Strategies for increasing the market share in tier II and tier III cities of India

Strategies for increasing the market share in tier II and tier III cities of IndiaMotorola MobilityPresented by Sachin Gupta14P101 Situation Complication Question AnswersMotorolas market share in tier II/III cities is very low compared to its share in tier I citiesMotorolas re-entry in Indian market; exclusive tie up with FlipkartQuickly capturing significant market share through its online only modelPut quality handsets at an affordable price before the customer Not enough sales generated from tier II and tier III citiesCompetition increasing at the speed of light; very alarmingFocus on strategy development to increase the share of Motorola especially in tier II and tier III citiesHow can this be achieved? What should be the strategy for Motorola going forward?

Situation Complication Question AnswersEntry of various competitors in the market has opened up the Indian smartphone marketCompeting on price only erodes the marginsEstablished competitors quickly copied the online model Competitors operating on both online and offline channelsMotorolas absence in offline channel ubiquitousEntry of Chinese makers into Indian market made the space even more competitiveEntry of various competitors in the market has opened up the Indian smartphone marketSamsung retains the top spot in Indian smartphone market with 24% IDC_ReportOther top players Micromax, Xiaomi, Apple, HTC,Intex, Lava, One plus Top 5 players account for about 59% of Indian Smartphone marketXiaomis entry in top 5 with 4% share; replaces Motorola from top 5 in the previous quarterSupposedly the awareness levels of Motorola not very high

Situation Complication Question AnswersWhat are the factors that govern Motorolas functioning? Hows the industry stacked up?Internet 3rd largest in the world; 32% CAGR; 213m(Dec13), 302m(Dec14), estimated 354m(Jun15) [report]Mobile internet users 173m in Dec14 to 213m in Jun15(estd), 23% growthEcommerce $13.5b in 2014 to $16.3b in 2015; growth of 33% [report]Drivers of ecommerce Smartphones, internet access, COD facility, Huge investmentsSmartphones 350m users(2014), growth of 200m by 2016 [report]Motorola Owned by Lenovo; Current range of devices: Moto E, Moto G, Moto X, Moto Turbo and Moto 360

Why do we want to conduct the research in the tier II and tier II cities of India? : rationalePropensity for ecommerce increasing substantiallySmartphone sales also increasing at a fast paceMajority of growth and expansion in semi-urban and rural areasBut Motorolas sales low in tier II and tier III citiesWhats holding Motorolas sales back?Why not directly ask the customers? Try to understand the decision drivers?How do they view Motorola against the competitors?

What are those critical objectives that we need to address?As the factors discussed earlier are all interlinked to Motorola: we divided our research broadly into 4 different categories:Demographic studySmartphone buying behavior Propensity for online shoppingAwareness of Motorola

The objective was to study and understand these four categories before working on the end goal. Recommendations that could only be supported by the research outputs.What are those critical questions for which the answers are being looked for?What is the current ecosystem of smartphone industry? How are the smartphones sold?How is the sales trend and buying behaviour among people in online v/s offline channel?How is Motorolas awareness in tier II and tier III cities? Are they at sufficient levels to trigger increased sales?

What is our sample? : MethodPrimary research conducted in the regions West , North and Central India.Major Cities (Tier I/II/III) :Punjab Amritsar, Jalandhar, PhagwaraHaryana Ambala, Kurukshetra, KarnalGujarat Ahmedabad, Vadodara, SuratMaharashtra Nashik, Aurangabad, NagpurChattisgarh Bhilai, RaipurTotal No of respondents 938Total Cities Covered 14The sample was pre-dominantly targeted at the students. 94.6% of the respondants were in the age group of 12-25y, 4.64% were in the range of 26-35y and the rest >35yearsHow have we conducted our survey? : ProcedureDivided into 2 phases:Visit to service centers of Delhi/NCRVisit to tier II and tier III cities of different zonesService CentersConducted face-to-face interviewsInteraction with service center employeesPhased visit to different zones of IndiaFloated questionnaireFace-to-face interviewsVisited colleges, Universities, Shopping Malls, Local mobile/electronics markets and other markets with high footfallPeople willing to spend time were interviewed at greater lengths Situation Complication Question AnswersResults and AnalysisSmartphone features ranks among the top 3 factors while buyingMajority complained about certain specific features which they would like to change in their smartphones Certain factors prohibit people from purchasing products online. Top ones are products genuineness, lack of touch & feel, payment optionsMotorola awareness level for new products low among the respondents

Improve product features by allowing the user to customize the phones featuresIntroducing concept of replaceable smartphone partsCustomer having the option of replacing an old part with an upgraded oneSwap an old low resolution camera with a higher resolution cameraTo be integrated on Moto Maker platformNo need to buy a new smartphone

Launch experience zones in different cities to overcome the online shopping obstaclesTo address products genuineness, lack of touch n feel aspect we recommend establishment of Motorola experience centers in different cities of India

This involvesProducts on display: customer able to touch n feel the productsFacility to order from these experience centersExclusive product launches at such storesSpecial promotional schemes when buying from these centers

Increase awareness of Motorola through various marketing waysIncrease in promotion activities contests and offersCustomer engagement programs through Campus engagement activitiesExperience centersWord of mouth marketingOOH AdvertisingNative advertisingIncreased social media interaction to increase branding

Thank You for the opportunity!