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Term paper
Launching Videocon Mobile Phones
Sheikh Talha RS 1904 B25 10906035
Master of Business Administration(Sem-I)
Lovely Professional University
Acknowledgement
I take this opportunity to present my vote of thanks to all those guidepost who really
acted as lightening pillars to enlighten our way throughout this project that has led to
successful and satisfactory completion of this study.
We are really grateful to our COD Mr.Devdhar shetty for providing us with an
opportunity to undertake this project in this university and providing us with all the
facilities. We are highly thankful to Miss.Kanika Jhamb for his active support,
valuable time and advice, whole-hearted guidance, sincere cooperation and pains-
taking involvement during the study and in completing the assignment of preparing
the said project within the time stipulated.
Lastly, We are thankful to all those, particularly the various friends , who have been
instrumental in creating proper, healthy and conductive environment and including
new and fresh innovative ideas for us during the project, their help, it would have
been extremely difficult for us to prepare the project in a time bound framework.
SHEIKH TALHA
VIDEOCON MOBILE PHONES
COMPANY DESCRIPTION:
Videocon is an industrial conglomerate with interests based all over India. The
Company has manufacturing sites in India as well as China, Poland, Italy and
Mexico. The company has an annual turnover of US$4.1 billion which makes it one
of the largest consumer electronics companies in India. Videocon has expanded its
operation globally since 1998 especially in the Middle East.
Following its expertise in the consumer electronics, the company has decided
to launch its new line of Mobile phones in India. Videocon’s venture into the fiercely
competitive market with global players like Nokia, Samsung, Sony Ericson and other
leading brands will bring some Indian flavor to the market. So far no Indian brand of
cell phone has tasted a phenomenal success in the cell phone industry. The number
of mobile users around the world is rising dramatically, especially in fast growing
markets like India. Success in high-growth markets is not only good news for
Videocon business, but for people in our country who are discovering the benefits of
mobile communications in their lives and even their livelihoods. Videocon wishes to
play a role in boosting growth by working on a number of fronts with operator
customers, local authorities and through the UNICT Taskforce to increase the
availability, affordability, and even usability, of mobile communications in the country.
Mobile phone industry is an industry with seamless boundaries which is
bringing completely new mobile devices, services and ways of using mobile devices
both socially and professionally. This is already clear from the phenomenal success
of camera phones as well as the growing use of smart phones, not just for making
calls, but also for computer-like applications such as email, web browsing and music
downloading. With this increasing demand for new generation devices and services
and more and more users in growth markets gaining access to mobile
communications, we now expect the global number of mobile subscriptions to reach
three billion by 2010.
While some markets have moved closer to maturity, other high-growth
markets have also arrived; customer dynamics is shifted as new players arrive and
others move towards consolidation; competition has intensified and began changing
face; even the underlying technologies of the business remain in flux, as we move
from traditional cellular networks to 3G, IP, and alternative access technologies.
Considering the current market situation in India where the GSM platform
dominates over the CDMA platform the Videocon mobiles would be based on the
GSM technology. The company would try to establish itself in the mid range segment
that is in between INR 2000 –INR 10,000. Videocon mobiles would also like to tap
some upper middle class segments by introducing some high end PDA phones for
business people that are more affordable than the nearest competitor. The main
emphasis will be on youth and general public.
BUSINESS MISSION:
Connecting is about helping people to feel close to what matters. Wherever,
whenever, Videocon believes in communicating, sharing, and in the awesome
potential in connecting and focusing on people, and use technology to help people
feel close to what matters, then growth will follow. In a world where everyone can be
connected, Videocon will take a very human approach to technology.
Videocon is committed to create a better quality of life for the people and
furthering the interests of the society. The company’s mission is a reflection of
continuity and change. Videocon mobiles is poised to delight and deliver beyond
expectation through ingenious strategy, improved technology and innovative and
user friendly mobile phones attracting the masses with an Indian feel. The company
is committed to deliver quality handsets suiting the Indian conditions to suit the
customers. Videocon mobiles would be put on java platform with customized user
interface. The company will try to make the user interface intuitive and responsive
which is hassle free in operation and easier to understand by everyone. Apart from
the interface the main stress would be on the design of the phone which is distinct
and has an aesthetic sense.
Videocon’s future success depends on delivering great experiences to the
customers by creating products and solutions that work seamlessly and are
appealing.
MARKETING OBJECTIVE:
With the outstanding market potential the objectives on volume and share are
nearly limitless for the coming years. Since there is such a huge market that needs
the supply of phones as long as the company has a good brand image the company
can expect that all of its stock should be purchased however setting an initial goal of
70 thousand units is not unreasonable and not to cost problematic.
This will also establish a decent market share. However the market share of
individual phones is ever changing as Videocon mobiles is competing with a
company which almost dominates the market share (Nokia,Sony ericsson and
Samsung) and image. The Videocon mobiles will try to capture a sizeable market
share and gradually improve to be in the race with the established players.
For sales the marketing objective of the company will be to establish
Videocon mobile phones in the market alongside its competitors such as Nokia,
Sony Ericson, and Samsung etc. The primary stress of the company would be upon
the mid-range segment since it’s the most active market segment. Videocon mobile
will provide cheaper multimedia phones in this segment with added features at the
same time maintaining the quality and standards to distinguish it from the other mid-
range competitors (product differentiation). Consumer targets are high school,
college and graduate students who need one portable multifunction device.
Videocon mobiles is also interested in the PDA (business class) phones with
touch-screen and windows mobile OS. The consumer targets would be the middle-
upper income professional to coordinate their busy schedules and communicate with
colleagues, friends and family.
As india is set to become a 3G nation by the next year, Videocon
mobile would like to exploit this technology by manufacturing 3G enabled handsets
both in the mid-range and its high end line up of cell phones. One of the key
business target for the company would be to partner with large cell phone service
providers and provide handsets cheaper than their original price in a combo plan on
a contract basis (this is hugely popular in the US).
SITUATION ANALYSIS
INDUSTRY ANALYSIS TRENDS:
By most accounts, India is among the world's fastest-growing markets for mobile
phones. The country has some 170 million subscribers and adds 6 million to 7 million
more each month. (China, in contrast, adds 5 million subscribers, and the U.S. 2
million subscribers a month.) Recognizing this potential, several global telecom
giants jumped into the fray when the Indian government first opened up the country's
telecom market to private enterprise in 1994. Among them, one company -- Finland-
based Nokia -- forged ahead of rivals and today commands a lead position in market
share for mobile phones (also called "handsets"). In specific segments, such as
GSM telephony, Nokia's market share in India is as high as 70%
FACTS AND FIGURES:
The cell phone industry is one of the fastest growths besides the Internet. Cell
phones have gone through a huge change and its market has expanded globally.
The current value of Indian tele market is estimated to be over US $10 billion which
is projected to rise to US $54 billion in 2012. The industry is embracing the mobile
technology in a big way. Four million subscribers are being added every month from
the past few months, around 18% cell phone users are willing to change their
handsets. There are close to 350 million mobile service subscribers in the country as
compared to the 30 million PC users!.The GSM subscribers based has crossed the
200 million mark this year which is growing at the rate of 11.89%.
Huge opportunity
• India has second largest market after China.
• Today 4-5 million new subscribers every month.
• Indian consumers tend to change their phone very fast.
COUNTRY CALL
RATE
(CENTS)
JAPAN 33
BRAZIL 11
AUSTRALIA 24
CHINA 4
INDIA 2
The cell phone market is increasing very fast with today’s ever-emerging
technology and innovation in improving cell phones. Today, society is living with
advance technology and everyone wants to keep pace with the new technologies.
Cell phone industry is growing larger because it has become a necessity. Parents
are getting mobile phones for their teens because they want to communicate in case
of an emergency and the wireless carriers have made it easy to add users to their
existing plans. Mobile phones have now become an extension of people’s
personalities; many are of the view that mobile define their individuality as well. It has
even been found that more Indians are using mobile internet rather than the surfing
the net from computer. Indian is going to be 3G enabled next year which is surely
going to boost the 3G sales.
As the market expands fulfilling the needs of mobile users by providing them
attractive services, mobile phones are becoming a new vehicle for reaching out to
the mobile generation. The Indian mobile scenario seems to be all set for the next
stage-expansion and consolidation.
COMPETITORS: The cell phone market is one of the fiercely competitive market in India. With so
many cell phone giants such as Nokia, Sony-Ericsson, Samsung , L.G. etc. The
road ahead for Videocon in such a situation would not be a cake walk. The closest
and most dominant competitor is Nokia.
Competitor Analysis:
Nokia: Nokia, a Finnish cell phone giant, has become the world's No.1 maker
of cell phones, ahead of rivals such as Motorola, Samsung and others. The
company's products are divided primarily between four divisions: mobile phones
(wireless voice and data devices for personal and business uses), multimedia (home
satellite systems, and mobile gaming devices), networks (wireless switching and
transmission equipment used in carrier networks), and enterprise solutions (wireless
systems for businesses).
Nokia wants to be the leader in third-generation (3G) wireless network
equipment. The company has slowly becoming the supplier to half of the world's
commercial 3G networks. By doing so, Nokia swims to the top of the wireless
network infrastructure market led by Ericsson. To capture the international market,
Nokia rolled out new business and consumer models with color screens worldwide.
The company also gained a piece of the Chinese market by delivering a unit of
models capable of English and Chinese text recognition to be sold by vendors in
China.
Key numbers:
Company Type Public (NYSE: NOK; Helsinki: NOK1V)
Fiscal Year-End December
2005 Sales (mil.) $40,465.0
1-Year Sales Growth 2.1%
2005 Net Income (mil.) $4,280.0
1-Year Net Income Growth (1.5%)
2005 Employees 58,874
1-Year Employee Growth 6.1%
Key People
Chairman and CEO Jorma Ollila
President and COO Olli-Pekka Kallasvuo
EVP and Chief Strategy Officer Tero Ojanperä
SVP and CFO Richard A. Simonson
SVP, Corporate Relations and Responsibility Veli Sundbäck
Sony-Ericsson:
Sony Ericsson, a 50:50 joint venture of Sony Corporation and Ericsson was
established in October 2001. Their mission is to establish Sony Ericsson as the most
attractive and innovative global brand in the mobile handset industry.
Sony Ericsson Mobile Communications is a global provider of mobile multimedia
devices, including feature-rich phones, accessories and PC cards. The products
combine technology with innovative applications for mobile imaging, music,
communications and entertainment. The net result is that Sony Ericsson is an
enticing brand that creates compelling business opportunities for mobile operators
and desirable, fun products for end users.
Sony Ericsson Mobile Communications was established in 2001 by
telecommunications leader Ericsson and consumer electronics poTheyrhouse Sony
Corporation. The company is owned equally by Ericsson and Sony and announced
its first joint products in March 2002.
Sony Ericsson products have universal appeal and are different in the key areas of
imaging, music, design and applications. The company has launched products that
make best use of the major mobile communications technologies, such as the 2G
and 3G platforms, while enhancing its offerings to entry level markets.
Sony Ericsson undertakes product research, design and development,
manufacturing, marketing, sales, distribution and customer services. Global
management is based in London, and R&D is in STheyden, UK, France,
Netherlands, India, Japan, China and the US. The management team is led by
President Hideki Komiyama, a former senior executive of Sony Europe and one of
the key players in the growth of Sony in Europe; and Executive Vice-President and
Head of Sales Anders Runevad, the former President of Ericsson Brazil.
As new products are introduced to end user acclaim, existing products continue to
receive accolades and Sony Ericsson is today accepted as a world leader in design
and innovation.
Sony Ericsson strives to be a cutting edge provider of applications, forging
partnerships with developers and content providers. Strategic agreement with
partners such as Sony BMG is one way in which the company is bringing the best
and latest in entertainment content to its 48 users. In the mobile gaming market Sony
Ericsson took the lead in 2004, being the first to launch Java 3D-enabled handsets,
and is forging ahead to bring 3D gaming to a wider audience.
Key People:
Company Type Public (NASDAQ: ERICY [ADR]; Stockholm:
ERIC)
Fiscal Year-End December
2005 Sales (mil.) $19,099.0
1-Year Sales Growth (4.3%)
2005 Net Income (mil.) $3,059.0
1-Year Net Income Growth 6.4%
2004 Employees 50,534
1-Year Employee Growth (2.0%)
Samsung:
The digital age has brought revolutionary change – and opportunity – to global
business, and SAMSUNG has responded with advanced techno-logies, competitive
products, and constant innovation.
From it’s inception as a small export business in Taegu, Korea, Samsung has grown
to become one of the world’s leading electronics companies, specializing in digital
appliances and media, semiconductors, memory and system integration. Today
Samsung’s innovative and top quality products and processes are world recognized.
2008-Samsung takes No. 1 spot in U.S. cellphone market 2006-Unveiled 10M pixel
camera phone .
2005-Released the world's first 7 mega pixel camera phone.
2003-SAMSUNG brand value ranked 25th in the world by Interbrand.
2002-Launch of Their mobile phones in which the new concept UFB-LCD is
introduced , Launched new high-definition TFT-LCD colTheir cellular phone.
Motorola:
Motorola is the No. 2 manufacturer of wireless handsets after global leader
Nokia. After a previous reorganization, its remaining operations have been focused
in four business segments: connected home solutions; government and enterprise
mobility solutions; mobile devices; and networks. The company generates nearly
60% of sales through the manufacture and sales of wireless handsets and related
products.
Key People:
Company Type Public (NYSE: MOT)
Fiscal Year-End December
2005 Sales (mil.) $36,843.0
1-Year Sales Growth 17.6%
2005 Net Income (mil.) $4,578.0
1-Year Net Income Growth 198.8%
2004 Employees 68,000
1-Year Employee Growth (22.7%)
Fly:
Fly is operated by the Meridian Telecoms Group. Fly phones are currently available
in 25 countries of the world and is one of the fastest growing mobile phone brands in
the markets it 48 competes in. We hold a 5% global market share. Our range
comprises of Mid & High-end phones. Fly, with its highly differentiated range has
been received with great enthusiasm in India by the trade as well as the users.
Meridian Mobile Private Limited is part of the Meridian Group, headquartered in
Europe.
The company is now expanding rapidly in India by developing a large offering under
the Fly brand. The products include: Feature Phones, Smart-phones and Mobile
Phone Accessories.
Meridian came to India on October 2004 and the Fly brand was launched in India in
June 2005. With 10 Regional Offices and a Head Office based in New Delhi, the
company has a head count of over 4000 employees and is entrenched in over 7000
top mobile shops in 145 cities.
The unveiling of the brand was kick started by the announcement of Malaika Arora
Khan as the brand ambassador. The company has a pan India presence and within
a short span of time it has become the fastest growing mobile phone company in the
country with a significant market share within its range.
Product development is a key strength of Meridian. Sourcing professionals from the
overseas offices of Meridian Telecom have selected models for the Indian market
that are both at the cutting-edge of features, design and incorporate the best of
international styling. Also, Meridian Telecom has over a period of one year carried-
out extensive and rigorous testing and customization of Fly products for the Indian
market.
Fly is available with a variety of exclusive and differentiated mobile phones. It is
important to have fully loaded phones as the replacement market gets stronger. This
is likely to result in huge demand for feature rich and stylish phones. Meridian offers
the critical buyer smart value choices.
Meridian Mobile is now poised to become one of the fastest growing companies in
mobile telephony today. During a short period of existence, the company has
managed to gain a significant market share and became an important player in
handset distribution in Central & West Europe including Russia. Meridian's
successful strategy of strong product offerings and a differentiated retail strategy
have resulted in recording high growths in the fast emerging markets.
2002 Company founded as a marketer of mid-end mobile phones
2003 Fly brand launched in Russia to provide quality & stylish mobile phones 2004 Fly launched in CIS markets, India 2005 Fly repositioning with series of high-end multimedia & designer phones 2006 Fly launched in the UK with leading UK operators and retailers 2007
Acquisition of design & manufacturing companies to improve product quality and Roadmap 2008 Expansion across Europe, MENA and in other digital products.
TECHNOLOGY: Mobile Phones offers a global range of highly competitive mobile
phones for large consumer segments, and develops mobile phones for all major
standards and customer segments in Various countries. It is responsible for Videocon
core mobile phones business, based mainly on WCDMA, GSM, CDMA and TDMA
technologies. Mobile Phones focuses on bringing feature-rich, segmented mobile phones
to the global market.
Multimedia brings mobile multimedia to consumers in the form of advanced mobile
devices and applications. Its products have features and functionality such as imaging,
games, music, media and a range of other attractive content, as well as innovative mobile
enhancements and solutions.
Networks continues to offer leading-edge network infrastructure, technology and related
services, based on major wireless standards to mobile operators and service providers.
Focusing on the GSM family of technologies, the group aims at leadership in GSM, EDGE
and WCDMA radio networks. Our networks have been installed in all major global
markets that have adopted these standards. Networks is also a leading provider of
broadband access and TETRA networks for professional users in the public safety and
security sector.
Apart from multimedia features and network cell phone industry has evolved so
much that today we can see some smartphones competing head to head with tablet
pc’s.Imroved technology has brought newer innovation in the mobile phones now a
days. For e.g. today we can easily find a 5 mega pixel camera on high-end phones
which a few years earlier was not even available in some digicams. What’s
more?Mobiles are now having dedicated RAM’s and processors on their PSU’s.
Camera cell phones:
The key factor consumers consider when choosing a device is their context.
Phones with the ability to take images, both still and video have captured about 40%
of the wireless phone market. But despite the product’s popularity, customer users
want higher resolution, the ability to use storage media, and many other state of the
art features found in modern digital camera. With consumers’ desire for high
resolution digital camera, the market for camera and camcorder phones will peak in
2007.
Nowadays camera phones are the rage in markets all around the globe because
consumers are attracted to the convenience of having an imaging device with them
at all times. The business model is focused on users displaying and sending images
wirelessly. As advanced 3G networks are implemented in the coming years, the
advance higher resolution camera phones will likewise become very popular. There
are three critical pieces to this type of phone:
1. The device (phone)
2. The application (picture taking)
3. The network (3G)
The introduction of 3G network will accelerate the adoption of the camera
phones. Why? Because the timing is right for digital imaging to become part of the
cell phone industry, especially in new cell phones and new networks. Camera
phones would not work with older phones and networks, because there are small
monochrome displays and little storage, and the speed to transmit a digital photo
would take a long time. Just as important is improvement to camera phones, new
advanced third generation wireless network (3G) will enable the cost effective
transmission of these higher-resolution images. Purpose of migrating to 3G is to
enable users to spend more time using their multimedia phones every day by
enjoying the world and keeping in touch with their friends and families.
Here are characteristics of the 3G network on cell phones:
The 3G networks are able to transmit at 380 K bps.
There is also improvements on the image to 330,000 pixels
Internal storage grew so consumers could store a dozen photos on
their phone
This means better pictures, better experience, and consumers bought them – by
tens of millions of cell phones around the world.
Consumers do not have to pay extra for the camera features; they will get the
camera as part of the phone. Although camera phones are great to take pictures,
consumers use them as wallpaper and screensavers instead of printing. This is how
consumers change the way they interact with digital technology. Today, camera
phones are so popular that every cell phone company or provider offers them.
Features on all cell phones are similar. If consumers were to just buy cell phones for
their features, consumers can find a similar phone in other companies as well. This
makes the industry very competitive which drives companies to lower product cost
and service cost in order to bring large volumes of consumers.
Although camera phones are very popular, one factor that makes consumers
dissatisfied is the picture quality, which is limited when these images are printed or
sent:
Vast majority of users use high-resolution camera in addition to their camera
phones.
3% of consumers use their phone as their only digital camera
Most consumers take fewer than 10 pictures with their camera phone each
month
Fewer than 2% of consumers say they will consider a camera phone with less
than one mega pixel
50% of consumers say they would only consider a handset with more than
two mega pixels of resolution.
Downloadable Application:
Cell phones are programmed allowing users to download applications onto their
cell phones. Such common downloads are of games such as JAMDAT Bowling.
Most applications are large, between 40 KB to 550KB, and with applications ever
growing-in-size and very-more-appealing, better multimedia and larger memory in
the phones, and better network capabilities for economic high-speed data access.
Video (Streaming):
Video Streaming is when videos are sent over a wireless network to a cell phone.
The Video streaming with 3G helps in ways that is usable and cost effective by the
consumer, and economical viable for the wireless operator.
Internet Access via PC Card:
Wireless PC Cards in smaller form will be produced for handhelds. IT wants
access through the internet at the fastest data rates possible, and at the lowest
costs. Operator wireless also wants to keep consumers happy with internet access
which will maximize revenues and reduce their costs.
Even the internet surfing technology used in mobile phone has been reincarnated
itself from Edge(2G) to HSPDA(3G) which are capable of surfing net at the
lightening speed of upto 7 mbps.
Nowadays touch screen technology has taken itself to new heights making way for
much smarter phones with multi tasking capabilities and improved user interface
thereby attracting a large number of youth.
Near Field Communication (NFC) technology lets wireless devices connect to other
devices nearby and transfer data, which ranges from payment information to digital
pictures. Building cell phones with embedded NFC chips could double when used
as debit cards or electronic IDs. For example, in Japan and Korea, users can charge
their phones with virtual cash; by waving their cell phones near an NFC-enabled
machine to buy anything from a soda to lunch. This means NFC devices from
different manufacturers must be interoperable and integrated to work with the credit
card infrastructure and also, it requires working with Visa to encourage support of the
new technology.
A new launch for SkypeIn and Skype Voicemail are built by the same company,
which makes the Skype software, and it allows internet users call one another for
free anywhere in the world. With SkypeIn built into the latest version of software, it
allows users to get regular phone numbers and can receive calls from landline or
mobile phones without having to pay roaming charges. Users can purchase up to
three numbers in their home country. Skype Voicemail allows users receive
voicemail message for up to ten minutes from any user or traditional phone. These
two technologies enhance the basic free Skype and gives friends, family, and
colleagues not connected to the internet an inexpensive and convenient way to
contact each other in their global base.
Phone Design
Cell phones will become much more powerful, and designs will continue to morph
into ever more complex, multi-purpose personal communication devices, including
the growing use of the cell phone as a financial transaction device (see Mobile
Commerce below). Batteries for wireless devices will begin to last much longer as
well.
SWOT ANALYSIS:
STRENGTHS
Videocon has largest network of distribution and selling as compared to other mobile
phone company in the world. It is backed with the high quality and professional team
in the HRD Dept. The financial aspect is very strong in case of Videocon as it has
many more profitable business. The product being user friendly and have all the
accessories one want that is why is in great demand by Indian people. Wide range
of products for all class. The re-sell value of Videocon phones are high compared to
other company’s product.
Videocon‘s Product are backed with a high quality professional team and could have
a huge advantage following its long expertise in R&D in different countries. Videocon
has also a wide range of products and high product quality with global warrantee.
WEAKNESS:
Videocon has many strengths and some weakness. Some of the weakness includes
the price of the product offered by the company. Some of the products are not user
friendly. Not concern about the lower class f the society people. Not targeting
promotion toward them. The price of the product is the main issue. The service
centers in India are very few and scare. So after sales service is not good.
Videocon has also incurred high chain costs which needs to be reduced.
OPPORTUNITIES:
Videocon has ample of opportunity to expand its business. With the wide range in
products, features and different price range for different people, it has an advantage
over the competitors around. With the opportunity like ‘Telecom penetration in India’
being at the peak time, Videocon has an opportunity to increase its sales as well as
the market share. As the standard of living in India has increased the purchasing
power of the people as increased as well, so Videocon has to target right customer
at right time to gain the most out of the situation.
• Need to Increase their presence in the CDMA market, which they are just
entering, as well as 3G and Edge.
• New growth markets where cell phone adoption still has room to go, including
India and other countries.
• Joint venture in technology.
THREATS:
Videocon has many threats to tackle to maintain its position as market leader. The
threats like emerging of other mobile companies in the market.The companies like
Nokia , Motorola, Sony Eriksson, Samsung etc. These companies have come to the
stand of tough competition with Videocon in the field of Mobile Phones. Threats can
be like providing cheap phones, new features, new style and type, good after sales
service etc. So, Videocon has to keep in mind the growing competition around.
Videocon has to make strategies to tackle problems in the present and the near
future. The growing demand of WLL network can cause drop in sales for Videocon,
as it provides many less CDMA phones to the customer.
Looking mainly at the competition that would take away Videocon market
share.
Government legislations that hinder Nokia’s development as a company
(total cost of 3G licensing in Europe is 110 billion euros).
• Higher import charges.
• Indian consumer becoming fans of Chinese KIRFY phones is also a big
threat which has swept a large number of lower middle class segment
TARGET MARKET STRATEGIES
Cell phones are attractive targets for every consumer group. Mobile phones are
small, nowadays inexpensive and useful. For Videocon mobiles the greatest
opportunity lies in teens and middle class people. Phone usage is way up in younger
consumers who are hungry for new wireless capabilities. The next potential segment
would be business class mobile phones running on windows mobile platform (PDA’s)
Videocon has considerable understanding of user’s need. To catch a sizeable
portion of customers the company will rely upon the existing relationship which it has
gained along the years in its home appliance and consumer electronics sector.
As the company’s focus is on teens and middle class people, it would need to
develop market offerings that positions in the minds of the target buyers which
delivers some central benefits. Videocon mobile would also target lower class people
who just like to talk on phone for such people there would be phones with a built in
FM receiver at cheaper cost .
Demographic: Male and female . Ages 25-50, this is the segment that makes up 80% of the Mobile phone market
Professionals and College students.
To lure the target audience the company will launch events and advertising
campaigns that will not only lure customers but also generate curiosity in them.
Videocon mobiles will adopt Selective Specialization. This is a multiple-segment
strategy also known as a differentiated strategy.
Innovative mobile campaign design and deployment would allow direct interaction to
be more convenient, accurate and confidence instilling for Videocon. This can be
accomplished by providing the customer access to desired contents and branches of
their choice, which can further enhance the product service offerings.
In this era of Economic slowdown lowered consumer spending relevance becomes
more critical to marketing.
Reaching customer at the right time with the right offer and at right place will be of
utmost importance in order to sustain a competitive advantage.
Videocon mobiles will not launch its product in one go as it could lead to a
failure instead it will launch its line of products in selected states first and thereafter
in other states once the sales have been boosted.
More than 70% of Videocon’s distribution chain is in the rural areas, which is a
market ripe for the picking, so far as the telecom services and handset business is
concerned. Sceptics argue that while distribution may be a scorer for Videocon, the
group does not have much of a retail presence – just a few PlanetM and Next stores
will be unable to do the trick of taking the brand forward.
Videocon must also keep in mind that the telecom service business in India is
particularly competitive. Airtel, Reliance and Vodafone, having already conquered
the first phase of the Indian telecom race, and are hungering to expand their reach
into rural areas now. So, despite his vast distribution reach in rural India, it would be
a walk on the Razor’s edge for Videocon to create and sustain a powerful telecom
service brand, with or without Motorola’s handsets. And even if he pulls off a coup as
a service provider, Videocon should not forget that in the handset business, there is
cut-throat competition expected from Nokia, which commands a chunky 65%-plus of
the Indian handset market share, as opposed to just 34% in the global sweepstakes.
In the long run, Videocon too has the ability to silence its critics. It has done it in the
past. When analysts were busy writing obituaries for Indian consumer durable
brands, Videocon not only kept the brand Videocon alive through the years, but is
now also giving a new shine to his product portfolio through innovative marketing
and positioning strategies. If Videocon indeed manages to acquire Motorola’s
handset unit, all it will need would be that one wonder-model (like the revolutionary
Razr) and one will find it slicing away competitors with the Razr’s edge, rather than
walking on it.
MARKETING MIX
PRODUCT: Historically, the thinking was: a good product will sell itself. However there are no
bad products anymore in today's highly competitive markets. Plus there are many
laws giving customers the right to send back products that he perceives as bad.
Therefore the question on product has become: does the organization create what
its intended customers want? Define the characteristics of your product or service
that meets the needs of your customers.
Upom careful observation Videocon has observed that Indian folks are loving the
concept of Dual sim phones as most of the people have now more than one sim to
manage their professional and personal lives. Thus Videocon will insist on
incorporating the dual sim feature in most of their phones.
Functionality:
Quality
Appearance
Packaging
Brand
Service
Support
Warranty
Videocon mobiles would be divided into five product categories. Each category
would be targeted at different consumer segments .These segments are:
• Touch phones(PDA’s)
• Multimedia Phones
• Music phones
• Colour FM phones
Touch phones:
This segment includes touch screen phones one targeted at business class people
running on Windows mobile platform. The other phone in this category is a simple
touch screen phone with cool looks mainly targeted at teens who love to explore
social networking sites through their phones on the go.
Key Features:
• Windows Professional 6.1
• 624 MHz Marvell PXA300, NXP5209 processsor
• 3.2” WQVGA Full TFT Touch Screen Bar phone
• 3.2 MP Auto Focus with LED Flash and Video
• Motion Sensor and G Sensor
• Wireless Push Email
• A- GPS enable
V-8610
Key features
o 3.2” WQVGA Full TFT Touch Screen
o 3.5 mm Headset Jack and Adjustable Equalisers
o Bass Enhancer
o 3.2 MP Camera with Auto Focus, LED Flash and Image Editor
o Motion and G Sensor
o Bluetooth Streaming (A2DP)
o Upto 8 GB memory expandable
V-3650
Multimedia Phones: This segment is targeted at teens who are voracious phone users and love to listen to music occasionally, capture pictures to cherish their precious moments and browse internet o their mobiles .The phones in this segment are lower in plass and are mid range phones.
Key features:
Dual SIM Dual Standby (GSM + GSM)
o High Resolution 2.4" TFT Screen
o 2 MP Camera with Digital Zoom and Video Recorder
o 3 Stereo Speakers
o Motion Sensors for shuffling Wallpapers and Music
o Bluetooth Streaming (A2DP) V-1604
Key features:
Dual SIM, Dual Standby
o Slim and Brushed Metal Surface
o 2MP Camera with Digital Zoom and Video Recorder
o Upto 2 GB expandable memory
o Stereo FM Radio with Recording
V-1502 MP3 Music Player
Music phones: Music phones are lower in prices with some basic functionalities that cater to the
needs of people who use phone just to talk but do want to listen to music on their
phones. These phones would have extended battery and a memory card support for
storing mp3 songs.
Key features:
o Dual SIM, Dual Standby (GSM + GSM)
o FM on Loudspeaker and Stereo FM Recording
o MP3 Music Player
o 1.8" Large Screen
o Upto 2 GB expandable memory and GPRS enabled
V-1301
Key features:
Dual Tone Slim, Sleek,Ergonomic and Stylish Bar Phone
Large "EZI" Soft Touch key
MP3 Player with 20 mm VIBRA speakers for loud bass music
experience
Internal FM antenna and Stereo FM recorder
V-1306
LED Torch and Mobile Tracker
Dual SIM feature
Colour FM phones:
These phones cater to the needs of the people who just want a phone for the sake of
conversation. We have added FM as an additional feature. These phones won’t
have any kind of extra features not even an internet browser. This would be the
lowest section of phones targeted at mostly rural people.
Key features:
o FM on Speaker
o FM Recording
o Bright Torch
o Loudspeaker
V-200
PRICING: How much are the intended customers willing to pay? Here we decide on a pricing
strategy - do not let it just happen! Even if one decides not to ask (enough) money
for a product or service, one must realize that this is a conscious decision and forms
part of the pricing strategy. Although competing on price is as old as mankind, the
consumer is often still sensitive for price discounts and special offers. Price has also
an irrational side: something that is expensive must be good. Permanently
competing on price is for many companies not a very sensible approach.
List Price:
• Discounts
• Financing
• Leasing Options
• Allowances.
Videocon mobiles would be wisely priced keeping in mind the highly price sensitive
cell phone market. Thus having a reasonable price at a reasonable value.
Generally lower price of phones than the competitors prices would ensure to
establish market dominance in as short of time as possible .
Various phones under different categories would be priced as follows:
Touchscreen phones: PDA phone would cost around INR 16,000 While the simpler
touch phone would be priced at INR 10,000 in order to attract teens.
Multimedia phones: This segment is the highest revenue generator for the
company because of largest number of buyers as people nowadays are more
inclined towards feature rich phones. The phones under this category would range
anywhere between INR 5,000 to INR 8,500.
Music phones: Music phones would range from INR 2,000 to INR 3,500
Colour FM phones: These would be the lowest priced phones mainly for lower
segment and priced between INR 1,200 to INR 1,800.
PLACE:
How are the chosen target groups informed or educated about the organization and
its products? This includes all the weapons in the marketing armory - advertising,
selling, sales promotions, Public Relations, etc. While the other three P's have lost
much of their meanings in today's markets, Promotion has become the most
important P to focus on.
Advertising:
• Front Line Service
• Public Relations
• Message
• Direct Sales
• Sales
• Media
• Budget
The plan is to launch the mobile phones in the market in a phased manner i.e.
launching first in some selected states and then expanding the sales to all over India
to reduce the chances of failure. For this Videocon will first launch its product at
Diwali time in Tamilnadu and Andhra Pradesh which will be followed by its launch in
several other states after gaining some popularity.
Videocon mobiles would be made available at different national stores and retail
outlets coupled with attractive offering.
What’s more? Videocon’s proprietary Planet-M outlets come as a blessing
disguise for Videocon’s mobile phone where these phones could be promoted and
even sold.
Apart from Retail outlets Videocon’s would also aim to have good relationship with
the distributors and small scale dealers, as dealers are the one where lower middle
class people prefer to go to have a steal-deal.
PROMOTION: Available at the right place, at the right time, in the right quantities? Some of the
recent major changes in business have come about by changing Place. Think of the
Internet and mobile telephones
Locations:
• Logistics
• Channel members
• Channel Motivation
• Market Coverage
• Service Levels
• Internet
• Accessibility
Videocon mobiles need to be advertised in order to reach masses. The company’s
advertising campaign will consist of TV advertisement generating curiosity among
the target customers and in news papers as well (print media).
Internet is also a useful resource for advertising targeted towards the youngsters and
teens. Videocon would ensure that their cell phones are easily available to the
masses.
Service is also an important part of promoting the brand value. Mobile phones being
electronic instruments are prone to defects therefore efficient service centers solving
customer’s issues quickly can bring about a good perception of Videocon mobiles in
the customer’s mind.
Videocon has strong PR. They need to keep on doing some or the other new events,
programmes and publicity, so as to keep up with the brilliant image of the company
and also to enhance the brand equity.
Major decisions in product promotion: When we promote a new product in
market then we take major decision for promoting their product and these are
following:
Establishing objective.
Selecting trade promotion tool.
Selecting consumer promotion tool.
Selecting business and sale force promotion tools.
Develop the program.
Evaluation and pretesting.
MARKETING RESEARCH
Today mobile phones have moved beyond their primary role of voice
communications and have graduated to become an essential entertaining device for
mobile users. We are in an era where users buy mobile phones not just to be in
touch, today’s youth use it to express their thoughts, for social networking, to show
their interests, play games, read news, surf on the internet, listen to music, chat
instantly with friends & families and even check their bank balances. There are
various phone manufacturers providing handsets.
However, Nokia is the dominant player on the GSM space, accounting for 63% of
the installed base (phone’s currently in use) while LG rules CDMA with 48% of
installed base market share. On looking at urban India GSM/CDMA combined
installed base, Nokia is at the top with 54% of installed base market followed by LG
(14%). LG is second most used handset manufacturer India primarily due to its
dominant position in the CDMA.
Phone manufacturer usage
April 2009 ending quarterly Average - India Urban Mobile Phone Users (N=5,775)
Brands Installed base*
GSM CDMA
Total
(GSM +
CDMA)
LG 4.4% 47.6% 14.4%
Motorola 7.8% 5.4% 7.2%
Nokia 62.6% 24.3% 53.7%
Samsung 9.0% 11.2% 9.5%
Sony-
Ericsson 8.9%
6.8%
* – Users currently using the phone model
On looking at the ability of manufacturers to gain market share via word of
mouth, Nokia and Sony-Ericsson fare a lot better compared to the other three
big manufacturers, with 2 out of 3 users for each of the two manufacturers
mentioning they are likely to recommend their handset to their friends.
Phone manufacturer usage
April 2009 ending quarterly Average – India Urban Mobile Phone Users (N=5,775)
Model Installed base*
Likely to Recommend**
LG 57.6%
Motorola 41.0%
Nokia 68.6%
Samsung 55.7%
Sony-Ericsson 65.3%
* – Users currently using the phone model
**Likely to recommend current phone manufacturer to others
Key Success Factors
There are factors that are necessary to attract customers, compete, and
ultimately be successful in the cell phone industry. For a company to be successful
in the cell phone industry they can create value by providing the basic features,
technical features, and support to back up those features.
Basic
These features are assumed to be included and expected in a basic cell phone
package to satisfy the simplest customers.
Caller ID Line Block
Call Forwarding
Call Hold
Call Waiting
Caller ID
No Answer Call Forwarding
Three-Way Calling
Voicemail
Technical
These features go beyond the basics and provide the technical features to attract
the savviest of cell phone subscribers.
Internet capabilities to receive billing, make payments, and download
ringtones.
Detailed Billing either in paper form or downloadable from the internet.
High-Resolution Camera, most important feature among subscribers.
Text Messaging, 3 billion wireless text messages are sent each month.
Web Access to get stock quotes, sports scores, weather, and up to the minute
news.
Insurance to protect yourself in case of malfunction.
E-mail Messaging can now be done from the palm of your hand
NO Domestic Long-Distance Charges, not available with landlines.
Ability to Download Ringtones, free is better.
Battery Power is the second most important feature among subscribers.
Bluetooth is wireless technology that communicates with a wireless hands-
free headset.
Video capability at least 15 seconds of video is the standard.
Prepaid Minutes typically useful for an individual that requires minimal talk
time.
Mp3 Capable, subscribers want to be able to use their iPod’s with their
handsets.
Ability to Record Music and play it back or use as a ringtone.
FM Radio can now be transmitted through a handset.
FLASH Memory Cards can hold up to 100 songs and are removable.
Support
Every company can provide the basic and technical features but the ultimate test
for success or failure is decided by the support the cell phone company can provide
to their subscribers.
Pricing Plans that provide a reasonable amount of minutes and coordinate
with the basic and technical features. A family plan allows the whole family to
share their minutes on one plan.
Wireless Service Satisfaction, a strong signal reception for a network is a
must to provide the subscriber with clear call quality minus the
static/interference, voice distortion, echoes, and dropped/disconnected calls.
Wireless Customer Care Performance, the customer service is as important
as the basic and technical features.
Wireless Retail Sales Locations can provide a physical location to get hands
on experience with a handset and face-to-face contact with a representative.
Wireless Phone Handset Satisfaction can offer multiple options from size,
weight, design (folding, swivel, rectangular, or sliding can affect the
performance), and antenna.
FINANCIAL PROJECTIONS:
Videocon plans to give Nokia and others a tough competition. It will plan to achieve a
small but sizeable portion of the market and then try to position itself in the market
giving others a tough competition.
Objective metric: Achieving sales of 100,000 cell phones in a six months period and
then going for higher sales through expanded operations overall india.
Market share: Videocon’s objective is to capture a market share of 10% - 15% and
reducing Nokia and others market share.
The company plans to have secured a strong hold in each region of India to operate
by the end of year of their establishment.
Videocon will inject around $120,000 in R&D to come up with newer and innovative
line up of phones in the future
CONCLUSION
In recent years, cell phones have turned out to be a necessity rather than a
status symbol. Nowadays, cell phone manufacturers are producing different phones
that fit different needs; and also, service providers have different plans for customers
to choose from. With the advance in technology, consumers are able to experience
the ease in communication. From 1994 onwards, the cell phone industry has seen
great success through the years, and analysts predict that this growth is only going
to increase with the advancement of technology.
In the end Videocon’s success in India would depend on how wisely they
implement their strategy and how well they understand the vast Indian market. Being
an Indian company it has a good knowledge about the Indian customers mind setup
and buying preferences which will definitely aid the company to move ahead.
REFERENCES:
http://connect.in.com/videocon-industries/view-comments-2382456-307151-
3417951.html
http://www.videocon.com
http://mobileanalystwatch.blogspot.com/
http://en.wikipedia.org/wiki/Cell_phone
http://news.digitaltrends.com
http://cellphones.about.com
http://www.mobiletrax.com/vp/20040330.html
Marketing Management by Philip kotler
