Market

Micromax Mobile needs no introduction today. Just two years back people were not aware of the brand at all but today it’s India’s third largest mobile selling company by volume after Nokia and Samsung (IDC Report). Brand’s success can be attributed to it’s ability to understand the need of the market, aggressive marketing with a budget of Rs. 00 crore and smart distribution channel management. Its one of the leading Indian Telecom Companies with 23 domestic offices across the country and international offices in Hong Kong, USA, Dubai and now in Nepal. With a futuristic vision and an exhaustive R&D at its helm, Micromax has successfully generated innovative technologies that have revolutionised the telecom consumerspace. As per IDC report Micromax displaced LG to become third largest selling mobile handset company in india with a market share of 6%.

Nokia is market leader with 62% share and Samsung is on second place with 8% market share. The company today sells more than a million handsets a month and is now a Rs. 1600 cr worth brand. The company has presence in more than 500 districts and 90,000 retail outlets. The company started its Mobile handset business in 2008 and the challenge was to establish an identity in a market dominated by big MNCs Like Nokia, Samsung, LG and Motorola. Today Micromax has become a brand which people relate and look up to for realizing their individual device preferences and other out-of-the-box solutions.

Micromax, is now churning out 1 million phones a month. Micromax is on a mission to successfully overcome the technological barriers and constantly engender “life enhancing solutions”. The company’s vision is to develop path-breaking technologies and efficient processes that incubate newer markets, enliven customer aspirations and continue to make Micromax a trusted market leader amongst people.

Micromax founders : Rajesh Agarwal:

handles company finances Sumeet Arora: chief technology officer Vikas jain: handles alliances with other companies

Rahul Sharma: risk taker with the big ideas 4 P’s of marketing for Micromax mobiles:

1. Product

Micromax has been quite effective in the marking a difference with almost every product that it launched. The range that they have covered varies quite a large variety. Right from the handsets with 30 days battery backup, dual SIM, handsets switching networks (GSM -CDMA) using gravity sensors, aspirational QWERTY keypad handsets to operator branded 3G handsets to the most exciting OMH CDMA Handsets, etc. Every product of Micromax had the potential to grab the attention of media as ell as the consumers in a market which is already flooded with mobile phone handsets and a launch is there in every day or two.

2. Price

Micromax specialized in entry-level and mid-segment handsets priced between Rs1,800 and Rs2,400 when it started selling the devices in 2008, confining itself to small towns and rural areas in the first 12-18 months. Encouraged by its success, the firm expanded to larger cities and now has a distribution network of 55,000 retailers, which it plans to scale up to 70,000 by the end of March as part of its strategy to raise sales to 1. million handsets a month.

3. Place

Micromax is one of the leading Indian Telecom Companies with 23 domestic offices across the country and international offices in Hong Kong, USA, Dubai and now in Nepal. Micromax has invested Rs100 crore to set up a plant in Baddi in Himachal Pradesh as it feels outsourcing manufacturing completely leaves the door open for supply-side uncertainties. Production will be scaled up from an initial 50,000 per month. “If everything goes right, by the third phase in March 2011, the Baddi plant will be making about 500,000 handsets,” Jain said.

If the plant isn’t able to cope with the numbers, the fallback plan is to acquire a facility in South Korea, Taiwan or China, he added.

4. Promotion

Having gained traction, Micromax is also working on a strategy to create awareness in the metros, which includes tying up with MTV for co-branded phones. Micromax has also tied up with a Bollywood celebrity “AKSHAY KUMAR” as brand ambassador. Micromax has also tied up some pretty big brands like Yamaha for enhancing their audio experiences and the X360 comes with an MTV branding and exclusive content.

It is utilizing the integrated market communication tools like sponsoring events (cricket match and film awards), advertising through hoardings, TV, radio etc very effectively. With a 360 degree advertising and marketing strategy sketched out, the company has an optimistic outlook for the telecom consumer space. Currently present in more than 40,000 stores across the country, the company plans to have an aggressive market incursion to reach out to its customers through 70,000 operational stores in the coming year The following tools of IMC are being used by Micromax:

Events and experiences For marketing of its products the company is riding on two enduring Indian obsessions–sports and films–to build its brand. Following up on its association with the popular Twenty20 cricket Indian Premier League (IPL), Micromax, a brand that is less than three years old, has become the title sponsor of almost all tournaments and series of which India is a part, including the recently concluded Asia Cup, the forthcoming India-Sri Lanka Test series and the India-New Zealand-Sri Lanka tri-series in August.

The objective behind the cricket “roadblock”, as such behavior is termed in advertising, is to drive brand awareness and recall. The company believes that while cricket may boost a brand instantly, viewers may still not remember the brand after the match or the tournament. Even if consumers remember a series, they may not remember the advertisers. That’s when they thought of a roadblock and decided to sponsor all cricketing properties post IPL. Bollywood is also a major platform for the brand, which is targeting consumers between 18 and 27 years.

Bollywood’s most bankable star Akshay Kumar was signed on as the brand ambassador six months ago. More recently, his wife Twinkle Khanna was engaged to promote Micromax’s bling phone that comes with Swarovski crystals and a vanity mirror. To push its association with films, the firm also sponsored the IIFA (International Indian Film Academy) Awards held in Sri Lanka, where Micromax recently launched its phones. The brand is now ready to enter Bangladesh and West Asia. Advertising Broadcast media micromax use television to broadcast their advertisements. Apart from using cricket, films, celebrity micromax also advertise through news papers.

They also utilize hoarding and bill boards to advertise their products. Prime site recently kicked off a month-long campaign for Micromax mobile phones in Delhi, executed mostly through hoardings. Going further, this promotion will be extended to the other regions of northern India as well. All the Medias used by micromax are very carefully selected as to reach its target audience and through each medium the innovative aspect of the product is portrayed. The three advertising objectives of micromax mobile are

• To create awareness
• To increase recall of their brand
• To create brand equity.

Company’s current marketing strategy:

1. Tapping the Indian consumers by knowing what they need specifically:

a. Indian context: When Nokia or Samsung roll out a new model they do so from its global portfolio rather than launching something specifically for India. Micromax realized the fact that there are certain unmet needs still there in the market which is not being addressed by big brands. Micromax’s strategy, since their inception has been to identify the unmet latent needs of people and come up with a product which no one else has and thus fits well with the consumer need.

b. Rural context: Micromax initially targeted rural market and once it established its presence went on to lure urban youth. Micromax’s first innovation – a handset with 30 days of standby battery life — crucial in a country like India where power failures are common. Also in rural areas its not easy to charge one’s mobile phones because not only are there power failures but also they don’t have money to pay for electricity every month and hence such a phone was introduced. Also One of the major aspects that contribute towards the substantial monthly growth of Micromax is its 80% sales in the rural areas. After building a strong presence in the rural market, where the prominence of both subscribers and operators is rapidly increasing, Micromax is now progressively moving towards establishing its foothold in the competitive urban towns as well.

2. Value for money &amp: Cost effective:

The company didn’t bank on price competition only rather it catered to the needs of people unaddressed by MNC brands. Big brand like Nokia, Samsung had not introduced Dual sim phones earlier. But with the onset of such phones launched by Micromax, Nokia , Samsung etc. ave tough competition and their phones are just a case of “me-too” products. Also Micromax has made sure that all their mobile phones are value for money and serve the purpose and the need of the customer.

3. R&D and Innovation : Versatile Product Portfolio: It was the first to introduce:

a) Handsets with 30 days battery backup

b) Handsets with Dual SIM / Dual Standby

c) Handsets Switching Networks (GSM – CDMA) using gravity sensors

d) Aspirational Qwerty Keypad Handsets

e) Operator Branded 3G Handsets

f) OMH CDMA Handsets, etc. .

4. First mover advantage: They have introduced phones specially targeting the Indian people which were never even thought of remotely by the top players in the mobile phone industry like Nokia & Samsung. So they clearly have a first mover advantage.

5. Outsourcing the manufacturing: Instead of manufacturing itself, Micromax sourced its handsets from 12 factories in China, South Korea and Taiwan. It was model-based sourcing: Micromax would come up with an idea and give it to the factory best placed to deliver it.

This is different from, say, Nokia, which would be compelled to stay in-house or go to a vendor-partner, even if another vendor had better capabilities to execute a particular model.

6. Smart distribution channel management: Micromax also looked at distribution in a new way, standing by its cash-only model. While rivals offered a 60-day credit line, Micromax refused to give credit. “If the distributor does not buy your handsets, there is no pressure on him to sell them,” explains Mr Agarwal. At the same time, Micromax offered to supply distributors regularly to keep inventories down.

So, distributors didn’t have to shell out large amounts upfront or have a lot of money locked in. “If we give a distributor 1,000 handsets and ask him to sell them over a month, he will worry about his daily sales,” says Mr Agarwal. “But if we supply less, demand will be close to equal or more than supply. ”Micromax has 34 super-distributors across India. Unlike a Nokia or a Samsung, it doesn’t interact with the 500-plus sub-distributors. Neither does it intervene in how the super-distributors sell or place the products. “We offer our super-distributors a 15% margin, which is higher than the ndustry average of 6-10%,” claims Mr Jain.

7. Unmet needs of consumer 30-DAY BATTERY PHONES April 2008: Rs 2,249; Now: Rs 1,999 The X1i, Micromax’s first phone, had a battery that could give 17 hours of talk time and go 30 days on a single charge. DUAL-SIM PHONES July 2008: Rs 1,999-12,999 For those who want two numbers but one handset PHONE-CUM-REMOTE May 2010: Rs 2,999 A mobile that can switch TV channels and even change the AC Temperature PHONE-CUM-STEREO Feb 2010: Rs 4,999 With 3D surround sound, fed by Yamaha and Wolfson BLING Feb 2010: Rs 5,500 A big hit with women, comes with Swarovski embellishments

In the works

A mosquito-repellent phone. A phone that can be used as a computer mouse Micromax focuses on being different 8. Production related moves: Micromax is investing Rs 100 crore to set up a manufacturing plant in Baddi, Himachal Pradesh, to ensure its outsourcing model does not cause supply-side uncertainties. Production is being scaled up from 50,000 units per month to 500,000 units a month by March 2011. How to increase the market share with respect to the consumer buying behaviour: Steps of consumer buying behaviour:

1) Need awareness:

The beginning point of most purchasing is your potential buyer recognition of a need in their life. This need can be established by encountering a problem or prompted by a company’s marketing. Already Micromax is into a lot of marketing through promotions, Ads, sponsorships of events, etc. But few suggestions on that front to make sure that their potential consumer hears them rightly is –

Now they are at the 3rd position in the mobile handset industry and they have achieved a good market share in a very short p of time, so their advertisements should focus on brand building. They don`t develop very creative advertisements, sometimes their advertisements are mere noises like the advertisement featuring Akshay kumar. They must add creativity to their advertisements. (Micromax Bling Ad featuring Twinkle Khanna is an exception to this point).

Break the resistance of no need by aligning their marketing with the current needs and wants of your market.

It’s a general norm that whatever is expensive is good to use, of high quality, has more life and is definitely something which will increase one’s status.

So it would be a good strategy to increase the prices which will work for the image of Micromax because there is a risk of the brand being perceived not as an aspirational brand but a ordinary price warrior if it does not focus on the quality of the communication.

The needs of not even two consumers are the same. Therefore, they buy only those products and services, which satisfy their wants and desires.

To survive in the market, a firm has to be constantly innovating and understand the latest consumer needs and tastes it will be extremely useful in exploiting marketing opportunities and in meeting the challenges that the Indian market offers. This reality can be turned into an opportunity by introducing “Customization of mobile phones”.

a) People can goto Micromax mobile stores, and fill a form listing their options of the type of phone they want, color of the phone, screen size of the phone, features like audio player, radio, one –touch applications, etc. ;amp; all other specifications of the phone.

b) Once that form is filled the Micromax staff can show a picture of the newly designed phone to the consumer on a computer and if necessary can make any changes and then finally place the order for such a phone.

c) Payment terms and conditions can be advance payment – half the price of the phone at the time of placing and half at the time of delivery.

This makes the consumer feel that the mobile phone company is not only generally consumer centric but it believes in the fact that every person is different and unique in his/ her own way and would have different needs and wants.

Also this gives a chance to the consumers to become innovative and its definite that a consumer will definitely want to buy such a phone again from Micromax.

2) Information search:

Its important to make sure consumers know about all the new variants and products that the company introduces. With the rise of the Internet, it has never been easier for buyers to research their purchase. It needs to make sure that all information is readily available on the website.

They can break the resistance of lack of education by adding an educational seminar to their marketing mix to provide maximum information about their company, phones, promotions, variants, prices, etc. to not just the tech-savvy urban population but also the rural people. Their goal at this point in the buying process is to get their product or service in front of the consumer. They need to make them aware of their solution.

3) Check options:

Once the consumer understands his or her situation and has gathered research on possible solutions, the mobile handset buying process enters an evaluation period.

The consumer now starts to take a close look at specifics, such as the company providing the solution, the brand name of the product, and the features and benefits of each solution. Branding and product differentiation are extremely important tools of persuasion during the evaluation stage. This is where the strategies listed above would help Micromax gain an edge over its competitors and increase the market share when a potential consumer would sit and evaluate his options while buying a cell phone.

4) Purchase:

After a comprehensive review of solutions and specific products and services, the consumer makes a purchase decision.

At this point in the buying process, supporting information needs to be provided to reinforce the decision to buy. Help the buyer by telling them what and why the company/ staff in the store would recommend a certain handset as they are the experts in that. Also Depending on urban / rural population, the company can provide different payment options or billing terms.

5) Evaluation of the purchase:

The buyer will look for reinforcement from media, friends, and other sources confirming they made the right decision. Cognitive dissonance or “buyer’s remorse” happens when the buyer begins to feel the purchase wasn’t right for them.

To make sure such dissonance doesn’t occur they should offer warranties, there must be after purchase follow-up calls to make sure that the consumer is happy with the handset he/she has purchased, excellent after sales service by opening as many service centers as possible in all parts of India. It is crucial to building strong relationships with customers and encouraging repeat purchases that you not only provide a positive purchase experience and after sale support, but that you strengthen the buyer’s perception that they made the right purchase decision.

Australia has a wealthy, Western-style mixed economy, with a per capita GDP, in terms of purchasing power parity, vaguely higher than those of the UK, Germany, and France. The country was ranked sixth in The Economist worldwide quality-of-life index 2005 and third in the United Nations’ 2006 Human Development Index. The absence of an export-oriented manufacturing industry has been considered a key weakness of the Australian economy.

More recently, rising prices for Australia’s commodity exports and increasing tourism have made this criticism less significant. However, Australia has the world’s fourth largest current account deficit in absolute terms, in comparative terms it is more than 7% of GDP. This is considered challenging by some economists, particularly as it has concurred with the high terms of trade and low interest rates that make the cost of servicing the foreign debt low. (Colebach, 2005)

The market structure of Australia shows a radical change in the structure of the Australian market over the last ten years. At the end of June 1992, the domestic market capitalization was $198 billion. By the end of June 2002, the market capitalization had increased to $700 billion. For that reason, while the Finance ; Insurance and the Other Services sectors which includes communications and media stocks have grown most significantly, strong growth is evident in all the industry sectors of the Australian market. (http://www.immi.gov.au/, 2008)

In determining the market attractiveness and efficiency, the key measure to use is the liquidity. It computes, in percentage terms, the volume of trading in relation to the size of the market. Investors look upon liquidity as one of the most important elements of a market, since in a liquid market, securities can be bought and sold more easily so the general cost of trading activity, and consequently risk for the investor has decreased.

Over the past decade, Australia has experienced an upward turn over. There are two other significant aspects which, joined with liquidity, define the attractiveness of a market to investors. These are efficient price discovery and the depth of the market. The depth of the market can be seen by the capitalizations of the market, the depth of the Australian market has grown drastically over the past decade. (https://www.cia.gov, 2008)

The basis of determining a country’s market efficiency is through the efficient market hypothesis (EMH) which implies that if new information is revealed about a firm it will be combined into the share price quickly and logically, with deference to the bearing of the share price movement and the size of that movement.

In an efficient market no trader will be introduced with an opportunity for making a return on a share other security that is greater than a fair return for the risk related with that. The deficiency of abnormal profit possibilities occurs because current and past information is instantly reflected in current prices. What causes prices to change is new information. Perfect powers of prediction of investors is not denoted by stock market efficiency all it implies  is that the current level is an unbiased estimate of its true economic value basis on the discovery of new information. (http://www.asx.com.au, 2008)

Prices are set by forces of supply and demand in the major stock markets of the world. There are hundreds of analysts and thousands of traders, each receiving some new information on a company through electronic and paper media. The instant an unforeseen, positive piece of information seeps out investors will act and prices will rise quickly to a level that gives no chance to make additional profit. (http://cbdd.wsu.edu. 2008)

Different levels of efficiency according to the type of information, which is reflected in prices, were identified by economists. Three levels of market efficiency can be identified as weak-form efficiency, semi-strong form efficiency and strong form efficiency.

The first form is the weak-form efficiency is where share prices fully mirror all information contained in past price movements. Seeing that the future cannot be forecast in such way, it is useless basing trading rules on share price history. For instance technical analysts utilize a vast variety of trading rules. Others recommend a purchase when a share rises in price at the same time as an increase in trading volume takes place. Some suggest buying shares that have carried out well in relation to the rest of the market, retaining that their performance will continue in that vein. Tremendously the evidence and weight of academic opinion is that the weak form of the EMH is to be honored. The history of share prices is useless to foresee the future in any peculiar profitable way.

The second form is the semi-strong form efficiency where share prices fully mirror all the significant publicly accessible information. This comprises not only past price movements but also earnings and, technological breakthroughs, rights issues, dividend announcements, resignations of directors, and others. The semi-strong form of efficiency means that there is no advantage in studying publicly available information after it has been given out, for the reason that the market has already engaged it into the price.

As an example, the semi-strong form tests focus on the matter of whether it is worth acquiring expensively and analyzing publicly available information. If semi-strong efficiency is true it dents the work of millions of primary professional or amateur analysts whose trading rules cannot be useful to fabricate abnormal returns as all publicly available information is already mirrored in the share price.

The third form is the strong-form efficiency where all relevant information, together with that which is confidentially held, is mirrored in the share price. In this form the focal point is on insider trading, wherein a few privileged individuals, directors per se are capable to trade in shares, as they more aware compared to the normal investor in the market. In a strong-form efficient market even insiders are powerless to make abnormal profits even if the market is acknowledged as being ineffective at this level of definition. For instance, it is well known that it is feasible to trade shares on the basis of information not in the public domain and in this manner make abnormal profits.

In this light, stock markets are not strong form efficient. Trading on inside knowledge is perceived to be a “bad thing”. It makes those outside of the captivated circle feel cheated. A breakdown of the fair game perception will give investors the feeling that the inside traders are making profits at their expense. If they start to believe that the market is less than a fair game they will be more hesitant to invest and society will suffer.

To prevent the loss of confidence in the market most stock exchanges try to control insider dealing and it is a criminal offence for most exchanges. Insider trading is measured to be, aside from dealing for oneself, either procuring another individual to deal in the securities or communicating knowledge to any other person counseling, while being conscious that they will deal in under those securities.

The efficient market hypothesis has several implications for the investors and the companies. For the investors, the vast majority of people public information cannot be used to gross abnormal returns in which returns above the normal level for that systematic risk class. The implication is that basic analysis is a wasting of money and that as long as efficiency is preserved the average investor should basically select a correctly diversified-portfolio, in so doing circumventing the analysis and transaction costs.

Investors need to press for a larger volume of appropriate information. Semi-strong efficiency relies on the quality and quantity of publicly available information, and so companies should be confident by investor pressure, government rulings, accounting bodies and stock market regulation to offer as much as is attuned with the need for some concealment to avert competitors discovering useful knowledge. The discernment of a fair game market could be enhanced by further deterrents and constraints placed on insider dealers.

For companies, a number of implications are subject on a company in the efficiency market hypothesis. Substance is the focus, not the short-term appearance, for some managers behave as is they believe they can deceive shareholders. For instance creative accounting is utilized to show a more remarkable performance than what is just necessary. More often than not, these tricks are obvious to investors, who are able to construe the real position, and security prices do not ascend synthetically.

In circumstances in which the drive for short-term heightens reported earnings could be positively harmful to shareholders for example, a firm might have a tendency to overestimate its stock to advance short-term profitability; one more might not record bad debts. These doings will result in further, or at least advance, taxation payments, which will be risky to shareholder wealth. Managers being aware that the analysts regularly pay a great deal of attention to accounting rate of return, when facing an option among a project with a higher NPV but a poor short-term ARR, or one with a lower NPV but higher short-term ARR and will opt for the latter.

It is not that essential for the timing security issues to be fine-tuned. Regard a team of managers weighing up a share issue who sense that their shares are presently under-priced because the market is low. They will decide on to delay the sale, hopeful that the market will rise to a more “normal level”. This flouts the logic of the EMH wherein if the market is efficient the shares are already acceptably priced and it is just as similar that the next movement of prices will be down as up. The past price movements have nothing to do in relation to future movements.

The situation is somewhat differs if the managers have confidential information that they what they are aware of are not yet priced into the shares. In such scenario if the directors have good news then they would be shrewd to wait in anticipation of after an announcement and consequent adjustment to the share price before putting to market the new shares. Appalling news announcements are more complicated, to sell the shares to new investors while keeping bad news may benefit existing shareholders, however will result to loss for the coming in of new shareholders. (http://cbdd.wsu.edu, 2008)

The Australian economy, over the recent years has outpaced larger developed economies and has proved flexible despite of global and regional economic downturns. The Australian economy has grown speaking of real terms by an average of 3.7 per cent annually over the past 10 years. This compares to an average rate of growth of 2.25 per cent across the G7 economies.

Australia keeps on changing into a dynamic, open economy completely incorporated into both global and Asia-Pacific trade. In a p of 20 years, Australian trade in goods and services has increased by an average of 7.9 per cent per annually. Encompassing strong comparative advantages predominantly in the mining and agricultural sectors for over a century, Australia is on the rise of new competitive strengths as an international supplier of services and advanced goods. Australia is in general a price taker in international markets, on average accounting for around one per cent of global the trade.

By tradition, Australia has been a capital importing country and has consequently operated with deficits in its current account. The current account deficit widened in the past to years to an average of 6.3 per cent of GDP compared to a ratio of 5.9 per cent in 2004. In total, the deficit on the current account increased to $55.3 billion in 2005, which is 1.2 per cent higher than the deficit recorded in 2004. Over the past years the aggregate current account deficit has more than trebled.  This is because to an increase in the net income deficit where the net of income flows into Australia.

The aggregate deficit in Australia’s income balance increased to a record high $35.2 billion in, an increase of 23 per cent on the previous year. The increasing deficit over this period mirrors Australia’s large interest rate discrepancy with other major economies, particularly the United States and EU as well as the tough performance of the Australian share market in relation to other world bourses. It also shows the high level of foreign borrowing in Australia. In 2005, the ratio of net foreign debt to GDP averaged a record high of 49.7 per cent. In comparison, the aggregate deficit in Australia’s balance on goods and services or the net of exports and imports, fell to $19.6 billion in 2005 after a record deficit of $25.7 billion was reached in 2004.

The balance on goods and services has improved noticeably because of higher merchandise exports, which increased by 18 per cent in 2005 on the support of high world article of trade prices as well as a stabling in the Australian dollar. On the other hand, merchandise imports have been constant to rise in keeping the goods and services balance in deficit. Imports increased by 10.2 per cent, mostly a product of higher imports of intermediate goods. Though, high levels of business investment and strong wages growth has also seen boosting in imports of capital and consumer goods.

Australia’s current account deficit has been anticipated to narrow slightly in 2005-07 as Australia’s trade deficit developed. Export activity is foreseen to pick up in the medium term due to high world commodity prices and higher export volumes curtailing from capital expansion across the economy. (Chamber of Commerce and Industry, 2006)

Australia’s economic growth is projected to remain solid, yet discreet, because of the negative influences of the falling investment of dwelling and high current account deficit. Overall, GDP growth is expected to reach 2½ per cent before intensifying to 3¼ per cent in 2007-2008 as the housing sector stabilizes and higher commodity prices begin to fuel exports even though down from the previous forecast of four per cent. Household consumption growth is anticipated to moderate to three per cent as consumers maintain to re-establish their balance sheets after a continued period of high consumption that conveyed with it higher levels of debt in the household sector.

After recording a modest fall of 0.6 per cent in 2004-05, dwelling investment is predicted to fall by a further 3¼ per cent, consistent with expectations of a soft landing for the residential building sector. Thereafter, housing activity is foreseen to pick up again, with growth of 2¾ per cent expected. Conditions in the business sector continue to stay positive, as confirmed by the strong upswing in business investment evidenced over the years. After growing by a strong 12.3 per cent, business investment is anticipated to grow by an additional seven per cent in the present year as conditions remain supportive.

As high levels of business investment are projected to continue into 2006-07, the rate of growth is expected to moderate to 1¾ per cent. High commodity prices are expected to support a stronger export performance, after the much awaited recovery in the export sector failed to materialize during 2004-05. Exports are estimated to increase by five per cent and by a further nine per cent in 2007-2008. On the other hand, imports are projected to moderate over the next two years in line with a lessening in domestic economic activity, rising by seven per cent in up to six per cent in the current year.

As employment growth is a covering economic indicator, the slower output growth foreseen to bring with it more moderate growth in employment of 1¾ per cent. Having the analysis on Australian economy and its position in the global market and its outlook on the coming years, it can be concluded that the Australian share market is efficient, although unstable at certain points; Australian economy has always been in the world’s list of countries with strongest market structures. (Chamber of Commerce and Industry, 2006)

 References

1. Australian Securities Exchange. (2008). Australian Market Overview. Retrieved

January 7, 2008 from Website: http://www.asx.com.au.

2. Chamber of Commerce and Industry. (2006) A Guide to Market. Western Australia

3. Colebach, T. (2005) We’re on a long and slippery slide to disaster: The Age.

4. Choose Australia. (2008). Why is Australia great?. Retrieved January 7, 2008 from

Living in Australia, Website: http://www.immi.gov.au.

5. Financial Analysis (2008). Market Efficiency. Retrieved January 7, 2008 from

NetTel @ Africa from Website: http://cbdd.wsu.edu.

6. The World Fact Book. (2008) Australia. Retrieved January 7, 2008 from Central

Intelligence Agency from Website: https://www.cia.gov.

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Pakistan is the 25th largest economy in the world and is a country that has many industries including the textile industry, chemicals, food processing, and agriculture. Pakistan’s economy has been going through many political problems, the rapid growth of population, inflation, and law and order situation. In past years since 1960 2005 the gross domestic product (GDP) at market prices was in 19960, 100 million Pakistani rupees, in 1980 it was 283460, in 1985 it was 560114 million rupees, in 1990, 1029093, in 1995, 2268461, in 2000 it was 3826111 and in 2005 it was 6581103. All the figures are estimated by the IMF International Monetary Fund. Pakistan industrial sector is very vast including textile industry which is 8. 5% of the GDP, fertilizers, cement, oil refineries, dairy products, food processing, beverages, construction material, clothing, paper products, shrimps, etc. with the industrial production growth rate of 10. 7% in 2005 and large scale manufacturing growth rate of 18% in 2003. In Pakistan, foreign investors are free to establish their businesses and own business enterprises in all sectors of the economy except four sectors which include arms and munitions, high explosive, currency/mint operations, and radioactive substances.

No restrictions on technology transfer with that the government investment policy also the repatriation of capital, capital goods, dividends, and profit with the approval of the State Bank of Pakistan. In the E-Commerce sector there are no trade restrictions but still, the government has the rights to block certain websites that conflict with the Pakistani religion and culture. All the above trade restrictions are based on the political bases, economical condition of the country as well as on the trade and foreign policy which are also beneficial for the people of Pakistan. Pakistan does not protect anyone industry but does support its agriculture and textile industry which are bigger than others and helps to generate revenue.

Reference

1. www.issi.org.pk/journal/2007_files/no_1/article/a1.htm
2. www.ideas.repec.org/a/pid/journl/v42y2003i4p795-807.html
3. Central Board of Revenue Pakistan: www.cbr.gov.pk

Money plays a vital and crucial role in the development of an individual, a nation, as well as, the whole globe. In this regard, banks, governments, and multinational corporations have created the largest financial market of the world, which has been referred as the currency exchange market. In this regard, different individual companies or governments are involved for the trading of different currencies with another. Some of the studies have found that approximately three trillion dollars is the amount of daily trade in the current currency exchange market of the world.

Thus, it can be seen that an enormous volume is traded everyday in this market, which affects the lives of millions of people every day, as different countries participate in this exchange market, which constitutes of thousands of traders from different parts of the world. In addition, traders do not get a high rate of profit in the market, and the market can be taken as a perfect competition market. If we go into the past, Chicago Mercantile Exchange was the first one to introduce the currency exchange market to the globe, which was based on the future contracts of different companies.

Currently, approximately 2. 7 trillion dollars is average turnover of global transactions in the currency exchange market. In specific, two currencies are exchanged simultaneously in a single transaction of currency exchange market. A floating exchange rate is provided to the traders that are considered for the exchange of different currencies of the world at the same time. If we even, sum up the turnover of all the equity markets in the world, the turnover of the single currency exchange market is greater than the former ones due to its huge daily turnover.

In the result, the role of an important asset class has been played by the currency exchange market. One of the other reasons of its growth is the increment in the fund management assets, which ahs been followed by the internet that has facilitated the streaming transactions with thousands of traders at the same time. The United Kingdom has the largest trading centre in the globe, which shared more than thirty percent of the trading volume in the month of June 2007. (Agenor, 2007)

Specifically, more than seventy percent of the trading is done by the large international banks that are considered the most active traders in the currency exchange market. Different levels of access are provided to the traders by the market in which, the highest level of access is mostly acquired by the investment banks, and they get different prices that the outside players that are not provided with these prices. In other words, the amount of volume that is traded results in the acquiring of different levels in the market.

In this regard, more than fifty percent of all the transactions can be attributed to the top investment banks of the globe, whereas, the top levels of access are acquired by small investment banks, hedge funds, forex market creators, and multinational companies from different parts of the world. Central, commercial, and investment banks have generally dominated the currency exchange market as compared with the other traders in the market.

However, different small and large traders can participate in the currency exchange market due to the globalization that has facilitated effectively. In this regard, money brokers, money managers, and private speculators are some of the members of current currency exchange market. Banks usually take part in the transactions of billions of dollars, which plays a vital role in their own growth. In terms of timing, the market opens on Sunday and closes on Friday between which, it does not stop and can be considered a twenty-four hour market.

Australia is the first country that starts the trading due to its time zone, which is followed by Japan, the United Kingdom, the United States, and so on. Different factors play a vital role in creation of fluctuations in the currency exchange market, and the currency exchange market provides the opportunity to investors to respond to these fluctuations, which is quite different from the other financial markets around the world. (Agenor, 2007). Capital mobility and financial globalization are some of the areas that developed and advanced significantly during the 1990s.

Interestingly, the budding market economies expanded greatly during this period and the advancement was not limited to the industrialized and developed countries of the world. On the other hand, the abovementioned emerging market economies confronted financial and money related crises in their region due to the advancement. For instance, the Asian crisis of the year 1997 is regarded as one of the most famous crises of all the time that affected the continent in an adverse manner. In this regard, a tremendous instability in the international capital flows resulted in the characterization of the Asian crisis.

In specific, Indonesia, the Philippines, Thailand, Malaysia, and Korea were greatly hit by the abovementioned crisis, which resulted in the losing of more than a hundred billion dollars in the year 1998 that affected these countries, which were quite stable with the receipt of around ninety-three billion dollars a year before the attack of the Asian crisis. It has been observed that approximate ten percent of the total gross domestic product of the five countries was the sum of reversal capital flows before the crisis.

Moreover, high share of temporary peripheral arrears in the external debt of the five countries was one of the major reasons of the sharp reversal in the banking and business flows of these countries. Furthermore, the crisis leveled significantly due to the different macroeconomic policies of these countries. In response to the massive capital inflow, the financial policies of most of these countries were confined for the avoidance of any excessive amplification in the demand at domestic level. Therefore, an increment was observed in the rates of demand at domestic level, which resulted in the further increment in the capital inflows.

In addition, exchange rate risk was assessed ineffectively, which was presented by the instability and fake constancy of the exchange rate system of these countries. Consequently, the external debts were prevaricated by the widespread relinquishment that was led by the above-mentioned wrong evaluation of the exchange rate risk in these countries. In the month of April 20007, the average turnover of the spot market on daily basis was totaled to thirty-eight billion dollars according to the triennial survey conducted by the Bank for International Settlements regarding the derivatives market.

An increase of six percent was observed in this survey, as compared to the previous survey that observed the total amount of thirty-six billion dollars as an average daily net turnover in these markets. In specific, the Hong Kong dollar and the United States dollar made the most-traded pair in the market, which was involved in more than forty percent of the daily forex turnover. Secondly, the Euro and the US dollar made the second most-traded pair in the currency exchange market accounted for more than ten percent of the transactions.

The forex market has also been employed by the finance and deposit-taking companies with treasury departments that followed the international banks and securities houses. In this regard, HSBC is the most active member of the currency exchange market, which plays a crucial role in the advancement of the region. Some of the other active participants of the forex market are the Bank of America, Citibank, some Japanese banks, and several European multinational companies around the world. In broad terms, the best rate in a given transaction is generally used by the corporate users in the forex market.

Several banks start their trading from 8 am; however, most of the companies perform trading during the office hours of 9 am to 5 pm. In addition, 24-hour trading rooms have been maintained by a number of banks around the world. Usually, it takes around two business days for the settlement of currency transactions. In the month of April 2006, the fixing of US dollar with the Hong Kong dollar was introduced by the Treasury Markets Association, which provided a standard to thousands of traders in the Asian countries.

In this regard, twenty designated banks are required to provide their rates that are averaged, in order to acquire a reference rate for the Hong Kong dollar and the US dollar. (Agenor, 1995) When the goods and services are acquired by the foreign clients, they wish to pay in their own currency to the commercial enterprises. In the result, the foreign currency market facilitates the trading of goods and services. However, private speculators trade in larger amounts, as compared to these commercial enterprises. In the result, the commercial enterprises have little or no impact on the rate of the foreign currency market.

The foreign currency exchange market constitutes of an important component, the national banks, which play the role of the controlling the money supply and inflation in the market. One of the best characteristics of the national banks is their reserves that can be used anytime to stabilize the market, as it has been observed that rumors and assumptions often destabilize the market, which affects millions of traders around the globe. In most of the cases, budgetary goals have not been achieved by the central banks due to their inability to stabilize the market in real situations.

The customers usually have large accounts in the investment management firms. In the result, these large amounts are utilized for the facilitation of transactions in the currency exchange market. The foreign equities are bought and sold by the buying and selling of foreign currencies by these firms. Therefore, the profit maximization is not the objective of most of the investment management firms, but the buying of foreign equities. However, some of the firms limit the risk by utilizing the deposited currency of the clients for the generation of profits in the market transactions.

One of the examples is the hedge funds that have the ability to speculate and destabilize the market by the trading of their equity worth of billions of dollars. Favored economic factors can result in the overwhelming of any currency by the hedge funds, as compared with the central banks. Another speculative role is played by the retail forex brokers that can also contemplate the trading by their equities. (Agenor, 1995) As earlier mentioned in the paper, the currency exchange market does not have a central market unlike other financial markets in the globe.

This market does not have any border regulations and thus, it can be referred as a perfect competition market. This twenty-four hour market confronts various fluctuations due to different financial flows and future reports related to these monetary flows in different parts of the world. Nowadays, the most heavily traded paired-currencies are the Euro with the US dollar. The pairs of US dollar and the Japanese Yen, and the UK Sterling with the US dollar are some of the other most heavily traded currencies parts in the currency exchange market.

The majority of the market share has been retained by the US dollar, which is not affected usually by the rise in the rate of Euro in the currency exchange market. The United Kingdom, the United States, and several Asian countries have some of the leading currency exchange markets of the world. As earlier mentioned in the paper, the European and American markets usually follow the Asian trade markets that start first due to their earlier time zone. A number of factors are responsible for the fluctuations in the exchange rates of currencies in the currency exchange market.

In this regard, supply and demand forces play the crucial role in the provision of these factors that change the price of one currency resulting in the change of another. In addition, the exchange rates of currencies are also affected by the political activities in different parts of the world. Thus, the currency exchange market is highly vulnerable to the supply and demand forces that account for most of the price fluctuations in the market. (Algahtani, 2002) Moreover, different governments form different economic policies for their coming financial year, which plays a crucial role in the currency exchange market.

It has been observed that the market often confronts fluctuations due the announcement of new monetary policies by the different governments. In specific, budget deficits of governments affect the currency exchange market in a very unconstructive manner. On the other hand, reduction in the budget deficits results in the constructive attitude of the market. The currency exchange market is also affected by the excess of goods, as well as, shortfall of goods and services in different countries. Thus, a number of factors affect the activities of currency exchange market in different parts of the world.

In addition, a high inflation often results in the reduction of currency value of a country, and the market often fluctuates due to the factor of inflation. However, the prices are increased in the market due to the expectations of increase in the interest rate due to the inflation in different countries. Furthermore, different economists provide economic reports related to the GDP and economic growth of a country, which plays a crucial and deciding role in the currency exchange rate of a country.

Economy, as well as, currency exchange rate can be damaged and affected by the instability in the political conditions of a country. Moreover, the value of a currency can also be reduced due to this instability. Sometimes, the neighboring countries also get negative impact due to the political turmoil in a single country. In addition, perceptions of the market are also responsible for the fluctuations in the currency exchange market. On the other hand, traders can acquire a safe zone during the international events that can have a positive impact on the currency exchange markets.

As earlier discussed in the paper, future prospects and activities of governments also have a great impact on the fluctuations in a currency exchange market. (Algahtani, 2002) The currency exchange market has been developed significantly due to the facilitation of the electronic trading means. A currency exchange market consists of various financial instruments. A direct exchange between two currencies is represented by a spot transaction, which involves cash. On the other hand, a future date is settled for a forward transaction that is another important financial instrument of a currency exchange market.

Contract sizes and maturity dates can be observed in the future financial instruments of the market. The US Dollar is the only standard that is used for the tracking of price movement of different currencies by the foreign exchange funds. The amount of units of a country that can be used to exchange with currency of another country can be referred as the foreign exchange rate. (Algahtani, 2002) As earlier mentioned in the paper, the foreign currency exchange market is also available with a variety of financial instruments.

Different roles are played by different financial instruments on long term and short term bases. In this regard, the nature of a company is responsible for the acquiring of suitable financial instrument for the organization. Different options and opportunities are available to different traders, such as multinational companies, private speculators, banks, retail forex traders, etc. Currency exchange markets consist of different markets, such as international capital markets, international foreign exchange markets, etc.

From the point of a business transaction, a transaction in the domestic market and a transaction in the international market share a significant difference between each other. A domestic transaction involves the utilization of a single currency; whereas, two or more than two currencies are usually involved in a foreign transaction, which is a fundamental difference in these transactions. The largest market of the world is the foreign exchange market that involves the selling and buying of different currencies against each other.

A number of experts refer this market as a forex market, which has been described as over-the-counter market. A forex market is very different from a stock market, as there is no single market or organized market like the stock markets. On the other hand, most of the multinational banks have forex market dealing rooms where, the traders can sit and discuss and trade currencies in the market. Most of these dealing rooms are now equipped with electronic technologies that allow the traders to make transactions through internet, which has played a vital role in the development of the forex market.

(Alami, 2001) Occasionally, profit making is done by performing of different transactions by foreign exchange investors and dealers. In this regard, arbitrage is one of the types of forex market activities that are meant for the profit only. In such activity, a market is considered for the buying of a currency, and another market is considered for the selling of same currency immediately that may provide an immediate profit from the transaction.

Therefore, activity that considers different quoted rates resulting in a difference in various markets that may provide profit without any risk can be referred as arbitrage. As earlier discussed in the paper, more than three trillion dollars are traded in the currency exchange market on daily basis. In this regard, different individual companies or governments are involved for the trading of different currencies with another. Some of the studies have found that approximately three trillion dollars is the amount of daily trade in the current currency exchange market of the world.

Thus, it can be seen that an enormous volume is traded everyday in this market, which affects the lives of millions of people every day, as different countries participate in this exchange market, which constitutes of thousands of traders from different parts of the world. A number of factors are responsible for the fluctuations in the exchange rates of currencies in the currency exchange market. In this regard, supply and demand forces play the crucial role in the provision of these factors that change the price of one currency resulting in the change of another.

In addition, the exchange rates of currencies are also affected by the political activities in different parts of the world. Thus, the currency exchange market is highly vulnerable to the supply and demand forces that account for most of the price fluctuations in the market. References Agenor, Pierre-Richard. 2007. “Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange: A Formal Framework. ” IMF Staff Papers, v. 37, no. 3, September: 560-92. Agenor, Pierre-Richard. 1997. “A Monetary Model of the Parallel Market for Foreign Exchange.

” Journal of Economic Studies, v. 18, no. 4: 4-18. Agenor, Pierre-Richard. 1995. “Monetary Shocks and Exchange Rate Dynamics with Informal Currency Markets. ” International Review of Economics and Finance, v. 4, no. 3: 211-26. Alami, Tarik H. 2001. “Currency Substitution Versus Dollarization: A Portfolio Balance Model. ” Journal of Policy Modeling, v. 23, no. 4, May: 473-479. Algahthani, Ibrahim M. 2002. “Currency Substitution, Gold Price and the Demand for Money in a Developing Economy: The Case of Kuwait. ” Middle East Business and Economic Review, v. 4, no. 2, July: 1-5. (Kuwait)

Haldiram, the brand names that is always associated with quality product and service. It took more than six decades to become the leading manufacturer of Indian savory snacks. The savory snacks industry has been immensely through all these years to form an industry of about $425 millions. And the market potential for this industry is estimated to be around $ 1 billion. The savory snacks market is divided into organized sector and an unorganized sector. Currently, about 45 % of the market is being served by the organizes sector and the balance 55% is served by the unorganized sector.

Presently the company has 20% market share of the organized sector and overall about 7.5% of the market share, with a turnover of $30 million. With the increasing competition and demand for the product the company needs to expand its output and also its product line. The company is opening up a new plant. The project is called “Haldirams Food limited”. There would also be a change in the organizational structure. Currently it’s more centralized but in the new company it would be more decentralized, which reduces the time taken in decision-making process and would also motivate and improve self-confidence among the employees. Looking at the market potential and the new strategies adopted by the company shows that the project is most likely to be successful.

INTRODUCTION

“HALDIRAM” – a name associated with discerning consumers for sweets and namkeens for the past six decades in India and abroad. It made its modest start in the beginning of way back in 1941 in Bikaner in the State of Rajasthan. The brand name “HALDIRAM BHUJIAWALA” was introduced during pre-partition era-1941 and never looked back and ventured first major step in this direction by opening up a shop in 1983 in Chandni Chowk, the main hub of commercial center in Delhi. The prime focus was to serve sweets and namkeens amongst direct consumers and the trade.

Presently the company has 20% market share of the organized sector and an overall about 7.5% of the market share, with a turnover of around $30 million.
1. BRITANNIA: Britannia, having a market share of 15% is the second largest manufacturer in the country. It owns a number of successful brands and has access to its latest technology and product range recently the company has entered into the savory snacks segment. According to the sources the company is not doing well right now. But with a strong strategy for the future, the company is a serious threat.

2. FRITO LAYS LEHAR NAMKEEN: Frito lay, is snack Food Company under the Pepsi group. Frito lay has three brands-lays, cheetos and Lehar. Sources claim that the company has a 65% market share in the branded potato chips market while lehar has a market share of 2.50% in the branded savory market 3. BIKAJI: Established in 1985, the company concentrates on Rajasthan, which is the main market for savory snack. The price of their products is lower than others, which helps them to become more prices competitive. Even then their market share is below haldiram, mainly because it is more focused on one particular state only.

4. BIKANO: Bikano is a very small company established in Delhi since 1980. The company has recently entered into savory snacks market. The quality of the product is average. 5. OTHRES: The rest of the organized market is shared by hundreds and of very small manufacturers spread all over the country like Priya Gold, Kakaji, and Uncle Chips etc.

Lafferty and Hult (2001) present a conceptual framework that incorporates five recently advanced points of view regarding market orientation. In their article the differences as well as similarities are reviewed whereupon a synthesized conceptualization regarding the orientation of the market is offered. Consequently, the synthesis is succeeded by a discussion of market orientation as a phenomenon that pits the organizational management with culture so as to attain a competitive advantage.

Lafferty and Hult, (2001) postulate that with the more recent focus on market orientation, five distinct attempts have been made in a bid to conceptualize the construct. These include, the decision making perspective as well as the market intelligence perspective. Moreover, we also have the culturally based behavioral perspective in addition to the customer perspective as well as the strategic perspective. In a bid to integrate the five perspectives into a synthesized model, the authors assess the market orientation perspectives.

So as to understand the concept behind the perspectives, it is critical to define market orientation. Despite the existence of differentiation in literature regarding the use of the term market orientation, the term was initially adopted in reference to the marketing concept that McCarthy and Perreault, (1990) defined. Conventionally, market orientation stressed on the customer whereupon it emphasized the needs of the customer as well as profit making by ensuring customer satisfaction. The contemporary outlook of market orientation contrastingly, institutes the marketing concept.

A market oriented approach under this guise is more likely to be embraced by departments that are not necessarily marketing departments (Lafferty and Hult, 2001). At the heart of the decision making perspective of market orientation proposed by Shapiro, (1988) is the management’s commitment as well as willingness to share information throughout the organization’s departments in addition to the practice of decision-making in an open manner between both divisional and functional personnel. Under this perspective, three concepts are critical for an organization’s success.

Firstly, information regarding critical buying influences has to permeate all the functions of the corporation. Secondly, tactical as well as strategic decisions have to be made both inter-divisionally as well as inter-functionally. Lastly, Shapiro, (1988) contends that an organization’s functions as well as divisions have to make sure that all decisions are well coordinated and executed in manner that shows commitment. The market intelligence perspective perceives market orientation to be a corporate-wide derivation of market intelligence.

This intelligence has to do with both current as well as future needs of the company’s customers. Consequently, the generated intelligence has to be disseminated across all departments whereupon organization-wide response is expected. The market intelligence perspective has been conceptualized as a wide concept that overlaps over customers’ verbalized needs as well as their preferences. This perspective contends that competitors’ actions as well as the effects of these actions on prospective customers have to be monitored.

Additionally, market intelligence also calls for an assessment of other exogenous factors for instance, environmental forces as well as government regulation and technology. The culturally based behavioral perspective posits market orientation to be a company’s culture that efficiently and effectively inspires and creates essential behaviors that motivate a superior value for buyers. As such, the creation of this superior value for the company’s prospective customers sustains the business’s superior performance in terms of profitability.

The element of customer orientation calls upon the organization to sufficiently understand its customer so as to come up with products or services that are of superior value to them. The forth perspective, the strategic focus perspective in a business unit is the extent to which the organization’s business unit obtains information from its prospective customers whereupon this information is used for developing strategies that meet the needs of the customers. Consequently, this developed strategy is implemented through responsiveness to customers’ wants as well as needs.

The strategic approach by Ruekert, (1992) enables an organization’s management to assemble and construe exogenous information so as to not only set goals but also objectives whereupon resources are allocated to various programs within the business unit. The last perspective that Lafferty and Hult, (2001) exemplify is the customer orientation perspective. Primarily, customer orientation is a set of beliefs that prioritize the needs of the customer while not disregarding those of other company stakeholders such us owners, employees as well as the management.

This enables the company to develop a long term enterprise that is also profitable. Primarily this perspective perceives market orientation to be a culture that prioritizes the profitable creation as well as maintenance of advanced customer value alongside consideration of stakeholder interests. Additionally, customer orientation has to stipulate norms for behavior that have to do with corporate development as well as responsiveness to market information.

In conclusion, Lafferty and Hult (2001) presented a model that amalgamated five modern conceptualizations regarding market orientation whereupon it also provided a synthesis of their components. Primarily, the focus on a synthesized market orientation model is endeared towards meeting the needs of customers as well as creation of value for them. A second critical concept is information an element within the corporate framework. This information includes all that can be generated or derived not only regarding the customer but the competitor as well so as to assist the organization in its quest for market orientation.

References Lafferty, B. A and Hult, G. T. M. , 2001, “A synthesis of contemporary market orientation perspectives”. European Journal of Marketing. Vol. 35 No. 1 / 2 pp. 92-109 McCarthy, J. E. , Perreault, W. D. Jr (1990), Basic Marketing – A Managerial Approach, 10th ed. Irwin, Homewood, IL. Ruekert, R. W. (1992), “Developing a market orientation: an organizational strategy perspective”, International Journal of Research in Marketing, Vol. 9 pp. 225-45. Shapiro, B. (1988), “What the hell is ‘market-oriented’? ” Harvard Business Review, pp. 119-25.