TUESDAY, MARCH 16, 2010

Micromax : Nothing Like Anything

Corporate Brand : Micromax
Ad Agency : Lowe Lintas

Brand Analysis Count #447

Micromax is a challenger brand in the highly competitive mobile handset market. This
Indian firm is shaking up the market dominated by MNCs. Micromax was founded in
1991 by Rajesh Agarwal . Micromax in its original avatar was a distributor of computer
hardwares. In 1998, three more people Sumit Arora, Rahul Sharma and Vikas Jain
joined Micromax as co-founders.The company branched out from a mere distributor to
a marketer of telecommunication equipments.

It was in 2008 that Micromax ventured into the mobile handset market. The brand
wanted to create a base before taking on the large players . Hence as a go-to- market
strategy, Micromax concentrated on the rural market first. It was a different move
altogether since most of the marketers tend to concentrate on the urban markets then
move to the rural markets.

Micromax launched its first phone in the rural market with a very unique USP- 30 days
battery standby time. The brand was launched from a consumer insight that most of the
rural households do not get enough electricity to recharge phones on a daily basis .
Hence a phone with a 30 day battery standby would be a worthwhile differentiation. The
first product was a big success. The first product Micromax X1i priced at Rs 2150 was
lapped up by rural market.
The success of X1i enthused the company to go aggressively into the market. But tapping
the rural market is not an easy task. There is severe logistics pressure in servicing these
markets. One of the first things that Micromax did was to establish the distribution
network . According to a report in Forbes India ( March 5,2010), Micromax created a
distribution network comprising of 34 super distributors, 450 distributors and around
55,000 retailers. The brand could also take advantage of the inroads made by other
brands into advantage.

One of the highlight of their distribution strategy was that Micromax managed to make
these dealers pay in advance by offering them more margins. Marketers will vouch that
the most difficult part in managing distribution is the payment collection part.
According to the news report, Micromax managed this hurdle through this strategy of
more margins for advance payment. It is not a new strategy to offer such kind of
discounts for advance payments (cash discounts), but to make a retailer accept such an
offer is indeed a remarkable feat (if the Forbes report is true).

Unlike many challenger brands, Micromax was careful in its product strategy. Although
all Micromax products were towards the lower end of the pricing spectrum, the brand
was focusing on adding more features at a reasonable price . The focus was more on
value than price. What I have noticed while going through their product range was that
there was some USP in their products which offered more value. I think , that value
orientation with a clear differentiation was a significant factor that aided the significant
growth of this brand in Indian market.

The company in their website claims to have invested heavily in the product
development. The brand boast of launching many firsts in the market like

30 day battery life

Affordable QWERTY phones

Affordable Double Sim etc

Besides the focus on product development, Micromax has invested heavily in brand
building. The brand is one of the big spenders in the current IPL. Micromax has
centered much of its brand building exercise around cricket. It was one of the principal
sponsors of the South Africa VS India ODI series in 2010.

Most of the brand promotion for Macromax is centered around products. I havn't seen a
corporate brand building campaign from Micromax. The ads are for individual products
highlighting the product features and USPs.

Micromax has the tagline " Nothing Like Anything " which initially appeared confusing
to me. Perhaps the brand wants to convey that every product from Micromax has
something unique. It is not just like any other product.( I need to have more clarification
on this regard).

The brand's promotions , although heavy, is a big let down. Some of the campaigns are
good but most are below par. For example , the Micromax Facebook ad was outright
disgusting. Most of the campaigns like Gravity, MTV , EEZPad was very ordinary basic
ads. There was no brand building theme behind those ads. They talked about the
product and that is it. I feel a visible lack of creativity behind those ads.

In a big marketing move, Micromax roped in the Bollywood Action hero Akshay Kumar
as the brand ambassador. This move is going to boost the brand recall of Micromax to
new heights. Akshay Kumar has strong equity both in urban and rural markets. The
association with such a big star will also have a positive impact on the image of
Micromax. The brand can now overcome the perception of a low price product.
But the first campaign featuring Akshay Kumar was nothing but pure noise. I couldn't
believe that Lowe Lintas could come out with such a pathetic ad. Watch it here.

The new Gamolution handset was supposed to be a game changer for Micromax. But the
campaign was a big let down. With a star like Akshay, the brand could have done much
much more rather than some funny noises and acrobatics. I think the agency was stuck
in a stereotype as to how to use Akshay Kumar.

The new game handset uses the motion- sensor technology with bluetooth ( as I
understand). So one can play games using the computer and handset. I don't think that
the ads were in anyway doing justice to the brand's intention. Motion Sensor games are
not new to the Indian markets but playing games on a PC using mobile is something
new. I am not sure whether the ad essentially communicated the innovation.

A very poorly made ad like this will do more harm to the image of Micromax. The brand
may get lot of eyeballs due to the ' noise ' and celebrity power, but a low quality ad will
reflect in the image perception of Micromax. A lot of my students said to me " Have you
seen that Akshay ad, its crap !!" . Micromax has lot of powerful positives that many
consumers doesn't know. I came to know more about this brand only after I digged for
information to write this post.

There is a risk of the brand perceived not as an aspirational brand but a ordinary price
warrior if it does not focus on the quality of the communication.

Micromax now have a wonderful chance of moving up the ladder. With a good product
range, reasonable pricing base and a high profile celebrity, the brand could have
positioned itself as an aspirational brand. Instead of also ran ads that lack any brand
vision, Micromax would do well if it could bring in some class in their campaigns.

The brand should also move from a product oriented ad campaign to a brand building
mode. Micromax as a brand should be developed focusing on the core brand values like
innovation and value orientation. When the product range widens, it may not be
practical to sustain individual campaigns. So it is time for Micromax to position the
Family Brand and develop a brand identity.