Micromax’s Hugh bet

When Rahul Sharma, Co-founder of Micromax, first told his employees about the prospects of signing up Hugh Jackman as the brand ambassador, more than 90 per cent of them were not convinced. They were worried that the consumer segment where Micromax had established itself may not even know Jackman. But Sharma had no second thoughts. For, in his mind he had decided to take Micromax to a global audience and the Hollywood actor’s profile was a perfect fit.

“I don’t want Micromax users to know Hugh Jackman because they are already my users. I want to influence those guys who know Hugh Jackman but not Micromax - and who are the opinion-makers. The trickle-down effect would happen from there. We want to change the perception of people when they see Micromax,” says Sharma.

While big multinational mobile phone makers try to win the market by introducing innovative products with new features and the promise of never-before capabilities, Micromax has been able to thrive in the Indian market so far just by being cheaper and by catering to mass market needs. For instance, one of its first phones launched in 2007 was priced at Rs 2,300 and had a battery that could last 30 days on a single charge. This phone became a huge hit in rural areas where charging a phone had become a major problem due to lack of power. Soon enough Micromax came to be known as an Indian brand selling cheap Chinese phones.

Changing gear

While this strategy has paid off for the homegrown phone company, making it the second largest smartphone brand in the country after Samsung, Sharma reckons it’s time to change gears. “I do not want Micromax to be an Indian company anymore. We are a global organisation and our aspirations are global,” says Sharma, adding that soon Micromax phones will be launched in international markets such as Russia, Europe and even the US. But to be a global brand, Micromax needs two things – products that can compete with the likes of Samsung and Nokia, and a global brand icon.

Sharma believes he has joined all the dots with the Canvas range of smartphones and Jackman as the brand ambassador. “If your product is shoddy and then even if you have Hugh Jackman, nothing is going to work. You have to have your products right first. As an analogy’… we don’t want to be a Gucci or Prada or a Louis Vuitton and at the same time we don’t want to be Peter England or Allen Solly … what we want to be is a Zara or a Mango, which are high-street brands, are cool and stylish, but amazing value for money,” says Sharma.

If the initial reaction on social media is any indication then Sharma’s bet seems to be paying off. According to Unmetric, a social media benchmark company, Micromax’s Facebook post on October 19 announcing the deal with Jackman is its most Liked and Shared post ever. “In the last year, Micromax has posted 578 updates and on average, they get 1,765 likes, 112 comments and 105 shares per post. The Hugh Jackman post was over ten times more popular in terms of shares,” says Peter Claridge, Marketing Manager, Unmetric.

On Twitter too the number of people talking about Micromax went up after the announcement. On an average day, Micromax gets about 60 people that mention the brand in a tweet. This number shot up to 381, six times higher than normal riding on the actor who has starred in many blockbusters including X-Men and Kate & Leopold . “The word ‘Micromax' was also trending all day as plenty of people were digesting the news,” says Claridge.

Performance matters

But brand consultants say the strategy will work in the long term only if the company backs its positioning with a strong product portfolio.

“Unfortunately Micromax has accumulated baggage in the Indian market and is perceived to be a company that offers low-cost, Chinese-made handsets. The strategy of roping in a popular Hollywood actor might work in overseas markets as the brand will be introduced to the consumers for the first time, provided it backs it up with premium products,” said brand strategy expert Harish Bijoor.

In the late Nineties, S. Kumar roped in James Bond (with Pierce Brosnan) for Reid and Taylor soon after the acquisition of the international brand. Bijoor points out that this strategy was used right at the beginning, when the Indian consumers were being introduced to the brand. It also used the tagline Bond with the Best. The company changed its strategy by roping in Amitabh Bachchan later. In the recent past real estate players had roped in Michael Schumacher and Maria Sharapova to launch and sell their premium apartments which was targeted at a small segment of the Indian audiences.

Brand consultants also pointed out that as far as India is concerned Hollywood stars have a limited appeal. Brand consultant Santosh Desai says, “Micromax is trying to outgrow its current positioning with this strategy and this is an announcement of its intent to do the same. Whether it works for them remains to be seen.”

Industry analysts said that Micromax runs the risk of alienating its existing user segments in trying to change its brand perception. “Micromax is what it is today, because of reaching out to a very large base of aspirational phone users – feature and smart, that was untouched by the MNC brands earlier. Rather than changing the perception of being an ‘international’ brand, its focus should be on increasing the users’ confidence about reliability and dependability of the brand,” says Faizal Kawooza, Lead Analyst, CyberMedia Research Telecoms Practice.

“I would say somebody like Rahul Dravid would have been a better option as people still see him as Mr Dependable,” he added.

Sharma, however, insists that Micromax is not giving up on the mass market. “We are following a dual game plan. While Jackman will be used for promoting only the Canvas range of smartphones, we will continue with Bollywood star Akshay Kumar as the brand ambassador for the other models.”

“We feel we have products better than international companies and that’s why we went after someone who can match that in terms of perception,” he adds. It took over a year for Micromax to find that someone. After short-listing top 10 internationally known faces, the Indian phone maker signed up Jackman for his multi-tasking capabilities. “He is the biggest multi-tasker I have ever seen – he can sing, dance, act and fight – otherwise you have actors such as Jackie Chan who can fight but are bad at romance,” says Sharma. While Micromax won’t reveal the signing amount, Sharma says it’s one of the biggest brand deals done by an Indian company.

Market analysts feel that Micromax has a long way to go before it can be seen as a serious competitor to foreign brands such as Samsung “Samsung has maintained its leadership in the Indian smartphone market owing to the fact that it has a huge product line-up with various products across the price spectrum. They have been trying to drive the prices lower to make sure they cater to every segment in the target audience for phones,” says Manasi Yadav, Senior Market Analyst - Mobile Phones and Tablets at IDC.

Sharma, on the other hand, thinks there is no difference between Micromax’s phones and rivals products. “What I am doing is to be one up. Samsung or Sony are still using plastics, I am using a completely unique body with aluminium design. They have full HD, I have full HD…I have all top notch stuff that they have. But, I have Hugh Jackman, they don’t have Hugh Jackman,” says the co-founder of what could be one of the biggest success stories from India.

(With inputs from Meenakshi Verma Ambwani)

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