TABLE OF CONTENTS

2
ABBREVIATIONS
CHAPTERS
3
1.
Introduction
4
2.
Global market scenari o of mobile
handset industry
4
3.
Domestic market scenario of mobile
handset industry
8
4.
PEST Analysis
14
5.
Market Analysis
17
6.
Competi tor Analysis
19
7.
SWOT Analysi s
22
8.
Su rvey Analysis (market research)
25
9.
Conclusion
26
BIBLIOGRAPHY
27
REFERENCES
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ABBREVIATIONS
3G:
International Mobile Telecommunications-2000 (IMT--2000),
better known as 3G or 3rd Generation
AVSM
: Audiovisual Media Services
CDMA
: Code division multiple access
GSM
: Global System for Mobile Communications
IMEI
: International Mobile Equipment Identity
MFE:
Mobile Entertainment Forum
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INTRODUCTION:
The first Nokia century began with Fredrik Ides
tam s
paper mill on the banks of the
Nokianvirta river. Between 1865 and 1967, the company would become a major industrial
force; but it took a merger with a cable company and a rubber firm to set the new Nokia
Corporation on the path to electronics.
The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early
evolution of mobile communications. As European telecommunications markets were
deregulated and mobile networks became global, Nokia led the way with some iconic
products
In 1992, Nokia decided to focus on its telecommunications business. This was probably the
most important strategic decision in its history. As adoption of the GSM standard grew, new
CEO Jorma Ollila put
Nokia at the head of the mobile telephone industry s global boom –
and made it the world leader before the end of the decade
Nokia s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look
to the future.
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GLOBAL MARKET SCENARIO OF MOBILE
HANDSET INDUSTRY
The global cellular handset market is one of the largest markets in the world. This large
market was worth $ 131 billion in revenues in the same year. A total of 1.034 billion new
handsets were shipped in 2009. But the figures of total revenue in 2008 were $159 billion.
This decline in total revenue was because of the global recession or the sub-prime crisis
(crisis crunch) which left age old respected institutions like Lehman brothers down into dust.
Despite falling back, Nokia was the market leader and in both total sales value and total
shipped units. It held a 41% share of total sales revenue with Apple having the 2
position
nd
with 11%.
In terms of total shipped units Samsung and LG were in 2
and 3
positions respectively.
nd
rd
After the recession the market is growing largely due to expansion in under penetrated
markets and in selling ever increasing sophisticated smart phones to wealthy customers.

DOMESTIC MARKET SCENARIO OF

MOBILE HANDSET INDUSTRY
The mobile handset market in our country is one the fastest growing markets and is rapidly
evolving. The market may witness 1.159 billion subscribers by 2013, according to London-
based Informa Telecoms and Media's latest forecast.
Though Nokia remained as the leader in mobile handset industry with a market share of
52%, it faces a stiff competition from the mushrooming domestic brands which have a
market share of 14%. Around 108 million mobile handsets were sold in the country during
FY 2009-10, adding up to Rs 27,000 Crore sales.
The market share of companies in India is given below:-
Mobile Brand Market Share (%)
52.2
17.4
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5.9
4.1
3.9
3.0
1.1
1.0
0.9
Source: Report of Cyber Media Telecom journal Voice & Data Survey
Micromax, an Indian brand which entered the mobile handset market in 2008 gave a tough
competition to MNCs like NOKIA, Samsung and LG becomes India's third-largest mobile
phone vendor.
The MNC brand NOKIA has to share its marketplace with the above mentioned Indian
brands.
Chinese mobile handset brand Huawei entered the Indian mobile market launching 20
models here.
Reasons for Growth of Indian Handset market
Improvement of Technology:
Changing technology has drastically affected the handset market. These changes have been
in the field of software as well as hardware for the handsets. Introduction of Android as new
operating system has changed the mobile industry as it is now giving a stiff competition to
Nokia s Symbian operating system. New development in fields of hardware like introduction
of dual SIM phones, improvement in megapixels, new HD recording etc.
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Cheaper Tariff Rates:
India has one of the cheapest calling rates and this fact has boosted the sales of mobile
handsets in India. This has attracted many companies in Indian market.
Boosting Export:
Mobile handsets were the only telecom device that was exported from India financial year
2009-10. This export was of 135 million handsets.
Government regulation:
After government imposed a ban on use of mobile handsets without IMEI number,
the sales of such mobiles has decreased from 2.6 million to 1 million. This new
market share has been taken up mostly by Indian mobile manufacturers. Increase in
VAT by China on mobile handset has driven many companies to set up their plant in
India. This change in scenario is very good for Indian handset market.
Tapping Rural Market:
The decline in mobile tariffs and availability of handsets at low costs made the mobile
handset industry more competitive. This led the mobile handset companies to vie rural India
as their next area of growth.
According to the study conducted by digital multimedia company MediaTek Inc ., on this
segment of buyers , the bu
yers decision depend on the factors like price of the handset,
durability of batteries, life of the handset and advice of their friends and peers.
Advertisements have less effect in attracting this segment of the market.
The success mantra for rural mobile market lies in low-cost and durable handsets apart from
the service provided by the mobile service operators.
Indian and MNC companies are recognizing the need to innovate and customize their
products according to the needs of people in rural areas.
Vodafone has launched two models
(Vodafone 150 and Vodafone 250) to
tap the rural mobile handset market.
The world s
lowest price mobile
phone, Vodafone 150 is available at
Rs.799 in India.
Vodafone 150 and 250 models
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In June 2009 Samsung launched Guru E1107, a
solar powered mobile phone in Indian market. The
handset enables its users to charge the battery
anywhere the sun is shining, so that the users are
not inconvenienced when
the phone battery is running out of normal charge.
This model was developed keeping in mind the
needs of customers who are residing in areas
where power supply is unstable.
Samsung Guru E1107
The world's largest mobile phone maker
NOKIA launched low-cost handsets and
a recharger which can be connected to a
bicycle's dynamo. It works well at 5 kph -
50 kph speed. These models are aimed
at users with limited access to power
supply.
NOKIA has come up with a new service
called Nokia life tools. Nokia Life Tools will focus on Agriculture information and Education
services with Entertainment supplementing the offering.
Driven by these low-cost mobiles, the mobile sales in our country are expected to be more
than 206 million mobile users by the year 2014. This accounts for 10 percent of handset
sales worldwide.
Urban Indian Market:
Global recession has affected the mobile market partially. However this affect was nullified
due to increase in sales of smart phones in urban markets. Now people are demanding more
in terms of features and benefits associated with a handset. Increase in demand of high end
phone has resulted in due to awareness among the customers. This has attracted
companies like Apple, BlackBerry, and HTC etc. In last financial year these companies have
launched various new handsets.
A very big change which has been seen in urban market has been in terms of buying
behaviour of the customers. Now people are associating themselves with buying new
handsets on various occasions. This can be a very positive sign for a rapidly saturating
urban market.
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PEST ANALYSIS
The market environment is a marketing term and it refers to all of the forces outside of
marketing that affect marketing management s ability to build and maintain successful
relationships with target customers.Company, its suppliers, distributors, and its competitors
are also impacted by what is happening in the world. To succeed therefore, it is necessary to
continuously monitor, anticipate, and adapt, to that environment, and wherever possible,
shape that environment.
The market environment consists of both the macro environment and the micro environment.
Micro environment
This environment influences the organization directly. It includes suppliers that deal
directly or indirectly, consumers and customers, and other local stakeholders. This
determines the relationship between consumers, suppliers, distributors, public and
dealers.
Macro environment
This includes all factors that can influence and organization, but that are out of their
direct control. A company does not generally influence any laws (although it is
accepted that they could lobby or be part of a trade organization). It is continuously
changing, and the company needs to be flexible to adapt. There may be aggressive
competition and rivalry in a market. Globalization means that there is always the
threat of substitute products and new entrants. The wider environment is also ever
changing, and the marketer needs to compensate for changes in culture, politics,
economics and technology.
he acronym “PEST” is used to describe framework for the analysis of these macro
T
environmental factors.
PEST Analysis of the Mobile Phone Industry
There are many factors in the macro-environment that will affect the decisions of the
managers of any organisation. Tax changes, new laws, trade barriers, demographic change
and government policy changes are all examples of macro change. To help analyse these
factors managers can categorise them using the PESTEL model. This classification
distinguishes between following factors:
–
Political
legal environment
Economic environment
Socio-cultural environment
Technological environment
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Political-Legal Environment:
This environment is composed of laws, government agencies, and pressure groups that
influence and limit various organizations and individuals .Sometimes these laws create new
opportunities for business. Various political and legal factors affect a particular industry. By
crossing the critical 100 million mark, India has one of the largest mobile service markets in
the world. In last two years alone, mobile phone users have jumped from 50 million to over
100 million. Other than the trend of growing Household income in India, the recent mobile
market expansion in India has been driven mainly by enlightened regulation and market
innovation. We explore some of the drivers below:
Enlightened Regulation
The Indian Government has been promoting market liberalisation and simplifying
regulation.
Unified Licensing
Indian government has issued new type of unified licences to operators, enabling
them to provide both fixed and mobile services. Fixed-Mobile convergence makes the
bundling of services easier and operators are offering much wider choice of product
to consumers. The unified licences also allow interconnectivity across contiguous
circles ; it is no longer necessary to route inter-circle traffic through a National Long
Distance operator which causes delay and increases costs.
Lowering of Interconnect Charges
Lowering interconnection charges has direct impact on mobile service tariff and
interconnection traffic will be boosted significantly, both fixed to mobile and mobile to
mobile services will benefit.
Made Licence Fees 10%-15% of Revenue
instead of a fixed amount irrespective of
the operator s revenue
. The fixed amount licence fee posed a serious entry barrier to
smaller operators and service providers before, now with fee linked with revenue,
small players can grow, evolve and diversify into different segment and offer
innovative products and services to the market.
Simplified Frequency Allocation Process
Radio spectrum is critical for mobile service, therefore if frequency allocation process
is lengthy and bureaucratic, mobile services deployment will be delayed and it will
hamper the whole industry s development. As the allocation process is getting more
simplified and transparent, networks are rolled out faster.
In summary, regulatory changes have lowered tariffs, bringing down overall cost of
service ownership and boosted investments in the networks which enhance both
mobile service quality and capacity, widened network coverage, which in turn will
further lower the tariff, then encourage more consumers to take up services.
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ECONOMIC ENVIRONMENT
Market requires not only people but purchasing power also. The available purchasing power
in an economy depends on
–
The state of the economy
State of the economy related to the category of
economic status of that country either is developed, developing or underdeveloped
economy. Basically developing economy is the potential market of handsets as these
countries have many of service providers so the demand of reliable and efficient
handsets as well.... India in spite of the recession had a growing economy and hence
this contributed to increased sales of handsets in these years.
Income distribution
- Income distribution basically related to the section of the
society, high income group, high middle class group, middle class group, low middle
class group & low class group. The preference of handset varies according to the
income groups. As per the survey done by Nokia Mobile main focus of high income
group is in the price range of >16000, Middle class group 5000 to 15000 and lower
class group <5000.
Market innovation
has contributed to the reduction of the cost of ownership and
made services more accessible for low income groups which are very price sensitive.
To overcome this hurdle, Indian operators boost the penetration in low income
groups with use of innovative tariff plans, offer very cheap handset to the public and
exploring attractive VAS which are appealing to different segment of customers.
Innovative tariff plans
The following tariff plans are examples of how they have boosted handset sales:
• Incoming
-only plans - employers got phones for chauffeurs and domestic staff;
companies keep in touch with mobile work force
• One India tari
–
ff plan (1 Rupee/min anywhere in India)
simple to grasp
• Lifetime prepaid plan –
no obligation for regular recharging
• Barter of talk minutes for extension of account validity
• Affordable (e.g. 10 Rupees) top
-up values for prepaid accounts
Affordable Handset
• The availability of low cost models from handset manufacturers –
price as low as
Rs1, 300 to 1,400 (US$ 29 to 32)
• An active second
-hand handset market
–
handsets selling at as low as Rs300 to
400 (US$ 7 to 9)
Attractive VAS that is compatible with less sophisticated handsets
DEMOGRAPHIC FACTORS
People make up markets. Marketers would therefore like to know the Size of population ,
Growth rate of population, Age distribution of population, Regional distribution of population,
Ethnic mix, Education levels, and Household patterns.
In May 2000 India s population had
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reached the billion marks - only the second country to do so. There are only four countries in
the world that have a population exceeding that of Uttar Pradesh (166 million).India adds
roughly 18 million people, the population of Australia, every year.
Demographic factors have an influence on the evaluations of different attributes related to
mobile phone choice. Specifically, gender and social class will impact on the evaluations of
the attributes as men belonging to higher social class seem to be more technology savvy.
Consumers value in smart phones features that enhance their personal time planning (e.g.,
Jones, 2002). These high-rated features include calendar and e-mail services.
New technology features such as built-in cameras, better memory, radio, more developed
messaging services, and colour displays are influencing consumer decisions to acquire new
models, which depend on the different age groups. Different age groups prefer different cell
phones. Teenagers mostly prefer cells which are attractive, look trendy and have attractive
features whereas people of age group i.e. between 40-50 use mobiles for communication
purposes mainly.
Size and brand play to some extent an important role in decision making. When choosing
between different mobile phone models, consumers value familiar brands .When choosing
between different mobile phone models, consumers prefer handsets which are user friendly.
Still after so many brands entering into the market, a major portion of the population still
prefer familiar reliable brands like Nokia. Because it is user friendly as compared to brands
like Sony Erickson, Micromax, LG, and Samsung and so on.
Price of the phone has been identified as a critical factor in the choice of the mobile phone
model, especially among the younger generation .It has been found that besides new
technological advances price is the most influential factor affecting the choice of a new
mobile phone model. Still large chunks of the population prefer the middle price range of cell
phones. That ranges between 5 to 12 thousand Indian rupees. In fact value for the money is
most important factor that influences consumer choice for a cell phone.
SOCIO-CULTURAL FACTORS
One of the greatest socio-cultural factors affecting the handset market is the increasing need
of social recognition among the masses, which is further fuelled by lowering of tariff rates by
the service providers. Moreover with higher spending power among the masses, festivals
and marriages and other socio cultural factors affect handset sales.
Socio-
cultural environment shapes customers beliefs, values, and norms
.
The social and cultural factors that influence the buying behaviour of consumers are
inclusive of culture, social class, reference group, family, demographics and geography.
Culture is an amalgam of tangible factors and intangible traditions that enunciate the lifestyle
of a particular group of people. As for social class, it defines the income group the individual
belongs too and that, in turn, is heavily dependent on the income earned, which is a great
factor in determining buying behaviour. The third factor is the reference group. As is obvious
from the name it is the group from whom the consumer seeks reference. It could range from
people like one's parents, members of the family whom the individual feels close to, close
friends, celebrities who endorse the brand etc. People whom we trust, their opinion means a
great deal to us and affects many decisions of ours including buying behaviour. Regarding
family, this determinant is totally different from the erstwhile one as this one focuses on the
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norms and preferences of the family in which the individual lives and is brought up. Moreover
this determinant is on a collective and unconscious basis as the individual's buying decision
is taking effect from the ambience of his family and the unconscious way he has grasped the
values that have been given to him by his family. Coming to demographics, these are small
and specific details about the individual such as age, gender, education, income, occupation
etc. Also the geographical location in which the consumer resides also determines the
buying behaviour depending on sub-factors like climatic conditions, availability of resources,
surroundings etc.
TECHNOLOGICAL ENVIRONMENT
One of the most important factors that affect
our lives is “Technology.”It is the most important
force that keeps on changing our day to day lives, which not only affects individuals but can
also affect economy as a whole. Technology is a dynamic force which shapes people and
industries lives and even wipes
out entire industries. We live in an age in which the pace of
technological change is pulsating ever faster, causing waves that spread outward toward all
people, and all industries.
Cell phones have no longer been limited to communication but also have indirectly emerged
as a means of reducing face to face social interaction as people can listen to music, can
watch movie on their cell phone and so on. So, it has become very essential for marketers to
have a look on dynamic technological environment, so that they can actual find out
customers
needs and aspirations. Marketers should monitor the following three trends:
Accelerating the pace of growth :
The pace of change is accelerating as a consequence of two primary factors.
Firstly, consumers are adopting new technologies faster than ever before, as a result
of: widespread, ultra-fast wireless broadband; increased choice of platforms and
providers; and a vastly increased level of trust in technology generally (versus the
hesitant adoption of new technologies just a few years ago).
Secondly, the recession is proving to be a catalyst for powerful organisations to look
beyond their narrow field of vision for incremental future growth opportunities. .
Technology has created a society which expects instant results. This technological
revolution has increased the rate at which information is exchanged between
stakeholders. A faster exchange of information can benefit businesses as they are
able to react quickly to changes within their operating environment. However an
ability to react quickly also creates extra pressure as businesses are expected to
deliver on their promises within ever decreasing timescales.
For example the Internet is having a profound impact on the marketing mix strategy
of organisations. Consumers can now shop 24 hours a day from their homes, work,
Internet cafes and via 3G phones and 3G cards. Some employees have instant
access to e-mails through Blackberry but this can be a double edged sword, as
studies have shown that this access can cause work to encroach on their personal
time outside work
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Increased regulation of technological change
Various agencies have been expanded to investigate and ban potentially unsafe
products. One such agency is MEF.
The Mobile Entertainment Forum is the global trade association of the mobile media
industry, working on behalf of its diverse membership to drive mobile entertainment
adoption, shape regulation and deliver competitive advantage to its members MEF
engages stakeholders across the industry at a local & international level, to shape
regulation & raise awareness of its effective implementation with the aim of protecting
revenues & ensuring a positive consumer experience.
This ongoing activity looks at the development of new and existing regulations
affecting the market for mobile entertainment services.
MEF Policy & Regulation achievements include:
Established the EMEA Regulatory Committee to discuss the effective
implementation of policy codes
Completed a regulatory tour of Asia, covering Singapore, Malaysia, Indonesia
and India, to meet with the industry and regional regulators to provide thought
leadership, foster collaboration and create an environment conducive to
continual industry growth
Launched the first ever interactive resource for sweepstakes promotions in
the US
Launched the first ever practical guide to the AVMS Directive for the mobile
entertainment industry.
Co-produced a European Framework for Safer Mobile Use by Younger
Teenagers and Children
Was mentioned in the Ayre report on TV broadcasters use of premium rate
telephone services in programmes as a body developing is its own voluntary
„framework for good practice in participation TV services in the UK.
Another law which looks at regulation is Mobile Telecoms Regulation and
Competition Law.
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MARKET ANALYSIS
Success of Nokia in future will depend upon providing best quality product and services to
the customer.
ustry s growth potential and
Its core marketing strategy involves recognizing the mobile ind
grabs the maximum part of it.
Competition
In presence of so many other tough competitors Nokia is still ahead of them for this
Nokia mainly focused of principles of marketing. Competitors of Nokia are Sony
Erickson, Samsung, Motorola, Siemens, Panasonic, Toplex, and NEG
Market Share
:
a. Nokia s market share in India from 56.2% as in 2008 to 54.1% in 2009
b. Samsung share rise to 9.7 % from 9.5%
c. LG share dropped from 7.2% to 6.4%
d. Local manufacturers share is 17.5% as compared to only 0.9% in 2008.
e.Local Manufacturers are Micromax, Spice, Videocon, Karbonn and Lava
international.
f. Micromax has largest share of 4.1% among local manufacturers.
Nokia’s Strategy in India :
•
Expand mobile voice
•
Drive consumer multimedia
•
Bring extended mobility to enterprises
•
Clearly defined objectives and goals
•
Right timing of decisions
•
Determination and risk taking
•
Foreseeing and using rising market opportunities
•
Creating the future
Marketing Principles:
Following are the marketing principles followed by Nokia
1. Customer Satisfaction- Based on marketing researched about what customer want and
his need fulfilled by current products or not.
Perception: What is the image of the company in customer s mind in terms of
2. Customer
value of money, quality of product, reliability.
3. Customer Need and expectations: What will be the future trend and what features and
quality can be added to future product and how customer needs will have changed.
4. Generating Profit: Generating profit for growth by firstly satisfying customers and secondly
stakeholders in the business.
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5. Awareness about market environment: An organization should know about what are the
changes taking place in organization, this is very crucial for survival of organization in the
market.
Core Analysis:
With increasing demand of dual SIMs driven by flood of new operators offering telephony at
the lowest prices, everyone from relative newcomer Micromax leapt aboard the dual SIM
bandwagon.
But it is a reality that market leader Nokia is yet to react to. Its first dual SIM models C1 and
C2 are still a few months away to launch. Dual SIMs segment is growing at 40%, the fastest
expanding segment in the category.
Apart from missing out the key innovations, it has been losing share. According to VOICE
DATA figures
, Nokia s
market share in India has fallen down from 64% in 2008-09 to 52.2%
in 2009-10. Globally its net sales fell in 2009 to euro 40,984 million from euro 50,710 million
in 2008.
Nokia is still a formidable presence. Almost all the 40 to 50 odd phones on its annual release
schedule make it to stores in India, its second largest market. According to Mr. D.
” we launched the 2690, aimed at the small town or rural
Shivkumar, vice president of Nokia,
consumer, six to seven weeks before we did anywhere else. In a month s time, it has
become a top 10 models . But winner like 1100 and N72 are not coming as thick and as they
used to off Nokia s p
roduct line.
The newcomers seems to fighting Nokia at a game it played very well, when it first fused
Nokia s
cameras and FM radios to its phones. Even the top and middle of the market,
mainstay, is under threat. While Nokia was slow to launch touch screen phones, Samsung,
Which claims to have a 16% volume and 20% value share of mobile market, went to town
with these models.
Part of the reason Nokia missed the bus on dual SIMs and a few other innovations could be
because the company s attention has been
consumed by its drive into the applications and
services spaces- a global strategy. Previously thought to be the domain of mobile providers,
a lot of senior management time at Nokia has been spent focussing on this area. In an
interview with The Economic Times, Nokia global CEO Olli Pekka Kallasvuvo outlined his
vision: „ we will be adding the services layer on top of the handset , and with it, we are
adding the context, the social dimension and the location dimension. For Nokia, this is a
major transformation. We have been talking about the target of 300 million subscribers, or
active users, by 2011. That s a target we could not have imagined earlier when we were
simply selling devices.”
Nokia s life tools aimed primarily at rural and
semi urban populations offer entertainment,
education and crop prices. Another focus area has been music. Nokia currently offers four
million songs for free download its Ovi store.
The ultimate test for Nokia will be if it can replicate the tenacity, speed and consumer in sight
that won it leadership status in the handset space. And this time, it doesn t have the luxury of
an extensive first mover advantage. Nokia raced to reach Rs25000 crore in 15 years flat.
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The next big leap will depend on whether the Indian consumer wants to go where the finish
marketer is taking them.
Marketing Strategies
:
•
Focused on Handset Manufacture only
•
Enhance Product Portfolio
•
Increase Distribution Channels
•
Adjust Preferences for specific markets
•
Customer Satisfaction
•
Focused on Replacement
•
Increase Commitment to Emerging Market
•
Improve Collaboration on Designs
•
Ensure Accountability and Quality
•
Aggressive Pricing
Promotion Mix:
•
AIDA in Nokia
–
:
•
–
A
Attention: attract the attention of the customer.
•
I
–
Interest: raise customer interest by demonstrating features, advantages, and
benefits.
•
–
D
Desire: convince customers that they want and desire the product or service and
that it will satisfy their needs.
•
–
A
Action: lead customers towards taking action and/or purchasing.
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COMPETITOR ANALYSIS
Michael E porter of Harvard business school in 1979 gave the porter five force model to
determine the competitive forces working against an organization in the market.
These five forces are competition
:-
Threat within the segment
Threat from new entrants
Threat from substitutes
Bargaining power of customers
Bargaining power of suppliers
Nokia faces these 5 forces and it is discussed below:
Threats within the segment
:
According to the IDC India report the mobile handset market grew 4.2% by revenue during
the FY 2009-10 (compared with 7.9% in FY 2008-09) and (11.9% in 2007-08).Most of the
sales are of low prices handset which is reflected in lower revenue growth.
Around 108 million mobile phones were sold in the country during 2009-10 adding up to Rs
27000 Crore in sales, up from Rs 25910 Cr the previous years and growing even more than
the handset numbers in 2009-10 was the number of mobile subscribers.
India added 192 million mobile subscribers in 2009-10. In 2009-10 Nokia market share in
India fell from 56.2% in 2008 to 54.1% in 2009 that is a fall of 2% of the market share. Its
in market share) Samsung s share rose marginally to 9.7% from 9.5%
main competitors (2
nd
another competitor (3
in market share) dropped from 7.2% to 6.4% (a loss of 0.8%)
rd
Nokia is a dominant force on the GSM mobile space, accounting for 63% of the installed
base (phones currently in use) while LG rules CDMA with 48% of installed base market
share. On looking at urban India s GSM/CDMA combined installed base, Nokia is at the top
with 54% of the installed base market followed by LG (14%).LG is the second most used
handset manufacturer in India due to its dominant position in the CDMA market. H ence
Nokia to improve its position further, has to improve in the CDMA sector. Blackberry with
service like push based emails which can be accused nationally and internationally with
added encryption is a big challenger to Nokia.
Apple s
lent form, looks backed by apple s brilliant marketing strategies is
I phone with excel
a big challenge in the high-end spectrum in Nokia.
Threats of new entrants
:
New entrants like Micromax, Spice, Karbonn, lava, lemon, Videocon and Maxx which are
domestic players are a big threat for Nokia. These local manufacturers have grabbed 17.5%
of the market share in 2009 compared to a market share of 0.9% in 2008. In 2008 there
were only 5 local companies in the Indian cellular phone markets, which later swelled to 28
in 2009 among these local players Micromax leads the race with a market share of 4.1%
followed by spice (3.9%), Karbonn (3%), lava (1.1%), lemon (1%), and Maxx (0.9%)
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While concentrating on the rural market, Nokia has neglected the urban market to its
disadvantage. The competitive prices and offers of telecom companies have inspired many
mobile users to subscribe to more than one telecom service simultaneously. Nokia has not
released sufficient phones in the dual SIM category. This point was noticed by these local
players who introduced dual SIM phones and increased their market share substantially in
very quick time. The local brands have gained because of their low price for perceived high-
end features.
Another reason for the increase in sales of the local players is the requirement for valid IMEI
numbers in the handsets which was issued by the government last year. These forced
consumers to opt for locally branded low price, high feature phones rather than Chinese
mobiles which were illegally sold and purchased.
Another
threat to Nokia is from makers of fake Nokia mobiles. A fake brand “NOKLA” has
eaten into Nokia s pie especially in the rural market .Moreover blackberry looks alike have
hurt sales of Nokia s E series.
Threats of substitutes products
:
Skype is a software application that allows users to make voice calls over the internet. Calls
to other users within the Skype service are free. Skype has other popular features like
instant messaging, file transfer and video conferencing.
In 2009 the international Skype users numbered 521 million. The growing popularity of
Skype is a direct threat to the mobile handset industry with Nokia in particular because
Skype is also very popular in India.
Nokia has tried to negate this threat by introducing Nokia N800 and N900 which uses the
Maemo software plat form to integrate its service with Skype.
Threat of buyers and suppliers:
Increased consumer consciousness, price sensitivity and consumer demands are a threat to
Nokia. Thus Nokia needs to innovate regularly to keep abreast to the changing trends of the
market.
Increased backward and forward integration by rivals is a threat to Nokia. By opening
exclusive Nokia priority retail centres Nokia is trying to integrate forward and to reduce the
distribution tests.
Porter 5 forces model has been modified by the works of Bradenberger and Nalebuff (using
game theory) and Andrew grove former CEO of Intel into the
6 forces model
.
There is addition of a 6
force which is:
th
Complementary products/ the government/ the public
:
Ever changing government financial, legal and governing policies in India are a threat which
Nokia has to anticipate and change accordingly. The recent issue of research in motion
(RIM), makers of blackberry versus the government of India regarding the issue of
encryption of blackberry mails and national security is a pointer in that note.
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SWOT ANALYSIS
What is SWOT Analysis?
SWOT (an acronym for Strength, Weakness, Opportunities, and Threat) is a technique used
for assessing an organization s present state and its
market environment. It is basically a
study of company s internal and external attributes necessary for fulfilling its goals. The
strengths and weaknesses of company are internal factors affecting the success of
company. On the other hand opportunities and threats are external factors which should be
assessed while keeping in mind an organization s resources and feasibility of exploiting
them.
SWOT Analysis of Nokia India
Strengths of Nokia
I. Wide Consumer Base:
Nokia has 52.2 % market share in India in terms of revenue (Survey by
V&D100). Entry of new players like Karbonn, Spice, Micromax, Videocon etc
has though challenged the might of Nokia in Indian market but still has not
been able to replace Nokia as India s most preferred mobile handset.
II.
Wide product range
:
–
Nokia has launched about 22 devices during April 2009
March 2010 in
various price bands. The entry level products (like 1100 series) were designed
to cater the needs of communication. Hence these sets concentrated on
offering affordability, ease of use and reliability to the customers. Along with
this Nokia also tried to stay in high end segment where it had competitors like
apple and blackberry. Launch of sets like E- series (to counter low range
blackberry business phones) to high-end N95 phone clearly shows the range
of products being offered by Nokia. Such a large range of products have has
helped the company in targeting larger market.
III. Strong supply chain:
Nokia has about 200000 retail outlets across the country. The company is
now having 700 plus care centres across 400 cities. It also has over 900
touch points for Nokia care. This clearly indicates the company s focus on its
reach to customers. To keep up with the demand of market Nokia has rolled
out 350 million handsets in India by April 2010 (voice and data 100 Survey)
IV.
Customer Service
:
Nokia is one of the first companies to see the service side of handset market.
Now its strategy revolves around services in India. It is now enhancing the
consumer s experience by offering them advance feat
ures and relevant
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services like Nokia life tools, music and navigation by OVI maps. It also
offered online free music download on newly purchased handsets.OVI stores
offer a wide range of products like application, games software etc for
handset. IT has attracted about 1.5 million each day globally.
V. Strength of brand:
Nokia has projected itself as consumer focused brand. The trust that Nokia
commands in consumers is unmatched with that of its competitors. Nokia has
positioned its products as strong and reliable handsets. This has been one of
the most important reasons for huge sale of Nokia s handsets. Grapevine
communication has also strengthened the brand perseverance among the
customers.
of Nokia:
Weakness
I. Failure in analysing the market:
The demand for dual SIM phones has been increasing in India. This segment
roughly accounts for 15% of mobile phone sales in India. Now Nokia is
launching new handsets with dual SIM feature. However this delayed entry of
Nokia has cost it in form of decrease in its market share by about 14% in last
FY.
II. Less focus on innovative products for high-end market:
In India market companies like apple blackberry Samsung have launched
new models regularly. Nokia though launches several models globally but
they are very lately introduced phones which are now being catered by
Samsung.
Opportunities for Nokia:
I.
Mobile money concept
:
Nokia along with Yes bank is launching a pilot scheme of Nokia money in
Pune. This service will allow people to transfer money by using phone. This
scheme can be useful in paying bills even without having a credit card. This
scheme will strengthen Nokia s image in terms of consumer service.
II.
Microfinance for low-end handsets
:
Nokia is now planning to offer its low end product on EMI in order to target
people living in rural parts of India. For if the company is joining hands with
micro-finance institutions like SKS microfinance, Ujjivan and Madura
microfinance. This will help Nokia in expanding its consumer base. In 2008,
rural penetration of handsets was mere 15%. This explains the tremendous
expected growth with calling rates going down.
III.
Developing 3G handsets
:
Auctioning of 3G licenses in India has given handset industry a new direction.
Though the 3G has limited presence till now but the handset industry is really
to supply 3G enabled sets both in high price market as well as in low price
market. As per Indian cellular association, 26 million of India s 563 million
mobile phones are 3G enabled. This segment is an eye candy for all mobile
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handset companies as the expected growth by 2013 in number of such
handsets in 395 million, a growth of about 82% CAGR (compounded annual
growth rate).
Threats:
New Player & Increasing Customer’s
I.
Expectancy:
Nokia s Symbian operating
system software is getting a stiff challenge from
Google s android software. This new software is being adopted by players like
Samsung, Sony Ericson. New high-end products from apple, HTC, blackberry
is keeping a pressure on Nokia to invest more on R&D. Convergence if
various wants in one phone at a cheaper price is the biggest problem for all
handset players in market. This may affect the margins of handset industry.
II.
Increasing strength of competitors
:
Indian mobile handset makers like spice, Micromax and Karbonn have
captured almost 14% of the mobile phone market in financial year
2009-10. In the previous FY they had only 3-4%market share.
This company started catering the demand for low priced high-end
feature mobile phone is bigger players like Apple and Blackberry.
Challenging Nokia in the high end phone segment. This increasing
popularity of I-Phones and launch of various models of blackberry has
affected the presence of Nokia in market.
III.
Counterfeits of Nokia Handset
:
Handsets with the name or design similar to that of Nokia have creating risk
for Nokia s market share especially in rural market. These counterfeits are
cheaper than Nokia s sets and hence there demand is increasing. However
these sets are very unreliable and in due course of time they ultimately
hamper the brand image of Nokia.
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SURVEY ANALYSIS (MARKET RESEARCH)
A business survey is based on whether they can give the customer what they want and
when they want. It involves collection and analysis of data. The purpose of this is to find out
whether there is a gap in the market for your product. Collection of information is generally
based on following:
Consumer Behaviour
Buying pattern and sales trends
Consumer preferences
Activities of competitors in the market
Sources of Market Information
–
1. Quantitative Data
It refers to data presented in numerical form usually figures.
2. Qualitative Data
–
This is the information concerning the motives and attitudes of
customer for example, more people buy Nokia phones than Sony because Nokia phones are
more reliable.
Methods used for collecting data in our survey are following
:
Face to face survey
Online Survey
Telephone Survey
The Data Collected was analysed and on the basis of that analysis some key concerns were
drawn. The first thing that we analysed was how the brand is positioned in the mind of the
customers. The results show that chief attributes for which Nokia has a place in mind of
customer are quality of product, reliability & durability.
The second thing that we tried to deduce out of this survey was why does prefer buying
Nokia s handsets. The most important reasons turned out to be quality of phone, durability,
availability of handsets, technology and price of the handsets.
In next step of survey we tried to figure out the expectations of customers from company.
Mostly people expected a slight change in prices. Some customers expect improvement in
looks of the handsets, were others expect further improvement in technology.
The results of above done analysis are shown with the help of pie-charts.
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Communication
made easy
3%
User friendly
Best brand
Stability
Variety
6%
3%
6%
3%
Good connectivity
6%
Durability
Affordable
10% Traveller's
mobile
3%
3%
Longevity
6%
Quality product
25%
Mobile
Reliability
market leader
16%
7%
Part of life
3%
Brand Value
Figure: - Positioning of Nokia
Games
3% Reliability
3%
Cost
12%
Technology
13%
Service Availability
16%
Quality
34%
Durability
19%
Reasons for prefering Nokia
Figure: - Why Nokia?
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Further
Waterproof
Better Services
Improvement in
6%
6%
Technology
13%
Better
Software
6%
Slight change in
Variety
prices
6%
38%
Improvement in
looks
25%
Suggestions from customers
Figure: - What Customers Want
45-50
20-25
40-45
5%
28%
17%
25-30
30-35
17%
33%
Segmentation based on Age
Figure: - Segmentation
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CONCLUSION
1. The products should be more technically advanced as it is lacking of technology like
dual SIM.
2. Overview of prices, it should be lower in comparison to other companies. More focus
should be given on value for money.
3. Adoption of key innovative technology and come up with new product line matching
with the requirement of different age groups.
4. The ultimate test for Nokia will be if it can replicate the tenacity, speed and consumer
insight that won it leadership status in the handset space.
5. As urban market is penetrated completely , more focus should be given to rural
market to regain the earlier status of company with 2/3
of market in hand.
rd
6. Improvise the looks of handsets is needed.
7. High price range phones are facing serious technical problem like hanging, it force
the selling of that product to lower than expectation.
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BIBLIOGRAPHY
A. Aker, David; Strategic Market management; Wiley India Pvt. Ltd.
Kotler, Philips; Lane Keller, Kevin; Koshay, Abraham; Jha, Mithileshwar (13
edition);
th
Marketing Managment: A South Asian Perspective ; Dorling Kindersely (India) Pvt.
Ltd.
Palmer, Adrin ; Principles of Marketing ; Oxford University Press
Prahlad, C.K. ; The Fortune at The Bottom of The Pyramid ; Warton School
Publishing
Steinbock, Dan ; The Nokia Revolution ; AMACON: American Management
Association
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