There was a time when Colors Mobile directly challenged Samsung
in Nepali mobile market. In 2013, Samsung was greatly hit by home brand Colors
in budget segment. Colors had secured second largest brand in Nepali market. This
same market scenario was seen in the Indian market too. Indian OEM brand
Micromax was listed in the top ten mobile shipment. Immediately after 2013, OEM
brand started facing problem in their sales and slowly they losing market share. What may be the main reason behind their market share loss? Let’s find out some relevance answers.
I.
More focused on Quantity rather than
Quality:
OEM brand are skimmed profit since 2011 to
2014. At that time, they were happy enough because there was no competitive
demand by consumer. All consumers were first time mobile user. They really do
not have depth understanding about smartphone. They were happy because they were
getting smartphone at their budget. So also, companies were also busy launching
new models every week or months so that they can penetrate market through
quantity not quality. The major drawback done by OEM is that they never concern
about brand building strategy. They followed mistake formula, more sales build
stronger brand. They never treat brand as a persona so that people used their
product one time but they never recalled their brand or say perceived brand as
premium brand.
II.
Poor Service : Negative customer
dissatisfaction
OEM brand never promised stronger customer
after sales service. Their service is so poor that people becoming more
dissatisfied and slowly loosing trust toward any brand. Service is one factor
that can retain customer for longer period of time. If they were excelled in
service then they would win customers heart. Customer retention rate is so low
that this lead to long run trouble to brand. So that Micromax rebranding their
image through heavy marketing expenditure to regain their image and retain
their existing costumer.
III.
Rise of Chinese Companies: Better value for
Money
At the end of 2014, Huawei and Gionee
enters in Indian and Nepali market with better specs, looks and promising
hardware. Then after, the countdown of OEM brand started. Initially Gionee and
Coolpad used to make smartphone for Colors and Micromax. But, they decide to
sell their own Brand name instead of supplying phones to ODM. As a result, they
clearly segment their market above budget segment. It leads to keep better
brand image and perception towards them. Also, they started to provide better
hardware, latest android system, better design at affordable than Samsung. So
the pool of consumer who are dissatisfied with OEM started using those brand
and feel satisfied. I mean, MNC brand able to retain customer satisfaction,
they don’t only sell phone but also sell their brand value.
IV.
Unpopular segmentation: Budget tagline
Indian OEM brand like Micromax, Lava, Intex,
Karbon and Nepali Brand Colors segmented their product portfolio in the budget
category. I mean they were popularly known for cheap android phone brand. It
kills them. Selling cheap or focusing on budget category does not make a strong
premium brand. They should focus on premium segment or upper budget segment
specifically above 30k segment so make brand perception in long run. As a
customer, now I cannot find any smartphone costing above 25k of any OEM brand.
They are falling in the cheap brand trap. They cannot able to come out from
that trap. They need to think it about two or three year before where they were
top sellers. At that time, they focused in budget category and happy in
quantity sells. They trapped in their decision.
To build a successful brand, always target loyal premium customer not
budget customer. Budget customer helps to increase turnover not brand image.
This lesson is clearly learn by Huawei and One plus but Xiaomi also trapped in their
cheap segmentation now.
Conclusion:
This is the high time realizing wrong decision done in before 3 year time. They were happy in quantity not quality and long run strategy. Now, they have two option; Re-branding their image or diversifying their product portfolio. If correct steps not started now, they may disappear from mobile market fro two to three year down the tine.
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