Motorola Phones India Company Marketing Essay

5379 words (22 pages) Essay

1st Jan 1970 Marketing Reference this

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The brand in consideration for this report is Motorola Mobile Phones, India. Since the early 1990’s when mobile communication drastically revolutionised across the world, Motorola emerged to be one of the leading manufacturers and distributors of Mobile phone handsets. Since its inception in 1928, Motorola has been one of the pioneers in the production of wireless communication devices.

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In 1991, the company demonstrated the world’s first digital prototype cellular system using the GSM technology in Germany. To continue further with its advent and innovation in cellular wireless communication, it launched the first digital radio system that comprised a combination of paging, data and cellular communications and voice dispatch in a single radio network and handset in 1994. The Motorola Pager was one of the flagship products of the company that made the company a global market leader. However in 1998, Motorola was overtaken by Nokia as the world’s largest seller of mobile phone handsets. Since then the company has invested heavily on research and development to introduce some of the finest mobile phone handsets in the market. (Motorola, 2010)

However post 2005; the story has not been the same. The mobile hand set division reported 48% lower net earnings in the fourth quarter of the fiscal year 2006, due to weaker handset margins. Also the net earnings in the year end of 2006 were $3.6 bn compared to that of $4.5 bn in the preceding year. Although the company reported a 19% increase in sales, the net earnings went down due to unfavourable geographical and product tier mix (Twice, 2007). In 2007, the mobile handset division witnessed the worst phase in its business cycle with the company shipping only 36 million handsets worldwide. The fall in sales was attributed primarily in the European and Asian markets. (Telecom Web, 2007)

In the first quarter of 2008, during April the share prices of the company were rock bottom low. The company reported a loss of $194 million in the first three month itself with handset sales dropping down by 21% and competitors such as Nokia, Sony Ericson and Samsung continuously expanding their market share. (Business Week, 25 April 2008). The company’s lack of compelling handsets at this point was depressing the market share compelling it to exit the market. The only loyal partner of Motorola; AT&T’ which was the largest network service provider in the US, had reserved the rights to sell only its new handset Z9 Slider. (Business Week, 14 July 2008)

All the above figures pertain to the global scenario for Motorola (reports for a specific country being unavailable) but the same phase is applicable to India as well. In spite of deliberate attempts to bring out new mobile handsets and creative campaigns, the sales figure and the profits of the mobile handset division have consistently declined. Through this report we will apply the SOSTAC model to create a marketing plan, in an attempt to rejuvenate the brand Motorola in India.

http://www.motorola.com/web/Business/Corporate/US-EN/images/chart_about_2009revenue_269x290.jpg

SOSTAC MODEL

SOSTAC model is a step- by step method where a holistic analysis is done for a product, service or an organization to identify the issues or the problems and define alternative solutions to it. It comprises of the following steps:

SITUATION ANALYSIS

This part of the SOSTAC model is done to understand the current position of the organization i.e. of Motorola, India in this context. Where does Motorola stand today in India, need to be seen at three levels:

INTERNAL

MICRO

MACRO

INTERNAL analysis is done to better comprehend the fact about what is going on inside the firm. For this purpose Mckinsey’s 7 S will be used here.

Mckinsey’s 7 S

Strategy- The strategy is about how the firm would achieve its objectives. So, Motorola in India has been not very proactive in terms of marketing communications as well as in product awareness. Whereas it should be doing the other way round with more brand spread with better recognition of itself and start exploring other product spheres where mobile phones market is on verge of saturation.

Style- It explains the leadership attributes or style in the firm. The leadership system and the top- level people involved in it have been quite controversial in terms of their plan of actions and laidback attitude towards any activities involved. Motorola, if wants to come out of the latent phase it is going through, the leaders should come into the Transformational style and motivate their people and create a stir in media, not by just launching products now and then (as they do now).

Systems- The kind of technology used in the company comprises of systems. There is no doubt in the fact that Motorola has one of eth best technologies in communications industry in the world. It provides wireless network solutions, software for independent vendors, various enterprise mobility solutions etc. (Motorola, 2010)

Independent Software Vendor ProgramEnterprise Mobility – PartnerSelect ProgramTwo-Way Radio Program

Structure- The level of authority or hierarchy levels and responsibilities come under the structure of the firm. The top hierarchy levels for Motorola are:

CEO

Country heads

(Regional CEO)

Executive Vice President, Product & Business Operations

Senior Vice President

Regional Managers

Staff- Employee skill range from assembly and warehouse workers to senior house management/ president. Education levels range from high school to PhD graduates. (Though the number of employees and other recruitment policies has been normally working before 2005, but massive employees cuts have been seen in the past 3 years, with 1900 employees were sacked in 2008, making a total of 12,000 since 2007. (Digital daily, December 31, 2008)

Skills- The specific strengths and what the firm is good at are the skills, based on which the company stand apart among the competitors. It cannot be argued that Motorola had the best of skills in terms of technology and innovation, but the skills needed to be in a dynamic market like mobile phones in a fast growing market like India, are completely lacking.

Shared values- What the company strongly believes in and the same should be supported by the employees as well constitute the shared values of the company. The company believes in innovation and varied solution providing to all dominion of the communication industry viz. digital entertainment devices, wireless access systems, voice and data communications systems.

MICRO:

In the micro level of analysis, porter’s 5 forces would be used to understand complete 360 degree aspects that affect an organization’s operations and strategies. (See appendix 1)

MACRO:

The analysis of the external environment that affects the business operations and are generally, not under control is called the Macro analysis of the situation. For the same, PESTLE analysis would be done. (See appendix 2)

http://www.cellphonebulls.com/wp-content/uploads/2010/05/motorola_backflip.jpg

http://www.geeky-gadgets.com/wp-content/uploads/2010/01/motorola-backflip_1.jpg

OBJECTIVE SETTING-

The strategic intent of an organization that it wants to achieve in a specific time frame is the objectives of a company. Motorola’s objectives based on the SMART criteria i.e. Specific, Measurable, Achievable, Realistic, Time- bound.

The objectives can be the following:

Business Level Strategy: To increase Motorola market share by 5% in India through rising sales in growing states’ urban and semi- urban market by 2012.

Corporate Level Strategy: To increase its profitability by 10% in India by 2012.

Marketing Strategy: To become the phone in 20% of Indian families by 2012.

STRATEGY DEVELOPMENT

The means of achieving the set goals for an organization is called its strategy. It is categorized into a step- wise process of STP i.e. Segmentation the customer group which needs to be focused on, Targeting and then Positioning itself as a brand in their minds. It goes in the following manner:

Segmentation- It involves identifying the customer group with the similar needs so that it becomes easier and specific to differentiate and serve the segment. Segmentation should be Measurable, Accessible, Substantial and Homogeneous. For Motorola, it is suggested to identify its customer segment on the basis of Psycho-demographic Segmentation specifically with Income levels and Lifestyle. This would be best suited as the varied range of the Motorola phones can cater to different income level consumers. For e.g. on the Motorola website, there is a fine webpage, that enables the viewer to choose a phone as per his or her range and choice of appearance and features. This would enable to understand the right and bottoms- up narrowed outlook along with a clearer picture of the market base. The current focus for Mobile phones segment can also be partly shifted to B2B markets segmentation based on size of them. For e.g. Motorola can go to large corporations and offer deals favourable to both the parties encouraging mass- deals and better brand acceptance, as these employees can spread word- of mouth to their friends and families as well.

Targeting- Targeting is deciding to devote the organization resources to the part of the market segment identified. Motorola would go for Differentiated targeting due to the reasons mentioned earlier of serving different product for a different need of the consumer segment. So, for a semi- urban market, a product range of Rs.5, 000- Rs.10, 000 would be focused more.

Positioning- The image of the product or the brand in the mind of the customer is its positioning. Mobile phones by Motorola would be positioned on the basis of BENEFIT AND PRODUCT USER, unlike other mobile phone companies, which already position themselves on other bases like product attributes, price, quality etc. This would be, in literal terms, the differentiating factor, or in other words the Unique Selling proportion of Motorola in India. An interesting fact to remember here is that Motorola is not anyways too popular on any of the other common differentiating points in mind for the customer perception. So, According to Porter’s Generic strategy (Ghemawat, 2008) and sources of competitive advantage, Motorola would be positioned in the following way:

Uniqueness Perceived by Low Cost Position

Customer

DIFFERENTIATION

Motorola Phones, India

OVERALL COST LEADERSHIP

Industry wide

FOCUS

Particular Segment Only

So, it is better to start all its campaigns and repositioning strategies based on those mentioned above. The details of the action plan required here are elaborated further.

TACTICS

The lines of action or the techniques that help to achieve the strategy for the desired result are the tactics. The use of 7Ps would be discussed here.

Product: It is very much clear by now that the products offered by Motorola are pretty competitive whether it is technological attributes, features or the width and depth of the product portfolio Motorola offers. It was a leading mobile phone company at a time. But the decline stage, in India started snowballing mainly with the faulty products that Motorola started getting complaints about. There was a hue and cry about it in the media when around 2003, Motorola started losing its charm. This is where the organization needs to pay attention to and see to it that product arrives in the market completely flawless.

Price: Price decides a lot about company’s future in terms of profitability and revenue sustenance. It is important to consider that the stage of the organization, in the Product Life Cycle, is an important factor from the consumer as well as company’s perspective. Other vital factors like demand, competition, and availability of substitutes are applicable to Motorola’s current condition. The report here would rely on the statement that current pricing, starting from Rs.800 to Rs. 25,000 and above, is suitable enough from Indian perspective. Yet, some more active strategies are needed here. The best suitable would be PRODUCT MIX PRICING. Since, Motorola is very much spread across other communication related products and services; it can promote the phones by selling accessories along with them. So, it can lower the prices of the phones a bit as suitable for the required profit level, thereby attracting customers for a value deal in the major categories of middle range phones of Rs. 5000- Rs. 15,000.

Place: The channels of distribution for Motorola phones are widespread already. Since Motorola is in India from a long time. Motorola has specifically designed various softwares to just help the distribution strategy get as much non- disruptive and convenient as possible. Motorola has been using intensive distribution strategy with the smallest of rural areas have access to the company’s phones. But a minor hurdle here is that this made it too generic to be bounded in a unique image. So, it is recommended that it should go for a mixed strategy with being INTENSIVE AND SELECTIVE. That means that for semi urban and rural areas, it should use intensive strategy whereas for urban and metro locations, it should go for selective strategy. This would enable the company to sell its high- end phones with a dignity of not being found everywhere. When a product becomes a bit selective in point- of sale area selection, it creates inquisitiveness for the product, and thereby, increasing popularity and demand.

Promotion: Keeping in mind the DRIPE model (Fill, 2005), the promotional tools would be used astutely to fulfill all the objectives of the model. Following is the thorough details of the promotions mix used for Motorola. Promotion is the most influencing factor, that would drive the customer base to understand the new messages, communicated by Motorola and thus, trying to revoke the lost charisma of the brand. Various factors like, cost of the media to be used, target audience, coverage etc. would be kept in mind to choose selectively the media to be used.

Advertising- TV (in broadcast media); newspapers, pamphlets, (in print media); billboards around shopping malls, cinema theatres, and other commercial areas (in outdoor media)would be the most fundamental media for advertising purpose. These media would ensure maximum reach with highest number of frequency and most effective way of conveying the messages. Also, these would enable to add the creativity as much as possible suiting to the local culture, language. Brand ambassadors would be chosen carefully, a movie star or celebrity who has revived from a declining fame stage and now is doing well. All the messages in print media like technology specialist magazines and columns in newspapers would talk about the revival plan. This is very important for the customer to understand the effort by the company to breathe life into the brand’s image in the market. According to an IMAI survey, Online Ad spends estimated to touch INR 993 Cr by 2010-11. So there is no doubt that viral marketing can be left from the campaign. Lot of internet advertising like that on Social Networking sites can be done to create a buzz in the youth.

Sales promotions- Sales promotion tools like Point- of-Sale displays, lower prices when bought in combination with accessories (explained previously) can be effectively used. This is due to the fact that since Motorola has efficient supplier relations and has economies of scale in the operations it has, it is manageable to cut on some profits for existence sake in the country.

Public Relations- This would be a determining factor to perk up Motorola phones in India. People look up to the press and institutions that make an opinion of the companies. Timely press releases, about new product launches or timely damage repair of any product complaints pending before, would help people to forget about the past issues with Motorola and probably try the phones if relaunched with the right media.

Event promotions- Event promotions especially college fests, festival community functions held on regional level can be captured for promotional purposes. These events are a very good platform for grabbing attention as Indian culture has humungous number of festivals, so any brand that gets attached to these would be paid attention.

People: Though Motorola is a product- oriented company, still people are very important to their survival. Any sort of purchase decisions generally involves a lot of human interaction in India market. So, physical presence of the sales team from Motorola should be very proactive as the brand needs a real push at this time and it is the people who can try and make a difference to the situation. More training should be given to the faces of the company. They should be motivated and non- monetary benefits should be emphasized on, so that they feel more encouraged as a family in the organization that tries to help the whole family come out of a crisis. Staff performance should be regularly monitored and skill- development programme would take place for employees of all departments.

Processes: The way Motorola handles customers also involves a lot of issues. There has been fervor that Motorola is an apathetic company while handling customer queries and complaints. This should not only be a part of the employee training of interpersonal skills but also, the easy- accessible information providing methods should be there. Replacement warranties etc. should be handled quickly and effectively. A customer would happily spread good word- of- mouth with a bad- phone replaced with apologies and a new faultless phone rather than a laid- back service with late replies. Lot of information should be available at the websites, various information junctions like retailers.

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Physical Evidence: Motorola has been a known company in the Indian marketplace. As it is known that a company is perceived the way it is seen. To be seen as a customer- friendly, and at the same time appealing in its looks, the corporate identity of Motorola should be a bit more attractive rather than just the gizmo look of “batman wings “looking ‘M’. A little bit of colour can be added to the whole campaign of revitalizing the brand. As colours are an integral part of India, so it becomes all the way important for Motorola to go for the above suggestion. Also, the appearance of the phones can be made more customized. For example, Motorola phones don’t have any appealing looks for young females. This can be a good beginning point to grab attention of the female customers who can also bring along their friends and family people.

http://t3.gstatic.com/images?q=tbn:ANd9GcSA1H46-V0LAz7fk1GrOontZlkSeD9RtgZT8O8u9RaSWZLkPXX4xQ http://www.treehugger.com/cell-phone-landfills.jpg

ACTION

The actions needed would be planned in three step-by-step activity set as:

Allocating tasks and responsibilities to the people working on the plan henceforth to make it operative on practical grounds. All the people of marketing team would be, team- wise, allocated advertising, PR activities, promotional activities on the outdoors and retail stores. Sales team would meet the corporate for deals in the B2B segment. Marketing campaigns along with the local community or cultural activities like festivities arrangements would be handled separately by other marketing teams.

Scheduling of marketing activities- GANTT chart is used to plan the time of the year for different marketing activities.

Marketing Activity

Time of the year

Staff allocated

Budget Allocated

(In Rs.)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Advertising

Outsourced

(O&M Adv. Agency))

20 Crore

Sales Promotions

Marketing and Sales Team

5 Crore

Press Releases

Public Relations Team

2.5 Crore

Event promotions

Marketing Team

3 Crore

PoS Displays

Sales team in association with Retailers

50 Lakhs

Viral Marketing

Technical support team along with Marketing Deptt.

3 Crore

Setting the marketing budget would be done by the Objective and task method, due to the fact that it is the most scientifically correct and appeals lesser risk. The company is already in such a stage that it cannot afford any wrongly resulting actions and thus brand demolition. To avoid the above mentioned, following budgets are suggested on the basis of Task and objective method:

Broadcast media promotions:

TV- Rs. 6,00,00,000 (For a 10 sec ad in primetime, it costs an average of Rs. 112, 500)(StarTV,2010)

Radio- Rs. 2,00,00,000 ( For a 10 slot, the rate is Rs. 1000 on FM channels in urban areas.

Cinema- Rs. 1,50,00,000

Print media promotions:

Newspapers: Rs. 3,00,00,000 – As per the current standard print advertisement rate of national newspaper (Hindustan Times, 2010)

Magazines: Rs.2,00,00,000 – As per the standard rates, the rates are Rs 30,000 for a half page insertion in any standard magazine(FHRAI,2009)

Outdoor media (Cabs, Buses, Billboards, Railway stations, Bus stops etc.)-Rs 5,50,00,000 ( As per the standard rates, a bus stop advertising costs around Rs. 60,000 a month in a metro city) (TDI,2010)

Viral media- Rs 3,00,00,000

Press releases, point of sale displays and event promotions would cost approximately Rs. 6, 00, 00,000

(All the above figures are derived from various media companies’ websites). This is to notify here that all figures are mentioned in Rupees, the Indian currency to maintain consistency with the Indian context of operations.

CONTROL

The control method would comprise of the monitoring and regular checking of whether the implemented plan is working in the way it should be to achieve the desired objectives and if not, then the corrective measures for the same. Motorola phones in India would be using mainly Sales control, marketing audit and benchmarking against the competitors and top- players. Periodic control is important to mitigate any ongoing flaws of the plan and can be rectified on time. Since the plan is stretched over a period of time, all the departments need to be careful about any progress or shortcomings of the operative part of the plan. Hence, active participation of all the employees should be encouraged. An auditing organization for auditing and benchmarking practices can be outsourced. Discrepancy in results should be immediately looked into and swift actions to rectify the same should be taken. Customer feedback is a key method to prove whether the plan is working in the right direction. Questionnaires, in- store interviews can also help to ensure customer satisfaction and thus, effectiveness of the marketing strategies.

WORD COUNT FOR TASK-1 (3587 words)

INDIVIDIAL CRITICAL REFLECTION

The business group of Motorola phones, India is undoubtedly in declining stage as precisely clear from the facts and figures put in the executive summary. Not only is the data reflective of waning sales figures but also the share of mind and heart of the consumers. This is an insight to the reality that Motorola is not able to capture the consumer attention enough to turn into sales. It is not able to understand that just good technology is not enough to pull customers to buy the product. Also, it is imperative to know here that due to low brand recall, it is a possibility that Motorola may soon be wiped out in the mobile phones segment if corrective actions are not taken on time.

The learning outcomes that I believe are the most impactful for my understanding of the subject are:

Appreciating the importance of separate marketing functions, their management and how each function affects other functions within and external to the marketing domain.

Appreciating the dynamic nature of marketing in the changing global business environment.

Debating and appreciating interpretations and applications of academic theory and practice.

In reference to all the three learning outcomes above, it has been a truly poignant experience to understand marketing as a subject more learning on the practical basis. Various marketing functions, like advertising or managing relations with the media, are not only enjoyable but need a lot of background works to be done. It is significant to understand the dynamic nature of the market happenings and it is here, that we need to connect the academic theories and work further. This concept was well understood when a case study of an electronics company called Ho-Hin was discussed and debated in the class. It gave a clear picture of how companies, which have been doing good business previously, make mistakes due to lack of research. Also, the everyday changing tastes and preferences of the new- age consumer, makes it an uphill task for the organizations to identify those wants and convert them into innovation.

At the start of the module, I definitely had some level of expectations from the course. My idea of coming to UK and studying my second Masters was well enough a reason that I looked at this module as a way of profound understanding of marketing, which is where I want to make my career ahead into.

A post- graduation in marketing with Retail specialization helped me a lot in comprehending the basics better. Also, my previous work experience as a Strategy manager helped me linking the theoretical knowledge with its practical implication. The learning outcomes mentioned are those which I could link the best with my previous knowledge and experience. They made me look at the marketing functions from a new perspective. I also imbibed various new ideas while discussing in the class how different cultural background and national diversity plays crucial role in the marketing activities for different places.

The classes, discussions held during the classes, the case studies debated and the presentations made during the module, have been very informative and enjoyable experience. The whole process has been not only beneficial for future academic purpose but emphasized on its day to day use at workplace. I have developed deeper observation power to see beyond a billboard advertisement or a sales promotion activity going on in a retail store.

As a result of the learning taken place during the course of the Marketing management module, it is needless to say how advantageous it has been with the views mentioned above. Also, the great diversity in terms of cultural backgrounds and work experience that the classmates had has been commendably helpful. It made me more accommodative towards different strategies and tactics required for a different scenario for the same product or the same organization customizing the product or service to suit the local preferences. For e.g. the case of a low involvement low price product like Coca Cola is served in different taste and packaging in different parts of the world. While undergoing the process of learning of various marketing functions and marketing, especially the six promotional techniques, I valued the amount of effort it goes in just planning for a promotional activity.

Though the way the module has proceeded, I am more prepared to face the challenges of the marketplace. But I feel, there is still a lot more room for improvement on my part, which would happen over a period of time. As far as any issues regarding the module are concerned, I do not face any major hurdles. However, I perceive that I need to refer to a lot of journals, databases and readings to be more precise when I write exams and be more transparent on the workplace.

(Word Count for TASK 2- 797 words)

WORD COUNT FOR THE REPORT- 4384 WORDS

APPENDIX 1

PORTER 5 FORCES OF MODEL

Degree of Rivalry: (High)

It answers the degree of competition that exists in a market. Since communication devices is a fragmented Industry: There are too many players in the market serving customers with identical products like Nokia, Samsung, etc. which leads to lesser market share for the average performing players like what happened lately to Motorola.

Switching cost (Low)

It shows how easy or difficult it is for a consumer to switch from one brand to another. Motorola in India could never reflect any uniqueness to which it could stand apart. Hence, high strategic stakes could be seen as customers had many options to choose from in the same offering category.

Threat of Substitutes: (Low)

Motorola, as an organization for communication- related products has decent offering and doesn’t faces any major threats from substitutes as that matter in India.

Bargaining Power of Suppliers: (Low)

Bargaining power of suppliers would comprehend the factors like size and number of suppliers, nature of product and its uniqueness if any. Being a vertically integrated company, Motorola manages to have a good relation with various suppliers, also whichever parts and constituents are required are manufactured in- house.

Bargaining Power of Buyers: (High)

Choices that consumer has regarding the products or services they buy and so, the various factors comprising them make the bargaining power of buyers. It is a well- known fact that consumers are flooded with choices and range that suits every pocket and every style with best features. With the advent cellular phones from companies like Apple, Nokia, etc the buyers bargaining power increases. Price war from low price players reduces the customers’ intent to buy Motorola phones.

Threat of potential entrants:

The ease or difficulty that a new competitor faces while entering the industry comprises the threat of new entrants. Since this is a dynamic industry, hence it would be difficult to obtain a low cost leadership. Entry barriers which are created through patents and licences, or high costs of production or extreme saturation in a market depend mainly on external environment factors and core competency needed for an industry.

APPENDIX 2

PESTLE ANALYSIS

Political:-

Close linkages can be observed between government and communications industry environment in India. There is also political pressure to protect the communication industries in developed countries. However the industry has not been successful in creating a long term alliance with the political institution. So, Motorola can take advantage of this situation and try and lobby with some of the government works like getting into community activities where it is government operated so, sponsorship can be done. Example of Nigerian Mobile phone companies were in news for lobbying for Mobile Money Transfer and Payment. (Tidenews, 2010)

Economical:-

Most of the developing countries like India have strong revenues coming from the telecom segment. In the last five years, the market has showcased a growth of nearly 8.12% from 2000-2007. In 2008, it is believed that about three hundred million people have mobile phones in India. This number is expected to grow and double by the end of 2010.( Jennifer Gandhi, 2008) Motorola has not yet proved its competence in the economical panorama of India with price war happening all the time, but still it is not an absolute poorly performing firm either, which is an opportunity in itself by providin

The brand in consideration for this report is Motorola Mobile Phones, India. Since the early 1990’s when mobile communication drastically revolutionised across the world, Motorola emerged to be one of the leading manufacturers and distributors of Mobile phone handsets. Since its inception in 1928, Motorola has been one of the pioneers in the production of wireless communication devices.

In 1991, the company demonstrated the world’s first digital prototype cellular system using the GSM technology in Germany. To continue further with its advent and innovation in cellular wireless communication, it launched the first digital radio system that comprised a combination of paging, data and cellular communications and voice dispatch in a single radio network and handset in 1994. The Motorola Pager was one of the flagship products of the company that made the company a global market leader. However in 1998, Motorola was overtaken by Nokia as the world’s largest seller of mobile phone handsets. Since then the company has invested heavily on research and development to introduce some of the finest mobile phone handsets in the market. (Motorola, 2010)

However post 2005; the story has not been the same. The mobile hand set division reported 48% lower net earnings in the fourth quarter of the fiscal year 2006, due to weaker handset margins. Also the net earnings in the year end of 2006 were $3.6 bn compared to that of $4.5 bn in the preceding year. Although the company reported a 19% increase in sales, the net earnings went down due to unfavourable geographical and product tier mix (Twice, 2007). In 2007, the mobile handset division witnessed the worst phase in its business cycle with the company shipping only 36 million handsets worldwide. The fall in sales was attributed primarily in the European and Asian markets. (Telecom Web, 2007)

In the first quarter of 2008, during April the share prices of the company were rock bottom low. The company reported a loss of $194 million in the first three month itself with handset sales dropping down by 21% and competitors such as Nokia, Sony Ericson and Samsung continuously expanding their market share. (Business Week, 25 April 2008). The company’s lack of compelling handsets at this point was depressing the market share compelling it to exit the market. The only loyal partner of Motorola; AT&T’ which was the largest network service provider in the US, had reserved the rights to sell only its new handset Z9 Slider. (Business Week, 14 July 2008)

All the above figures pertain to the global scenario for Motorola (reports for a specific country being unavailable) but the same phase is applicable to India as well. In spite of deliberate attempts to bring out new mobile handsets and creative campaigns, the sales figure and the profits of the mobile handset division have consistently declined. Through this report we will apply the SOSTAC model to create a marketing plan, in an attempt to rejuvenate the brand Motorola in India.

http://www.motorola.com/web/Business/Corporate/US-EN/images/chart_about_2009revenue_269x290.jpg

SOSTAC MODEL

SOSTAC model is a step- by step method where a holistic analysis is done for a product, service or an organization to identify the issues or the problems and define alternative solutions to it. It comprises of the following steps:

SITUATION ANALYSIS

This part of the SOSTAC model is done to understand the current position of the organization i.e. of Motorola, India in this context. Where does Motorola stand today in India, need to be seen at three levels:

INTERNAL

MICRO

MACRO

INTERNAL analysis is done to better comprehend the fact about what is going on inside the firm. For this purpose Mckinsey’s 7 S will be used here.

Mckinsey’s 7 S

Strategy- The strategy is about how the firm would achieve its objectives. So, Motorola in India has been not very proactive in terms of marketing communications as well as in product awareness. Whereas it should be doing the other way round with more brand spread with better recognition of itself and start exploring other product spheres where mobile phones market is on verge of saturation.

Style- It explains the leadership attributes or style in the firm. The leadership system and the top- level people involved in it have been quite controversial in terms of their plan of actions and laidback attitude towards any activities involved. Motorola, if wants to come out of the latent phase it is going through, the leaders should come into the Transformational style and motivate their people and create a stir in media, not by just launching products now and then (as they do now).

Systems- The kind of technology used in the company comprises of systems. There is no doubt in the fact that Motorola has one of eth best technologies in communications industry in the world. It provides wireless network solutions, software for independent vendors, various enterprise mobility solutions etc. (Motorola, 2010)

Independent Software Vendor ProgramEnterprise Mobility – PartnerSelect ProgramTwo-Way Radio Program

Structure- The level of authority or hierarchy levels and responsibilities come under the structure of the firm. The top hierarchy levels for Motorola are:

CEO

Country heads

(Regional CEO)

Executive Vice President, Product & Business Operations

Senior Vice President

Regional Managers

Staff- Employee skill range from assembly and warehouse workers to senior house management/ president. Education levels range from high school to PhD graduates. (Though the number of employees and other recruitment policies has been normally working before 2005, but massive employees cuts have been seen in the past 3 years, with 1900 employees were sacked in 2008, making a total of 12,000 since 2007. (Digital daily, December 31, 2008)

Skills- The specific strengths and what the firm is good at are the skills, based on which the company stand apart among the competitors. It cannot be argued that Motorola had the best of skills in terms of technology and innovation, but the skills needed to be in a dynamic market like mobile phones in a fast growing market like India, are completely lacking.

Shared values- What the company strongly believes in and the same should be supported by the employees as well constitute the shared values of the company. The company believes in innovation and varied solution providing to all dominion of the communication industry viz. digital entertainment devices, wireless access systems, voice and data communications systems.

MICRO:

In the micro level of analysis, porter’s 5 forces would be used to understand complete 360 degree aspects that affect an organization’s operations and strategies. (See appendix 1)

MACRO:

The analysis of the external environment that affects the business operations and are generally, not under control is called the Macro analysis of the situation. For the same, PESTLE analysis would be done. (See appendix 2)

http://www.cellphonebulls.com/wp-content/uploads/2010/05/motorola_backflip.jpg

http://www.geeky-gadgets.com/wp-content/uploads/2010/01/motorola-backflip_1.jpg

OBJECTIVE SETTING-

The strategic intent of an organization that it wants to achieve in a specific time frame is the objectives of a company. Motorola’s objectives based on the SMART criteria i.e. Specific, Measurable, Achievable, Realistic, Time- bound.

The objectives can be the following:

Business Level Strategy: To increase Motorola market share by 5% in India through rising sales in growing states’ urban and semi- urban market by 2012.

Corporate Level Strategy: To increase its profitability by 10% in India by 2012.

Marketing Strategy: To become the phone in 20% of Indian families by 2012.

STRATEGY DEVELOPMENT

The means of achieving the set goals for an organization is called its strategy. It is categorized into a step- wise process of STP i.e. Segmentation the customer group which needs to be focused on, Targeting and then Positioning itself as a brand in their minds. It goes in the following manner:

Segmentation- It involves identifying the customer group with the similar needs so that it becomes easier and specific to differentiate and serve the segment. Segmentation should be Measurable, Accessible, Substantial and Homogeneous. For Motorola, it is suggested to identify its customer segment on the basis of Psycho-demographic Segmentation specifically with Income levels and Lifestyle. This would be best suited as the varied range of the Motorola phones can cater to different income level consumers. For e.g. on the Motorola website, there is a fine webpage, that enables the viewer to choose a phone as per his or her range and choice of appearance and features. This would enable to understand the right and bottoms- up narrowed outlook along with a clearer picture of the market base. The current focus for Mobile phones segment can also be partly shifted to B2B markets segmentation based on size of them. For e.g. Motorola can go to large corporations and offer deals favourable to both the parties encouraging mass- deals and better brand acceptance, as these employees can spread word- of mouth to their friends and families as well.

Targeting- Targeting is deciding to devote the organization resources to the part of the market segment identified. Motorola would go for Differentiated targeting due to the reasons mentioned earlier of serving different product for a different need of the consumer segment. So, for a semi- urban market, a product range of Rs.5, 000- Rs.10, 000 would be focused more.

Positioning- The image of the product or the brand in the mind of the customer is its positioning. Mobile phones by Motorola would be positioned on the basis of BENEFIT AND PRODUCT USER, unlike other mobile phone companies, which already position themselves on other bases like product attributes, price, quality etc. This would be, in literal terms, the differentiating factor, or in other words the Unique Selling proportion of Motorola in India. An interesting fact to remember here is that Motorola is not anyways too popular on any of the other common differentiating points in mind for the customer perception. So, According to Porter’s Generic strategy (Ghemawat, 2008) and sources of competitive advantage, Motorola would be positioned in the following way:

Uniqueness Perceived by Low Cost Position

Customer

DIFFERENTIATION

Motorola Phones, India

OVERALL COST LEADERSHIP

Industry wide

FOCUS

Particular Segment Only

So, it is better to start all its campaigns and repositioning strategies based on those mentioned above. The details of the action plan required here are elaborated further.

TACTICS

The lines of action or the techniques that help to achieve the strategy for the desired result are the tactics. The use of 7Ps would be discussed here.

Product: It is very much clear by now that the products offered by Motorola are pretty competitive whether it is technological attributes, features or the width and depth of the product portfolio Motorola offers. It was a leading mobile phone company at a time. But the decline stage, in India started snowballing mainly with the faulty products that Motorola started getting complaints about. There was a hue and cry about it in the media when around 2003, Motorola started losing its charm. This is where the organization needs to pay attention to and see to it that product arrives in the market completely flawless.

Price: Price decides a lot about company’s future in terms of profitability and revenue sustenance. It is important to consider that the stage of the organization, in the Product Life Cycle, is an important factor from the consumer as well as company’s perspective. Other vital factors like demand, competition, and availability of substitutes are applicable to Motorola’s current condition. The report here would rely on the statement that current pricing, starting from Rs.800 to Rs. 25,000 and above, is suitable enough from Indian perspective. Yet, some more active strategies are needed here. The best suitable would be PRODUCT MIX PRICING. Since, Motorola is very much spread across other communication related products and services; it can promote the phones by selling accessories along with them. So, it can lower the prices of the phones a bit as suitable for the required profit level, thereby attracting customers for a value deal in the major categories of middle range phones of Rs. 5000- Rs. 15,000.

Place: The channels of distribution for Motorola phones are widespread already. Since Motorola is in India from a long time. Motorola has specifically designed various softwares to just help the distribution strategy get as much non- disruptive and convenient as possible. Motorola has been using intensive distribution strategy with the smallest of rural areas have access to the company’s phones. But a minor hurdle here is that this made it too generic to be bounded in a unique image. So, it is recommended that it should go for a mixed strategy with being INTENSIVE AND SELECTIVE. That means that for semi urban and rural areas, it should use intensive strategy whereas for urban and metro locations, it should go for selective strategy. This would enable the company to sell its high- end phones with a dignity of not being found everywhere. When a product becomes a bit selective in point- of sale area selection, it creates inquisitiveness for the product, and thereby, increasing popularity and demand.

Promotion: Keeping in mind the DRIPE model (Fill, 2005), the promotional tools would be used astutely to fulfill all the objectives of the model. Following is the thorough details of the promotions mix used for Motorola. Promotion is the most influencing factor, that would drive the customer base to understand the new messages, communicated by Motorola and thus, trying to revoke the lost charisma of the brand. Various factors like, cost of the media to be used, target audience, coverage etc. would be kept in mind to choose selectively the media to be used.

Advertising- TV (in broadcast media); newspapers, pamphlets, (in print media); billboards around shopping malls, cinema theatres, and other commercial areas (in outdoor media)would be the most fundamental media for advertising purpose. These media would ensure maximum reach with highest number of frequency and most effective way of conveying the messages. Also, these would enable to add the creativity as much as possible suiting to the local culture, language. Brand ambassadors would be chosen carefully, a movie star or celebrity who has revived from a declining fame stage and now is doing well. All the messages in print media like technology specialist magazines and columns in newspapers would talk about the revival plan. This is very important for the customer to understand the effort by the company to breathe life into the brand’s image in the market. According to an IMAI survey, Online Ad spends estimated to touch INR 993 Cr by 2010-11. So there is no doubt that viral marketing can be left from the campaign. Lot of internet advertising like that on Social Networking sites can be done to create a buzz in the youth.

Sales promotions- Sales promotion tools like Point- of-Sale displays, lower prices when bought in combination with accessories (explained previously) can be effectively used. This is due to the fact that since Motorola has efficient supplier relations and has economies of scale in the operations it has, it is manageable to cut on some profits for existence sake in the country.

Public Relations- This would be a determining factor to perk up Motorola phones in India. People look up to the press and institutions that make an opinion of the companies. Timely press releases, about new product launches or timely damage repair of any product complaints pending before, would help people to forget about the past issues with Motorola and probably try the phones if relaunched with the right media.

Event promotions- Event promotions especially college fests, festival community functions held on regional level can be captured for promotional purposes. These events are a very good platform for grabbing attention as Indian culture has humungous number of festivals, so any brand that gets attached to these would be paid attention.

People: Though Motorola is a product- oriented company, still people are very important to their survival. Any sort of purchase decisions generally involves a lot of human interaction in India market. So, physical presence of the sales team from Motorola should be very proactive as the brand needs a real push at this time and it is the people who can try and make a difference to the situation. More training should be given to the faces of the company. They should be motivated and non- monetary benefits should be emphasized on, so that they feel more encouraged as a family in the organization that tries to help the whole family come out of a crisis. Staff performance should be regularly monitored and skill- development programme would take place for employees of all departments.

Processes: The way Motorola handles customers also involves a lot of issues. There has been fervor that Motorola is an apathetic company while handling customer queries and complaints. This should not only be a part of the employee training of interpersonal skills but also, the easy- accessible information providing methods should be there. Replacement warranties etc. should be handled quickly and effectively. A customer would happily spread good word- of- mouth with a bad- phone replaced with apologies and a new faultless phone rather than a laid- back service with late replies. Lot of information should be available at the websites, various information junctions like retailers.

Physical Evidence: Motorola has been a known company in the Indian marketplace. As it is known that a company is perceived the way it is seen. To be seen as a customer- friendly, and at the same time appealing in its looks, the corporate identity of Motorola should be a bit more attractive rather than just the gizmo look of “batman wings “looking ‘M’. A little bit of colour can be added to the whole campaign of revitalizing the brand. As colours are an integral part of India, so it becomes all the way important for Motorola to go for the above suggestion. Also, the appearance of the phones can be made more customized. For example, Motorola phones don’t have any appealing looks for young females. This can be a good beginning point to grab attention of the female customers who can also bring along their friends and family people.

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ACTION

The actions needed would be planned in three step-by-step activity set as:

Allocating tasks and responsibilities to the people working on the plan henceforth to make it operative on practical grounds. All the people of marketing team would be, team- wise, allocated advertising, PR activities, promotional activities on the outdoors and retail stores. Sales team would meet the corporate for deals in the B2B segment. Marketing campaigns along with the local community or cultural activities like festivities arrangements would be handled separately by other marketing teams.

Scheduling of marketing activities- GANTT chart is used to plan the time of the year for different marketing activities.

Marketing Activity

Time of the year

Staff allocated

Budget Allocated

(In Rs.)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Advertising

Outsourced

(O&M Adv. Agency))

20 Crore

Sales Promotions

Marketing and Sales Team

5 Crore

Press Releases

Public Relations Team

2.5 Crore

Event promotions

Marketing Team

3 Crore

PoS Displays

Sales team in association with Retailers

50 Lakhs

Viral Marketing

Technical support team along with Marketing Deptt.

3 Crore

Setting the marketing budget would be done by the Objective and task method, due to the fact that it is the most scientifically correct and appeals lesser risk. The company is already in such a stage that it cannot afford any wrongly resulting actions and thus brand demolition. To avoid the above mentioned, following budgets are suggested on the basis of Task and objective method:

Broadcast media promotions:

TV- Rs. 6,00,00,000 (For a 10 sec ad in primetime, it costs an average of Rs. 112, 500)(StarTV,2010)

Radio- Rs. 2,00,00,000 ( For a 10 slot, the rate is Rs. 1000 on FM channels in urban areas.

Cinema- Rs. 1,50,00,000

Print media promotions:

Newspapers: Rs. 3,00,00,000 – As per the current standard print advertisement rate of national newspaper (Hindustan Times, 2010)

Magazines: Rs.2,00,00,000 – As per the standard rates, the rates are Rs 30,000 for a half page insertion in any standard magazine(FHRAI,2009)

Outdoor media (Cabs, Buses, Billboards, Railway stations, Bus stops etc.)-Rs 5,50,00,000 ( As per the standard rates, a bus stop advertising costs around Rs. 60,000 a month in a metro city) (TDI,2010)

Viral media- Rs 3,00,00,000

Press releases, point of sale displays and event promotions would cost approximately Rs. 6, 00, 00,000

(All the above figures are derived from various media companies’ websites). This is to notify here that all figures are mentioned in Rupees, the Indian currency to maintain consistency with the Indian context of operations.

CONTROL

The control method would comprise of the monitoring and regular checking of whether the implemented plan is working in the way it should be to achieve the desired objectives and if not, then the corrective measures for the same. Motorola phones in India would be using mainly Sales control, marketing audit and benchmarking against the competitors and top- players. Periodic control is important to mitigate any ongoing flaws of the plan and can be rectified on time. Since the plan is stretched over a period of time, all the departments need to be careful about any progress or shortcomings of the operative part of the plan. Hence, active participation of all the employees should be encouraged. An auditing organization for auditing and benchmarking practices can be outsourced. Discrepancy in results should be immediately looked into and swift actions to rectify the same should be taken. Customer feedback is a key method to prove whether the plan is working in the right direction. Questionnaires, in- store interviews can also help to ensure customer satisfaction and thus, effectiveness of the marketing strategies.

WORD COUNT FOR TASK-1 (3587 words)

INDIVIDIAL CRITICAL REFLECTION

The business group of Motorola phones, India is undoubtedly in declining stage as precisely clear from the facts and figures put in the executive summary. Not only is the data reflective of waning sales figures but also the share of mind and heart of the consumers. This is an insight to the reality that Motorola is not able to capture the consumer attention enough to turn into sales. It is not able to understand that just good technology is not enough to pull customers to buy the product. Also, it is imperative to know here that due to low brand recall, it is a possibility that Motorola may soon be wiped out in the mobile phones segment if corrective actions are not taken on time.

The learning outcomes that I believe are the most impactful for my understanding of the subject are:

Appreciating the importance of separate marketing functions, their management and how each function affects other functions within and external to the marketing domain.

Appreciating the dynamic nature of marketing in the changing global business environment.

Debating and appreciating interpretations and applications of academic theory and practice.

In reference to all the three learning outcomes above, it has been a truly poignant experience to understand marketing as a subject more learning on the practical basis. Various marketing functions, like advertising or managing relations with the media, are not only enjoyable but need a lot of background works to be done. It is significant to understand the dynamic nature of the market happenings and it is here, that we need to connect the academic theories and work further. This concept was well understood when a case study of an electronics company called Ho-Hin was discussed and debated in the class. It gave a clear picture of how companies, which have been doing good business previously, make mistakes due to lack of research. Also, the everyday changing tastes and preferences of the new- age consumer, makes it an uphill task for the organizations to identify those wants and convert them into innovation.

At the start of the module, I definitely had some level of expectations from the course. My idea of coming to UK and studying my second Masters was well enough a reason that I looked at this module as a way of profound understanding of marketing, which is where I want to make my career ahead into.

A post- graduation in marketing with Retail specialization helped me a lot in comprehending the basics better. Also, my previous work experience as a Strategy manager helped me linking the theoretical knowledge with its practical implication. The learning outcomes mentioned are those which I could link the best with my previous knowledge and experience. They made me look at the marketing functions from a new perspective. I also imbibed various new ideas while discussing in the class how different cultural background and national diversity plays crucial role in the marketing activities for different places.

The classes, discussions held during the classes, the case studies debated and the presentations made during the module, have been very informative and enjoyable experience. The whole process has been not only beneficial for future academic purpose but emphasized on its day to day use at workplace. I have developed deeper observation power to see beyond a billboard advertisement or a sales promotion activity going on in a retail store.

As a result of the learning taken place during the course of the Marketing management module, it is needless to say how advantageous it has been with the views mentioned above. Also, the great diversity in terms of cultural backgrounds and work experience that the classmates had has been commendably helpful. It made me more accommodative towards different strategies and tactics required for a different scenario for the same product or the same organization customizing the product or service to suit the local preferences. For e.g. the case of a low involvement low price product like Coca Cola is served in different taste and packaging in different parts of the world. While undergoing the process of learning of various marketing functions and marketing, especially the six promotional techniques, I valued the amount of effort it goes in just planning for a promotional activity.

Though the way the module has proceeded, I am more prepared to face the challenges of the marketplace. But I feel, there is still a lot more room for improvement on my part, which would happen over a period of time. As far as any issues regarding the module are concerned, I do not face any major hurdles. However, I perceive that I need to refer to a lot of journals, databases and readings to be more precise when I write exams and be more transparent on the workplace.

(Word Count for TASK 2- 797 words)

WORD COUNT FOR THE REPORT- 4384 WORDS

APPENDIX 1

PORTER 5 FORCES OF MODEL

Degree of Rivalry: (High)

It answers the degree of competition that exists in a market. Since communication devices is a fragmented Industry: There are too many players in the market serving customers with identical products like Nokia, Samsung, etc. which leads to lesser market share for the average performing players like what happened lately to Motorola.

Switching cost (Low)

It shows how easy or difficult it is for a consumer to switch from one brand to another. Motorola in India could never reflect any uniqueness to which it could stand apart. Hence, high strategic stakes could be seen as customers had many options to choose from in the same offering category.

Threat of Substitutes: (Low)

Motorola, as an organization for communication- related products has decent offering and doesn’t faces any major threats from substitutes as that matter in India.

Bargaining Power of Suppliers: (Low)

Bargaining power of suppliers would comprehend the factors like size and number of suppliers, nature of product and its uniqueness if any. Being a vertically integrated company, Motorola manages to have a good relation with various suppliers, also whichever parts and constituents are required are manufactured in- house.

Bargaining Power of Buyers: (High)

Choices that consumer has regarding the products or services they buy and so, the various factors comprising them make the bargaining power of buyers. It is a well- known fact that consumers are flooded with choices and range that suits every pocket and every style with best features. With the advent cellular phones from companies like Apple, Nokia, etc the buyers bargaining power increases. Price war from low price players reduces the customers’ intent to buy Motorola phones.

Threat of potential entrants:

The ease or difficulty that a new competitor faces while entering the industry comprises the threat of new entrants. Since this is a dynamic industry, hence it would be difficult to obtain a low cost leadership. Entry barriers which are created through patents and licences, or high costs of production or extreme saturation in a market depend mainly on external environment factors and core competency needed for an industry.

APPENDIX 2

PESTLE ANALYSIS

Political:-

Close linkages can be observed between government and communications industry environment in India. There is also political pressure to protect the communication industries in developed countries. However the industry has not been successful in creating a long term alliance with the political institution. So, Motorola can take advantage of this situation and try and lobby with some of the government works like getting into community activities where it is government operated so, sponsorship can be done. Example of Nigerian Mobile phone companies were in news for lobbying for Mobile Money Transfer and Payment. (Tidenews, 2010)

Economical:-

Most of the developing countries like India have strong revenues coming from the telecom segment. In the last five years, the market has showcased a growth of nearly 8.12% from 2000-2007. In 2008, it is believed that about three hundred million people have mobile phones in India. This number is expected to grow and double by the end of 2010.( Jennifer Gandhi, 2008) Motorola has not yet proved its competence in the economical panorama of India with price war happening all the time, but still it is not an absolute poorly performing firm either, which is an opportunity in itself by providin

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