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Nepal is known to be one of the richest countries in the world in terms of bio – diversity due to its unique geographical position and altitude variation. Nepal is officially known as the Kingdom of Nepal which is situated in South Asia and in between China and India. It is surrounded by the Himalayas, where seven of the world’s highest mountain peaks are found. The total population of Nepal was 28, 56,377 in the year 2009 (Central Bureau of Statistics). The population growth of the country is 1.83% (World Bank, 2010). The country has more than 100 multiple ethnic groups who speak more than 93 languages and dialects which are further divided into different caste. “Nepali” is the official language which is spoken and understood by almost the people of Nepal. Though nepali is their official language but most of the education in private schools are done in English and even people in business and government offices speak English.
The GDP of Nepal (market exchange rate) is $12.47 billion and the real GDP growth rate in the year 2009 was 4.7%. The gross domestic product (GDP) in terms of purchasing power parity (PPP) for the year 2009 was $33.26 billion (CIA World factbook).
Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and one-third of the GDP. During the global recession of 2009, payments from foreign workers abroad increased 47% to $2.8 billion whereas the tourist arrivals in the country decreased only by 1% as compared to the previous year.
Nepal is known for its tourism rather than for its business, and the land of Mount Everest, which is also the birth place of Buddha, trades with neighbours like India and China and also with European Union and USA.
Background of Mobile Phones
Today technology is growing at a faster pace in Nepal making mobile phones a necessity for every common man to own it. In the coming years with more advanced technology such as 3G more demand would incur of the mobile phones. The consumers today have got many different choices to select their product from as they have more expectations for the price they are paying to attain a mobile phone from the market. In order to enter into the Nepal market, “Karbonn Mobiles” would have to have a strategic marketing plan in order to survive in the competitive market with product differentiation.
Mobile phones are becoming more complex today. They have various services to offer other than voice services such as data communication and multimedia services. The international mobile phone industry is growing at a very fast pace. The research conducted by IDC, which shows that the vendors shipped 346.4 million mobile phones, an increase of 15% for Q1 2008 from the previous year.
Global Mobile M
Mobile Market Share – 2009
Market Size and Demand – Nepal
Nepal has young and dynamic consumer market which would be the potential target market for Karbonn mobiles as they look for the value of money phones and also which has the latest technology with all the latest and dynamic features in built in the phones.
They have the capability of spending money on the new technology which would help them competing in terms of knowledge and awareness in the world.
The young generation does not have any source of income of their own and are dependent on their family earnings, in this case they look for cheaper phones with a better technology and features available.
As we all know that Nepal is one of the emerging markets and its GDP is increasing year by year and the average income is also increasing, by this the people would have more demands in terms of a better product and affordability as their purchasing power would increase and this would lead to more spending.
In the competitive world of mobile phones where we could see that, the mobiles from China are very cheap and they are gaining market share because of their cheap price and more features. These are being advertised more and they attract young generation who look for value for money products.
The trend of cell phone is changing where now we have GSM and CDMA technology and both are available in Nepal. Because of these two different technology the mobile phone manufacturers are now producing one single phone in which both the different technology can be used at the same time with two different sim cards which is known as “dual sim mobile”.
Though Nepal currently is not so known for its mobile phone market but in the coming years, with their per – capita income rising, the cell phones would become a necessity for every individual in the country.
If we see the telecom market size of Nepal, then it can be observed that market is moving rapidly and growing on yearly basis:
Fixed- Line Services
Total Number of Subscribers
Fixed Line penetration (Population)
Total Number of Subscribers
Fixed Line penetration (Population)
Total Number of Subscribers (million)
Fixed Line penetration (Population)
In the above table it can be observed that in the mobile services category, the annual growth of mobile subscribers increased by 73% in the year 2008 and by 36% in the year 2009 in Nepal and it is expected to grow at tremendous rate because now the Nepal has developed a long and short – term plans to develop its manufacturing, IT and education sector in order to benefit from the emerging knowledge based economy like their neighbouring countries India and China.
The two Indian telecom majors, UTL and Jaina have joined forces to trigger the revolution. The UTL group is a multi division telecom group with an annual turnover of Rs 1600 crore and over 2000 employees. The company’s headquarter is situated in Bangalore which has manufacturing, services and distribution. The company has successfully represented mobile phones brand like Samsung, Nokia, Alcatel and Virgin in the country.
The Jaina group is a reputed distribution house with interest in telecom and consumer durables. They have headquarters in Delhi and have successfully represented prominent brands such as Siemens, Panasonic, Samsung, Nokia and Philips as regional or nation distribution partners.
Consumer Analysis and Target Market
Male and Female
Age Group 15 – 50
Young College Students
Young working executives
Urban / Semi – Urban
Should have presence in all areas where network and connectivity are available
Porter’s Five Forces Analysis
Other Chinese Mobile brands
Industry Dynamics / Evolutionary Forces
Industry Growth (overall growth)
High growth in camera phone market
Touch Screen – Growing (growth in emerging)
Segments: In Nepal = growth
Huge potential for growth in emerging countries like Nepal
Accelerated Product Life Cycle throughout Industry
New ways of selling through e – marketing
Touch Screen Phones
Changes in buyer markets served
Growing emerging markets
Learning by buyers
Increasing awareness of value added services by service providers
Expansion/contraction in scale
Huge potential for growth in emerging markets like India, China and Nepal
Changes in input costs/exchange rates
Impact of recession on exchange rates and consumer disposable incomes.
Raw material costs rising.
Government Policy Changes
Recent changes in environmental regulations – becoming stricter
Entries and exits
Though entry barriers are less but the competition is high with big brands available in the market
The Nepal consumer market has an outstanding potential with the increase in volume and market share could be limitless in the next few years with its growth at a very fast pace. As the production unit is in India and the volumes of the phones will be huge due to the market size, so Karbonn mobiles should supply their phones which are top selling and have a good brand image in the existing market like India.
This strategy would establish a decent market share for the company initially at the time of launch. The market share of each phone models keeps changing as and when something new comes up in the market. Being a new player in the market of mobile phones manufacturing and distribution, the company should keep in mind to promote their core competency which can be for Karbonn Mobiles, a good featured mobile phone at an affordable price.
What Karbonn Mobile should think ?
THINK GLOBAL BUT ACT LOCAL
Nepal is a diverse market
Every country and their respective market is different and actions should be taken according to the country specific
They should be faster in responding the market needs and even with the dealers
The planning and implementation should go hand in hand
Decision making should be made at the field level
Delegation should be done at local level at different departments such as sales activities and schemes, the expansion of network coverage, and also the local marketing activities happening.
Integration of all activities should be done at the district levels which would include marketing, sales and after sales support service.
The problem solving should be limited to local level and the development schemes should be implemented locally
The strategies should be specific according to the market environmental changes
Reaching out to the customers directly
The company should be able to deliver the value for the money each customer pays for their product.
Marketing Mix and Product Strategy
The key marketing strategies that should be taken care of:
The product should be stylish and it should be in with the current trend and with an updated technology. The latest trend is ‘touch screen’ phones with the advent of Apple iphone and LG Prada. If the latest trend of style is being focused, then Karbonn mobiles can attract the youth and young adults with an increasing amount of disposable income and these consumers look for those brands which are fashionable and in with the latest trend.
Karbonn Mobile should be differentiated according to pricing. As they have a presence in the Indian market already, where the prices are reasonably cheaper and affordable. They should maintain the same in the Nepal market because of heavy competition they have to cut their profit margins and increase their volume of sales. Karbonn mobiles should use the penetration technique and try and create a new market segment altogether as Nokia did when it launched Nokia 1130, a dust proof phone with a torch inbuilt.
Karbonn Mobiles would have to use the differentiation strategy, and this should be done on the basis of respective bundling; if it is focusing on the dual sim card phones then it should be placed in the different category from the handset which has camera as its speciality.
The main emphasis should be given to the customer relationship management (CRM) and the company should try the direct marketing strategy.
To make the brand more accessible in the memory of the consumers, this could be done with the product placement strategy, which should be utilised in the digital media to make a mark on the customers mind. Using digital media by the way of advertisements in youth oriented programmes which should target the teenagers.
The Mobile phones of Karbonn should be placed strategically in a way where the customers treat as a status symbol and also a fashion statement. To achieve this, the company has to adopt direct marketing strategy, in malls and company owned showrooms which would improve the brand image.
Karbonn Mobiles should endorse local celebrity who has an inspiration for their country people and should not go for an international celebrity as the local might not be able to relate them.
The company should have the best trained staff to attend the customers and for which they need to be taught as to how to be more presentable, pleasing and well mannered and the manner in which they should handle the customers efficiently.
Insurance and Warranty
All mobiles of Karbonn comes with a standard one year warranty for the mobile phone without the battery and six months for the consumable products such as battery, chargers and handsfree kit. And the company states that the repaired parts will be warranted for thirty days from the date of repair.
Insurance may be a new terminology in mobile market in Asian countries but in developed markets such as Europe, UK and USA, this has been successful business for both mobile manufacturers to gain business more and also the insurance companies and it has been very effective in terms of marketing. They should develop an idea to tie up with an insurance company for the insurance of the handsets sold at a nominal monthly or yearly premium. This could be a value added strategy to attract the customers.
After Sales Service
Karbonn Mobiles should heighten their customer service differentiating from their competitors. They should have something similar to the Sony’s customer care where it says, answering to the queries within the maximum time of one – day. They can also have privilege member’s card option for the customers. These service stations should be situated in the places which are connected by all means of transport available. They should have enhanced 24 hour and seven business day toll free phone line and professional staff to handle the customer queries.
Karbonn Mobiles retail price should be issued to the distributors which should be implemented strictly. And by doing the same the retailers can be tapped so that they do not dilute the brand by selling them at a lower price.
Being a new company, Karbonn would not have any existing distribution system in Nepal and to launch a new strategy altogether, they need to think deeply in the same. They could use the “Channel Members” distribution system. By this method of distribution they can increase their sales volume and market share. The company should use the conventional distribution process where it utilizes a selection of distributors where they have an option of reselling the products to the retailers or sell directly to the consumers. In order to optimize the product exposure in the retail channels, Karbonn Mobiles should issue display racks to high volume retailers.
The aim of the advertisement is to increase the brand awareness amongst the consumers. Being a new company in mobile manufacturing, Karbonn Mobiles have to promote their core competence which is their pricing structure with a good quality product and which differentiates them from others. The high priority should be to communicate Karbonn’s stance on giving its customers the ultimate mobile phones, with equipped functionality suitable for all kinds of customers.
While marketing in the rural areas of Nepal, Karbonn has to keep in mind, that they do not have various methods of advertising such as digital media, internet etc. and for this they should be able to update their advertisements in the daily newspaper and local magazines, and also hoardings at all places possible to increase the awareness.
The objective of the sales promotion is to encourage sales of the mobiles and make their presence in the Nepal market. Karbonn Mobiles should also look for strategic tie-ups with corporate organizations to allow discounts for the employees. This promotion would be highly effective as their primary target segment would be young professionals.
Nepal is a known to be a discount driven market. Karbonn should introduce various different schemes on different occasions such as festivals scheme and also exchange schemes, where the customers have an option to exchange the old phone with the new one. Dealers and the distributors should be given assigned targets and performance appraisal should be based on the target achievement.
Nepal has various trade fairs and shows in a calendar year and Karbonn Mobiles should use this as a platform to get in touch with the real end consumers to understand their needs.
Sales and Marketing department executives training should be conducted on regular basis in order to ensure that the team has will and motivation and are not new to the world of ideas and innovation.
In today’s competitive world of innovation and technology, where mobiles phone manufacturers are launching new models on a regular basis, Karbonn mobiles have to be innovative with competitive price if they choose to gain market share. The above strategies suggested in this report for Karbonn Mobiles would be useful for the company if in future they would like to target Nepal mobile market which is growing at a faster pace. The above strategies are recommended according to the current market scenario.
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