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The number two crown in the handset mart is a slippery devil. But for now, it seems that incumbent (albeit distant) Samsung Mobile may be here to stay for the long haul!

Markets, like life, are unpredictable and often unforgiving. A couple of years ago American handset maker Motorola was basking in the reflected glory of its successful model RAZR. After Nokia, it was a clear number two in India’s cluttered handset mart. But the picture changed fast and in just the next ten months, Sony Ericsson found itself sitting tight on the number two throne. Unlike Moto, Sony Ericsson’s claim to fame did not begin and end with one blockbuster model. The company had gained prominence in an entire segment viz. the mid-end market (between Rs.6,000 – Rs.12,000) through its powerful Walkman series and had Hrithik Roshan tapping sinuously to their thumping tones. But, the Sony Ericsson euphoria was short lived and lasted for just about a quarter. Last year, Korean giant Samsung Mobile swooped in to snatch away the crown.

Compared to Motorola and Sony Ericsson, Samsung Mobile’s stability at the number two spotlight seems more lasting, largely because of its two fold game plan. First, the company has made a great impact in the low end market through its Guru series of handsets. Secondly, its effectively priced touch offerings have made it the strongest handset maker in the mid-end category. Apart from effective marketing and robust distribution, to succeed in the Indian handset industry, critical touch points include having an efficient component sourcing, low cost product manufacturing and low cost engineering design. And Samsung has been getting all these right in recent years. Already a strong player in terms of manufacturing and component sourcing, Samsung also seems to have got its distribution strategy in place now. The missing link has come into place in their latest lifestyle positioning with Aamir Khan as brand ambassador. Given that Shah Rukh Khan was endorsing Nokia, Bachchan Junior was professing his love for Motorola and Hrithik Roshan’s loyalties were enmeshed with Sony Ericsson, Samsung too needed a powerful face to promote the brand. And with Aamir they seem to have found just that.
“Another factor that helped Samsung in marketing of its low-end portfolio is that the company offers a wide variety of feature rich phones at competitive prices,” offers an industry analyst. Factor this: Samsung is currently offering as many as 15 products in the entry level portfolio as opposed to 13 being offered by market leader Nokia. Though the difference here might be insignificant, but the distinguishing factor for Samsung’s entire portfolio comes from design. This is unlike Nokia’s strategy, wherein most of its entry level phones look almost similar. Samsung through its communication for the Guru series has also focused on highlighting features like loud sound, flashlight, et al, which are relevant to Tier II and III consumers. And that’s apart from loading these phones with features like mobile phone tracker and fake call activation, normally associated with mid or high-end phones. The fact that these phones are moving off the shelf fast is also delighting distributors and vendors alike. Unfortunately, this is where the good news ends. Samsung’s share in the category is under 10%, whereas Nokia commands a whopping 58% of the market. Besides, smaller and nimbler players like Fly, Intex, Spice and Micromax are a clear and present threat. With Nokia on top and these players below, Samsung Mobile’s No. two position is literally being squeezed from both ends. To counter competition, the Korean major is planning to launch about six to nine new handsets at under $100 to boost its portfolio.

In a bid to woo the well-heeled consumers, Samsung also entered the high end touch-screen category last year with the OMNIA and has kept the excitement going with the subsequent Pixon, Beat DJ, Star, Jet and the latest Android powered Samsung Galaxy. Says Asim Warsi, GM-Marketing at Samsung India Electronics Ltd., “In India, we are currently offering about 11 touch screen devices and would be looking at launching many more in the times to come including some more Android devices in this year itself.” Given that Samsung Mobile expects the market for touch screen phones to double this year and has enhanced its product offerings accordingly, they estimate that touch screen phones will contribute “around 10% of (their) total mobile volumes this year,” says Ruchika Batra, spokesperson, Samsung Mobile.

“Most companies offer top end products to balance their product portfolio and the same strategy applies to Samsung. They have a decent line up which they would soon enhance with more Android devices,” shares the CEO of an organised mobile retailer. The only stumbling block in Samsung’s smartphone journey could be the unavailability of applications and softwares. To deal with that eventuality, the company would be soon offering its own application store (like the Apple App Store or Nokia’s Ovi) that would offer free and paid content for most of their portfolio.
But climbing and winning the handset market mountain in India is a distant dream for Samsung Mobile. For now, the biggest challenge it faces is to maintain its current momentum through aggressive marketing and fine tuning of its distribution line-up. With local and smaller brands becoming more aggressive and Chinese price-warriors like ZTE and Yulong (in partnership with Reliance Communications) jumping into the fray, Samsung will have to ensure that it keeps its costs in check. It’s well known that manufacturing costs in Korea are 25% more than China, but the success of Samsung’s latest Star series has proved that this Korean has learnt the fine art of value pricing for the Indian consumer. Perhaps that learning alone is enough to help them warm the number two seat for much longer than some of its worthy peers. Maybe!?

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Lusting for eyeballs!!!

Roadies’ success made reality shows staple fare on GECs. They too wanted more than just housewives...

It was a real shocker when Rakhi Sawant’s mom Jaya walked the red carpet at the much hyped premiere of Big Boss 3. To live upto the high benchmarks of the drama dose set by her daughter, Jaya started her action packed, tear-jerking theatrics even before entering the Big Boss house. But poor Jaya is simply a part of the larger strategy of GECs to grab eyeballs. After the death of Kitchen politics on TV, sleazy wars between real people resulting in real drama and real tears (almost real) is the lethal weapon that channels are stacking up for TRP wars.

The positive side of the story is that channels are exploring various sub-genres within reality, giving a break to the audience from the overdose of music and dance shows. So you have shows on adventure and fear, on in house celeb politics, on wrestling , on parenting someone else’ kid et al. Moreover, reality shows that started as a weekend change fare now served as a daily staple on GECs. Star Plus leads the pack with two reality shows Aap ki kachehri and Perfect bride. Colors currently has Big Boss 3 on air after Khatron ka Khiladi 2 concluded recently. Sony has just launched Dance Premiere League. Imagine has the controversial Pati Patni aur Wo. “It’s all about making the drama real! With real tears of real people! Most of these shows are an exaggerated version of the fiction show”, says Sukesh Motwani, Creative Head, Zee TV.

This increased focus on reality content is because GECs are looking beyond housewives. And why not? When around 60% of the country’s population is below 30 years of age! And 93% of young India watches TV. The age group of 15–24 SEC AB spendS 2.5 hrs/day on TV, which makes them the highest TV consuming audience. Sunil Lulla, Director, Real Broadcasting says, “I think this is the time when channels have started looking at TV viewing habits from the demographic perspective too.” This strategy is paying well for the channels. Sach Ka saamna, the boldest show on TV, got impressive opening of 4.59. The finale of Rakhi ka Swayamvar on Imagine got 6.3 TRPs, highest in the channels’ history. Imagine quickly pick the clue and has already announced the second season of the Swayamvar with Rahul Mahajan. Also, the channel has another highly controversial show Pati Patni Aur Wo. Quiz the channel’s captain Sameer Nair about his deliberate strategy of roping in controversial celebs for eyeballs and he sheepishly admits, “People will watch the show only if the celebs are interesting.” Surprisingly, Zee doesn’t have any such shows. Motwani says, “We are not shying away from them. We will be exploring the space soon.”

So what if Big B’s charismatic presence failed to boost the TRPs of Big Boss, the channel is still hopeful that wanna-bees like KRK, Jaya, Sherlin Chopra, Shamita Shetty et al. will bring those eyeballs to the show which Big B failed to! Didn’t someone say everything is fair in love and war! Or Should we say in love for war!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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“I miss the M from MTV...”

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Cyrus Oshidar, who nurtured MTV for over a decade, reminisces the old days.

I still remember the early days at MTV. The days when I use to work on the wooden table hired from the chor bazaar of Mumbai, which was Bombay in those times. Those were the days when we were trying to bring the local flavour to MTV. And in that process we aired songs like Jawaani Diwani. “Oh my God! It’s so down market” is how the channel’s management reacted at first. I didn’t really think I had a job after that but luckily the audience really loved the channel in its new avataar and we never looked back after that. In those days, everything about the channel was small be it TRPs, budgets or show formats. Cheap and cheerful was the core mantra at that time and shows like Bakra, Filmi Funda, Fully Faltoo, One tight slap became the soul of the channel. It was all about being raw and edgy. We didn’t even bothered about ratings in those days but slowly things started changing. Music was dead on television and so M from MTV died. But that was the need of the hour. Since music was no more the exclusivity, we had to explore new terrains. In all that madness, we even tried fiction. That was a blunder. And then Roadies happened! I brought the show to the channel but slowly I started missing the soul of MTV and that’s when I decided to call it quits. I feel that in the last three years everything on the channel has become big: be it ratings, budgets or the show formats. That is absolutely the right direction and that’s what the global trend has been. But personally, I miss the old DNA of music and masti. That’s why I have not watched the channel for a long time but that probably shows that they are on the right track. After all I am 45 years old. I am not their target audience!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Now let’s get on to the branded war!

ZTE came out of nowhere to shake the global handset industry by offering ultra low cost handsets. It now plans to offer its own brand lineage in India, Surbhi Chawla finds out if it will be able to make the idea click amongst the Nokias and Samsungs of the world?

“One fine day our Chairman Hou Weigui woke up from the wrong side of the bed and announced that the company would now be entering the handset domain,” D. K. Ghosh, Chairman and MD of ZTE India amusingly informs 4Ps B&M. Well, that’s how ZTE Corp., which kicked off its operations in 1985 and was dealing in telecom equipments and infrastructure, decided (in 1990) that they would be entering the handset industry (though there were no real synergies). However, its biggest strength when it started off was the cost advantage (don’t forget it’s a Chinese company) that it could offer and ZTE made optimum use of the same to establish itself as the Ultra low Cost handsets company. For starters, it’s already the sixth largest handset player in the world and inching closer towards displacing Sony Ericsson.

Even in India ZTE is the fourth largest handset player with 5.6% market share. The company has been offering service operator branded handsets in the country for over 15 years now and has already sold more than 25 million handset through its clients Reliance Communications, Tata Teleservices, Vodafone, Virgin Mobile, Spice mobile, et al. Interestingly, this Chinese player had clocked in revenues to the tunes of $1 billion from its Indian operations in the last fiscal and claims that 50% of these revenues were from its handset business. Having learnt some tricks of the trade now this company is even planning to have its own brand of handsets in the Indian market. But the big question is – will ZTE able to make a mark of its own given that there are already many established players in the country. And not to forget that it’s one of the late entrants to get on the bandwagon, which is already cluttered? “The Indian telecom market is growing at burgeoning pace and there is great demand from both, the first time users as well as consumers seeking replacement. ZTE is primarily seen as the phone for the low rung of the consumer, which till now has been dominated by Nokia. Even Micromax and Samsung have started to take some share out of this market. So it would be difficult for ZTE to make its mark,” avers a handset expert.

ZTE too on its parts realises that the task to sell handset in its own name would surely not be a cake walk with distribution being one of the critical aspect. Therefore, it has tied up with Overseas Mobiles as its national distributor for mobile handsets. “This is a field that is completely new to us and the distribution channel for handsets is much like FMCG. Had we entered it directly it would have been a disaster so we got an expert to do it for us,” reasons Ghosh.

In fact, with the help of this partnership, the company has already started to offer the first few handsets models in the eastern parts of the country including Kolkata and it plans to make a national presence before Diwali. The company is also looking at making a large outlay in terms of marketing in the form of 360 degree advertising campaign that would be well supported by BTL activities like road shows to make ZTE a mass brand. The company is so confident with regards to its marketing initiatives that it claims that by March-April 2010, it would be one of the most recognised handset brand in the country and would have sold about 1.5 to 2 million ZTE branded phone by that time.

But then, the question that pops in the mind is that will it continue to offer operator branded handsets now that it is planning to launch its own lineage as well? To this Ghosh answers, “Both operator branded phones and our own brand of phones would be important to us going forward”. He also states that the features that one needs to add in operator branded handsets are directed separately by each operator, but through its own brand it would be packing in features that it feels are relevant for its target market.

Though ZTE is currently looked at by the service operators to offer low end phones, but under its own brand it would be offering an entire range of products to be relevant to all aspects of the market with a special focus on the low end phones in the rural market and mid-end market in the urban pockets. Looks like this company has done its homework well and given the price differentiation it seeks to offer, but then it shouldn’t forget that the Nokias and Samsungs of the world are there to give it good run for its money. Hope you wake up from the right side of the bed next time, Mr. Weigui!

Surbhi Chawla

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

Outlook Magazine's B School Ranking Scam Exposed
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Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri
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