The market plan of Nokia

Table of contents

Executive summary…………………………………………………………………..2

Introduction………………………………………………………………………….2

The marketing objectives of Nokia in China…………………………………………3

The target market strategy of Nokia in China………………..

……………………….3

The competitive strategy of Nokia in China………………………………………….5

The marketing mix of Nokia...………………………………………………………..7

Conclusions…………………………………………………………………………..12

References……………………………………………………………………………13
Executive summary

Mobile phone, which is defined as a high technology electronic product, is

popular all over the world. China must be one of the biggest markets for those
mobile phone manufacturers. As a leader in mobile telecommunications market,
Nokia has its scientific business strategy that leads to success, and pays a great
attention to the market of China. Based on the Chinese mobile phone market,
this paper analyzes Nokia’s business strategy to show reason of Nokia’s
success.

The business strategy includes the strategic intent, the competitive strategy and
marketing mix. The strategic concept of Nokia is to take the demand-side
strategy. Nokia subdivides the whole market into several objective markets
according to the researches about the partialities of different individuals. And
then different types of mobile phones are put into the market aimed at attracting
different consumer groups. The competitive strategy of Nokia is to improve the
innovative ability to win the competitive advantage. Strong technological
innovation ability makes Nokia stand in the most forward position of mobile
industry all the time, and characterized this brand by a special vitality. And the
marketing mix of Nokia is to use the integrated marketing strategy including
product, price, promotion and place. It values the construction of a brand, the
orientation of its products and pays a lot of attention to technology improvement.
It increases the sales through sensitive advertisement, presentation to the
celebrities and large-scale entertainment. And also choose the FD platform as its
major sales channel to improve its sale.

Introduction

Nokia is famous all over the world as a successful mobile phone manufacturer. It
keeps being the leader in the mobile telecommunications relies on its plentiful
experience, technology innovation and scientific marketing strategy. The concept
of the company is "technology connecting people", which has been rooted in
people’s mind deeply. The company emphasizes the consideration of humanity
either in the decision of marketing strategy or in the management of the
corporation.

In 1985, Nokia established its first branch company in Beijing, which means that
Nokia has entered the Chinese market. And now the employee of Nokia in China
has increased far beyond 6000. Nokia insists on the combination of produce and
research in China. It has set up two research centers in China and paid a great
attention to the cooperation with other local company. Nokia also takes parts in
several public services and has gained great reputation in China.

The first part gives a brief description of the Nokia in China. The second part
shows the marketing objective of Nokia, and the third one talks about the Target
Market Strategy of this company. Following that is the Competitive Strategy of
Nokia, and finally marketing mix is the which includes product strategy, price
strategy, and promotional strategy and place strategy. At last is the conclusion
about Nokia’s total business strategy.
The marketing objectives of Nokia in China

As Nokia knows that everyone in the world needs communication, it insists on

helping people fulfill this need by providing consumers with very human
technology- technology that is intuitive, a joy to use and beautiful. While in the
Chinese market, the marketing objectives of Nokia is to take the first place in the
field of mobile communications and become the international enterprise
welcomed by government, operator and consumer most of all. Besides these,
Nokia in China is determined to become the best employer that has the ability to
attract and keep outstanding talents.

Because of such market target, the strategy of Nokia relies on growing,

transforming, and building the Nokia business to ensure its future success.

The Target Market Strategy of Nokia in China

a. The market segmentation

The subdivision of the market is essential for a company to make decision. It is

required as a basic skill for a company to understand the mobile phone market
and its structure, so as to the market decision. (Earl Peter, 1996))

Nokia collect data and process it in order to get results that may reflect the age,
sex, region, education, income, lifestyle and the partiality of the consumers in
China. Then it subdivides consumers according to the research results and
chooses the target market accurately. (John C, Mowen, Miner, 2004) According
to the development of communication and the extensive market research, Nokia
has subdivided the mobile phone market into four different types: the science and
technology pursuer, the time controller, the personal communicator and the
image chaser. From such continuously improving market segmentation, the
products of Nokia have been more and more mature, and have attracted the
attention of the majority of customers. (Reid, David A, Richard E, 2004)
b. The target market strategy of Nokia

According to the correct subdivision of the Chinese mobile phone market, Nokia
has delineated its different market strategies emphasized on different market
demands. Through its abundant product line, strong investigative ability and
sound commercial network, with the suitable marketing strategy, Nokia designs
various types of products to meet the need of each target market.

In the market of personal communicator, the objective-oriented consumers pay

more attention to the quality, price and convenience of a phone rather than any
additional features. For this features, the product from Nokia, which is expected
to satisfy the consumers, is simple, practical, and abandons a lot of phone's
additional features to result in lower prices on a large cut-off. Because of the lack
of additional features, to extend the service life is very feasible. And the 1 series
and the 3 series Nokia mobile phones like 1100, 3100, 3108 and 3120 have
reflected this.

In the market that pursues science and technology, the consumers wish that their
phones could be helpful to raise the efficiency of the work and study. For this
reason, Nokia develop new technology applications on mobile phones as
possible as it can. And the N series of Nokia phones are the typical
representatives to fit this market. They have already become a kind of electronic
product with a high price. In customers’ view, it is worthwhile to by such a mobile
phone at a high price because of the application of new technology and improved
efficiency. With a high price, this market offers Nokia with generous profits as
well as a high-technology image of Nokia.

While in the market of image chaser, the customers prefer to care about the
external image of a mobile phone. So the products should catch the popular
element, including products appearance, propagate spokesman that popularizes,
etc. And the orientation of the Nokia adoring series is to express the individual
character and grade of their users appropriately. The Nokia 7260, Nokia 7280
and Nokia 7360 are representatives of these phones that have satisfied the
demand of fashion, grade and lifestyle.

And in the market pursuing management of time, the products of Nokia are trying
their best to improve their work efficiency. So that the users could have enough
rest time out of their heavy workload. So for the supervisors who usually need to
make decision and emphasize on efficiency, the 6 series of Nokia mobile phones
like 6600, 6670 and 6681 are the correct choices.

The Competitive Strategy of Nokia

a. Theories of competitive strategy

There are five kinds of basic competitive strength in an industry. They determine
the potentiality for profit of this industry. The potentiality here is measured in the
long-term investment, and not every industry has the same potentiality. The final
profit potentiality will change fundamentally with the change of the joint
competitive strength. (He Zi-Lin, Lim Kwanghui, Won Pho-Kam, 2006)

The result comes out from the interaction of the competitive strength is to form
three kinds of basic competitive strategies. Those strategies are: overall cost
leadership strategy, differentiation strategy and focus strategy. (Michael porter,
1997)

The first strategy means to make the greatest efforts to lower commodity prices
through reducing costs, then to maintain competitive advantage. It is necessary
to improve the control of cost because the profit of a low-cost company could be
much more than the average level. While in the competitive market, this is
essential for a company to overpower its competitors, to take the initiative and to
be a winner. (Hooley Graham J, John Saunders, 1993)

The second strategy is to provide a unique product or service that is more

functional, more fashionable or handsome. If a differentiation strategy can be
achieved, it would help the company acquire the extraordinary income in this
area. Because it can establish a defensive position to deal with the five
competitive forces, and maintain the competitive advantage on the basis of the
customer brand loyalty. (Hooley Graham J, John Saunders, 1993)

Finally, the main strategy is to focus on a particular customer base or a certain

regional market. This requires a company to provide goods or services more
efficaciously to a narrow strategic target, and then surpass their competitors in a
wider scale. This strategy has the potential to gain profit over the average level.
(Ketels Christian H, 2006)

b. The competitive strategy of Nokia in China

The Chinese market of mobile phone is large and attractive for each mobile
phone manufacturer. And so it is no doubt that the competition in Chinese mobile
phone market is intense. Even though Nokia is in a leading position in global
mobile communications industry, it always maintains a high degree of vigilance.
Motorola must be its major competitor either in China or other areas. Anycall
Corporation comes from Korea also wants to seize this profitable market.
Meanwhile, more and more local mobile phone manufacturers appear and
acquire support from some consumers. Nokia could never slacken itself.

The basic competitive strategy of Nokia is the differentiation strategy, which

requires winning the competitive advantage through improving its innovative
ability continuously. Strong technological innovation ability makes Nokia stand in
the most forward position of mobile industry all the time, and characterized this
brand by a special vitality. How to meet demands of realistic market? This is the
biggest challenge which the Hi-Tech company faces together. (Oster Sharon M,
1994)

Nokia pays a great attention to technology innovations, and has invested a lot in
developing new technologies to maintain its leadership. Till now, Nokia has 54
researches & develop centers all over the world. These centers work hard to
analyze the global market and keep on providing new concept, new demands to
the company. This ensures its advanced technology and leading position. In
China, Nokia has 2 R&D centers which are located in Beijing and Hangzhou
separately. So that the researches in China develop fast and won great
reputation. Relied on these investments Nokia has enough resources to do
researches, and could always keep ahead of others.

The individuation is the marrow of the Nokia mobile phones. On the gradually
ripe market of mobile phone, the dazzling and outstanding design is even more
important than the technology. Nokia is far-sighted that takes the initial to
establish an independent apartment which are specialized in appearance design.
The assignment of this apartment is to provide mobile phones with diversification
and individual character. Over the past 10 years, the factor that Nokia’s
continually updated product design has become a unique competitive advantage.
Under the guidance of the philosophy called “technology connecting people”,
Nokia has not only won the leading position in mobile phone market, it also fit the
customers’ needs accurately.

Nokia also makes great effort to innovate upon technology, produce new mobile
phones continuously, create good cooperative relationship with local companies
and carry out humanized management. All of these are essential for Nokia to
hold its competitive advantage and leading position.

The marketing mix

The mix marketing program, which is one of the major concepts in modern
marketing, means a set of controllable, tactical marketing tools that the firm
blends to produce the goods or services to meet the demands in the target
market. It consists of everything that a company has ability to de to influence the
demands for its product. There are four kinds of tools that are well known, they
are product, price, place, and promotion. (Peter Doyle, 2006)

a. Product Strategy

There are many choices for a company to make its product strategy. Among
them, the product orientation strategy, the brand strategy and the product
development strategy are the most three important choices. (Safon Vicente,
2007)

After subdividing, confirming the target market, how to enter and capture that
market becomes the essential problem for Nokia. This is a problem about its
products orientation. The market researches of Nokia shows that the consumers
can make decisions completely in accordance with their own preferences, the
product brand, the ability of the economy, consumer confidence and other
personal characteristics, when supplied with the mobile phone products with the
same quality and effort. In this so-called buyers’ market, the marketing strategy
should be corresponding to the characteristics of the different consumption
community to win the competition. Nokia has done well in this area. Researchers
in Nokia analyze the different personalities, divide consumer groups and decide
what kind of mobile phones should be supplied to a particular consumer
community. So the Nokia mobile phones have won a great number of supporters
around the world. It is no doubt that the Nokia mobile phones will be considered
first of all when a person decides to buy a mobile phone because of its high
ability, special design and good reputation. (Sadler Philip, 2003)

A brand is a name, term, sign, symbol, or design, or a combination of these, that

identifies the maker or seller of a product or service. Consumers view a brand as
an important part of a product, and branding can add value to a product. And
product design is certainly affect the success of the brand. Nokia keeps being
good at molding the good brand image by injecting individuality into product
design. It has considered a lot about how the customers will choose the brand,
and how it can make that experience reflect the brand character. For example,
Nokia designers believe that the screen of a phone is the "eye into the soul of the
product". The shape of phones is curvy and easy to hold. The soft key touch
pads also add to the feeling of friendliness, expressing the brand personality. All
in a word, the design of a mobile phone is essential and important to the
development of Nokia.

At the year of 2006, Nokia has won several design awards because of the four
successful types of mobile phones. Nokia 8800, Nokia N70, Nokia 7370 and the
N series are the awarded phones. All of them has gained glorification and always
been welcomed by consumers since the day they were put into the market. Here
shows that Nokia has paid a great attention to the fit the consumers’ demands
and acquired encouraging repayments.

b. Price strategy

The price of a product reflects that the business enterprise should satisfy the
various kinds of demand and get profit to ensure its general index object. The
pricing objectives are the guidance for an enterprise to make price decision,
which means the purpose or the standard that the company consciously wants to
attain while setting a price for its product.

The pricing decision means that the business enterprise set a reasonable price
for its product scientifically so that it could achieve the goal. And the major
method for Nokia to make its pricing decision is the Brand Life Cycle Model that
means to set different prices based on different life cycle of the product. That
means to set a high price for new products, medium price for second-line
products and low price for third-line products. The new products are the
substitutes for the original first-line products. Once there has a change or
development, whether it is technical, functional or just on the packaging and even
it is the slightest one, the price can jumped to a new level.

The technologies applied to mobile phones are innovated fast because of the
short life cycle of the mobile phone. When the market is not saturated, the
competition is not intensifying, and the transparency of the product technology is
not very high, the enterprise could access to excess profits most easily. Once the
new entrants and the transparency of improving technology increase, it only can
get a basic profit. So it is necessary for a new product to have a high price, which
could make the enterprise earn excess profits. When others begin to supply the
similar products, it is essential to provide substitutes with improvements and
reduce the price of the original ones. It is not only ensure the sales of the new
products, also lengthen the life time of the old ones. As long as the enterprises
innovates, challenges itself, surpass itself, it will be able to keep leadership when
compete with other manufacturers.

Meanwhile, the price should be made on the basis of sufficient market

researches on consumers. No matter what an advanced technology that a
product has, it is successful only the consumers love and purchase it. Take
Nokia 88 series and 89 series as an example, these phones were made for those
costumers who have strong purchase abilities and treat the mobile phone as a
symbol of their status. So this kind of mobile phones usually has a high price and
a long life cycle, and seldom reduces their price because their users do not
change their mobile phones too frequently.

c. Promotion of Nokia

Promotion refers to the use of effective ways to attract consumers’ attentions and
acquire their comprehensions to understand and pay attention to their products
and to stimulate consumer desire to purchase and promote the realization of the
final purchase.
The promotional strategy for Nokia to increase the sales is the integrated
promotional strategy. It is a series of activities inform the consumer the existence
and characteristics of the enterprises, brands and products, which could arouse
the market demands, create and maintain the image of a company.

The promotional activities of Nokia are always based on the topic like fashion,
convenience and function etc. Especially in the past two years, it pays more and
more attention to attract consumers and create consumer group through the
usage of emotional elements.

"Technology Connecting People" is the distinguished brand concept of Nokia,

which has been rooted in consumers’ mind through some traditional promotion
methods like TV advertisements, magazine advertisements. But now, it adopts
some new ways to publicize its products. Nokia usually contracts with film
distributors to make its phones appear in the film. This is actually an
advertisement in a different form. People could see Nokia phones in the TV or
film just like “Friends”, “Love of Scenery” and “An Empire” etc. And Nokia takes
the lead to use the celebrity effect and presents the celebrity with its own
products. It also holds programs accord with its products to publicize the brand,
concept and the culture of Nokia.

d. Marketing Channel Strategy of Nokia

The marketing channel strategy is a set of inter-reliant channels through which

the products could be spread from manufacturers to the consumers. The
meaning of products here is not restricted to the tangible ones. The marketing
channel strategy is an important component of the entire marketing system,
which plays a significant part in reducing the cost and enhancing the competitive
power of the enterprise. Along with the market development, the patterns of the
marketing channel strategy are diversified. The vertical marketing system,
horizontal marketing system and hybrid marketing system are three common
forms. (Arch W, 1975)

Nokia choose its local business agent based on 5C principle. That is to say,
Nokia will decide whom to choose according to their capital, credibility, channel,
cooperation and management. Once the decision is made, the agent must
comply with the contract, and sale the phone in his own area. The office should
supply perfect base station for the sell. Meanwhile, pay attention to the network
marketing and try to take the intensive marketing strategy in all domains.

In 2005, Nokia chose new channel pattern called FD, which has ability to change
the provincial agent into funds platform, save a lot of intermediate links and make
the channel flat. Through this method, most of Nokia monopoly stores can
acquire the ability of direct supply, which will help Nokia reduce the decision time,
ensure the profit of its terminal cooperators and its good post-sale service.

Conclusions

In conclusion, the success of Nokia is inseparable with the scientific business

strategy. The business strategy is a general concept. It includes two
indispensable elements called competitive strategy and marketing strategies as
well as the concept of the business strategy. The strategic concept of Nokia is to
take the demand-side strategy. Nokia subdivides the whole market into several
objective markets according to the researches about the partialities of different
individuals. And then different types of mobile phones are put into the market
aimed at attracting different consumer groups. The competitive strategy of Nokia
is to improve the innovative ability to win the competitive advantage. Strong
technological innovation ability makes Nokia stand in the most forward position of
mobile industry all the time, and characterized this brand by a special vitality. And
the marketing mix of Nokia is to use the integrated marketing strategy including
product, price, promotion and place. It values the construction of a brand, the
orientation of its products and pays a lot of attention to technology improvement.
It increases the sales through sensitive advertisement, presentation to the
celebrities and large-scale entertainment. And also choose the FD platform as its
major sales channel to improve its sale.

References

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Telecom Press

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Hooley Graham J, John Saunders. (1993). Competitive Strategy: the Key to

Marketing Strategy. New York: Prentice Hall

John C, Mowen, Miner. (2004). Consumer Behavior-A

Framework. Beijing:Tsinghua University Press
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Learnings and New Research Priorities. Journal of Industry, Competition
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Michael Porter. (1997). Competitive Advantage: Creating and Sustaining

Superior Performance. Beijing: Hua Xia Press

Oster Sharon M. (1994). Modern Competitive Analysis. New York: Oxford

University

Peter Doyle. (2006). Marketing Management and Strategy. London: Post &
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Reid, David A. Plank, Richard E. (2004). Fundamentals of Business Marketing

Research. New York: Best Business Books

Sadler Philip. (2003). Strategic Management. Binghamton: New Down Press

Safon Vicente. (2007). How to Compete and How to Compete Profitably: A

Model of Competitive Positions and Business Performance. Global Journal
of Business Research, no.1, 47-59

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