phone. 

The graph clearly indicated that now a days consumer want best features in a mobile at reasonable prices.

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The most preferred by people was the battery life that a mobile phone gives you.

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As price is important for the consumers and even if they have a high budget for a mobile, for them warranty & guarantee would also be important

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Dual sim was not preferred by many consumers.

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2. Conclusions 

Mobile has become an important part of people’s life and it is no more a luxury.

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The majority of respondents who use mobile are quite young.

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There is a good scope for new entrants in the game as the service provided by the existing players are not up to the mark and subscribers want to try out new ones provided they stand up to the customers expectations.

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Younger generation have started adopting new brands as they get better features and services at reasonable prices.

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Now a days brand is no longer the only buying criteria of people, but the products quality and durability has also become important for consumers.

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MMS and Bluetooth functions have become most popular with the mobile users. In fact they have become a criterion for choosing a mobile handset.

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3. RECOMMENDATIONS 

Now a days mobile market has become very competitive, people are looking for a mobile that gives best features a reasonable prices. Micromax should adopt new marketing strategies with good advertisement and new offers.

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Since customer education about new launchings and facilities provided inhandsets is the major problem faced by most of the mobile users, Micromax needs to take extra efforts for promptness in customer education to win and retain users.

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Micromax needs to prune up its advertising campaign to increase its visibility further as one of its competitors’ visibility is high.

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As the numbers of mobile users are relatively young, marketing strategy should be more focused on this age group.

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Bluetooth and other connectivity services have become an important area of mobile service. Therefore, Micromax should come up with these relevant services from time to time differentiate its product and to generate additional revenue.

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Micromax should give high priority to customer service and satisfaction as your satisfied customers do the best advertisement.

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CONSUMER QUESTIONNAIRE Place: ________________

Serial No.: _________

Dear Sir/Madam, For Micromax India Ltd. , we are Carrying out the survey of current market scenario of Micromax mobiles. 1) Which mobile do you have? a.NOKIA

b. SAMSUNG

c. MICROMAX

d. SONY ERICSON

e. BLACKBERRY

2) Since how long have you been using mobile? a. Less than one year

b.1-2Year

c.2-3Year

d.3Year and above

3) In which age group do you belong? a. 15-25yrs b.26-35yrs

c.36-45yrs d.Above45yrs

4) In which income group do you fall? (Annually) a. Less than 50000INR

b.50000-150000

c.150000-300000

d.Above300000

5) Which attribute characteristic have you most preferred? a. Good Reputation/Brand

b. Low Price

c. Quality/Durability

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d. Features

6) According to you what are the negatives in your handset? a. Low Battery Life b. Poor Camera Quality

c. Outdated Features d. Overall Look

Please mention If any (------------------------------------------------------------------------------------------------------------------) 7) Rate the importance of PRODUCT features in your purchasing decision. (5 being most important Importance Features

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Price Multimedia features like MP3, camera Connectivity features like Wi-Fi Advanced features like QWERTY, Touch Screen Dual SIM Battery life Warranty & Guarantee

Kindly fill in the following personal details Name: ______________________________ Address: ____________________________ (Opptional) Tel.no: __________________

(Opptional)

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2

3

4

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Bibliography http://www.google.co.in/ http://micromaxinfo.com/ http://en.wikipedia.org/wiki/Micromax_Mobile#History http://www.mobilephone.co.in/tag/micromax-revenue http://www.medianama.com/2011/06/223-voice-data-survey-indian-mobile-handset-revenue-rs33171-cr-up-15/ www.micromaxinfo.net/plans

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