Description
Highlights the marketing plan for mobile handset including segmentation, targeting and positioning.
Marketing Plan ~ Concurrently Running Assignment (CRA)
Marketing CRA: GoGetter Mobiles
[1]
Group E2
Marketing CRA: GoGetter Mobiles
[2]
Group E2
INDIAN MOBILE PHONE MARKET
In the last decade Indian mobile phone industry has witnessed a dramatic growth. India's mobile phone market has become the fastest growing in the world, with Indians adding nearly seven million new connections every month. As per latest statistics India has around 140 million mobile subscribers. The percentage of Indian population owning mobiles was 13% in December 2006 (It was 8% in December 2005) with the number of subscribers equal to 129.5 million. Various studies & reports say that much of the growth is among low-income consumers. When mobile phones were introduced in India more than a decade ago, they were considered a luxury. But low calling charges and cheap handsets have brought them within the reach of tens of millions of people. Today, mobiles are being used as means to increase customer reach even in small businesses like vegetable sales or performing rituals at distant places. Telecom companies are going all out to woo such customers, offering them deals that make cell phones affordable for even those who earn as little as Rs5000 a month. Handsets are available for as low as 1000/-. With various promotional offers in place, low-income and selfemployed people are snapping up mobiles at a frantic pace. Many marketing consultants with telecommunication consulting firms say that in our country with more than a billion people, there is still a vast market to be tapped. The penetration of mobile phones in India is just 20%, not more than that. That means, there is a huge prospect for growth. Indian market is considered to be a very hot market and many business opportunists are eyeing at this market.
THE LOCAL MARKET
The number of mobile phone subscribers in Karnataka is 1,48,65,606 with Nokia, Motorola, Sony Ericsson found to be the major brands for handsets in Udupi and Manipal Area. The consumer market is divided into two parts of High end mobile users & Low end mobile users in the ratio of 60:40 in Manipal and 35:65 in Udupi. Consumers consider the locality of service station as an important factor before buying handsets. Nokia and Sony Ericsson have their authorized dealers in Udupi. The other brands are sent to Mangalore/Bangalore for service by the various retail shop owners. Each retail shop owner takes the liability to send the handset for repairs to the nearest service station. Major flaws in Sony Ericsson take around 1-2 months to repair and hence this brand is Marketing CRA: GoGetter Mobiles [3] Group E2
not much favorable in the market. On the contrary, Motorola & Nokia take a 15 day time period to resolve major flaws. Our major competitors with similar features & price are handsets from Motorola brand. Motorola is followed closely by Nokia & lastly Sony. Various sources of procuring mobile handsets are Authorized Dealers (Nokia priority dealer, Sony World), big retail shops (Pai Electronics, Harsha Electronics & Big Bazar) and numerous small retail shops. The approximate distribution of the market share of the various brands in Udupi & Manipal is as shown below. Others include LG, Spice Mobiles, Reliance, Tata Indicomm, etc.
Informal channels aren?t a very popular medium in this market due to the geographic location as they don?t give guarantee for service.
PRODUCT DESCRIPTION
Mobile Handsets: In India mobile handset market is flooded with handsets from different companies like Nokia, Samsung, Sony Ericsson, LG and Motorola. Handset Manufacturers are coming up with extra features like FM radio, MP3 player, high quality camera with flash, GPRS, MMS, WAP, blue tooth etc to attract the users. GoGetter w220 is at par with the other competitor product existing in the category. The points of parity in this category are Color display, Polyphonic ringtone and FM radio. Since most of the products in this category already offer these features, we will have to incorporate some extra features as Point of Difference of GoGetter w220 within the category. The point of Difference we can offer are: 1. Flap design [4] 2. Sleek Design Group E2
Marketing CRA: GoGetter Mobiles
3. 4. 5.
Light weight Aesthetic Appeal Usage of softer keypads for
6.
Speaker phone
easier navigation and messaging
Personalization or Fun Features: FM Radio: Radio while you walk or work, listen to latest music on the hottest FM stations using headset (stereo) or speaker. Audio Player: The handset is equipped with MIDI, SP-MIDI, AMR and iMelody Downloadable Games Call Management features: Handset memory recalls last calls; Last 20 calls made, Last 20 calls received/missed, along with call number. Lifestyle Features: Calculator, Currency converter, Calendar and Alarm at your disposal. Messaging Features: EMS & MMS messaging, SMS & SMS chat one-to-one: Chat with T9 predictive chat input. Performance Features: Talk time up to 497 minutes, Bands serviceable 900/1800, Stand by time lasts up to 293 hours. Technical Specifications: A sleek phone with 46.70 x 95.00 x 16.70 mm dimensions weighing 93 grams. 500kb user + 600 phonebook +250 SMS memory provided. The handset has a display of 128 x 128 65k color CSTN with Internal Antenna to avoid hampering the Look of the mobile.
PRODUCTS IN COMPETITION
The handsets which are in direct competition with GoGetter w220 can be divided into two types: Handsets within the same or a little lesser price range of the product & Handsets with the same features and having the similar price range. Given below are the top 5 competitors of the product with respect to Udupi and Manipal market. Motorola C168i: Also called the Radio Moto this handset has the characteristics of slim and attractive design. When launched, this handset was one among the most favorite among the consumers and it penetrated the market very soon after its launch. Although its current status isn?t very encouraging, it is surely one of the competitors. Marketing CRA: GoGetter Mobiles [5] Group E2
Motorola W215: Apart from the features provided by our product, this handset from Motorola includes many other interesting features like extra long battery life, Polyphonic speakers, up to 500 contacts memory and saves up to 750 messages. Most importantly, it had an integrated digital camera with 4x digital zoom. With Udupi market alone selling around 30 handsets a month per shop, this handset can be considered as the toughest competitor to beat as far as the current scenario appears. Nokia 2626: This handset from Nokia gives the “Standout from the crowd feeling” with stylish colored covers, FM Radio, Integrated hands free speakers, Nokia express audio messaging, email, multimedia messaging and storage space up to 300 contacts. Features wise, this is same as GoGetter w220. Sony Ericsson K220i: Again, one of the major competitors of GoGetter w220, this handset has and additional feature of having integrated camera in it. With the price of Rs. 3200 which is slightly higher than the price of our product, this product has the capability to pull the customers due to its integrated camera. However, due to its looks, it is not so popular among the customers. Samsung SGH C170: Favored by people who like simplicity, this handset stands out due to its slim body. The phone has similar features as GoGetter w220 and states to eliminate the unnecessary features. But, the sales of this product suggest it?s not a very tough competitor. It goes through the sales of around 10 pieces a month from 1 retail shop including Udupi & Manipal. To comprehend,
Brand Motorola Motorola (Toughest competitor) Nokia Sony Ericsson Samsung Model Number C168i W215 2626 K220i SGH C170 Display Colour Colour Colour Colour Colour FM Radio Yes Yes Yes Yes Yes Camera No Yes No Yes No GPRS/WAP No Yes Yes Yes Yes Slim body Other features Slim and Attractive design Very popular since launch More memory Low range, yet has camera Stylish collared covers Price 2000 2700 2600 3200 2700
Here, an important fact to note is that all the competitors are considered as tough/manageable competition on and important factor i.e. Service Station. Marketing CRA: GoGetter Mobiles [6] Group E2
Udupi/Manipal consumers consider the locality of service station to be very important before buying the mobile handset. Since Nokia and Sony Ericsson have their service stations in Udupi, the mobiles of this brand are sold more.
CONSUMER BEHAVIOR
By carrying out market research in Manipal and Udupi, we tried finding out the purchasing behavior of consumers. Based on this, we have done further analysis to decide on the target segment and other promotional activities. We carried out in depth interviews with various retailers (organized as well as unorganized sector) in Udupi and Manipal. Also, interception interviews were done with random customer base in both the towns. Manipal Market: Manipal has mostly student community with most of the students in the age group between 18 and 25. Among them, there is high tendency to replace their mobiles on a frequent basis. The most common reasons for the same can be thefts or losses of mobiles, wanting to appear as happening and trendy by staying in touch with new styles and the desire to show off new mobiles phones among peer groups. Few less common reasons may be technical faults with old handsets, upgrading old handsets being used since many years to buy newer handsets and exciting replacement schemes on offer at the retail shop. The salient features which were observed for this market are: 1. The average period for students in Manipal to change their mobile phones is 6
months. As most of the students studying here are from affluent or middle class families, financing for this frequent replacements of handset does not seem to be any issue. 2. Students prefer buying mobile handsets in franchise outlets like MobileNext, Big
Bazaar etc where they have the option of choosing from various category and range of handsets. Also, their perception is that franchise outlets are sure to sell original handsets which is why they cost a little more than the retail outlets. While retail outlets may or may not sell original handsets. 3. Another factor of consideration is after sales services. In franchise outlets, they
are able to get immediate services or temporary replacement handset if there are any issues with the handset. The same is not the case with small kirana retail outlets. 4. They do not have any particular priority or loyalty towards a particular brand.
They are more interested in features, looks and styles within their price range.
Marketing CRA: GoGetter Mobiles
[7]
Group E2
5.
They are interested in sleeker and slimmer mobile phones which are trendy and
stylish in looks. Udupi Market: This market comprises mainly of workers, traders and middle class families. Their basic intention behind purchasing of mobile phones is to stay connected with others and for their business purpose. The salient features observed for this market are: 1. Average period for people to change their handsets is 3 years. The reasons for this
may be that of problems with old handset or need for another mobile for their family members. 2. People here prefer purchasing handsets from their local friendly retailer or small
mobile stores whom they know personally and are sure that they would be selling original equipments at reasonable prices. They tend to think of company and franchisee outlets as places which add extra costs to make profits for selling the same goods. 3. Although they have little of brand loyalty, it is the retailer?s advice or opinion
which most influences their decision making. 4. They are more interested in basic features of mobile phones like battery life,
warranty period, costs of the phone etc.
Sales Potential: According to the retailers interviewed, there are around 6-7 shops (big franchise, company owned outlets and small grocery-type, retail stores) selling mobile phones in Manipal and about 30-40 shops around Udupi district. The normal sales in Manipal area are about 900-1000 mobile sets per month while they are around 5000-5500 handsets per month in Udupi district area. This can be attributed to the difference in population levels between two places.
SEGMENTATION
Market segments are large identifiable groups within a market which exhibit different needs or product responses. Majorly the segmentation can be done on the basis of three descriptive characteristics: Geographic, Demographic, Psychographic Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, countries or cities. In demographic segmentation, the market is divided into groups on the basis of variables such as age, Marketing CRA: GoGetter Mobiles [8] Group E2
family size, family life cycle, gender, income, occupation, education, religion, race and social class. In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, life cycle or values. As far as GoGetter w220 is concerned, the consumer preferences and purchase habits across different regions and states of country does not vary drastically and hence geographic segmentation will not be an appropriate criteria for segmenting the market. Similarly, the consumer?s buying behavior is not much dependant on gender, education, religion and race. Hence, these variables are not worth considering for segmenting of our phone. As per our analysis, occupation will be the most suitable variable on the basis of which the segmentation can be done. Whole of the existing mobile handset market is brimming with a lot of products from various companies. As per consumer expectations, whole of product range can be classified into five groups:
Price Range (Rs) 1000 – 2000 2000 – 4000 4000 – 6000 6000 – 10000 Above 10000 Features Expected by Consumers in the product Basic features + ‘Black & White’ display + monophonic ringtones Basic + FM radio + Color Display + Polyphonic ringtones VGA/1MP Camera + Blue Tooth + MMS MP3, Video Recording, Expandable Memory, GPRS, 2-3MP Camera Email and other high end features
The pattern of target market selection which we are following is „Product Specialization.? Our firm makes a certain product that is sold to several different market segments.
Above 10000 6000 – 10000 4000 – 6000 2000 – 4000 1000 – 2000 Retired / Students Senior Citizens Worker / Labor Class Traders / Shop Junior Executiv es Senior Executiv es Businessmen/ Industrialists Rs.
Owners
Marketing CRA: GoGetter Mobiles
[9]
Group E2
POSITIONING
Positioning refers to the process by which a marketer is able to attract potential customer?s attention and occupy distinct place in the minds of the target market. For GoGetter w220, positioning has been done differently for each of the target segment we are aiming; this is because of different segment of people need mobiles for different needs and they also view it from different perspectives. Students mostly may need mobile so as to be connected to their families and friends. But at the same time, they will appreciate and want to have phones which are attractive to look, sleek and stylish as mobiles form an important part of their style statements. A student is likely to choose a phone which is more stylish and has better design than a normal phone within his range of budget. Hence, with students, we will position GoGetter w220 as being stylish, cool and different. Retired / Senior citizens have restricted ability to spend. Also, their basic aim to buy a mobile is to stay connected with near and dear ones. They do not tend to spend extra amount on style and looks but concentrate more on costs, basic features and ease of usage of the phone. Hence, for this segment, we will position GoGetter w220 as one which is easy to use and offers good value for money. Workers/labor class is normally faced with limited purchasing power and hence they do not like to buy expensive products. They want phone to meet their basic requirements along with being durable and offering long life so that they do not have to invest in phones again and again. Hence, our positioning strategy for them will be of a phone which is durable and rugged. Finally, traders/shop owners use phone mostly in their business interactions. Their main aim while looking for a phone is high battery life, excellent connectivity and low maintenance issues. Hence, we will position GoGetter w220 as a symbol of success in this segment. We will highlight the features of our phone as to how the advantage of high battery life, better connectivity and low maintenance can be seen as a symbol of success to their business. There might be difficulties in positioning our brand: being inexpensive as well as being of the highest quality and style quotient. Consumers may consider them as opposing attributes and might not buy the product. To resolve this issue, we will try to Marketing CRA: GoGetter Mobiles [10] Group E2
offer GoGetter w220 with different marketing campaigns for each of the potential market segment group. As far as sales and marketing promotion in Manipal is considered, we will primarily focus on student segments and position GoGetter w220 on the basis of style quotient. In Udupi, majority of our customers will lie in workers, traders and senior citizens. Hence we will focus on cost effectiveness, durability and usage quotients.
PROMOTION MIX
GoGetter w220 is currently in its initial stages and there is no brand recognition. Hence, we will have to do major marketing and promotion. The promotion of the product will be done with the help of following mediums: 1. Sponsoring of few events: On a local scale, we will be sponsoring few local
events like college fests, rock shows, sport tournaments, musical nights etc 2. Print media like newspapers and magazines: This will be done on both national
and local scale. Leading national and major local papers and magazines will be chosen to advertise in. 3. Billboards: They will be done on a local scale as of now starting with Manipal
and Udupi City and later in other surrounding areas. 4. Wallpapers on college canteens and other popular hangouts: As one of our major
target segments is the student community, we will advertise GoGetter w220 by pasting the wall-posters in college canteens and other popular eateries and hangouts. 5. Local FM Radio: With Radio Mirchi becoming popular in Udupi and Manipal and
possible arrival of other private FM players, this medium provides us with a cost effective means to reach larger audience base and will be one of the main medium of promotion. We will try to promote our handset by conducting some contests relevant to our brand on FM. 6. Television: Even though this is one of the most effective medium of advertising, it
is expensive. Hence, advertising through television will be restricted only to local cable channels 7. College notice boards: We will also like to display official promotion posters in
college notice boards so that they are noticed by one and all including the administrative staff and the faculty.
Marketing CRA: GoGetter Mobiles
[11]
Group E2
8.
Pamphlet distribution: Initial promotions to some extent will be done by
distributing pamphlets of GoGetter w220 highlighting its features. For the pamphlet distribution, we will request shop owners selling various commodities like grocery stores, restaurants, bakeries, stationary shops etc to keep our pamphlets on their counters so that customers may look at it while doing the purchases. 9. E-Mail and Internet: Manipal has large student base which has access to internet.
Hence, we thought of using internet as a means of communication by advertising on college websites or some popular local websites which students may access. But since we could not find the option feasible and the option of advertising in large websites as costly, we have come up with a plan to email GoGetter w220 advertisements to various students requesting them to circulate the mail in their institutes and offering certain discounts to customers purchasing GoGetter w220 after reading that email. We have also thought of advertising in Pagalguy.com which is one of the most popular websites used by student. Even though there may be high costs involved in advertising in this site, we feel that it is worth investing in because of the large number of student community which accesses this particular site. Moreover, making use of Social Networking websites like Orkut on which students have communities is also considered. Distribution of GoGetter w220 will also be done through online auctioning site EBay. For this, we will have to pay monthly amount of Rs 1000/- for a premium account but we feel that it will be justified as advertising of the product will be done on a national scale. 10. Local Film Ads: We will also use local films as a medium to advertise GoGetter
w220s. The product can be advertised in small cinema halls like Galaxy, Kalpana and Moviedome. 11. Point of purchase promotions: Normally, consumers go to buy cell phone with
some idea about what they want to buy or what features are they looking for. But the final decision is mostly made at the point of purchase only. Hence, we will place cut outs, banners, ads of our product thus ensuring that customers learn about our product before making decisions.
DISTRIBUTION
About 20 - 25% of selling of Mobile Handsets in India takes place through organized retailers and about 75 – 80% through unorganized retailers. The margin per Marketing CRA: GoGetter Mobiles [12] Group E2
channel member is more in case of organized sector because number of channel partners is small. Whereas the case is opposite in case of unorganized mobile handset retail sector. Sale through Organized retailer follows the following distribution path: Manufacturer Super Stockist Company owned outlets Consumers Retailer Chain Warehouse
Retailer Outlets
The mobile handsets are sold by the company to their own company-owned outlets or to retail chain warehouses like Mobilenext, Sangam Electronics, Big Bazaar etc. In sales through unorganized retailers, the product distribution takes place through the following chain
Big Retailer / Franchiser Small Retailer Stores
Manufacturer
Super Stockist
Distributors
Consumers
In this case, there is an additional distributor in between the super stockists and retailers. All the retailers of a particular district or region have to purchase the mobiles through the distributors fixed for their regions. The super stockists retain price margins of about 1 - 2%. The distributors take a margin of about 2-3%, and finally retailer gets around 2%. Small retailers often make profits by evading taxes by making false invoices and bills. In case of our plan, we will be following straight and simple approach. We have assumed that the manufacturing facility is located in Bangalore. We will be transporting the handsets twice a month to our warehouse located in Mangalore. From here, handsets will be distributed to retailers in Manipal and Udupi region every week. The distribution
Marketing CRA: GoGetter Mobiles
[13]
Group E2
network will also be strengthened by the presence of sales and service centers in as many locations as possible.
FINANCIAL ANALYSIS
The initial investment is Rs. 20 lakhs. This was taken as a loan from bank at an interest rate of 20%. In our financial analysis, we have considered that we will procure the finished goods from manufacturers and do the transportation, marketing and other activities. In our financials-analysis, we expect that in the first two years, GoGetter w220 will be in initial and growth stage leading to increasing market shares. But after two years, mobile handsets reaches maturation and decline stage leading to declining market share. Hence, the allocation of expenditure has been done accordingly. Normally, successful mobile handsets have a life cycle of 3-3.5 years. Hence, we have assumed the life of our product to be 4 years and have attempted to repay the loan, achieve break-even and start reaping profits within this timeframe. We have represented the Financial Analysis of our project in the following table:
Year 1 Market Size by Volume Market Share of GoGetter w220 Expected Sales of our product Ex Factory Price Per Unit Cost Price Revenues from sales Cost of Goods Produced Channel Partners Margin Marketing Expenditure Loan Repayment Profit 50640 8% 4051 2700 1900 10938240 7697280 656294 3000000 1066666 (1482000) Year 2 55704 12% 6684 2700 1900 18048096 12700512 1082886 3100000 1066667 98031 Year 3 61274 10% 6127 2700 1900 16544088 11642136 992645 2500000 1066667 342640 Year 4 67402 8% 5392 2700 1900 14558797 10245080 873528 2000000 0 1440190 Total 235020 22255
60089221 42285008 3605353 10600000 3200000 398860
1.
Market Size by Volume: We have considered sales of 6000 mobiles per month in
Udupi region and 800 in Manipal regions (as per the primary research). The ratio of number of lower end mobiles sold with respect to that of higher end in Udupi and Manipal as 65% and 40% respectively. On this basis we have calculated the total market size of both regions for lower end mobiles.
Marketing CRA: GoGetter Mobiles
[14]
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2.
Market Share: We expect to capture 8% of the market in the first year followed by
12%, 10% and 8% in the following years. ( the product starts declining after 3rd year) 3. In the above table, we have calculated the total revenues obtained from sales &
costs of goods produced. We are offering our channel partners a margin of 6% on selling price as against normal industry standards of 5% to encourage them from selling GoGetter w220 more. Marketing budget has been fixed for each year based on the needs as mentioned in the marketing and other expenditure table below 4. Loan repayment is done on an Equated Yearly Installments. The total loan to be
repaid is 32 lakhs (20 lakhs principle + 20% interest on 20 lakhs for 3 years). 5. From this analysis, we have calculated to achieve the breakeven in second year. The detailed expenditure incurred on Marketing, Distribution and other overheads are as shown below:
Marketing, Distribution and Overhead Expenditure Breakup Transportation & Distribution Cost Warehouse Transportation Costs Transportation Superstockists Transportation to Retailers Marketing Costs Pamphlet Color Posters Sponsorship of events Print media-Local Newspapers Print media-National Newspapers Local Film ads Point of purchase promotions Local FM Radio Hoardings/Billboards 20000 21600 200000 588000 392000 162000 61250 100000 144000 18000 25200 400000 504000 294000 157500 61250 100000 151200 10000 14000 200000 300000 200000 100000 35000 50000 75000 3000 5000 50000 100000 0 75000 20000 0 50000 51000 65800 850000 1492000 886000 494500 177500 250000 420200 From B'lore to 120000 24000 126000 25200 132300 26460 138915 27783 517215 103443 42000 45360 49896 54886 192142 Year 1 Year 2 Year 3 Year 4 Total
Salaries of salesmen and other staff Other miscellaneous expenses
1056000 50000
1140480 50000
1254528 50000
1379981 50000
4830989 200000
Marketing CRA: GoGetter Mobiles
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1. 2.
The warehouse costs are Rs. 3500/- per month increasing annually at 8%. Transportation costs from Bangalore to warehouse are 5000/- per month and we
make two trips per month. Transport costs to retailers from warehouse to retailers as 500/-per month and we make 4 trips per month. 3. Costs of promotion through Pamphlets, sponsorship events and local FM radio
channels are fixed for each year. The rates are considered as per current market rates. 4. 5. 3000-3600 color posters will be printed at an average costs of 6/-. Average costs of advertising in local newspapers is Rs 200/-per sq cm. We will
advertise for 35sq cm, three times a week, two weeks a month, 7 months a year and in 2 newspapers in first year. This is because of subject to financial constraints. Similar costs have been calculated for other years. Similarly advertising will also be done for national newspapers which charge 350/-per sq cm with lesser frequency of ads. (Local newspapers are vernacular newspapers like Udayvani, Vijay Karnataka, etc) 6. Considering average advertising costs in local theaters like Galaxy, Movie Dome,
Kalpana to be Rs 300/-per ad, we will advertise 1 ad per day for 9 months with 2 theaters running ads per month. Appropriate time for ads shall be decided. 7. Budget of Rs. 1750/- has been allotted for banners, hoardings, cutouts and other
facilities to assist point of purchase promotions. These will be distributed to each of about 35 big and small retailers in Manipal and Udupi 8. Hoardings/Billboards average costs are 8000/pm. At a time, we will advertise in 3
hoardings and ads will run for 6 months in a year. 9. We have planned to employ 8 employees to carry out our marketing, distribution
and other works. Their average pay will be 11000/-pm increasing 8% annually 10. Budget of 50000 per year has been allotted for other miscellaneous expenses.
In the above financial analysis, we have taken the constraint that the selling price cannot be altered. If we were allowed to do that, then our strategy will be as follows: 1. 2. 3. Introduce the product with higher selling price initially in the market With the passage of time, we decrease the sales price of the product. As the product reaches the decline stage, we will lower GoGetter w220 price
further and try milking/harvesting the market for GoGetter w220. Marketing CRA: GoGetter Mobiles [16] Group E2
LEARNINGS
Demographics affect the consumer behavior: Although the distance between Udupi & Manipal is just 5 kilometers, there is a huge difference in the behavior of the consumers of both the towns. Major influencers of these differences in consumer behavior are occupation, income levels & age of the consumers. Hence the marketing strategies have to be in sync with the demographics of a particular region. Allocation of Marketing Budget: For Marketing Budget, two main categories can be identified: Nationwide marketing & Localized Marketing. Nationwide Marketing concentrates on mass communication channels while Localized Marketing focuses more on promotions, event sponsorships, etc. As far as the Mobile handset products are concerned, the buying behavior of a consumer is drastically influenced by demographic & geographic factors. Hence localized marketing is carried out by regional marketing and sales offices of producers/marketers. Also, the budget should be allocated keeping the demographic & geographic factors in mind along with prevalent competition in the market. Product Life cycle: Every product has a certain life cycle period which should influence the budget allocated for the marketing expenses. Our objective should be to maximize the profits while the product is in its Growth & Maturity stage while milking the market during the product?s decline stage. With average life cycle of product being around 3 years, we should always go for market skimming along with large scale marketing and promotions. But the main thing to remember is that even a proper market skimming wont assure you a profit in the immediate short run , say of an year or so. So some level of patience is needed.
Marketing CRA: GoGetter Mobiles
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doc_158387159.doc
Highlights the marketing plan for mobile handset including segmentation, targeting and positioning.
Marketing Plan ~ Concurrently Running Assignment (CRA)
Marketing CRA: GoGetter Mobiles
[1]
Group E2
Marketing CRA: GoGetter Mobiles
[2]
Group E2
INDIAN MOBILE PHONE MARKET
In the last decade Indian mobile phone industry has witnessed a dramatic growth. India's mobile phone market has become the fastest growing in the world, with Indians adding nearly seven million new connections every month. As per latest statistics India has around 140 million mobile subscribers. The percentage of Indian population owning mobiles was 13% in December 2006 (It was 8% in December 2005) with the number of subscribers equal to 129.5 million. Various studies & reports say that much of the growth is among low-income consumers. When mobile phones were introduced in India more than a decade ago, they were considered a luxury. But low calling charges and cheap handsets have brought them within the reach of tens of millions of people. Today, mobiles are being used as means to increase customer reach even in small businesses like vegetable sales or performing rituals at distant places. Telecom companies are going all out to woo such customers, offering them deals that make cell phones affordable for even those who earn as little as Rs5000 a month. Handsets are available for as low as 1000/-. With various promotional offers in place, low-income and selfemployed people are snapping up mobiles at a frantic pace. Many marketing consultants with telecommunication consulting firms say that in our country with more than a billion people, there is still a vast market to be tapped. The penetration of mobile phones in India is just 20%, not more than that. That means, there is a huge prospect for growth. Indian market is considered to be a very hot market and many business opportunists are eyeing at this market.
THE LOCAL MARKET
The number of mobile phone subscribers in Karnataka is 1,48,65,606 with Nokia, Motorola, Sony Ericsson found to be the major brands for handsets in Udupi and Manipal Area. The consumer market is divided into two parts of High end mobile users & Low end mobile users in the ratio of 60:40 in Manipal and 35:65 in Udupi. Consumers consider the locality of service station as an important factor before buying handsets. Nokia and Sony Ericsson have their authorized dealers in Udupi. The other brands are sent to Mangalore/Bangalore for service by the various retail shop owners. Each retail shop owner takes the liability to send the handset for repairs to the nearest service station. Major flaws in Sony Ericsson take around 1-2 months to repair and hence this brand is Marketing CRA: GoGetter Mobiles [3] Group E2
not much favorable in the market. On the contrary, Motorola & Nokia take a 15 day time period to resolve major flaws. Our major competitors with similar features & price are handsets from Motorola brand. Motorola is followed closely by Nokia & lastly Sony. Various sources of procuring mobile handsets are Authorized Dealers (Nokia priority dealer, Sony World), big retail shops (Pai Electronics, Harsha Electronics & Big Bazar) and numerous small retail shops. The approximate distribution of the market share of the various brands in Udupi & Manipal is as shown below. Others include LG, Spice Mobiles, Reliance, Tata Indicomm, etc.
Informal channels aren?t a very popular medium in this market due to the geographic location as they don?t give guarantee for service.
PRODUCT DESCRIPTION
Mobile Handsets: In India mobile handset market is flooded with handsets from different companies like Nokia, Samsung, Sony Ericsson, LG and Motorola. Handset Manufacturers are coming up with extra features like FM radio, MP3 player, high quality camera with flash, GPRS, MMS, WAP, blue tooth etc to attract the users. GoGetter w220 is at par with the other competitor product existing in the category. The points of parity in this category are Color display, Polyphonic ringtone and FM radio. Since most of the products in this category already offer these features, we will have to incorporate some extra features as Point of Difference of GoGetter w220 within the category. The point of Difference we can offer are: 1. Flap design [4] 2. Sleek Design Group E2
Marketing CRA: GoGetter Mobiles
3. 4. 5.
Light weight Aesthetic Appeal Usage of softer keypads for
6.
Speaker phone
easier navigation and messaging
Personalization or Fun Features: FM Radio: Radio while you walk or work, listen to latest music on the hottest FM stations using headset (stereo) or speaker. Audio Player: The handset is equipped with MIDI, SP-MIDI, AMR and iMelody Downloadable Games Call Management features: Handset memory recalls last calls; Last 20 calls made, Last 20 calls received/missed, along with call number. Lifestyle Features: Calculator, Currency converter, Calendar and Alarm at your disposal. Messaging Features: EMS & MMS messaging, SMS & SMS chat one-to-one: Chat with T9 predictive chat input. Performance Features: Talk time up to 497 minutes, Bands serviceable 900/1800, Stand by time lasts up to 293 hours. Technical Specifications: A sleek phone with 46.70 x 95.00 x 16.70 mm dimensions weighing 93 grams. 500kb user + 600 phonebook +250 SMS memory provided. The handset has a display of 128 x 128 65k color CSTN with Internal Antenna to avoid hampering the Look of the mobile.
PRODUCTS IN COMPETITION
The handsets which are in direct competition with GoGetter w220 can be divided into two types: Handsets within the same or a little lesser price range of the product & Handsets with the same features and having the similar price range. Given below are the top 5 competitors of the product with respect to Udupi and Manipal market. Motorola C168i: Also called the Radio Moto this handset has the characteristics of slim and attractive design. When launched, this handset was one among the most favorite among the consumers and it penetrated the market very soon after its launch. Although its current status isn?t very encouraging, it is surely one of the competitors. Marketing CRA: GoGetter Mobiles [5] Group E2
Motorola W215: Apart from the features provided by our product, this handset from Motorola includes many other interesting features like extra long battery life, Polyphonic speakers, up to 500 contacts memory and saves up to 750 messages. Most importantly, it had an integrated digital camera with 4x digital zoom. With Udupi market alone selling around 30 handsets a month per shop, this handset can be considered as the toughest competitor to beat as far as the current scenario appears. Nokia 2626: This handset from Nokia gives the “Standout from the crowd feeling” with stylish colored covers, FM Radio, Integrated hands free speakers, Nokia express audio messaging, email, multimedia messaging and storage space up to 300 contacts. Features wise, this is same as GoGetter w220. Sony Ericsson K220i: Again, one of the major competitors of GoGetter w220, this handset has and additional feature of having integrated camera in it. With the price of Rs. 3200 which is slightly higher than the price of our product, this product has the capability to pull the customers due to its integrated camera. However, due to its looks, it is not so popular among the customers. Samsung SGH C170: Favored by people who like simplicity, this handset stands out due to its slim body. The phone has similar features as GoGetter w220 and states to eliminate the unnecessary features. But, the sales of this product suggest it?s not a very tough competitor. It goes through the sales of around 10 pieces a month from 1 retail shop including Udupi & Manipal. To comprehend,
Brand Motorola Motorola (Toughest competitor) Nokia Sony Ericsson Samsung Model Number C168i W215 2626 K220i SGH C170 Display Colour Colour Colour Colour Colour FM Radio Yes Yes Yes Yes Yes Camera No Yes No Yes No GPRS/WAP No Yes Yes Yes Yes Slim body Other features Slim and Attractive design Very popular since launch More memory Low range, yet has camera Stylish collared covers Price 2000 2700 2600 3200 2700
Here, an important fact to note is that all the competitors are considered as tough/manageable competition on and important factor i.e. Service Station. Marketing CRA: GoGetter Mobiles [6] Group E2
Udupi/Manipal consumers consider the locality of service station to be very important before buying the mobile handset. Since Nokia and Sony Ericsson have their service stations in Udupi, the mobiles of this brand are sold more.
CONSUMER BEHAVIOR
By carrying out market research in Manipal and Udupi, we tried finding out the purchasing behavior of consumers. Based on this, we have done further analysis to decide on the target segment and other promotional activities. We carried out in depth interviews with various retailers (organized as well as unorganized sector) in Udupi and Manipal. Also, interception interviews were done with random customer base in both the towns. Manipal Market: Manipal has mostly student community with most of the students in the age group between 18 and 25. Among them, there is high tendency to replace their mobiles on a frequent basis. The most common reasons for the same can be thefts or losses of mobiles, wanting to appear as happening and trendy by staying in touch with new styles and the desire to show off new mobiles phones among peer groups. Few less common reasons may be technical faults with old handsets, upgrading old handsets being used since many years to buy newer handsets and exciting replacement schemes on offer at the retail shop. The salient features which were observed for this market are: 1. The average period for students in Manipal to change their mobile phones is 6
months. As most of the students studying here are from affluent or middle class families, financing for this frequent replacements of handset does not seem to be any issue. 2. Students prefer buying mobile handsets in franchise outlets like MobileNext, Big
Bazaar etc where they have the option of choosing from various category and range of handsets. Also, their perception is that franchise outlets are sure to sell original handsets which is why they cost a little more than the retail outlets. While retail outlets may or may not sell original handsets. 3. Another factor of consideration is after sales services. In franchise outlets, they
are able to get immediate services or temporary replacement handset if there are any issues with the handset. The same is not the case with small kirana retail outlets. 4. They do not have any particular priority or loyalty towards a particular brand.
They are more interested in features, looks and styles within their price range.
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5.
They are interested in sleeker and slimmer mobile phones which are trendy and
stylish in looks. Udupi Market: This market comprises mainly of workers, traders and middle class families. Their basic intention behind purchasing of mobile phones is to stay connected with others and for their business purpose. The salient features observed for this market are: 1. Average period for people to change their handsets is 3 years. The reasons for this
may be that of problems with old handset or need for another mobile for their family members. 2. People here prefer purchasing handsets from their local friendly retailer or small
mobile stores whom they know personally and are sure that they would be selling original equipments at reasonable prices. They tend to think of company and franchisee outlets as places which add extra costs to make profits for selling the same goods. 3. Although they have little of brand loyalty, it is the retailer?s advice or opinion
which most influences their decision making. 4. They are more interested in basic features of mobile phones like battery life,
warranty period, costs of the phone etc.
Sales Potential: According to the retailers interviewed, there are around 6-7 shops (big franchise, company owned outlets and small grocery-type, retail stores) selling mobile phones in Manipal and about 30-40 shops around Udupi district. The normal sales in Manipal area are about 900-1000 mobile sets per month while they are around 5000-5500 handsets per month in Udupi district area. This can be attributed to the difference in population levels between two places.
SEGMENTATION
Market segments are large identifiable groups within a market which exhibit different needs or product responses. Majorly the segmentation can be done on the basis of three descriptive characteristics: Geographic, Demographic, Psychographic Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, countries or cities. In demographic segmentation, the market is divided into groups on the basis of variables such as age, Marketing CRA: GoGetter Mobiles [8] Group E2
family size, family life cycle, gender, income, occupation, education, religion, race and social class. In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, life cycle or values. As far as GoGetter w220 is concerned, the consumer preferences and purchase habits across different regions and states of country does not vary drastically and hence geographic segmentation will not be an appropriate criteria for segmenting the market. Similarly, the consumer?s buying behavior is not much dependant on gender, education, religion and race. Hence, these variables are not worth considering for segmenting of our phone. As per our analysis, occupation will be the most suitable variable on the basis of which the segmentation can be done. Whole of the existing mobile handset market is brimming with a lot of products from various companies. As per consumer expectations, whole of product range can be classified into five groups:
Price Range (Rs) 1000 – 2000 2000 – 4000 4000 – 6000 6000 – 10000 Above 10000 Features Expected by Consumers in the product Basic features + ‘Black & White’ display + monophonic ringtones Basic + FM radio + Color Display + Polyphonic ringtones VGA/1MP Camera + Blue Tooth + MMS MP3, Video Recording, Expandable Memory, GPRS, 2-3MP Camera Email and other high end features
The pattern of target market selection which we are following is „Product Specialization.? Our firm makes a certain product that is sold to several different market segments.
Above 10000 6000 – 10000 4000 – 6000 2000 – 4000 1000 – 2000 Retired / Students Senior Citizens Worker / Labor Class Traders / Shop Junior Executiv es Senior Executiv es Businessmen/ Industrialists Rs.
Owners
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POSITIONING
Positioning refers to the process by which a marketer is able to attract potential customer?s attention and occupy distinct place in the minds of the target market. For GoGetter w220, positioning has been done differently for each of the target segment we are aiming; this is because of different segment of people need mobiles for different needs and they also view it from different perspectives. Students mostly may need mobile so as to be connected to their families and friends. But at the same time, they will appreciate and want to have phones which are attractive to look, sleek and stylish as mobiles form an important part of their style statements. A student is likely to choose a phone which is more stylish and has better design than a normal phone within his range of budget. Hence, with students, we will position GoGetter w220 as being stylish, cool and different. Retired / Senior citizens have restricted ability to spend. Also, their basic aim to buy a mobile is to stay connected with near and dear ones. They do not tend to spend extra amount on style and looks but concentrate more on costs, basic features and ease of usage of the phone. Hence, for this segment, we will position GoGetter w220 as one which is easy to use and offers good value for money. Workers/labor class is normally faced with limited purchasing power and hence they do not like to buy expensive products. They want phone to meet their basic requirements along with being durable and offering long life so that they do not have to invest in phones again and again. Hence, our positioning strategy for them will be of a phone which is durable and rugged. Finally, traders/shop owners use phone mostly in their business interactions. Their main aim while looking for a phone is high battery life, excellent connectivity and low maintenance issues. Hence, we will position GoGetter w220 as a symbol of success in this segment. We will highlight the features of our phone as to how the advantage of high battery life, better connectivity and low maintenance can be seen as a symbol of success to their business. There might be difficulties in positioning our brand: being inexpensive as well as being of the highest quality and style quotient. Consumers may consider them as opposing attributes and might not buy the product. To resolve this issue, we will try to Marketing CRA: GoGetter Mobiles [10] Group E2
offer GoGetter w220 with different marketing campaigns for each of the potential market segment group. As far as sales and marketing promotion in Manipal is considered, we will primarily focus on student segments and position GoGetter w220 on the basis of style quotient. In Udupi, majority of our customers will lie in workers, traders and senior citizens. Hence we will focus on cost effectiveness, durability and usage quotients.
PROMOTION MIX
GoGetter w220 is currently in its initial stages and there is no brand recognition. Hence, we will have to do major marketing and promotion. The promotion of the product will be done with the help of following mediums: 1. Sponsoring of few events: On a local scale, we will be sponsoring few local
events like college fests, rock shows, sport tournaments, musical nights etc 2. Print media like newspapers and magazines: This will be done on both national
and local scale. Leading national and major local papers and magazines will be chosen to advertise in. 3. Billboards: They will be done on a local scale as of now starting with Manipal
and Udupi City and later in other surrounding areas. 4. Wallpapers on college canteens and other popular hangouts: As one of our major
target segments is the student community, we will advertise GoGetter w220 by pasting the wall-posters in college canteens and other popular eateries and hangouts. 5. Local FM Radio: With Radio Mirchi becoming popular in Udupi and Manipal and
possible arrival of other private FM players, this medium provides us with a cost effective means to reach larger audience base and will be one of the main medium of promotion. We will try to promote our handset by conducting some contests relevant to our brand on FM. 6. Television: Even though this is one of the most effective medium of advertising, it
is expensive. Hence, advertising through television will be restricted only to local cable channels 7. College notice boards: We will also like to display official promotion posters in
college notice boards so that they are noticed by one and all including the administrative staff and the faculty.
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8.
Pamphlet distribution: Initial promotions to some extent will be done by
distributing pamphlets of GoGetter w220 highlighting its features. For the pamphlet distribution, we will request shop owners selling various commodities like grocery stores, restaurants, bakeries, stationary shops etc to keep our pamphlets on their counters so that customers may look at it while doing the purchases. 9. E-Mail and Internet: Manipal has large student base which has access to internet.
Hence, we thought of using internet as a means of communication by advertising on college websites or some popular local websites which students may access. But since we could not find the option feasible and the option of advertising in large websites as costly, we have come up with a plan to email GoGetter w220 advertisements to various students requesting them to circulate the mail in their institutes and offering certain discounts to customers purchasing GoGetter w220 after reading that email. We have also thought of advertising in Pagalguy.com which is one of the most popular websites used by student. Even though there may be high costs involved in advertising in this site, we feel that it is worth investing in because of the large number of student community which accesses this particular site. Moreover, making use of Social Networking websites like Orkut on which students have communities is also considered. Distribution of GoGetter w220 will also be done through online auctioning site EBay. For this, we will have to pay monthly amount of Rs 1000/- for a premium account but we feel that it will be justified as advertising of the product will be done on a national scale. 10. Local Film Ads: We will also use local films as a medium to advertise GoGetter
w220s. The product can be advertised in small cinema halls like Galaxy, Kalpana and Moviedome. 11. Point of purchase promotions: Normally, consumers go to buy cell phone with
some idea about what they want to buy or what features are they looking for. But the final decision is mostly made at the point of purchase only. Hence, we will place cut outs, banners, ads of our product thus ensuring that customers learn about our product before making decisions.
DISTRIBUTION
About 20 - 25% of selling of Mobile Handsets in India takes place through organized retailers and about 75 – 80% through unorganized retailers. The margin per Marketing CRA: GoGetter Mobiles [12] Group E2
channel member is more in case of organized sector because number of channel partners is small. Whereas the case is opposite in case of unorganized mobile handset retail sector. Sale through Organized retailer follows the following distribution path: Manufacturer Super Stockist Company owned outlets Consumers Retailer Chain Warehouse
Retailer Outlets
The mobile handsets are sold by the company to their own company-owned outlets or to retail chain warehouses like Mobilenext, Sangam Electronics, Big Bazaar etc. In sales through unorganized retailers, the product distribution takes place through the following chain
Big Retailer / Franchiser Small Retailer Stores
Manufacturer
Super Stockist
Distributors
Consumers
In this case, there is an additional distributor in between the super stockists and retailers. All the retailers of a particular district or region have to purchase the mobiles through the distributors fixed for their regions. The super stockists retain price margins of about 1 - 2%. The distributors take a margin of about 2-3%, and finally retailer gets around 2%. Small retailers often make profits by evading taxes by making false invoices and bills. In case of our plan, we will be following straight and simple approach. We have assumed that the manufacturing facility is located in Bangalore. We will be transporting the handsets twice a month to our warehouse located in Mangalore. From here, handsets will be distributed to retailers in Manipal and Udupi region every week. The distribution
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network will also be strengthened by the presence of sales and service centers in as many locations as possible.
FINANCIAL ANALYSIS
The initial investment is Rs. 20 lakhs. This was taken as a loan from bank at an interest rate of 20%. In our financial analysis, we have considered that we will procure the finished goods from manufacturers and do the transportation, marketing and other activities. In our financials-analysis, we expect that in the first two years, GoGetter w220 will be in initial and growth stage leading to increasing market shares. But after two years, mobile handsets reaches maturation and decline stage leading to declining market share. Hence, the allocation of expenditure has been done accordingly. Normally, successful mobile handsets have a life cycle of 3-3.5 years. Hence, we have assumed the life of our product to be 4 years and have attempted to repay the loan, achieve break-even and start reaping profits within this timeframe. We have represented the Financial Analysis of our project in the following table:
Year 1 Market Size by Volume Market Share of GoGetter w220 Expected Sales of our product Ex Factory Price Per Unit Cost Price Revenues from sales Cost of Goods Produced Channel Partners Margin Marketing Expenditure Loan Repayment Profit 50640 8% 4051 2700 1900 10938240 7697280 656294 3000000 1066666 (1482000) Year 2 55704 12% 6684 2700 1900 18048096 12700512 1082886 3100000 1066667 98031 Year 3 61274 10% 6127 2700 1900 16544088 11642136 992645 2500000 1066667 342640 Year 4 67402 8% 5392 2700 1900 14558797 10245080 873528 2000000 0 1440190 Total 235020 22255
60089221 42285008 3605353 10600000 3200000 398860
1.
Market Size by Volume: We have considered sales of 6000 mobiles per month in
Udupi region and 800 in Manipal regions (as per the primary research). The ratio of number of lower end mobiles sold with respect to that of higher end in Udupi and Manipal as 65% and 40% respectively. On this basis we have calculated the total market size of both regions for lower end mobiles.
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2.
Market Share: We expect to capture 8% of the market in the first year followed by
12%, 10% and 8% in the following years. ( the product starts declining after 3rd year) 3. In the above table, we have calculated the total revenues obtained from sales &
costs of goods produced. We are offering our channel partners a margin of 6% on selling price as against normal industry standards of 5% to encourage them from selling GoGetter w220 more. Marketing budget has been fixed for each year based on the needs as mentioned in the marketing and other expenditure table below 4. Loan repayment is done on an Equated Yearly Installments. The total loan to be
repaid is 32 lakhs (20 lakhs principle + 20% interest on 20 lakhs for 3 years). 5. From this analysis, we have calculated to achieve the breakeven in second year. The detailed expenditure incurred on Marketing, Distribution and other overheads are as shown below:
Marketing, Distribution and Overhead Expenditure Breakup Transportation & Distribution Cost Warehouse Transportation Costs Transportation Superstockists Transportation to Retailers Marketing Costs Pamphlet Color Posters Sponsorship of events Print media-Local Newspapers Print media-National Newspapers Local Film ads Point of purchase promotions Local FM Radio Hoardings/Billboards 20000 21600 200000 588000 392000 162000 61250 100000 144000 18000 25200 400000 504000 294000 157500 61250 100000 151200 10000 14000 200000 300000 200000 100000 35000 50000 75000 3000 5000 50000 100000 0 75000 20000 0 50000 51000 65800 850000 1492000 886000 494500 177500 250000 420200 From B'lore to 120000 24000 126000 25200 132300 26460 138915 27783 517215 103443 42000 45360 49896 54886 192142 Year 1 Year 2 Year 3 Year 4 Total
Salaries of salesmen and other staff Other miscellaneous expenses
1056000 50000
1140480 50000
1254528 50000
1379981 50000
4830989 200000
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1. 2.
The warehouse costs are Rs. 3500/- per month increasing annually at 8%. Transportation costs from Bangalore to warehouse are 5000/- per month and we
make two trips per month. Transport costs to retailers from warehouse to retailers as 500/-per month and we make 4 trips per month. 3. Costs of promotion through Pamphlets, sponsorship events and local FM radio
channels are fixed for each year. The rates are considered as per current market rates. 4. 5. 3000-3600 color posters will be printed at an average costs of 6/-. Average costs of advertising in local newspapers is Rs 200/-per sq cm. We will
advertise for 35sq cm, three times a week, two weeks a month, 7 months a year and in 2 newspapers in first year. This is because of subject to financial constraints. Similar costs have been calculated for other years. Similarly advertising will also be done for national newspapers which charge 350/-per sq cm with lesser frequency of ads. (Local newspapers are vernacular newspapers like Udayvani, Vijay Karnataka, etc) 6. Considering average advertising costs in local theaters like Galaxy, Movie Dome,
Kalpana to be Rs 300/-per ad, we will advertise 1 ad per day for 9 months with 2 theaters running ads per month. Appropriate time for ads shall be decided. 7. Budget of Rs. 1750/- has been allotted for banners, hoardings, cutouts and other
facilities to assist point of purchase promotions. These will be distributed to each of about 35 big and small retailers in Manipal and Udupi 8. Hoardings/Billboards average costs are 8000/pm. At a time, we will advertise in 3
hoardings and ads will run for 6 months in a year. 9. We have planned to employ 8 employees to carry out our marketing, distribution
and other works. Their average pay will be 11000/-pm increasing 8% annually 10. Budget of 50000 per year has been allotted for other miscellaneous expenses.
In the above financial analysis, we have taken the constraint that the selling price cannot be altered. If we were allowed to do that, then our strategy will be as follows: 1. 2. 3. Introduce the product with higher selling price initially in the market With the passage of time, we decrease the sales price of the product. As the product reaches the decline stage, we will lower GoGetter w220 price
further and try milking/harvesting the market for GoGetter w220. Marketing CRA: GoGetter Mobiles [16] Group E2
LEARNINGS
Demographics affect the consumer behavior: Although the distance between Udupi & Manipal is just 5 kilometers, there is a huge difference in the behavior of the consumers of both the towns. Major influencers of these differences in consumer behavior are occupation, income levels & age of the consumers. Hence the marketing strategies have to be in sync with the demographics of a particular region. Allocation of Marketing Budget: For Marketing Budget, two main categories can be identified: Nationwide marketing & Localized Marketing. Nationwide Marketing concentrates on mass communication channels while Localized Marketing focuses more on promotions, event sponsorships, etc. As far as the Mobile handset products are concerned, the buying behavior of a consumer is drastically influenced by demographic & geographic factors. Hence localized marketing is carried out by regional marketing and sales offices of producers/marketers. Also, the budget should be allocated keeping the demographic & geographic factors in mind along with prevalent competition in the market. Product Life cycle: Every product has a certain life cycle period which should influence the budget allocated for the marketing expenses. Our objective should be to maximize the profits while the product is in its Growth & Maturity stage while milking the market during the product?s decline stage. With average life cycle of product being around 3 years, we should always go for market skimming along with large scale marketing and promotions. But the main thing to remember is that even a proper market skimming wont assure you a profit in the immediate short run , say of an year or so. So some level of patience is needed.
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