The art of eye-ball grabbing..!!

Challenging the assumption that television ads with lots of
emotional content encourage viewers to look at them more closely, a
new study has claimed that such commercials make people more
susceptible to sales messages.

In fact, consumers are more likely to scrutinise fact-based adverts so
they can "counter-argue" what they are being told, said the study by
the University of Bath.

It is the likeable, entertainment-based ads that bring our guard down,
making us more relaxed and suggestible to the pitch, researchers
discovered.

That has "serious implications" for certain types of commercials,
particularly those aimed at children and those that may harm our
health, said Dr Robert Heath, who led the study, The Telegraph
reported.

"There has been a lot of research which shows that creative TV ads are
more effective than those which simply deliver information, and it has
always been assumed that it is because viewers pay more attention to
them", he said.

"But in a relaxed situation like TV watching, attention tends to be
used mainly as a defence mechanism. If an ad bombards us with new
information, our natural response is to pay attention so we can
counter-argue what it is telling us."

For their study, the team used an eye-tracking device to measure the
real-time attention paid to a range of adverts with different levels
of emotional content.

The adverts were "embedded" in an episode of the sitcom Frasier and
participants were unaware that advertising was the subject of the
research.

The findings, published in the Journal of Advertising Research, showed
that viewers paid less attention to likeable, creative adverts and
more attention to factual information-giving adverts, even when they
did not like them.

Dr Heath said, "On the other hand, if we feel we like and enjoy an ad,
we tend to be more trustful of it and therefore we don't feel we need
to pay too much attention to it".

"The sting in the tail is that by paying less attention, we are less
able to counter-argue what the ad is communicating. In effect we let
our guard down and leave ourselves more open to the advertiser's
message".

How Not To Do It

Social media is a great marketing tool. But there are pitfalls one should steer clear of..

Business was sailing on as usual when along came a beast called social media. With a life of its own, it took the globe by storm. In the US, Facebook replaced the unassailable Google as the most visited site. Social media even overtook porn as the No.1 activity on the Internet. In about five years, the online world was swimming with networks of people talking, complaining, recommending, sharing, learning. And guess who was not in charge? Big business.

Soon everything online was coloured social. Ordinary netizens swam to the deep end, but businesses were left gasping and clutching the railings. Suddenly what customers said online outpaced publicity or ad campaigns. Opinion came with photos, videos and voice, and could spread like wild-fire. This was a fad that would not go away. Businesses realised there was no beating the social media; they will have to join it.

Easier said than done. It took radio 38 years to reach an audience of 50 million; television, 13 years; Internet, four years; and the iPod, just three years. If businesses were caught unawares, it is understandable because the social media sites themselves are not quite sure of what they are about. Marketing consultant and CEO of Paul Writer, Jessie Paul, says: “It is early days, but like most other platforms before, social networking is seen as the marketers’ next big leap. Everybody wants to be there but nobody has the winning formula. They wait for the magical thing to open up.”

But there will be no magic. Marketers will have to reorient and reinvent for social media, which doesn’t look like it’s going away anytime soon. So, back in the boardroom, one can tell the men from the boys as they meet this new challenge where every move is nakedly visible to customers. There is no sure-fire winning formula yet for social media but there are several things that organisations definitely should not do.

Deadly Sin No. 1:
Just Be There
Starting up accounts and pages on social media sites and leaving them to fend for themselves is the first good way to mess it up. In fact, there’s little to choose between zero presence and mere presence. It’s a clear case of been there, but not done that.

Nirula’s has a Facebook page. While that may be exceedingly cool, don’t imagine that the page is as busy as the old capital-based favourite fast-food joints you’ve always known and loved. The page has the familiar Nirula’s logo, a dump of the Wikipedia entry, and 70-odd fans who have nothing to do after having pressed the ‘like’ button. Much the same goes for the popular Kurkure or Nimbooz. Their ads may be on YouTube because it costs nothing to put them there, but this does not amount to reorienting for social media.

5 Popular foreign brands on Facebook Starbucks: 9,382,743 Coca Cola: 6,829,105 Skittles: 6,100,328 Oreo: 5,855,692 Red Bull: 5,665,047

5 Popular Indian brands on Facebook Vodafone Zoo Zoos: 609,169 Fast track: 301,680 Cafe Coffee day: 160,227 Tata Docomo: 156,888 Kingfisher: 101,828 (Figures are number of fans as of 7 July)

2 Popular Hate Campaigns Boycott BP (Facebook): 795,205 fans as of 8 July Mission: Set up to Boycott BP fuel stations until the Gulf of Mexico oil spill is cleaned up. There was an uproar when the page was shown as deleted recently. It was put back within hours. Nestle Kit Kat video (YouTube, Vimeo) 1.5 mn views as of 8 July Mission: Greenpeace put up a mock ad of Kit-Kat alleging destruction of forests for producing palm oil. The video was replaced by a censored version.

Punita Lal, marketing head of beverages at PepsiCo India admits that the company is still trying to scale up its efforts on social media. “Twitter as a social medium is something we have limited knowledge of. We don’t know how best to use it other than a buzz medium,” she says. Pepsi, the beverage brand itself, is quite active on social media, but sub-brands such as Tropicana, Nimbooz and Mountain Dew are not. “By next year, we shall be more aggressive with our presence,” says Lal.

Hareesh Tibrewala, joint CEO of social media solutions company SocialWavelength, says brand managers are just beginning to wake up and smell the coffee and are figuring out that social media makes for a good place to communicate. Brand managers themselves agree. “In India most of the brands have not reached the desired level. We are still finding a way to get there,” accepts Mohit Beotra, head of brand and media at Airtel. The brand’s Facebook community is liked by a mere 2,262 people — hardly a representative of the number of subscribers it has.

Now, ever so cautiously, companies are getting ready to dip their toes in the water. “A year ago, we needed to sell the concept of social media,” Tibrewala says. “Today, when we meet a brand manager, he seems to be aware and is keen to allocate some nominal budget and try out the medium.” But things move at the speed of thought on social media and brand managers need to come up with quicker game plans. Easy choices: be swamped, survive, or swim very fast.

Not that being swamped is a real choice. Being non-existent on social media says something about a company today. If companies don’t create their own space and presence, someone else will — and not necessarily the way the company would like. “Many brand managers have the ostrich syndrome. They bury their heads and pretend that consumers are not talking,” say Prasanth Mohanachandran and Karl Gomes, co-founders of digital marketing firm AgencyDigi.

On the father of all social networking sites, Facebook, it is often fans, not brand managers, who put up pages for companies. But loyalty can only go so far before these pages begin to look neglected. Fans may use their personal networks to populate the page once, but what after that?

To add to the brand managers’ worries is the ever present possibility of something going wrong and fans putting up hate or cause pages. The Boycott BP page on Facebook has nearly one million followers busy taking potshots at the company for the oil spill off the Gulf of Mexico. Meanwhile, on Twitter, BP Global PR, which has no official connection with the company, has 182,000 followers who are having a field day getting at BP on the impact of the spill on the environment.

Deadly Sin No. 2:
Go Social, Minus Plan
Leaving social media to the company geek can be a waste of time at best and a disaster at worst. Coming at it from a different place, the tech savvy fast tracker will magically know how to do it, but not why. With a nebulous awareness of the company’s strategy, business goals, communication philosophy and other heavyweights, typically such a person will not be able to wear the brand manager’s hat and, sooner or later, will end up saying something that doesn’t fit the brand’s image.

In the world of social media, everybody stands an equal chance of being caught with his pants down. And, we are not referring to the Mayor of Leicester here. Personal care brand Dove’s ‘real beauty’ campaign, featuring actual consumers was under scathing attack on blogs in 2008 after someone on the production team of the commercials was quoted in an interview saying he had touched up the images of people in the ads. Consumers angrily criticised Dove for not being truthful after promising to showcase ‘real’ beauty.

In time, the dust settled after Unilever denied that the images were digitally altered. But it’s difficult to wipe away footprints. Dove recently advertised on Craigslist seeking women with ‘flawless skin’ and ‘no scars’ for its next ‘real beauty’ campaign. Consumers instantly pointed out that flawless could hardly be ‘real’ and that Dove seemed to be back to its old tricks.

Dove’s is not an isolated incident. Another famous case doing the rounds on the Net is of 3M, makers of Post-its, which discovered that someone had done a creative job of dressing up a Jaguar car in Post-its and taken a photograph. The company got in touch with the creator and said it would like to use the photograph in an ad, but when he asked for money, 3M decided to create its own Post-It art. This set the blogs on fire and it wasn’t long before 3M found itself in an embarrassing spot.

The danger of going social just to be there multiplies many times when accompanied by the lack of a strategy. Rajesh Lalwani, founder of social media consulting firm Blogworks, points out that there is a bit of science to social media. “Social media must be looked at from a strategic perspective. It’s not a toy; it’s not a game you are playing. Just because everybody is doing something, it’s not a good enough reason for your company to get there too.”

More confusion ensues when a social media strategy doesn’t remotely fit the existing strategy of a company. Says Tibrewala: “Companies are often unable to think of social media as part of an integrated brand communication. Social media platforms need to be connected to the other brand communication initiatives.”

Cadbury does a good job of integrating the message and uses its product packs to point to its online activities, says Tibrewala.

But when the challenge gets too much, brand managers in many companies cut and paste campaigns and activities offline on to a social media platform, whether it is appropriate or not. They even choose their social media platform more by default than by design.

Deadly Sin No. 3:
Broadcast Yourself
Youtube’s tagline was probably not meant for brand managers as much as it was for ordinary netizens. Yet, a large number of companies mess it up by pushing out one-sided communication in the name of social media marketing.

Pushkar Sane, global head of social marketing practice at Starcom Mediavest Group, a global media services agency, says brand managers couldn’t do worse than broadcasting on social media: “Marketers love their own voice. It’s all about I, me, myself, the brand; never about consumers. They talk to consumers rather than converse with them, when social media is all about having two-way conversations. How many times did a brand become your friend on Facebook?”

You have only to search for some of the top brands on Twitter to see one-way communication at work. Churning out 140-character information nuggets about products or companies takes neither the time nor the effort that is required to engage customers in conversations or to even listen. Lalwani says it’s important for companies to listen: “The reason social media is so important is because it is a platform where people talk about their lives so freely. Their experiences with products and services are also a part of their lives and they talk about that too.”

Predictably, companies claim they have no time or resources. But things can be done with little resources too. Starbucks uses a relatively small social media team of six and has one of the highest engagement scores among 100 top brands. Toyota, relatively new to the social media arena, launched its YouTube channel in March 2008 and a Twitter profile in April 2008. Yet, with a team of just three people, Toyota was able to achieve an impressive engagement score across multiple channels.

There are rich insights for businesses that care to listen to their customers on social media. Research that would cost a lot and yield very little qualitative information has some competition from the real-life learning that comes directly from customers. Rajesh Lalwani explains how directly useful social media is for the customer and the company. “Facebook and Twitter, for example, are great connection platforms. However, when a customer wants to make a purchase decision, blogs and forums.

often provide the answer. And it is easy enough for brand managers to scour relevant blogs and forums and see what customers are saying about them,” says Lalwani.

Deadly Sin No. 4:
Being Too Autocratic
Not so long ago, Nestle apparently posted a request to users asking them not to use variations of its logo as their profile picture. Posts would be deleted, someone from Nestle warned. Users were outraged and asked Nestle not to tell them what to do. The Nestle Facebook managers made things worse by getting outraged themselves and saying it was their page and they set the rules and if users didn’t like it, they could go.

Soon, what started off as a tussle between the food giant and Greenpeace became a free-for-all with consumers jumping into the mix. Greenpeace had created a mock ad of Nestle’s flagship brand, Kit-Kat, alleging that the company’s brands were destroying forests and endangering lives of Orangutans. In reply to this, Nestle asked that its logo not be tampered with, which started the fight.

Nestle recently made a statement saying that it has stopped procuring from suppliers who do not practise sustainable farming. The incident, however, is still a lesson in social media PR and customer communication.

Any company could face negative comments from customers. It is impossible to please everyone all of the time. But handling negativity or criticism by going on the offensive causes more harm than good. Brand managers have quickly learnt that such comments have to be handled with kid gloves. In fact, customers have to often be thanked for giving feedback, not rapped on the knuckles. One of the mandates of the social media consultant or manager within the company, says Lalwani, is to deftly bring the quantum of negative comments down.

4 Indian CEOs Who Are Active On Twitter

1) Anand Mahindra Vice-chairman and MD, Mahindra & Mahindra Following: 35 Followers: 76,275

2) Swati Piramal Director, Strategic Alliances & Comm., Piramal Healthcare Following: 9 Followers: 1,776

3) Vijay Mallya Chairman, UB Group Following: 42 Followers: 110,041

4) Vineet Nayar CEO, HCL Technologies Following: 15 Followers: 1,190 (As of 8 July)

It is not only important to respond, but to respond intelligently and quickly. Kiruba Shankar, CEO of Business Blogging, a company that helps businesses manage their online reputation, says social media is much like running a marathon — it needs to be effectively fast paced.

The speed with which word of mouth can travel on social media has led to the term being rephrased as ‘world of mouth’. A delay in responding to grievances, an apparent sluggishness in addressing a problem, failure to come up with a solution in a transparent manner can all negatively impact a brand today in ways that were never possible before.

Deadly Sin No. 5:
Sell, Sell, Sell
Although the ultimate aim of marketers and brand managers is to get more business, they could mess it up by forgetting that people on social media are not merely there to be the recipient of sales. Retail major Shoppers Stop’s page on Facebook looks no different from an e-shopping catalogue.

Tibrewala says that seeing social media as just another marketing tool is a fallacy. “One has to think of it as a communications tool and the brand has to intelligently build its brand communication and weave it into the social fabric of its target market. Instead, brand managers think of it as a campaign.”

We can blame much of the get-rich literature that floods the Internet for colouring everything in shades of marketing. In truth, marketing is just one aspect of the many things that happen on social media — very much like real life. User tolerance for marketing messages has a limit.

One person who handles communication, response, criticism and engagement rather well is the Mahindra Group managing director, Anand Mahindra. With 76,000-plus followers on his Twitter page, he is comfortable and natural while dealing with comments from customers and others. Always responsive and never dismissive, rather than hard selling, he sets just the right tone.

Deadly Sin No. 6:
Do One Thing, Say Another
This age of Web 2.0 has brought in a completely new level of transparency. Most consultants agree that social media is going to force companies to be more honest in their campaigns and claims simply because it is so easy for consumers and others to refute their claims.

Well, let us hope so. An unfortunate situation with IT giant HCL, highly acclaimed by the world of management for its unique concept ‘Employee First, Customer Second’, shows how things can go terribly wrong.

Online, employees have ripped apart the tagline and the concept it stands for. A group on Facebook for ‘Employee First Customer Second’ has members trashing the concept. HCL seems to have chosen to remain masterfully silent. “This is a typical example of companies who seem to be happy to respond to the positive but choose to remain silent when there are negative comments,” says Krishna Prasad, chief experience officer at Dentsu Digital.

HCL executives, however, say that such stray incidents do not take away the impact that social media can have. Saurav Adhikari, president and global head of corporate strategy for HCL says that social media has helped in popularising their brand image. “The average age of an HCL employee is 29 years,” says Adhikari. “There was no way of connecting with the young HCL-ite and young IT professionals but through social media. So, yes, social media is very integral for HCL as an organisation that must be connected to the pulse of its increasingly young consumer and employee.”

Language Sprechen Sie Social?

Customers are not just talking but talking in a strange new language. Understanding socialese is a whole new challenge and one that has made the new environment online seem more alien than ever. New words are actually being added to dictionaries and style guides like the Associated Press’s Stylebook. In a sense, the jargon keeps many people out, possibly including CEOs and top management of companies who have not had time to grow with social media. Consultants often make a bad situation worse by keeping their clients obfuscated and dependent on them to take any steps in social media. Understandably nervous about saying the wrong thing or looking naïve and technophobic, management may prefer to delegate anything to do with social media to others, often the most tech savvy individual in the company, or to the PR firm. To complicate matters, social media sites all have their own unspoken rules of etiquette. YouTube, for example, is relatively free-for-all and can get outright nasty, while those on Twitter are more careful about how they engage and respond. Facebook also has a variety of styles on its different pages and accounts. LinkedIn, focused on professional networking, has its own rules. These often unspoken norms lend to the site’s atmosphere and environment. Mistakes with these rules can prove costly.

These and many other incidents have shown that there is little point in being anything but truthful when anyone, particularly a disgruntled employee, can tell it like it is on social
media sites.

Deadly Sin No. 7:
Forget The Community
Another way to mess it up is to fail to build or target a community. Gaurav Mishra, CEO of social media consultancy 2020 Social, says, “Companies go wrong when they don’t start with the community. They go wrong when they start with a television commercial and say ‘how do we do social media now?’ If the punch line of a television ad does not connect with the consumer’s lifestyle, passion and interest, it is bound to fail.”

Mishra says that the smarter brand managers start with a community and build around it. “The campaign for Sunsilk Gang of Girls, or the Pepsi Youngistan campaign or Tata Tea’s Jaago Re are all ads that start with a community of young people.”

This year, Pepsi has said it will not do any regular Superbowl television ads (in the US) but will invest in an online project called Refresh, which will be about refreshing the society by providing millions of dollars to fund good ideas, big and small, Mishra adds.

Experts say the danger lies in companies chasing huge numbers but not doing anything to sustain the interest. “There seems to be no longer-term vision,” says Tibrewala.

Mishra points out, however, that Apple is an interesting example of a company not active on social media. “It does not do social media, it does not have a Twitter account, or even a blog. But it does business. It says that the people the company is trying to connect with want creative and high-end designs, and Apple does that with astounding success. The result is the fans are doing the social media marketing for the brand,” says Mishra. Apple, of course, may be an exception and who is to tell what would happen if they were, in fact, active on social media. But perhaps that would be more success than even Apple can handle.

At the end of the day, the one who can tell us all a thing or two about social media is probably Lady Gaga.

With reports from Prasad Sangameshwaran, Sunny Sen, Suneera Tandon and Malabika Sarkar
bweditor at abp dot in

MICROMAX

                  2008=#20
                         2010=#3
                              2012=#_?

Two years back, Micromax was a name heard by few and seen by fewer. Exhibiting a rare example of brilliant innovation combined with common sense, today it rules the world of advertising and has climbed to the number 3 spot in the domestic handset market. What next? by Surbhi Chawla
Of late, the Indian handset market has been flooded with a plethora of indigenous handset brands, which bear the stamp of companies that would have dumbfounded most acclaimed au faits as recently as a year ago. But these so criticised infantile firms have taught the masters of the mobile handset game (read: Nokia, Samsung, Motorola) how to ride the stalking-horse in the face of hell-raising competition. They have been successful in bringing to life the dormant aspirational values of many in the country, offering them “value for money” look-alikes of the best of handsets that the Indian Daddy Warbucks could afford. Their secret — they understand the psyche of the Indian consumer and deliver by “keeping it real fake”.

But as it occurs in many a fairy tale, there are the suitors, but there is just one real prince who walks away with all the glory and honour... and most importantly, wins the hand of the princess! In this race too, there appears to be one real prince for the moment – Micromax. And it is loud about not being a follower of the "keeping it real fake" cult. At present, Micromax offers 34 handsets in the Indian market. According to reports by tech-watchers at IDC, it is the third-largest handset vendor behind Nokia and Samsung. Some rise for a brand in the ghastly cluttered Indian handset market. So far so good. But will this north-bound express train gather greater momentum in the times to come? Some would debate, but considering the pace at which the industry has progressed in the recent past, Micromax may well be on its way to finding its name amongst the top two vendors in the country. According to IDC India, the number of handsets sold in the country touched 100.9 million units during the 12-month period ended June 30, 2009, registering a yoy growth of 6.7%. As the per capita income rises by the day, and as educational reforms make the common Indian more privileged, aspiration levels will rise, thus it will rise the demand for more handsets. In short – Micromax is in for a great ride along with other newbies.
But there is a sharp turn ahead. There’s no denying that Micromax has been the trend-setter in innovations and is well within the range of being considered a contender to grab the silver, but the very economic reason — a high forecast demand leading to natural rise in competition – that apparently guarantees a track-burning growth for the company, may burn its tyres. Says Deepak Kumar, AVP, Research, IDC India: "The number of emerging mobile handset vendors in the Indian market has grown to 26 in Q2 CY2009 and their contribution to overall shipments in terms of units, for the 12-month period ended June 2009, stood at 6.3%. This is in contrast to the count of only 11 emerging vendors, representing a share of 1.2% of overall shipments during the previous twelve-month period (July 2007–June 2008)." Says Vikas Jain, Business Director, Micromax Informatics: “I think our portfolio is nowhere close to being similar to that of any other manufacturer in the market; not even similar to any tier-III manufacturer, forget any tier-I competitor. We have always looked at introducing utility-based elements into the market through our devices and I think the customers are smart enough to understand it. This strategy is the secret to our success.” Adding to the drama, Vishal Sehgal, Co-founder and Director, Lava Mobiles, says: “In a short span of time, our company has captured 6% market share in terms of shipments and has grown so quickly due to the innovation that our products display." Taking innovation one step ahead, Lava recently launched the world's first ABCDE keyboard mobile device (this comes at a time when everyone is hopping onto the QWERTY bandwagon). This clearly gives Lava that "differentiation" edge. Innovation, competition and most importantly, clutter!

Evidently, the market is simply getting over-crowded, especially in the lower and mid-market segments. At the same time, an accelerated evolution of the market is at work, as the rising competition is forcing vendors to offer newer, richer features at attractive price points. Given the situation, the changes we see at Micromax – in order to nullify competitive challenges and retain its spot in the industry – are worth a notable case study and are taken hook, line and sinker out of Igor Ansoff’s product-market expansion strategy matrix. The first is pretty straightforward – trying to sell more products in current markets, through the adoption of a big-bang advertising strategy to drive the brand message through. Micromax has earmarked an advertising budget of Rs.100 crores for 2010. This is humungous by any standards (“We are going to continue to be associated with sports and Bollywood in a big way,” divulges Pratik Seal, Head (Marketing), Micromax, to B&E). The second is to apparently continue to grow in numbers by making the most of the untapped potential of rural India [while strengthening its presence in urban India through the latest product offerings like Q5 Facebook phone, Q7 and even a Windows-based phone, as revealed by company insiders].

The third strategy for long-term dominance adopted by the company is expansion into international markets. In fact, Micromax has already set up shops in Nepal, Sri Lanka and Bangladesh, and is looking forward to launch operations in the Middle-East in August 2010. As company officials say, Africa and Latin America will then follow. Strangely, funding is an issue that is not bothering Micromax at the moment. The company had received funding through the PE route in early 2010, when TA Associates had picked up a little less than 20% stake in Micromax. Naveen Wadhera, Director, TA Associates Advisory, tells B&E: “As a fast-growing, profitable company in a growth industry, Micromax ideally fitted TA’s investment profile. The company’s emergence as a leading mobile handset brand in only 18 months is remarkable. Ours is one of the largest technology investments in India over the past year, and we will provide additional support to ensure the company’s growth." With big ticket overseas organic plans, the funding will sure help.

It is noteworthy that prior to Micromax, Videocon was the only other Indian handset player, which had dared to take a shot at making it big in the international market by bidding for Motorola’s handset division. Though the deal did not materialise, Videocon proved its worth of being called an Indian MNC? Will Micromax too be able to say the same five years down the line?

Going by its track record, this company sure has taken the market by surprise and been a real trendsetter. But then, winning on foreign turf can prove a different ball game altogether. “We had promised to make Micromax a global brand and we will continue to deliver on our promises in the international markets,” avers Rahul Sharma, Executive Director, Micromax.

Amidst tough competition, one aspect that needs attention is how Micromax grew so fast in such a short time. It was not a cake walk. Many are aware that Micromax entered the handset market only two years back, but many don't know that it had already ventured into the distribution business six years before it even thought of betting big on handsets. They already had a B2B business in place, which gave them an automatic exposure to market truths and psychology of the consumers. This helped them understand what the market would desire in their handset. Also, during the time when the four founders – Rajesh Agarwal, Sumeet Arora, Rahul Sharma and Vikas Jain – got together to light the Micromax lamp, there were only five players in the domestic market – Nokia, Motorla, Sony Ericsson, LG and Samsung. "We realised that the mobile market was going to be big and only five players would not be able to address the wants of the entire market," says Sharma of Micromax. Company insiders explain how during one of the meetings, the management was trying to ascertain the mobile eco-system in India. It then realised the chasm — what the consumers wanted and what they were being delivered. For instance, demand for handsets was high in the interior of the country, but lack of electricity supply did not allow the market to accept the product. One of the promoters, during one of his trips to Bihar, learnt that there were areas, which received only 13 hours of electricity supply in an entire month and that people there used LED acid batteries to charge their phones. Agrees Anuj Kumar, Executive Director (South Asia) at Affle: “People in rural India had made a business model out of electricity shortage and would charge people Rs 10 or Rs.20 to charge their handsets.” With these insights, Micromax launched its first device – the X1i, which offered a 30 day battery backup.

At Micromax, the idea, though seemingly clichéd, is to fulfil the unfulfilled by harnessing already available technologies and a little common sense — the remote control mobile device is an example. There was a commercial technology available for manufacturing the universal remote control. Micromax simply used it and integrated into a mobile device. Developing an edge on the distribution front is also what the top honchos at Micromax worked on to succeed in India. The prime reason for this was to reach out to the non-connected rural and smaller locations, which were still untouched by rivals. The company also paid great attention to keep their channel partners pleased, up and running. With the system in place, it was not long when the company entered in the urban market through phones like the Q2, which marked Micromax's entry into the QWERTY category. With an attractive price tag of just Rs.4,000, it became a runaway hit (as at that time Nokia’s QWERTY range started at a price point of Rs.12,000). By changing the rules of the game, Micromax has indeed developed a short term sustainable competitive advantage.

Micromax posted revenues to the tune of Rs.1,600 crores and a net profit of Rs 150 crores in FY2009-10. It plans to increase the sales volume of its handsets from 1 million to 2 million by FY2010-11. It is also working out a plan to increase its distribution presence in the country from 70,000 retail outlets to 100,000 by the end of 2010. Micromax has also set up a manufacturing plant in Baddi in Himachal Pradesh, and is therefore, ready to answer any rule change by the government, which may make manufacturing (by handset vendors) compulsory in India. If innovation and speed-to-market were the only two criteria ruling the industry, one doesn’t need to look far of who has a high probability to takeover the lead in the near future.