A Report On Mobile Manufacturing Industry

+ Alliance University
Mobile Manufacturing
Industry
Lets talk about sales

Abhinay Jain
Jayanth Sharma
Sandya Kattimani
Monita Gupta
Syed Mehboob
Ramakrishna Rao
Submitted To:
Dr. Vasanth Kiran


Mobile Manufacturing Industry

2
Table of Contents

Content Pg. No.
Executive Summary 3
Introduction 4
Lets talk about Apple 8
Lets talk about Samsung 11
Lets talk about Micromax
Lets talk about Sony
Lets talk about Nokia
References
14
16
18
20



3
Executive Summary

The Snap shot of mobile industry in India:
! 791 million mobile users,
! 65 percent penetration rate
! An expected 82 percent penetration rate by 2014.
Globally, India has 2.5 times more mobile users than U.S.
Future prospects of Mobile phones space in India is expected to increase in volume at a CAGR of 13%
over the forecast period till 2017.
Following the current trend, Smartphones have caused a digital revolution in Mobile arena and
changed the way mobiles are being used.
Launch of smartphones by the categorys leading players like Apple, Samsung, and Micromax
contributing to the rapid increase in demand for smartphones in India during 2012 and 2013.
Initially, Apple iphones target segment is premium set of costumers who regard it as a status symbol
and are willing to pay price premium. But, consumers are becoming aspirational in nature, it is
appealing to mass audience as well.
Samsung India Electronics is the second leading player in mobile phones in India with a volume share
of 21%, while Indian player Micromax Informatics Ltd is in third position with a 9% volume share. All of
these leading smart phone players offer a wide range of mobile phone models with their respective
Unique selling proposition and operating on sales and marketing strategies in the competitive
landscape of highly cluttered market. This report will capture the insights of Market position of above
brands, product offerings along with their Sales data, distribution, marketing and customer retention
strategies.



4
Introduction

Consumer behavior is changing rapidly; Todays consumers are spoilt for choices. For instance, there
is huge amount of choice available to todays consumer in almost any category of products and
services. One such product Category in which there is constant need for innovation to Compete and
attain Sustainable Competitive advantage is Mobile industry. It is a very interesting area of study since
there is an alteration in competitor dynamics of the players with the launch of new products on a
regular basis.
Consumption patterns are changing. Consumers are willing to upgrade and pay a reasonable premium
for discretionary items such as mobile phones. Hence there is a huge potential for mobile
manufacturing players in the market to tap the Indian population.
Given the youth today have higher propensity to spend, They are brand conscious and there is
constant need to stay updated, this category is growing at a rapid pace due to the attractive product
offerings on daily basis.
Increasing access to information to consumers on online platform (i.e) E-commerce, is a great
challenge for all the players in this category. This makes the players in the market even more
competitive and price sensitive.
As consumers are becoming thoughtful about purchase decisions, they are seeking for value and best
prices.



5
Competitive Strategies Frame Mobile Manufacturing Industry > Smart Phone Segment

Market Leaders ways
Expanding: Addition of more features with every launch of G Generation to attract
more users
Defending: Continuous innovation with anticipative marketing to creating a sense of
newness
Strategies
! It is positioned as Premium & superior brand
! Its in the process of developing a lower end brand to fight out competition
! It is broadening its products with similar, diversified and convergence products
like laptops, ipod, ipad

Market leader - Samsung
High in terms of sales volume &
market share
Continuous innovation in R&D
Broadening of products with
similar & diversified products
(e.g) Basic to smart phones,
Samsung tabs

Market Challenger - Nokia
Matching the opponents price &
wide destribution
Usage & compatibility New OS
Platform) - Windows Mobile
(Lumia)
Frequent price cuts as means of
direct attack
Market Follower - Micromax
Product Imitation is the main
motive at economical pricing
Duplication of product with
similar features
with slight Differentiation
Niche - Apple Iphone
High brand value & premium
pricing
Achieving High margins
Speciality Product

Competitor Strategies Frame


6
Market Challengers ways
Attack the leader with similar products.
(e.g) Samsungs High end Product Galaxy 4 v/s iPhone
Strategies
! Matching the opponents price and wide distribution in all leaders existence
! Identifying the weak spots like geographic locations. (e.g) Availability in rural
areas.
! Usage and compatibility in multiple platforms (e.g) Android OS
! Frequent price cuts as means of direct attack

Market Followers ways
Product Imitation is the main motive at economical pricing.
Example: Micromax High end Product Knight 4 v/s iPhone 5
Micromax Canvas v/s Samsung Galaxy series
Strategies
! Duplication of the product with similar features
! Copying Certain features and technical specifications with slight differentiation

Market Niches ways
Being a specialist in a small market
Sony Smart phones Camera and video resolution clarity
Sonys music series Mobile phones
Strategies
! High brand value and charging premium pricing
! Strong culture and vision
! Achieving higher margins


7



8

Lets talk about Apple

Apple is an American company headquartered in Cupertino, California that is into designing,
developing and selling consumer electronics, personal computers and computer software. Steve Jobs,
Steve Wozniak and Ronald Wayne founded it on April 1, 1976. It is the second largest I.T. company by
revenue after Samsung electronics. The revolutionary changes that was brought by these company
were:

These are product categories, which revolutionized the whole industry. As we are looking deep into
the mobile manufacturing industry, well only talk about the iPhone sales, strategies and IMC tools
Apple applied to become 3
rd
in the world in this particular sector after Samsung & Nokia.

Few marketing techniques used by the company
Apple is a multinational company. It operates in 39 countries, worldwide. For a company this giant, it is
not possible to use a common marketing strategy. Still, there are somethings which are common in
Apples marketing strategy.
iPad (2009)
iPhone (2007)
iPod (2001)
The Macs (1984)


9
Apple concentrates only on one version of iPhone at a time. Therefore, it tries to push sales of
the iPhones, which exist, in the market by providing sale discounts and other offers worldwide
before launching a newer version of the iPhone models.
Apart from the hardware, Apple also concentrates on the iOS versions, by continuously
innovating new ideas into their OS platform, which is extremely critical for the success and sale
of the iPhone.
Apple has always tried to create curiosity among customers, which result in rumors. This can be
seen as the iPhone has been one of the most anticipated devices in the history. The press
coverage and rumors created for iPhone was unbelievable and the major reason was the
secrecy of the looks, features, etc of iPhone.
While releasing, iPhone 5s & 5c, Apple made a brilliant strategy to sell iPhone at a higher price.
iPhone has always been considered as a premium product. While iPhone 5c was priced at the
same amount as the iPhone 5, the iPhone 5s was priced at a higher amount. As a result, the sales
of iPhone 5s were more than iPhone 5c. It was because, even if the value of iPhone 5c was
premium, it was not in the minds of the customer. The consumer thought buying iPhone 5c
would degrade their value. Moreover people also didnt like the idea of iPhone with a plastic
body.
Apple are so clever that they have actually managed to get other companies (mainly mobile
phone operators) to pay for, and execute advertising for them. Network operators who want to
advertise that they sell the iPhone, in fact pay for Apple iPhone ads. When operators want to tell
the world that they sell the iPhones, not only do they pay the bill but Apple slaps a fat stack of
strict branding restrictions on the operators that dictated how the ad must look and what
information it can contain. Hence why all ads for Apple products look the same.
Apple uses exclusivity technique in their marketing strategies. The Exclusivity Technique is
typically executed with relative success by businesses giving a select subset of customers a
special deal on goods or services. The exclusivity technique works by making the eligible
subset of customers feel special. This creates a better customer business relationship and is
proven to increase brand loyalty. Apple have taken this technique and put their own spin on it to
develop what has been one of the most successful, and probably low-cost marketing techniques
of all time.


10
There is an annual conference held by Apple Inc. where different new versions of Apple
products are unveiled. This is a form of Public Relationship meeting with its consumers.
Apple as a brand has many loyal customers, and it also maintains a relationship with them
through CRM. Apple sends weekly newsletters to subscribers related to their products.

Lets talk numbers
The graph below shows the iPhone sales from the 3rd Quarter 2007 to 2
nd
Quarter 2014 (In
million Units) globally. As we can notice from the graph that there has been a huge difference in
the sales of iPhone since its inception in the third quarter of 2007.



11

Lets talk about Samsung

Samsung Group is South Koreas largest company and second largest conglomerate by revenue
leading several industries in the world.
The Digital age has brought revolutionary change and opportunity to global business and Samsung
Electronics has responded with advanced technologies, competitive products and constant innovation.
Samsungs commitment for being the worlds best has won the organization as No.1 global market
share for 13 of Samsungs products that include semi-conductors, TFT-LCDs, monitors and CDMA
mobile phones.
Samsung is making historic advances in Research and Development in the field of Semi-Conductor line,
including Flash memory and non-memory, custom semi-conductor, DRAM and SRAM as well as
producing best in class LCDs, mobile phones, digital appliances and more.
Samsung Electronics commenced its operations in India in December 1995 and is today a leading
provider of consumer Electronics, IT and Telecom products. In the Indian market. Samsung India is the
Regional Headquarters for Samsungs South West operations.

Samsung decided to use Tizen a new version of NonAndroid Operating system for its new range of
Smart Watches. This decision could give a massive blow to the Android developers if Samsung decides
to go with Tizen Technology in its mobile phones and especially in the Galaxy series and Note models.
Such a move would transfer 25% of the US market to Tizen from Android according to comScore.This
would also leave Google servicing a bunch of also ran Android phone brands like HTC, LG and Lenovo.


12
Samsung is hoping a marketing switch to Product Porn from a lifestyle positioning will help build
excitement for its Galaxy S5 series, a flagship device the brand believes will smash the sales of levels
of its predecessors.
Samsung Mobiles and Italian Coffee brand Illy formed a global partnership in order to introduce
Samsung Tablets and other Samsung devices to Illy Caffes. The companies said that the deal would
pool in the resources of both brands in order to leverage each others strengths and brand equities to
revolutionize coffee culture along with technology across the globe.
Samsung has deepened its ties with football by becoming the Football Associations first consumer
electronics partner, a deal that will see the world cup England squad use its products throughout the
tournament. England players will appear in promotions showcasing the health features of the new
Samsung Galaxy S5 phone.

Lets talk numbers

For the Year 2012



13
For the Year 2013:

Indian Market Share:

43%
13.30%
8.30%
35.40%
Market Share of Smartphone
Manufacturers, 2013
Samsung
Nokia
Sony
Others


14

Lets talk about Micromax

Micromax, the 12th most sizably voluminous handset manufacturer in the world, commenced as an IT
software company in the year 2000 working on embedded platforms. In 2008, it entered the mobile
handset business and by 2010, it became one of the most immensely colossal Indian domestic mobile
handsets company by offering unique yet affordable innovations. Through its accentuation on
acclimating to the transmuting market dynamics, introducing feature-affluent phones and smartphones
that are innovative and unique, Micromax has today 22 per cent market share in the smartphone
segment in India.Perceived as a Chinese brand, Micromax was a preferred brand in the rural areas and
for the same reasons was not considered desirable in the urban areas. To penetrate the urban markets,
an image rectification was required and a brand strategy needed to fade the recollections of Nokia
from the minds of the consumers.

Micromax has always had a good hand on distributers to capture the market. For promoting product
called Bling (cellular device for woman) , they roped in a face that was considered elegant and niche,
Twinkle Khanna. Micromax prehended the insight that GEN next girls are technologically keenly
intellective and stylish and that the mobile phones have become an incipient fashion adjunct, so girls
love to flaunt them. Thus, on the occasion of Mothers Day, Micromax promulgated the launch of its
latest android phone Bling that targeted fashionable and astute women. It had Swarovsky keys that
glamorized the phone for the girls to flaunt. They have also hired Hugh Jackman as a brand ambassador
for Micromax, as the company wants to expand their footprints across the globe in various international
markets.
Place strategy: By placing the products in popular stores like Croma, The mobile store, Reliance
Digital etc., high overtness was assured along with the competitive brands. Tie ups with local
distributors for facile availability availed to tap the customers who did not visit the popular stores.


15
Distribution strategy: For the B2C model, higher margins up to 15 per cent were offered to the
dealers, which was higher than the industry average of 6 per cent to 10 per cent. And distributors were
offered higher margins than what Nokia offered. This availed them penetrate the market deeper into
the urban markets. In B2B model, where corporate selling was involved, tie ups with major corporate
houses preserved the margins of the distributors and Micromax could provide the corporate houses a
lesser price than the market. Thus, the target market of professionals was reached.
Customer acquisition & retention: Provided better after-sales service and an extended warranty of 2
years, thereby gaining the trust of the customer. Exchange offers played a major role in customer
retention and created a chain of transactions with the customer.

Lets talk numbers

Micromax has reported in a record Rs 3,168
crore in sales revenues for the financial
year 2012-13. It was more than a 150% hike
over the Rs 1,486 crore sales turnover it
registered in the previous fiscal.



16

Lets talk about Sony

Sony Xperia is a family of Sony smartphones and tablets. The line of phones has been manufactured
since 2008, while the first tablet relinquished under the brand was launched in 2012. The designation
Xperia is derived from the word "experience", and was first utilized in the Xperia X1 tagline, "I (Sony
Ericsson) Xperia the best". The Xperia X1 was the first phone to be relinquished in the Xperia range.
By this time there was a clear shift towards the smartphone cessation of the spectrum. An exception was
the Xperia Pureness, a translucent phone without camera that was sold by culled retailers in culled
cities.
The X10 was relinquished at the commencement of 2010. It was the first in the Xperia line to feature the
Android operating system, where antecedent models ran on the Windows Mobile OS. The phone was
accolade on its design, but its downfall was the archaic version of Android, which was 1.6 at a time
when competitors were on 2.1. The X10 Mini and the X10 Mini Pro were, as the designation suggests,
miniature versions of the X10. These were welcomed with good replication and proved to be very
popular as there were no other smartphones on the market at that time which was as diminutive as the
two.

There's more than one way to skin a feline, or in this case, the smartphone market. Sony, a company not
precisely mentioned in the same breath as Apple, Samsung and HTC, has quietly moved into the
number three position in the global smartphone market in the third quarter but it got there in a less
than glorious way.
Sony tries to innovate in its Xperia series, through which it attracts the consumers. They have are
producing their smartphones with both Android & Windows OS to cater to more consumer needs.
They have found out that anywhere in the world, people love taking pictures, so they constantly focus
on making their camera & the clarity of their smartphone better and better.


17
The smartphone market is pretty crowded, with Samsung on top and then Apple, Huawei, LG and
Lenovo in the top five. Sony was known for its innovativeness, but as the mobile manufacturing market
is too crowded, it is difficult to capture this market.
They generally use Television and digital media to push their products across. Apart from they also
create newspaper ads to promote their products in India. They also offer discounts on timely basis.

Lets talk numbers

World Market Share

Indian Market Share:



18

Lets talk about Nokia

Nokia is a Finnish communications and information technology multinational corporation that is
headquartered in Espoo, Finland. The company provides Internet accommodations, including
applications, games, music, media and messaging accommodations, including free-of-charge digital
map information and navigation services distributed through its wholly owned subsidiary HERE. Its
Nokia Solutions and Networks subsidiary provides telecommunications network equipment and
accommodations. It is a communications predicated company, which fixates on mobile telephone
technology. When mobile phones first became available on the market the models were very
rudimentary with the best technology being SMS messaging (sending indited "text messages" from one
phone to another). Then the next advance in technology was being able to put different faces on your
phone (different style covers for the front and back of your mobile contrivance) and after that the
technological advances have come thick and expeditious, with advances such as:
1) MMS
2) WAP
3) Polyphonic Ringtones
4) Predictive SMS
5) Camera Phones
6) Video recorders

Nokia focused basically on rural as well as urban market. They had handsets in different ranges. Earlier
Nokia use to be the market leader , as it has captured whole market by promoting phones of different
range. They had operating system called Symbian. They started to loose their market when android
entered. Android is a operating system made by google. Google did a tie up with most of the


19
competitors of nokia such as Samsung, LG, Sony. Being a innovative company, Google did constant
innovation in the operating system and was much more advanced than Nokias current operating
system, which drastically effected sales of Nokia and it was nowhere seen in the market as it was
earlier. Now Microsoft bought Nokiapresumably to save the biggest Windows Phone manufacturer
from looming bankruptcy. Their value proposition and marketing strategy, however, are shining
examples of mistakes you just cant afford to make. For Nokia, the reality of a supply chain
management is a fact; and the commercial organisation chosen and the levels of service displayed are
proving it. Nokia doesnt sale its cell phones directly to individuals, they sale them through operators
such (Bouygues, SFR, Maroc Telecom) and to distributors (Cora, Auchan, Carrefour) also to traders
who are intermediate who are responsible for the marketing of Nokia products with the small
distributors.

Lets talk numbers

World Market Share: Inspite of the competition too high, Nokia still places second in the world
with a market share of 23%.
Total Mobile Shipments(October 2012 to March 2013)=148.20 Million Units
Revenue Figures: For Q1 2013=$3.64 billion & for Q4 2012= $4.79 billion
Nokia the pristine king of Mobile phones was a Burning Platform few years back. It has still not
recuperated thoroughly but with launch of its Lumi Windows Phone series, its again making its
presence felt. With Windows emerging as an independent ecosystem like Android, iOS, BB, Nokia
would definitely grow in coming quarters.

Indian Market Share: Nokia still has a market share of 28% after Samsung, as Indian consumers
are price sensitive. Lot of Indians use Hindi on their phones, Nokia provides them that option apart
from Samsung. Nokia also has cheap range phones which caters to lower segment of the society.



20

References

http://timesofindia.indiatimes.com/tech/slideshow/worlds-top-10-mobile-phone-
companies/Apple/itslideshow/30351422.cms, accessed on 25
th
May, 2014
http://www.business2community.com/marketing/apples-iphone-marketing-strategy-exposed-
0661613#!Qjv2x, accessed on 25
th
May, 2014
http://ibummed.com/essays-and-reports/imc-campaign-of-apple/, accessed on 25
th
May, 2014
http://en.wikipedia.org/wiki/Sony_Xperia, accessed on 26
th
May, 2014
http://en.wikipedia.org/wiki/Nokia, accessed on 26
th
May, 2014
http://www.brighthand.com/default.asp?newsID=19566&news=Sony+Smartphones+US+Xperia
, accessed on 26
th
May, 2014



21

A Report by
Group No. 4
Marketing
Jan Batch
2013-15

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