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Marketing Communication Management Paul Booth

Answer to the Question 1.

The company selected for this coursework is Nokia which was established in
1966 and currently have a presence in about 130 nations. The company was formed
through the merger of three companies which had main business areas in the
manufacturing of tyres, pulp and cables. Later in the 1970s Nokia diversified its
manufacturing business into electronic goods especially related telecommunication
products and later entering into the mobile segment. The main reason for changing the
business strategy was the lack of growth potential in the areas of tyres, pulp and cables in
the long run. In the last three decades Nokia has consolidated its position through Joint
Ventures, mergers and internationalisation of the mobile manufacturing business.

Thompson (2003) has defined SWOT analysis as “an analysis of an organisation’s


strengths and weaknesses alongside the opportunities and threats present in the external
environment”. The main purpose of SWOT analysis is to identify and develop
organisation specific models for business which is best suited for the capabilities and
resources of the organisation in the light of the operational environment. Developing
strategies based on company’s core competencies will result in the creation of
competitive advantage. The importance of competitive advantage is that the profitability
will be increased and it helps the company to survive in the long term in this period of
increased competition. The SWOT analysis for Nokia can be examined as follows;
Marketing Communication Management Paul Booth

Strengths

Nokia is the market leader in mobile phone manufacturing and the main strengths
of Nokia are in providing user friendly phones and the ability to produce cost-effective
phones through the economics of scale. The ability to manufacture user friendly phones
taking into account the needs of the customer is one of the main strength of Nokia. The
brand name “Nokia” play an important role in the market leadership for the Nokia
Company. Nokia has always focussed its brand name even in the several Joint Ventures it
has entered across the world.

The ability of Nokia to successfully enter into Joint Ventures is one of its main
strengths when compared with its competitors. Nokia has successfully used the Joint
Ventures with Mobira Oy in 1979 in order to enter into the mobile market segment and
later it entered into Joint Venture with Siemens with a view to consolidate its position in
the market. The competency of entering into Joint Ventures was helpful for Nokia’s
operation in China where it entered into a number of Joint Ventures for manufacturing as
well as for technology and software developments.

Weakness

Nokia’s main markets are United States, United Kingdom and Germany followed
by China and India. In its markets in United Kingdom and Germany, Nokia does not have
any role in retailing as it is done by mobile service providers and retail chains like “phone
4 U and Car phone Warehouse”. The lack of direct retail outlets for Nokia causes it to
depend on mobile service providers and phone retail chains affecting its profit and
operation margins.

Nokia is selling all its products under the brand name “Nokia” while its
competitors have tried to segment the market through marketing specific products for
Marketing Communication Management Paul Booth

each segment. Even though Nokia has a wide range of products targeting several market
segments, the importance given to the brand name Nokia affects customer’s ability to
identify the product from the rest in the portfolio (Fernandex, 2010).

Nokia has lagged in introducing innovative products based on the changing trends
of the customers. For instance Nokia failed to introduce camp shell mobiles and dual sim
mobiles in its key markets and this has caused Nokia to loss market share.

Opportunities

The market in United Kingdom has saturated in terms of growth and the mobile
manufacturers are trying to provide innovative functions with the mobiles. For addressing
this Nokia can effectively use its Joint Ventures in manufacturing and development of
technology and software in India and China for its advantage. Nokia’s strong brand name
provides its additional opportunity in key markets of United States, United Kingdom,
Germany, China and India where it enjoys market leadership.

The main opportunity for Nokia is in the emerging markets of Brazil, China,
Indonesia, India, Mexico and South Africa. The emerging markets have huge potential
for Nokia’s future growth and Nokia has already working hard in this markets. Apart
from the mobile service providers and retail chain phone sellers, Nokia is directly selling
its mobile phones through its own outlets and exclusive showrooms. This provides more
opportunity in terms of future growth since Nokia can use its experience to obtain market
leadership in these emerging markets.

Threats
Marketing Communication Management Paul Booth

Nokia is facing increased competition from companies like Sony, Motorola,


Samsung and LG in its matured markets of United States, United Kingdom and Europe.
In the emerging market together with the main competitors Nokia is also facing threat
from local manufacturers. The local manufacturers like ‘Kilburn’, ‘Hanwei’, ‘Videocon’
etc are able to introduce products much cheaper and taking into account the everyday
needs of the customers.

In the high end costly mobile phone segment Nokia there is increased threat from
Apple’s iPhone and RIM’s Blackberry. Even though Nokia has products suitable for all
segments of the market Nokia’s marketing policy of not developing portfolio of products
is affecting the ability to differentiate the product in key segments. Another threat is from
the grey markets in the emerging countries which are also making its way into markets of
the developed countries especially in the low-cost segment.

Analysis of Nokia’s Current Position

Nokia is enjoying considerable competitive advantage in the area of mobile phone


manufacturing across the world due to a variety of factors. The main competitive
advantage of Nokia is its ability to manufacture user-friendly mobile phones, the strong
brand name Nokia, ability to successfully build Joint Ventures and the ability to use
economics of scale. Nokia is the market leader in most of the markets across the work
and as result is facing renewed competition from a variety of mobile manufacturers.
Nokia needs to develop marketing strategy for each key segment of mobile users in order
to face the competition. The mobile service provides like O2, Vodafone and Orange are
now promoting their own brands using the cheap manufacturing facilities in China.

Answer to the Question 2.

Company’s marketing communication strategies and the company’s marketing


communication mix.
Marketing Communication Management Paul Booth

The marketing communication strategy of Nokia is highly focused on its brand name
Nokia and the tagline “connecting people”. The main objective of Nokia’s
communication strategy is in strengthening the connection of the consumer with the
brand through communication. Currently Nokia is focusing increasingly on the aspect of
entertainment in its marketing communication strategy across the world. One of the main
factors for change in this approach is the successful marketing of ‘iPhone’ mobile phones
by Apple which redefined the entertainment aspect in mobile phones and also due to the
importance given to total entertainment by Sony through a portfolio of mobile phones. In
this aspect Nokia introduced the “Nokia Comes with Music” in 2008 in order to reach
more customers but the changing customer trends for more entertainment functions like
movie watcing, mobile TV etc. This caused Nokia to withdraw the campaign based on
“Nokia Comes with Music” with a new campaign based on total entertainment. The new
marketing communication strategy is based on the theme of “bringing entertainemnt to
life” in overall focus on Nokia’s core tagline “connecting people” (Parker, 2008).

In this aspect the markeing communication mix like sales, promotion, advertising
and public relations becomes important for Nokia Company. Nokia uses an integrated
approach to the market communication mix it is based on the staretgy of connecting
people with the brand and it can be analyzed as follows;

Nokia has right from its entry into the mobile phone segment in late 1970s it has
focussed in increasing the sales in order to obtain market leadership and in increasing the
sales the main elements taken into consideration are ranking the product and customers
needs for that product. For instance in China and India, Nokia introduced the product
“Nokia 1100” which incorporated a small torchlight in order to penetrate the rural market
were constant “power cuts” are common. Moreover Nokia 1100 was the base level model
which helped Nokia to obtain market share through market penetration. Sales in an
important element for Nokia in retaining its market leadership. But in the sales of N-95
the aspect of market skimming was used since it was targeted the high end segment. The
Marketing Communication Management Paul Booth

major drawback of focusing on sales is that less operational margin and constant
reviewing of the base models is necessary to face the threat from low cost manufacturers
(Fernandex, 2010).

Promotion is also integral part to Nokia and it is based on the brand image Nokia and the
brand tagline connecting people. Recently in order to highlight the total entertainment
aspect of Nokia’s mobile phone it introduced the “bringing entertainemnt to life” based
campaign and the various promotional staretgies using online, print and visual media and
through retail outlets focussed on this aspect from brand promotion as a total
entertainment solution. The use of effective advertising is one of the main strategies used
by Nokia which reflect the product quality as well as the brand image. Nokia even though
provides avariety of low cost phones it does not use cost as a factor in the promotional
and advertising strategies. The main focus is in highlighting the usefullness to the
customers. In order to strengthen the promotion and advertising since 1997 Nokia has
acquired around 20 companies working in this area. For instance the Oz communications
based in Canada was acquired in 2008. Nokia is presently focusing on the promotional
strategy based on total entertainment aspect and in promoting the “bringing entertainemnt
to life” campaign it has tried to link it with the Nokia’s brand image and the Nokia’s
tagline “connecting people”. This allows the customers to associate the product with
brand name Nokia (Parker, 2008).

Public relations aspect is strongly used by Nokia to promote its various product and it
takes into account the company’s brand image and brand equity. Nokia does not use
direct marketing using online options or demo marketing for marketing its product. Nokia
is a member of the United Nations Global Compact a voluntray compliance scheme for
ethical corporate policies and Nokia has used its particpation in it to highlight it as an
ethical corporation having high value to social corporate responsibility.

According to Porter (2000) the main function of the marketing


communication mix of the company is to provide a strategic communication with its
customers. Thus the communication can achieved through using multiple paths through
selling and advertising which uses written communication or symbolic communication
Marketing Communication Management Paul Booth

forms based on product image, price and distribution channel. In this aspect Nokia has
effectively used its marketing mix with the communication to support its brand image
(Fernandex, 2010). The main objective of Nokia in supporting the marketing
communication strategy is with a view to retain its market leadership together with
achieving high level of customer satisfaction and customer loyalty.

This approach to marketing is for obtaining competitive advantage through


“segmentation, targeting and positioning”. Initially Nokia was focussed on sales with a
view to obtain market leadership and by 2005 it has changed its approach to a customer
friendly and dependable mobile phone. Further changes in the consumer trends,
development of technologies and introduction of innovative products by rival caused
Nokia to changes its marketing communication strategy to one based on “segmentation,
targeting and positioning”. This aspect was used in the marketing communication of
Nokia’s Smartphone range of mobile phones introduced with a view to counter Apple’s
iPhone targeting consumers who needs more entertainment options from the mobile
phones like music, mobile TV, movies, camera and internet (Fernandex, 2010). But the
marketing communication was built on the Nokia’s brand name and image.

Nokia in its international marketing communication strategy uses a multi-country


approach rather than a single approach. This allows Nokia to reflect the regional needs as
well as in position the product in terms of usability and price. For instance due to the
peculiarity of the UK market, Nokia was not able to provide direct sales through outlets
or website and it has caused Nokia to rely heavily on the retailers who have different
objectives. To prevent such a situation while entering emerging markets, Nokia focused
building on its own distribution and marketing channels together with strengthening the
retail sales. In this aspect in China, Nokia in major cities have started exclusive outlet to
feature its product using interactive technologies.

The marketing communication plan of Nokia is heavily based on the brand name
and brand image of Nokia and it follows a multi-country strategy towards marketing. The
main approach towards marketing is to retain the market leadership which is about 36%
Marketing Communication Management Paul Booth

to 38 % of the total mobile phone sales across the world and to strengthen the satisfaction
and loyalty of the customer including consumer.

Answer to the Question no 3.

“Critically discuss how the effectiveness of all the above can be established”.

The SWOT analysis has provided useful information regarding the strengths,
weakness, opportunities and threats faced by Nokia in its international operations. The
evaluation of the SWOT analysis will allow Nokia to effectively achieve competitive
advantage by strengthening it score competencies. In these aspect SMART objectives is
used to evaluate the SWOT Analyse of Nokia and its marketing plan. The main
objectives of SMART objectives include the organisation to taking its marketing plan’s
control, to motivate in achieving common goals for teams and individuals and focussing
on all organisational functions in an agreed and consistent manner. The SMART
objectives stand for “Specific, Measurable, Achievable, Realistic and Timed”.

The marketing communication plan of Nokia is heavily based on the brand name
and brand image of Nokia and it follows a multi-country strategy towards marketing. The
main approach towards marketing is to retain the market leadership which is about 36%
to 38 % of the total mobile phone sales across the world and to strengthen the satisfaction
and loyalty of the customer including consumer. The SMART objectives of Nokia can be
evaluated as follows;

Specific
Marketing Communication Management Paul Booth

Nokia’s marketing plan lack speciality as it only focus on retaining the present
market leadership in its markets across the world and as such it does not provide any
specific targets to Nokia’s marketing communication strategy to work with. This is due to
the undisputed market leadership it enjoys in its key markets and the SWOT analysis has
shown the increasing competition in the sector especially through the diversified portfolio
strategy of Samsung, LG and Sony.

Measurable

The marketing plan of Nokia is highly measurable as it focuses on attaining


market leadership and strengthening the customer satisfaction and loyalty. With a view to
increase the customer satisfaction Nokia has tried to provide a wide range of customer
services based on online as well as telephone in the UK market. While in other countries
especially in the emerging countries it has tried to develop customer satisfaction through
customer services at exclusive Nokia outlets. Nokia has introduced “Nokia Club Card” in
order to increase customer loyalty and also to measure customer satisfaction based on its
usage (Fernandex, 2010).

Achievable

The target set by Nokia with regard to market leadership is achievable but in the light of
the SWOT analysis there is increased competition from the major competitors like
Motorola, LG, Sony and Samsung together with the local manufacturers in emerging
markets. In the matured markets of United States, United Kingdom and Europe the use of
“bringing entertainemnt to life” was instrumental in changing the image of Nokia to a
mobile manufacturer providing total entertainment (Parker, 2008).

Realistic
Marketing Communication Management Paul Booth

The marketing plan Nokia in the light of SWOT analysis is highly realistic since
through several marketing campaigns and strategies Nokia was able to achieve market
leadership from Motorola in 1995. It was able to retain the growth in the segment by
concentrating on the low cost phones and also on other segments of the markets. The
current marketing strategy in China and India of Nokia is based on penetrating rural
markets and the same time providing high end products in the urban markets targeting the
youth. Both India and China have large population of Youth in the demography about
30% each and the rural population comes to around a total of 1 Billion which is much
more than the other markets. Thus in the light of the SWOT Analysis the marketing
communication plan targeting the rural population and the youth is realistic.

Timed

The objectives of marketing plan should be highly timed in order to obtain


competitive advantage. In this aspect Nokia has based on the consumer trends has highly
timed strategies in order to penetrate the market. For instance it was cost based marketing
strategies in till 2001 and it changed to a strategy based on customer friendliness and
quality in 2005 and in 2008 it introduced the strategy “Nokia comes with music” in order
to tap the growing customer preference for music and it introduced “bringing
entertainemnt to life” in 2010 based on consumer trends for mabile phones with total
entertainment. This new strategy is timed in order to reflect the changing customer needs
and consumer expectations.

Conclusion

Nokia is enjoying considerable competitive advantage in the area of mobile phone


manufacturing across the world due to a variety of factors. The main competitive
advantage of Nokia is its ability to manufacture user-friendly mobile phones, the strong
brand name Nokia, ability to successfully build Joint Ventures and the ability to use
economics of scale. The marketing communication strategies reflect the aspect of
SMART objectives in the light of the SWOT analysis. Nokia need to bring specific
Marketing Communication Management Paul Booth

objectives to its teams and individuals as part of SMART objective to retain the existing
market leadership in key market across the world. There is the need to develop effective
communication strategies based on its brand image and name in order to face the
competition from the low cost manufacturers from India and China.

References:

O’Sullivan, K. (2010) Strategic Intellectual Capital Management in Multinational


Organisations. Hershey : IGI Global.

Fernandex, J. (2010) Telecoms: Nokia adopts entertainment stance to push smart phones.
London: Marketing Week (Feb 4. 2010) p.5.

Parker, A. (2008) Nokia confident of music deals. London: Finnacial Times March 27,
2008 p.18
Sherman, E. (2010) Motorola divides to force focus, but the forecast remains hazy. B-net,
Feb 12, 2010. Accessed on 07-03-2010 from
http://industry.bnet.com/technology/10005259/motorola-split-will-get-the-companys-act-
together-maybe/ [online].

Johnson, G and Scholes, K (2002) Exploring Corporate Strategy, 6th Edition, Prentice
Hall
Marketing Communication Management Paul Booth

Kotler, P (2003) Marketing Management, 11th Edition. Prentice Hall.