School of Business and Law
- We are on the edge of a massive shift and it is not an overstatement to say that the future of some businesses and even industry sectors relies on how they react to mobile.
- There has been a quiet revolution in recent years as smartphones become more powerful and better connected.
- This has gone hand in hand with developments in wireless technologies and means that many people expect to be able to conduct their lives through their mobile device.
- People want not only to research products and services on mobile, but to purchase them too.
- Millions of users are happy to make purchases over the internet, and to transfer cash via electronic banking using computers, tablets and phones.
- Paying for goods and services with our mobile is just another part of the cashless mix.
- The widespread adoption of smartphones and tablets with the resulting growth of the mobile industry has been remarkable.
WHAT ARE DRIVING FORCES?
An industry gets affected by a lot of new trends & developments, influencing its profitability, which leads to some changes. Changes in the industry are due to the life-cycle & other factors, such as the driving forces. The widespread adoption of smartphones and tablets with the resulting growth of the mobile industry has been remarkable.
Driving forces are basically the factors that directly or indirectly affect the sales of the product/service.
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It may result in both the increase of the sales as well as decrease of the sales of a product. These changing agents or factors have a very big influence in re-shaping of the industry.
ORIGIN OF THE DRIVING FORCES
Macro-environment: (the outer ring) General economic conditions, legislations & regulations, population demographics, societal values & lifestyles, technology.
Macro-environment: (the inner ring) Suppliers, substitute products, buyers, new entrants, rival firms.
DRIVING FORCES – MOBILE INDUSTRY
Macro-environment A macro-environment is the condition that exists in the economy as a whole, rather than in a particular sector or a region.
Demography is the study of human population statistics in terms of their birth, density, location, gender, age, occupation.
- A major interest to marketers because it involves people & people make up markets. Key driving factors for mobile industry
- Mobile industry launches any handset, keeping in mind the occupation of the consumer. Mobile handset occupation Xiaomi, Lenovo, oppo, vivo Students/teenagers Nokia, micromax, etc. Blackberry & Apple Businessmen & high class users
- Any mobile gets launched by bifurcating the gender – based needs too.
GENERAL ECONOMIC CONDITIONS
It comprises the factors that directly affect the consumer purchasing power & spending patterns. Major attention areas- major trends & consumer spending patterns. The economic system is little bit critical- what the industry is to produce? How it should produce? The category of the recipient, that who should use their products at the end? Nokia Lumia 1020 was launched in US, but not in India because in India the mobile industry focused on the low budgeted mobile phones. Nokia Lumia price (USD)= $1069.87 INR= Rs. 4, 95,883/-
Technological advances are the most drastic driving forces affecting the marketing strategy of mobile industry. Mkt opportunities
NEW PRODUCTS NEW TECHNOLOGIES
As everyone can feel, that mobile phone that we carry, is now fully packed with the advanced tools that let us do so much more with it.
- NOKIA wireless charger
- ONE PLUS Dash charging, high speed phone
- GOOGLE Google assistant
- APPLE Its own apps & IOS
- SONY Dust & water resistant
- SAMSUNG HD sensitive screens
SOCIETAL VALUES & LIFE-STYLE
- People want to check the social media instead of text message and give a phone call.
- For example, Facebook shows a lot of information that people want to express for their days and also upload their photo to their friends.
- Smartphone can give people to see the latest news from the social media anywhere and anytime.
- Second, the lifestyle is going to change. People used to go to the bank to make transaction and deposit the check. After we have Smartphone and internet, we can just take a photo with check and upload to your bank. Finally, the attitude is going to change
- People used to buy the products and compare the price in the different stores. It was not convenient and efficiency way to shop
- Now you can easily to check the price of the product by using Smartphone that can help you make the right decision to shop.
Smartphone is changing our lifestyles, attitudes and societal concerns. A new entry price & myriad of brands! Brand concern- while buying a mobile phone, we always go for a brand that is famous, we believe in it to be superior. So, this can be a major driving forces of the buying behavior of mobile phones. Nowadays, people won’t prefer mobile phones of lava, Intex, karbonn or any other handsets, but rather they will go for the phones like, One Plus, Samsung, Sony, Nokia, Google, Apple (the major players of the mobile industry).
People want a mobile phone with an affordable range that also fulfills all their needs technology wise at a go. So phones like, Xiaomi & One Plus can perfectly fit to this driving force.
INTERNET ON MOBILE
- Another key driver of growth in smartphone sales is Internet usage on mobile.
- India lacks a robust fixed-line Internet infrastructure-This has led us to take a technological jump and rely on mobile broadband technologies (including smartphones) for high-speed Internet access to the masses.
- Industry reports suggest that more than 90% of Internet access in India is facilitated through mobile.
- This makes smartphones play a more important role than just a device to talk, and that’s further making people opt for a smartphone.
EXCLUSIVE ONLINE DISTRIBUTION
- Motorola’s re-entry in the Indian market with Moto G started a new trend of online distribution of smartphones.
- Motorola opted for an online-only distribution model and joined hands with Flipkart to sell its smartphones.
- This played well not only for Motorola, but also opened the online channel for many other smartphone brands.
- Xiaomi and Asus are a couple of brands, which have made good use of the online distribution channel after Motorola’s success.
- Online distribution model companies to save a lot of money that would have been spent in building up a physical distribution network.
- Not to forget the significant savings made with no distributor and retailer margins, which usually account for about 6-15% of the total cost.
- This helped smartphone companies offer their product at a more lucrative price.
- Experts estimate that the smartphone companies are able to cut costs by about Rs 3000-5000, which lures many consumers who would have not considered it otherwise.
7. EMI PAYMENT MODE OPTIONS
- The last couple of years have also seen EMI options from smartphone makers, which have made them affordable.
- Even Apple has some lucrative offers and EMI options for its high-priced phones.
- Many other brands, including Samsung, Motorola, Asus, besides others, have these EMI options, fueling the overall growth of smartphones in the country.
INDUSTRY LIFE- CYCLE
- In the early (introduction) stage, the industry starts to begin and develop the product to the public.
- In the growth stage, the company produces more products and increases the market share.
- In the shakeout/maturity stage, some of competitors start to see the opportunities in this market.
- In the maturity stage, the product price is stable and more competition comes to market.
- In the decline stage, the sale of the product decreases until the product innovation or discontinue in the market.
- The Smartphone industry is in the growth stage.
- The demand of the Smartphone industry is growing rapidly.
- The sale of the Smartphone was 174 million units in the 2009; there were 270 million units sold in 2010.
- In 2011, the sales forecast is going to be double from 2010 to 2011 that means about 500 million units.
- The demand of the Smartphone is going up twice than 2010 that make the Smartphone industry is in the growth stage, because of the strong demand of the Smartphone.
KEY SUCCESS FACTORS
Key success factors are basically the resources & the competitive capabilities that a seller should have to become successful in the industry.
Question 1: On what basis customers choose our product?
Technology – everyone wants the best technology or best technological updation in their hands to cope up with their fast & modern life styles. Technologies such as, fast charging, wireless charging, good HD screen resolution, etc. are appreciated in huge numbers.
Price- Low budget & high quality is the basic requirement for people to have for their handsets, that is affordable easily in every demographic conditions.
Distribution- Phones easily available online are more appreciated nowadays. People of high business class don’t like & don’t have time to go to stores & then buy mobiles for them, instead they prefer to book it online & receiving it under 6-7 days of frame & enjoy it.
Marketing- Many mobile phones such as Vivo, Oppo, One Plus heavily does marketing of their handsets via TVCs, Brand endorsements, Billboards hoardings, etc. which deliberately shooted up the sales of these phones.
Question 2: What short-comings can lead to disadvantages?
Technology changing at a rapid speed can be a disadvantage for mobile industry if continuous updating by launching new & differentiated phone doesn’t happens.