PROJECT REPORT

On

“MARKET POTENTIAL FOR SPICE PHONES

Submitted To: Submitted By:

Mrs. Shikha N. Khera Ravindra Kishore Shubham SharmaKaran GuptaDarshan JindalRachit Mehra

ACKNOWLEDGEMENT

I am extremely grateful to Mrs, Shikha N. Khera, JIMS, Delhi for being a source of inspiration

and for her constant support and suggestions which benefited me a lot while doing this project

“TO check the market potential for spice mobile phones.”

I also want to thank Mr. Harsh and Mr. Jitender for guiding me to get primary data from the

respondents.

Through this column, it would be my utmost pleasure to express my warm thanks to all the

respondents of my survey for their valuable answers and time.

Date

INDEX

1. Objective2. Literature Review3. Research Methodology4. Data collection5. Data Analysis & Interpretation6. Conclusion7. Recommendation8. Bibliography9. Appendices.

OBJECTIVE

To determine future prospects of Spice mobile phones To analyze the demand for the Spice mobile phones.

Literature Review

Today, mobile handsets have not only metamorphosed from the huge briefcase size devices of

the 1980s to the ultra slim phones, but have also moved beyond being mere devices to make and

receive calls. with more & more features and technologies being added, mobile handsets are on

the way to be a single device serving the purpose of a phone, camera, MP3 player,GPRS ,games,

television and a lot more.

India has been the largest emerging mobile handset market in the last one year, surpassing China

and these super gadgets have already made inroads in the Indian market.

In India, there are already 250 million mobile customers, with 7 million more people every

month becoming mobile users. In 2007 itself, the mobile market in India grew to 120 million and

this growth is expected to cross 180 million units this year. with such an astonishing no. of

mobile users in India, and just a little over 31 million PCs,mobile handsets will soon replace the

personal computer.

In India, Nokia, Sony Ericsson, and Motorola are the frontrunners, along with a plethora of

players like Samsung, LG, Spice and Fly with other small players looking to grab place for them.

Nokia, over the years, has been tasting success with its focused product range, competitive

pricing and good Distribution Network. Sony’s brand identity of high memory phones & phones

with unique imaging solutions has been built with aggressive advertising and marketing strategy,

while Motorola has focused on building an Indian appeal and strong Indian connection with

products targeting the youths. Right from opening up experience stores to branded retail shops,

handsets makers are leaving no stones unturned. While Spice mobiles and fly mobiles are aiming

mainly at bottom of the pyramid. Though, Spice is also attracting customers through its dual

mobiles like D-88n.

Mobile phone giant Nokia’s market share in India has increased to 62.5 % 2007-08 from 53.6 %

in the previous year.Nokia’s revenue from the mobile segment stood at Rs. 15,000 crore, up by

30.6 %, compared to Rs. 11,486 crore in 2006-07.the company’s increased market share seems

to have come from the LG, Motorola and other players who have lost significant shares.

The market leader is followed by Sony Ericsson and Samsung at second and third place with

12.8 % and 7% market share respectively.

Motorola which is planning to sell the handset business also saw its share erode to just 5.9%,

losing revenue by almost 50%.while LG is the biggest loser with a market share of just 3.41%

and the comers like Spice have only 1.7% stake,thanks to its good position in Karnataka and

Punjab, being the second and fifth largest handsets provider there.

India’s telecom equipment revenue touched Rs. 95407 crore in 2007-08 driven by the rising

demand for mobile handsets and wireless infrastructure expansion by service providers.

In telecom equipment, Ericsson had revenue of Rs. 8,000 crore. Nokia Siemens network, the

merged entity between Nokia and Siemens had revenues of Rs.7779 crore and Alcatel Lucent

posted revenues of Rs.7,000 crore.

“While Nokia and Ericsson retained their positions as top players, Nokia Siemens Network,

struck major deals in the wireless segment. Expansion of mobile networks And broadband

infrastructure and the introduction of 3G technology will sustain the growth in the current year.”

Out of the total revenue of Rs. 95,407 crore, handsets business was Rs. 24,000 crore.the phone

segment contributed nearly one fourth to the total telecom equipment industry, Rs. 25,203 crore

recording a growth of 7 per cent.

In the handset segment, revenues of mobile handsets manufacturer grew 12% to Rs.24,003 crore,

while the fixed handsets sales decreased by 41% to Rs. 12,00 crore, over the same period last

year.

The Indian handset market recorded a 33% growth by volume with 95.6 million pieces sold

during the year against 71.8 million in the same period in the previous year.

Of the total handsets sold, 68.3 million were GSM phones and 27.3 million phones are based on

CDMA technology

Youths have been the main target for the converged mobile phones. Handset makers have been

redefining the ways to crack the youth segment which is also the primary target for the

replacement market as young people have a tendency to change their handsets often. This has

seen companies launching new set of products every six months.

RESEARCH METHODOLOGY:

INTRODUCTION

This chapter aims to understand the research methodology establishing a framework of

evaluation and revaluation of primary and secondary research. The techniques and concepts used

during primary research in order to arrive at findings; which are also dealt with and lead to a

logical deduction towards the analysis and results

RESEARCH DESIGN

The research design applied here was exploratory research and descriptive research.

Exploratory Research is one in we don’t know about the problem, we have to find about the

problem and then work on solving the problem. Whereas in case of descriptive research, we

know the problem, we just have to find the solution to the problem. Generally descriptive

research design is applied after exploratory research design.

Here, through primary research we came to know about the sales for different mobiles, customer

likings, problems faced by dealers and reasons for low sales of Spice mobiles.

SAMPLE SIZE

To complete the research, the questionnaire was filled by 30 respondents.

RESEARCH TOOL

The purpose is to first conduct a intensive secondary research to understand the major players

in the market, their sales, studying their handsets and their features, & full impact and

implication of this on their market and the customers. This helped us in the primary research to

ask the questions which are still unanswered & we can get only through primary study.

DATA COLLECTION

DATA COLLECTION:

Both primary and secondary data have been collected very vigorously

Primary data: it is basically collected by getting the questionnaire filled by the respondents

selected for the research.

Secondary data: it is collected by the study of enormous material available on the company

websites and the previous researches related to mobile industry. The data was also collected from

the magazines and newspapers.

QUESTIONNAIRE METHOD

The questionnaire method has come to the more widely used and economical means of data

collection. The common factor in all varieties of the questionnaire method is this reliance on

verbal responses to questions, written or oral. We tried to make sure the questionnaire was easy

to read and understand to all spectrums of people in the sample. It was also important to respect

the samples time and energy hence the questionnaire was designed in such a way, that its

administration would not exceed 4-5 minutes. These questionnaires were personal administered.

Sample size: 30 respondents

No. of questions: 10

Data Analysis

Reliability Statistics

Cronbach's Alpha N of Items

.691 9

INTERPRETATION: Cronbach's Alpha test is conducted in order to check the reliability of the data we have collected. If the value comes out to be greater than 0.7 then it shows that the data is highly reliable and if the value comes out to be less than 0.7, it shows that either the respondents have wrongly answered the questions or there is some manipulation in the responses. And hence the data is not reliable.In our research the value is coming out to be 0.691 which shows that the data is reliable.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .523

Bartlett's Test of Sphericity

Approx. Chi-Square 50.259

df 36Sig. .058

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total% of

Variance Cumulative % Total % of Variance Cumulative % Total % of Variance1 2.197 24.411 24.411 2.197 24.411 24.411 1.9502 1.737 19.295 43.706 1.737 19.295 43.706 1.9273 1.377 15.304 59.010 1.377 15.304 59.010 1.4334 .940 10.439 69.4495 .859 9.541 78.9906 .740 8.226 87.2177 .589 6.539 93.7568 .355 3.944 97.7009 .207 2.300 100.000

Extraction Method: Principal Component Analysis.

Rotated Component Matrix(a)

Component

1 2 3BRAND AWARENESS -.237 .739 -.040LOOKS .029 -.173 .867SOUND .502 -.159 -.265BATTERY BACKUP .438 -.449 .255PRICE .845 .292 -.026ADVERTISMENTS .356 .585 -.089SCHEMES .776 -.254 .212COMPETITION -.074 .662 .258 SALES OF SPICE MOBILE -.023 .441 .652

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.a Rotation converged in 6 iterations.

Correlations

INTERPRETATION: KMO & Bartletts Test are conducted to find if the data is ready for factor analysis or not. Basically the test confirms if the existing variables form Identity matrix or not.If Identity matrix is formed it means that the data cannot be reduced & that the tools have to be straight away applied to the existing data. And if Identity matrix is not formed the data can be reduced i.e. it is ready for factor analysis.Further if the value of KMO comes out to be less than 0.5, it is not considered good. If it comes out to be between 0.5 & 0.75, it is considerable and if it exceeds 0.75, it is very good.In our research KMO is coming out to be 0.523 which shows that the data is considerable.

BRAND

AWARENESS LOOKS SOUNDBATTERY BACKUP PRICE

ADVERTISMENTS

BRAND AWARENESS Pearson Correlation 1 -.168 -.096 -.158 -.081 .292Sig. (2-tailed) .375 .612 .404 .671 .117N 30 30 30 30 30 30

LOOKS Pearson Correlation -.168 1 -.078 .238 -.086 .010Sig. (2-tailed) .375 .683 .206 .652 .958N 30 30 30 30 30 30

SOUND Pearson Correlation -.096 -.078 1 .170 .295 -.056Sig. (2-tailed) .612 .683 .369 .114 .769N 30 30 30 30 30 30

BATTERY BACKUP Pearson Correlation -.158 .238 .170 1 .155 -.088Sig. (2-tailed) .404 .206 .369 .412 .643N 30 30 30 30 30 30

PRICE Pearson Correlation -.081 -.086 .295 .155 1 .326Sig. (2-tailed) .671 .652 .114 .412 .079N 30 30 30 30 30 30

ADVERTISMENTS Pearson Correlation .292 .010 -.056 -.088 .326 1Sig. (2-tailed) .117 .958 .769 .643 .079

N 30 30 30 30 30 30SCHEMES Pearson Correlation -.384(*) .163 .197 .392(*) .502(**) .065

Sig. (2-tailed) .036 .389 .297 .032 .005 .731N 30 30 30 30 30 30

COMPETITION Pearson Correlation .374(*) .065 -.206 -.236 .132 .131Sig. (2-tailed) .042 .732 .275 .208 .487 .489N 30 30 30 30 30 30

SALES OF SPICE MOBILE

Pearson Correlation .308 .339 -.078 -.131 .138 .030

Sig. (2-tailed) .098 .067 .684 .490 .466 .874N 30 30 30 30 30 30

* Correlation is significant at the 0.05 level (2-tailed).** Correlation is significant at the 0.01 level (2-tailed).

INTERPRETATION: Correlation is done to find out the relationship between two variables.It has been observed that the prices of spice mobile and schemes provided by them have a positive and strong correlation

Variables Entered/Removed(b)

ModelVariables Entered

Variables Removed Method

1COMPETITION, LOOKS, ADVERTISMENTS, SCHEMES, SOUND, BATTERY BACKUP, BRAND AWARENESS, PRICE(a)

. Enter

a All requested variables entered.b Dependent Variable: SALES OF SPICE MOBILE

Model Summary

Model R R SquareAdjusted R

SquareStd. Error of the Estimate

1 .623(a) .389 .156 .70769

a Predictors: (Constant), COMPETITION, LOOKS, ADVERTISMENTS, SCHEMES, SOUND, BATTERY BACKUP, BRAND AWARENESS, PRICE

ANOVA(b)

Model Sum of

Squares df Mean Square F Sig.1 Regression 6.683 8 .835 1.668 .165(a)

Residual 10.517 21 .501

Total 17.200 29

a Predictors: (Constant), COMPETITION, LOOKS, ADVERTISMENTS, SCHEMES, SOUND, BATTERY BACKUP, BRAND AWARENESS, PRICEb Dependent Variable: SALES OF SPICE MOBILE

Coefficients(a)

Model

Unstandardized Coefficients

Standardized Coefficients t Sig.

B Std. Error Beta B Std. Error1 (Constant) .497 1.102 .451 .657

BRAND AWARENESS .318 .147 .468 2.165 .042LOOKS .436 .161 .508 2.716 .013SOUND -.055 .125 -.083 -.441 .663BATTERY BACKUP -.242 .187 -.257 -1.293 .210PRICE .366 .229 .369 1.597 .125ADVERTISMENTS -.220 .172 -.254 -1.282 .214SCHEMES .008 .220 .008 .035 .972COMPETITION -.054 .249 -.044 -.217 .831

a Dependent Variable: SALES OF SPICE MOBILE

Conclusion

The Spice mobile lacks in the brand awareness with 73% dealers thinking it to be the

reason for its low sales.23% also feel that it hasn’t got lucrative looks which is a must to

attract youth customers.Thus, they must work on promotions by PAN India movement

and should offer some stylish mobiles.

Moreover, the company should send their company executives to every dealer in order to

offer Spice mobile in each and every corner to all customers. As there are still many

shops which don’t have a Spice mobile because executives did not approach them.

It is concluded that within 10 years, the Spice mobile should overtake the likes of Samsung and Motorola and will occupy the same position as in Karnataka.

Recommendation

Spice mobile should not stop the production of mobiles at a time when they are

having the maximum sales for them like they did with C-810 model. There was a

good demand for the model and thus, Spice should provide the stock to the

distributors.

The company should work on its brand building if it really want to match the likes of

Nokia and infact should work on its models looks to catch the attention of youths.

The company should open their own service centers as the customers face problems

to get their phones serviced in Hotspot which already offers service for a large no. of

players like Samsung , Nokia LG , Sony, and Fly.

The company may offer some attractive offers with their mobiles like a Lucky Draw

winner to have a date with Spice’s brand Ambassador Katrina Kaif or the winner’s

photo to be displayed on one of its model’s box. That may cause a sudden rise in

sales.

Bibliography

Websites

www.marketresearch.com/product/

www.spicempbile.in

www.google.com

QUESTIONNAIRE

Q.1 Which price range mobiles do you purchase?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.2 Does spice mobiles phones has the maximum sales?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.3 Do you agree that brand awareness of spice mobiles are high?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.4 Does spice mobiles has the best looks?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.5 Does spice mobiles has the best sound?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.6 Does spice mobiles has the best battery backup?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.7 Do you think that spice mobile have lowest prices?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.8 Do you agree lack of advertisement is the problem for low sales of spice mobile?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.9 Do you agree new and improved schemes would increase the sales of mobiles?a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree

Q.10 Is spice mobile giving tough competition to nokia and Samsung mobile phones?

a. Strongly agree b. Agree c. Neutral d. Disagree e. strongly disagree