Engineering Management IV

Lecturer: Murray Wynter

Date: 30/10/17
Student Number: 212288067
Number of words: 5487
Declaration
By submitting this assignment, I declare that all the work herein is
my own, and that all external sources have been appropriately
referenced. I understand that any unreferenced or plagiarised work
will result in an immediate failure.
Contents
I. Introduction.........................................................................................................................................4
II. Literature study...................................................................................................................................5
1. Marketing............................................................................................................................................5
1.1. What is marketing?......................................................................................................................5
1.2. The role of marketing in business................................................................................................6
1.2.1. Product/Service...................................................................................................................6
1.2.2. Process.................................................................................................................................6
1.2.3. People..................................................................................................................................6
1.2.4. Professional Marketing........................................................................................................6
2. Marketing Process...............................................................................................................................7
2.1. The Market Strategy....................................................................................................................7
2.2. Target Market..............................................................................................................................8
2.3. Analyzing the Competition Market..............................................................................................9
2.4. Marketing Mix...........................................................................................................................10
2.4.1. Product..............................................................................................................................10
2.4.2. Price...................................................................................................................................10
2.4.3. Place..................................................................................................................................11
2.4.4. Promotion..........................................................................................................................11
III. Case study......................................................................................................................................13
3. Nokia verse Apple..............................................................................................................................13
3.1. Introduction...............................................................................................................................13
3.1.1. Apple..................................................................................................................................13
3.1.2. Nokia..................................................................................................................................13
3.2. Nokia’s market strategy (marketing mix)...................................................................................14
3.2.1. Product..............................................................................................................................14
3.2.2. Price...................................................................................................................................14
3.2.3. Place (distribution).............................................................................................................14
3.2.4. Promotion..........................................................................................................................14
3.3. Apple marketing strategy (marketing mix)................................................................................16
3.3.1 Product..............................................................................................................................16
 3.3.2. Place..................................................................................................................................16
3.3.3. Price...................................................................................................................................17
3.3.4. Promotion..........................................................................................................................17
3.4. Nokia’s Decline..........................................................................................................................18
3.5. Apple’s Success..........................................................................................................................19
IV. Conclusion.....................................................................................................................................20
V. Bibliography.......................................................................................................................................21
 I. Introduction

Marketing to most people is a generalized term used in everyday language but not many of us truly understand
the impact it has on how we as the consume respond to the product. In this Assignment we will be finding out
more about not just marketing but one of the major elements that make up the discipline which is the
Marketing Process.

The assignment has been split into two sections, the first section will solely deal with the literature review
which is also split in somewhat two categories. The second section will deal with the case study where we will
be comparing two cellphone manufacturing giants Nokia and Apple.

The literature review will deal with two sections, the first section deals with what is marketing in general and
also how is it important in business. Where Prof Mc Donald will give us 4 main themes where marketing is key,
The Professor continues to say that a company that does not value marketing does not want to succeed [2.6].
The second section is where we will be diving deep into understanding the Marketing Process by looking at the
4 major aspects when it comes to the Marketing Process namely.

-Analyzing the Competition Market

-Target Market Research

-The Marketing Strategy

-Marketing Mix

That will be what constitutes the first section of the assignment.

Figure1 [9]

In our case study we look at the strategies of Nokia and Apple and find out really what did the other one do
that the other one didn’t quite get right. We also conclude the case study by looking at a summary of each
company and see really what Nokia’s reason was for its decline and we look at why Apple became such a
success.

 
II. Literature study

1. Marketing
1.1. What is marketing?
The biggest misconception many people have is that marketing is just advertising and promoting a product of a
certain brand [1,411]. These are just two of the many tasks that marketing deals with. Marketing is actually
about managing and making decisions based on tasks that will successfully deal with the dynamic environment
of the weaknesses and threats that any organization works or conducts business in [1,411].

The organization does this by effectively understanding the needs of the customer by developing a product
that will meet their needs in a way that the organizations objectives are met also it must be appealing to
society [1,411].
1.2. The role of marketing in business.
Professor Mc Donald believes that to continuously grow as a company; the organization ought to have
marketing as closely related to all its processes, the main operations that he underlines are [2, 6]:

1.2.1. Product/Service
A good and performing service or product and its supporting departments such as research and development
closely produces what the company requires, are responsible in contributing in producing the final product or
service that the business provides and marketing plays a big role in giving the correct information as to how the
product should be [2.6].

1.2.2. Process
Marketing is involved in the influencing on how the process should function because the department knows
what the customer would like and suggest on how efficiently the company can do achieve the requirements
that the customer would like at little cost as possible but with high customer satisfaction [2.6].

1.2.3. People
Creativity is the central theme in marketing in terms of capturing the target market, so a culture that motivates
and encourages the workforce to be creative producers an entrepreneurial spirit in the company providing new
ideas thus increases performance and is very important in companies that deliver value to the customer [2.6].

1.2.4. Professional Marketing

Qualified people in your Workforce means that your team is very competent and the company has a far greater
chance in most cases in excelling in terms of marketing and also in business sales [2.7].

The main role of Marketing in a company is to equip the company with values that are required by the
customer in the different markets so that the organization as a whole in each department know that their
department contributes value to the end product that gets delivered to the client [2.7].

Figure 2 [13]
2. Marketing Process
The simple explanation of the marketing process is that it is the transferring of goods and services to the
consumer from the manufacturer and all the details and processes in between [1.411].

This system or process is made up of four main systems that are to make sure that the services reach the
target market [1.415]. The process is to make sure that the customer is attracted to the brand. The main
mandate of this process is to make sure that the product is delivered to the customer and that the organization
runs and does this smoothly [1.415]. The four main processes that achieve the marketing process are as follows

2.1. The Market Strategy.

Marketing strategy is how the organization will make decisions on core implementation that the organization
will have to make with regards to the product market, marketing activities, marketing resources and the
communication of the product to the public [5.10]. The direct and simple definition is that the marketing
strategy is there to make sure that the findings from the research based on the target market is interpreted
into a solid plan that will have goals and objectives to make sure that the product sells [5.10].

The marketing strategy must be able to answer or give account to the following questions to an organization
from the research that has been conducted based on the target market

- What is the problem with the customer that we are trying to solve?
- What are the benefits that the customer seeks?
- How well does the organizations products solve the problem and benefit the customer

Many researchers have agreed that the strategy is there to direct the company to achieve their goals [6.2]. The
marketing conditions are not always favorable to achieve and get the goals set by the organization []. The
Strategy also allows the company to be flexible in dealing with these marketing conditions without losing the
target of the company [6.2].
2.2. Target Market.

This is when the company does a market research on what is the main need of the target market which is
determined by a study about the customer [3.24], this program is the main core of marketing. Here we focus
on what the organization needs to do in order to get the customer [3.24].

This section is important because the marketing strategy is developed from understanding the target market,
the target market is controlled by the organization as to which group we go to and also determine the
effectiveness of the marketing mix developing by the sector targeted [3.24]. In defining the market this does
not mean that the organization will reject the needs of the other people but it means that the organization has
a certain group of people it will focus its energies on and they’ve name this group [3.24].

The target markets needs will determine how the organization develops its Strategic Marketing Plan, the
strategy of the business and the strategy of marketing should be very much similar in terms of having the same
goals [4]. The research of the target market will need to be an in-depth study that would look at past trends,
present trends and even try to predict how in future the target market might react to certain aspects [4]. This
will mean that a historical study will inform the company about how the market has performed previously to
the current state and also by forecasting from this information the company can have a good indication on
expenditure and net overspend in the coming years [3.24].

The study on the target market should give the company a clear understanding of how the market is reacting to
the products. There needs to be collaboration between the organizations mission and the demand the
organization needs to put in terms of resources that will meet the requirement of the target market [4].
2.3. Analyzing the Competition Market

After coming up or choosing the plan the organization needs to look at what its counterparts are doing in the
same market this exercise is part of the strategic planning process to observe and study the competition [7.27].

There is a five Focus model of the industry structure, this model looks at all the major contributing factors that
add to the competitiveness of the market and measure of the space [7.27].

The environment has four major forces which act on the industry hence five Force model because the industry
also exerts its own force out on the forces namely:

- The Threat of the substitute product

- The bargaining power of suppliers and bargaining power of the customer
- Threat of the new entrances
- Threat of old entrances

All of these four forces have sort of an impact on the competitive space [7.27].

Competition is really close and intense when everyone in industry is equal and provides a similar service or
product [7.27].

New competitors also create a new unpredictable force on the environment and because of this company’s
need to know so as to keep watch and analyze their competitors because they become a potential interest to
their customers [7.27].

Another major contributor to competition in the market is substitute products or services in traditional
business is hits them hard, since the common practice of providing the same product is a norm and when a
substitute product comes in to the market and competition rises most often than not if the traditional
businesses do not adapt to these changes they normally shrivel up and close [7.27].

Suppliers and buyers also have a contribution to how competitive the environment becomes [7.28]. Customers
have a large economic impression in the industry in the sense that the more the people support a certain
industry the higher the level of economic impression it has and when these people leave, less money comes
into the space [7.28]. The supplier also has a similar effect on the business because if the supplier chooses to
not support the business or not to deliver its products to a certain company it gives your counterpart an added
advantage or you the added advantage [7.28]. If one of the suppliers cannot supply, the demand that is
required of them the company suffers and losses money and support [7.28].
2.4. Marketing Mix.

The marketing mix is a vital part of marketing the marketing mix is the combination of four major elements of
marketing strategy [2.6], these elements are controllable variables that inform the market place which a
business uses to fit a certain goal level for sales [2.6].

Understanding that organization needs to respond to their customers with a product and that product comes
with a certain value which is known as the price, the organization promotes and choose the prime location to
sell and also advertise their product or service [2.6]. The four elements are what determine the success of the
company in the strategy phase the four elements are explained below as follows [2.6].

2.4.1. Product

The product is the item that the organization offers as a service or commodity [2.6, 4], here the organization
also looks at developing the product into a more suitable commodity for the customer [8.1]. The product also
in the market strategy is the right product that will satisfy the needs of the customer [8.1].

Product appearance is very important in enticing the customer and also getting them to buy and to be brand
loyal, the new Venture group have termed the product aspect as a “product bundle value” which would be all
the aspects that the product covers such as, target needs, design must be appealing, warranties, guarantees
and other related things around the product [8.2]. The product bundle is done to fit the SWOT analysis and is
informed by the market research [8.2].

2.4.2. Price

This refers to the value of the product, also adding the profit [8.2], the price simply put is how much is the
product worth [8.2]. It is a very tricky and critical aspect of the marketing, bearing in mind that the price could
either attract or repel customers [8.2]. The challenge with the price is that most customers normally associate
price with quality so if it is to low the market might think it is of low quality thus rejecting it but on the other
side if it is too expensive the market might look at it and think it is overpriced [8.2].

The best ways to price your product is by understanding the target market and price it in so that it is just
enough to cover the cost and also getting your profit [8.2]. Business marketing managers when it comes to this
tricky situation of pricing they look at the target market and apply one of the 8 different pricing strategies as to
attract the customer [8.2]. This is based on understanding the target market that the company is gunning for
and is based on the target market research that is done by the company.

- Cost plus
- Value based
- Competitive
- Going-rate
 - Skimming
- Discount
- Loss leader
- Psychological enter

Whatever method the company decides to go with, the marketing manager always makes sure that the price
will always cover the cost to make the product and make sure that the company does not incur losses [8.3].

2.4.3. Place

Place is where the product either is sold made or where the company deals with business related to the
product, the place can be divided into 2 different categories [8.2]:

2.4.3.1. Direct
This is when the company decides to sell the product themselves at their own stores [8.2]. The benefits here
are that the company has full control of the product processing and also the quality is controlled by the
company [8.3]. If it is from wholesalers they might handle it in a way that it might damage the product and the
customer gets it damaged and thus damaging the reputation of the company [8.3].

Another added advantage is face to face meeting with your clients, direct sales deals would mean the business
has a good customer interface that would be assertive in dealing with all problems and inquiries related to the
product at first hand [8.3]. A big disadvantage is that direct sales also limit the product in reaching more people
[8.3].

2.4.3.2. Indirect
This is when the company use a middleman such as wholesalers and retailers to sell their product, by doing this
the organization gets to cover more people and the product becomes accessible to more people [8.3]. It also
helps with storage of the product as the more middle man you have the less on-site stock the company will be
able to save on storage costs as compared to having to store their stock on site as compared to direct sellers
[8.3].

The biggest benefit of middle man is that cliental increases because people the company could never reach the
wholesaler or retailer reach them on behalf of the company [8.3], because the middle man introduce your
product to a new customer connection that are Loyal to the retailer []. The product gets exposed however a
disadvantage could be that the middle man comes with a certain fixed price for having your certain product at
their store [8.3].

2.4.4. Promotion
Promotion is a key element in any company. There is a well-known saying that says “Bad publicity is good
publicity”. This term promotion means to advertise the company’s product or service that it offers to the
customer [8.4]. The act of promoting is a way the company tells the market what they are about, what they
offer, what the benefit of the product is and also why the client should buy their product [8.4].

A very successful company is a company with a very effective promotion strategy where the message is clear
and specific to the client and also reaches them to the correct medium [], for an example imagine trying to
reach people who live in the rural areas through social media and also imagine trying to reach people who are
in varsity through radio shows. A company needs to be very specific on how it advertises itself based on its
correct target market therefore people in the rural areas are much more inclined to the radio than social media
vice versa when it comes to students [8.4].

There are about six well-known promotional channel methods out there that many promotion and market
managers use [8.4]:

- Radio far-reaching and inexpensive for both local and regional depending on the scale of the company.
- Television- expensive for reaching for Regional or national audiences.
- Print direct mail- also commercial such as newspapers magazines flyers and Logos this is also far-
reaching at all levels local, regional and national.
- Electronic-- used on company website and also social media see how we have international market
based also can give exclusive content to people that sign up for Exclusive content based on the
company using passwords.
- Word-of-mouth- this is normally used by customers based on good service.
- Generic- simply means that when one promote a whole industry such as vegan Lifestyle or milk or beef
[8.4].

Promotions is important in any company and it makes the company understand that it uses the medium of
their target market that is more tuned into will help them get the message across and sell their product [8.5].
III. Case study

3. Nokia verse Apple

Nokia and Apple are one of the biggest house hold names in the electronic devices industry. The companies
both have contributed greatly in the cellphone industry in terms of both hardware and software. I have chosen
to profile and do my case study on these two companies because many people that when Apple stepped in
Nokia stepped out so I wanted to see how this happened.

3.1. Introduction
3.1.1. Apple

Apple Inc. is a personal computer manufacturer that was founded in 1976, the personal computer company
also had a very difficult time in its history when the late Steve job who is well-known and linked to the
company left the company but came back to instill a new set in the company to redeem them in 1998 [10.11].
Mr. jobs being the new man at the helm diversified the company from just making personal computers to more
general consumer electronic products [10.11], giving the company a bigger platform to showcase itself [10.11].

In 2007 jobs and his team took the World by surprise when they released the iPhone smartphone which
combined the personal computer side with the consumer electronic division [10.11]. After the iPhone came out
Apple Inc. dominated the cellular industry for a full 5 years and keeping this up they released a new version
every 12 months currently many people believe that with the new iPhone x and new generation of the iPhone
is born [12].

3.1.2. Nokia

Nokia is a phone manufacturing company that over the past 5 years has had its own fair share of
disappointments [10.10]. Nokia started out as a paper company in Finland the year is 1865 [10.10]. The
company used to at one stage dominate the phone industry and in 2008 it has sold about 450 million units
[10.10]. In 2003 Nokia launched its first 3G phone the Nokia 6650 which saw the phone giant pave the way for
all other phone operating companies [10.10].

Nokia in 2005 sold their billionth phone and was recognized as one of the most influential brands in the world
[10.11]. The organization as early as 2005 it was the first company to introduce the smartphone however in
2011 the company could not keep up with the fast developing Market and in 2012 started incurring serious
losses [10.11]. In 2012 we than saw the company strategically partner with computer giants Microsoft and
sidelined the Symbian operation system which was being outperformed by Apple and Samsung operation
system [10.11]. Currently Nokia has once again planned a come back into the market by signing up with HMD
Global in December 2016 [11].
3.2. Nokia’s market strategy (marketing mix)

Nokia the Once Upon a Time cellphone giant is said to be on the path of regaining Lost ground through their
solid marketing mix strategy [18]. The company has set out goals and objectives that they wish to achieve using
the 4p strategy discussed below

3.2.1. Product

Nokia as cell phone manufacturing company have a large range of phones which cater for a large group of
people within their target market [18]. Because Nokia is only a cell phone manufacturer they only cater for this
market and throughout the years the company has tried to upgrade their look [19]. The design of Nokia is
another aspect that is a plus for the company [19], it provides their customers with a wide range to choose
from this catering for everyone in the market space [19].

3.2.2. Price

Nokia is believed to be using the price skimming strategy [19]. The company believes that it is fundamental to
make sure that their customers buy the product from different periods once they have entered the market as
to maximize their product life cycle [19].

In South African rand converted from the Indian currency, the selling price of Nokia products ranges from R262
to R10900 which makes them very affordable to all classes in the market [19].

3.2.3. Place (distribution)

Nokia just like most companies does not deal directly with the customer but works through distribution
channels [20]. The company also sells its devices to the mobile phone companies such as Vodafone mobicell
and the likes [20]. The company also uses the Internet as a place of business to reach their customers [20].

The company’s distribution policy makes sure that their product is available everywhere in the world [20]. The
company has a distribution strategy that focuses on reaching rural areas and also urban areas as to stay
competitive [20]. The head offices of the cellphone giant are in Espoo Finland

3.2.4. Promotion

The 3310 hit phone manufacturer considers promotion as a key role in the increase of sales and also getting
back into the market [19]. The company invests time and money to make sure that their target market gets the
correct information about the product and when they have specials and sales [20].

The company uses the following mediums to reach their target market:
Electronic media

Print media

Social media

And also the other forms of traditional marketing [20]

Public relations plays a big role in the advertising of the company as it is part of the promotional strategy of
the company [20]. The organization is involved in some corporate social responsibility projects as to be
involved in the community which helps in promoting the company [20].
3.3. Apple marketing strategy (marketing mix)

Apple Inc. as a company has been very successful, with an everyday increasing value yeah upon year Cellular
dominating force and is very much highly ranked and respected in the international market [14.1].

Below is the marketing mix for the company.

3.3.1 Product
Apple Inc. is a company that has been a leader in the technology and Innovation side [15]. The main products
that the company manufactures are

Mackintosh personal computer

The iPhone smartphone

The iPod music player

Apple Watch phone accessory

Apple television

Apple software and service

Apple Inc. prides themselves in being able to meet their customers’ needs through diversification which is part
of their intense growth strategy [15].

3.3.2. Place

The apple brand has a very holistic approach to the distribution of its products and also how it positions itself
[15]. The company uses a distribution network based on a selective distribution Pro strategy, where the
company only allows certain shops to sell their products they do this to control this area of the market space
the following list is of the channels that Apple Inc. uses to reach to its market [15]:

Apple Store

Online Apple Store and App Store

Authorized retailers

Telecom companies

Fulfillment services

The headquarters of Apple are found in California 1 infinite loop the company has over 200 retail stores
worldwide [17].
3.3.3. Price
Apple Inc. uses a pricing strategy that is aligned to the company’s premium product development strategy [16],
where the company uses a prime pricing strategy also known as skimming [16]. This price strategy helps
maintain the company’s high end image and also adds value to its products [15]. The price of Apple product has
a certain market group that is the middle and high class people this is because Apple products are very
expensive many people have a argued for Apple saying that the reason their products are so expensive is
because of all the latest technology used in their devices [15].

3.3.4. Promotion
Apple Inc. has a certain market group that they make sure they give them a unique experience [15]. The
companies promotional strategy in the marketing mix focuses on using all the 6 channels discussed in the
literature review [15]. Apple always focuses on how different the product is from the rest of their competition
making their customers feel exclusive and unique [15]. The company believes in simple adverts that will
connect to the hearts of their client yet very simple and giving all the relevant information []. Because they
target the premium class and middle class they never offer discounts unless expressed in bundles or for
students [15].

The main forms of promoting Apple users are as follows

Advertising

Personal selling enter sales promotions

Public relations

This company is believed to have mastered the promotion of their company especially during their launchers
[16].
3.4. Nokia’s Decline

According to Yin and Jin the company prioritized Hardware over software and did not realize that their Symbian
operating system could not keep up to the smartphone era [21.5]. The system could not fully accept 3G and
insisted on 2G the cost of the Symbian systems Research and development came to be too much due to
inability for compatibility of previous versions [21.6].

They continue to say that Nokia’s other downfall was their lack of teamwork they ascribe this lack of teamwork
to the company because the company refused to partner up with other cell phone software manufacturing
Departments of other companies to develop the now famous and leading Android system [21.5].

It also came out to be the fact that the directors of the company at that time never really grasped the market
accurately [21.6]. The reason why Nokia failed is because the company’s decisions were no longer customer-
based which led to not just separating them from the market but also abandoning the reason why people do
market research which is to meet the customers’ needs [21.4].
3.5. Apple’s Success

This marketing strategy must be commended Apple has done a great job in terms of one reaching its target
market with their thorough market research, two by being able to go after all their opportunities, creating a
demand in the market for their product [22.42]. Apple’s decision to diversify also gave them another great
boost into the market space putting the company ahead for a good solid 5 years and also generating revenue
from more than just one income market source which at that time was the Macintosh computer [22.40].

The company’s retail strategy was the cherry on top this created a place where customers could enjoy a unique
and different experience of their product this strategy also gave the company direct conversation with its
customers [22.40]. Apple is a brand for its customers and centers around them and this is why they took over
the market from Nokia [22.41].
IV. Conclusion

What I have come to understand is that the marketing process are the eyes and ears of an organization and is
the only department that directly deals with the customer.

Its sole purpose is to make sure it gives the company the correct information to make sure that the product fits
the needs of the customer marketing also is there to understand what the competition is doing and make sure
that it capitalizes on any opportunities that are out there in the market to make sure that the product sells.

Now coming to the case study what I noticed is that how Apple became a success is very much in line with how
marketing is supposed to be carried out in any organization. As I have already mentioned that marketing is a
direct link between what the customer wants and how the company can give the necessary product that is
demanded and when you look at the Nokia story you find out that even though many people can align it to the
then CEO that is clearly visible that Nokia tried something that the customer clearly did not want or need.

Apple capitalized on Nokia’s weakness and was the fact that they indeed gave even more to what the
customer needs. Even if you look now how Apple conducts their business they are very much customer
centered as already mentioned in the report.

In the case study that Nokia focus more on making phones that were indestructible instead of giving people
technology to help them with their daily lives where is Apple focused always energies on giving technology that
assisted people in their daily lives this is a clear example of how marketing should not be done Nokia because
they were used to the space they did not necessarily fulfill their Mandate to their customer we find that Apple
came to the party.

In conclusion marketing is definitely a department that needs to understand that target market and audience
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