Sie sind auf Seite 1von 16

1 |Page

Assignment Topic Critically evaluate the marketing strategy of Nokia

Marketing Management Master of Business Administration

Prepared By Isaac Victor. Neduri STU 13633

Blake Hall College

Total Words 2,476 (Excl bibliography and contents)

Submission Date: 8th March 2010


2 |Page

Table of Contents
Abstract...........................................................................................03 Background of Nokia .................................................................... 04

SWOT ............................................................................................ 05 Mission Statement .......................................................................... 05 Corporate Development strategy.......................................................08 McKinsey 7s ................................................................................. 10 Marketing Mix ................................................................................. 11

Suggested strategies for Nokia.......................................................... 13 Bibliography ................................................................................ 14


3 |Page Marketing is not the art of finding clever ways to dispose of what you make. it is the art of creating the genuine customer value. Philip Kotler


Presently Nokia is the worlds largest mobile telephone device manufacture whilst mobile phone devices are increasingly becoming the necessary commodity. With new entrants in the market and heavy investments are needed to upgrade. In the midst of these chaos it is remarkable to see how the worlds largest mobile phone manufacturer able to maintain its competitive edge whilst maintaining its consumer loyalty and brand image. as part of this assignment we shall analyse and focus on the marketing strategy of Nokia. Besides analysing of how the factors like globalisation, and Ebusiness has been incorporated in their market planning


4 |Page

Background of Nokia:Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS).( presently it is the worlds largest mobile phone manufacturer with market share up to 39% Globally. It is the most admired brand, ranking 5th position. Initially Nokia started as pulp industry in 1865 then in next 100 years it emerged as a powerful industrial conglomerate. In 1967 it entered into mobile communications catering niche market i.e., Finnish military, within the next 30 years it has become the world leader in mobile phone market. Nokia is customer oriented organisation

The Nokia`s marketing is mainly involved in identifying the customer requirements and cater to needs of the customer accordingly. Nokia is a market driven company it quickly adopts strategic level marketing where marketing has a key role in defining the long term objectives and vision of the company. As the company products are technologically driven, so the user requirements are highly volatile. Nokia has to keep the pace and satisfy the consumer .There is always a progressive and continuous increase in customer involvement with technology and communications globally. Increasingly the modes of communication are broadening. Nokias promise is to connect people in new and better ways. Nokias strategy is to build trusted consumer relationships by offering compelling and valued consumer solutions that combine beautiful devices with context enriched services. [ accessed on 7.03.09 ]

Strategy: a definition
A strategy is fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets, competitors, and other environmental


5 |Page

factors. Cited in Orville C. Walker et al, 1992 Marketing strategy: Planning and Implementation, Pg 8. Richard D. Irwin Inc

Nokia Strategic Planning Process consists of the steps shown below we examine steps in the sections below: Business mission SWOT analysis (both internal and external) Goal Formulation Strategy Formulation Implementation

Mission statement: our vision is the world everyone can be connected.( accessed on 07.03.10) Thus the scope of Nokia refers to the breadth of its strategic domain i.e., the type of the industry it is operating in, and scalability of their product lines. It covers almost all the market segments it competes in, with its mission statement. The mission statement defines the essential nature of its business and what it is planning to be in future

S.W.OT:Strengths: Nokia is one of the most popular mobile communications manufacturers. Its greatest

strength is its strong brand image. Its brand equity is rated as top 5th in best global brands and valued at 34,864$ million. ( accessed on 07.03.10) as compiled by Inter band-Business Week in 2009 (Inter brand, 2009)

Nokia Offering high product quality well built and durable handsets,

Scalability of products, new product innovations designed to satisfy user preferences. Strong supply chain network. Nokia has an extensive marketing and distribution

network by offering its products through its own retail outlets and also through network service providers. Strong Nokia Siemens tie-up

6 |Page

Weakness: Highly priced as compared to its competitors like Sony Ericson and Motorola

High supply chain cost

Opportunities: Nokia has only 6% of total CDMA market share where as their biggest competitor in

CDMA Motorola owns a market share of 33%. Thus Nokia has a opportunity in Increasing their presence in the CDMA market

Nokia has new market opportunities in many developing countries that are in Africa and Asia continents. Where mobile phone implementation still has more room to grow

Increased attention on 3G Market

Threats: Nokia facing serious threats of brand piracy China mobile limited made counterfeit products which are produced in china and distributed throughout the world. This causes serious damage to the Nokia brand name.
Mobile phone service providers like Vodafone O2, Orange, and 3 networks has

started to market their own branded products making use of their brand fame Higher import charges. New Entries into Market line Apple computers and HTC with cutting edge technology

Goal Formulation:After completion of environmental analysis, Nokia has proceeded to develop specific goals for a planning period. Nokia has introduced products, balancing short term profit versus long term growth. balancing deep penetration into existing markets with

7 |Page

development of new markets for instance, Nokia has been developing its numbered series with all the core and conventional requirements of a mobile phone device, besides developing a new range of products like using internet services on the phone and simultaneously offering social networking services and SIP phones etc that are to embedded in one handset to meet customer requirement and satisfaction

Strategy:Nokia new mission was to focus on more attractive market opportunities like 4G technology where its strengths resources and competencies can provide a sustainable competitive advantage to generate profitable revenue growth. Nokia is organised into four operating divisions they are, Nokia Mobile Phones, Nokia Networks, Nokia Ventures Organizations, and Nokia Research Centre. Every business strategy consists of a marketing strategy plus compatible technology strategy and sourcing strategy (Philip Kotler, 2001, p.47) In view of Michael porters condensed three generic marketing strategies, Nokia seems to be observing differentiation and focus types of strategies together , In differentiation strategy the business concentrates on achieving superior performance in an important customer benefit area(Philip Kotler, 2001, p.48.) Nokia differentiates itself through leadership in developing user friendly phones, which are being catered to most of mobile phone market. In focus business strategy business focuses on one or more narrow market segments (Philip Kotler, 2001, p.48.). Nokia is excellent in understanding customer requirements and meeting them accordingly, it also good in focusing on extremely narrow segment and produces handsets that suits the needs for instance Nokia is the first company to produce handsets that has user interface in 16 different languages in India. Thus knowing these Segments intimately and achieving leadership in market

Corporate culture at Nokia:

Nokia Way of approach represents the speed and flexibility in decision-making. Nokia is Flat-networked organization with a blend of bureaucracy Enhanced shareholder value

8 |Page

The Nokia Values are Customer Satisfaction, Respect, Achievement, and Renewal.

Corporate development strategy:Since some high growth markets are likely to mature over time, and some high profit, mature business may decline as they get older. With respect to these limitations Nokia has Nokia has applied two business strategies seeking future business growth. I.e. Expansion and diversification

Expansion: Presently Nokia is extending its business activities into computer tablet manufacturing, offering new product line to existing customers. Another way to expand existing business is to develop product line extension or new product extensions or new product offerings for existing customers. (Orville C. Walker et al, 1992, p.49) Thus Nokia corporate strategy is reflecting its continuous expansion of new series of mobile handsets offering different services suiting different consumer needs like N-series, E-series, C series and numbered series etc.

Diversification:Diversification through vertical integration vertical integration is one way for corporation to diversify their operations.(Orville C. Walker et al, 1992, p.49). Nokia was engaged in backward integration by acquiring its suppliers as a part of its corporate strategic decisions for instance NAVTEQ, NAVTEQ is a Chicago, Illinois-based provider of Geographic Information Systems (GIS) data and is a dominant company in providing the base electronic navigable maps. The company is a wholly-owned subsidiary of Nokia but operates independently [ accessed on 07.03.10]. Integration gave firm access to tighter control over marketing distribution and servicing of its products


9 |Page

Portfolio Models BCG Matrix These models help to classify and review the current and prospective SBUs- at present Nokia. One of the best portfolio is Growth- share matrix developed by BCG ( Boston consulting Group) it assesses the products and investing resources in different business units on the corporation`s future earnings and cash flow (Orville C. Walker et al, 1992, p.51)

With regards to the BCG model, The Nokia brand can be placed as a fusion of star and cash cows. Although Nokia has a high market share 39% with some of its products ranges has a very low market growth rate for instance Nokias N-gage series, Nokia has to be more creative and should be able to innovate new product lines to attain its position as a star. In the midst of market turmoil due to new potential entrants like Apple I phone and HTC and black berry Nokia Premium series like Nokia communicator which are aimed to target niche market has been showing a weaker performance, all the entry level mobile phones can be placed as cash cows like 7610, 6600, 3210, 3310 2100 etc.. Nokias hot selling N-series would be classified as a star. As it has gained significant market share besides gaining leadership in that target market Limitations of Growth Share Matrix:-


10 | P a g e

Growth share matrix uses only two variables to define the firms business Market Growth rate is an inadequate descriptor of overall industry attractiveness Relative market share is not enough to depict over all competitive strength

IMPLEMENTATION:McKinsey 7s A clear strategy and well thought out supporting programme may be useless if the firm fails to implement them carefully. Indeed strategy is only one of the seven elements (Philip Kotler, 2001, p.48.). Thus Mc Kinsey has added strategy as only one of the element in their 7s frame work. Thus 7`s frame work implementation is vital for affective business management Structure Nokia is a global organization, with its well organised structure Nokia Mobile Phones, Nokia Networks, Nokia Ventures Organizations, and Nokia Research Centre Strategy Nokia mission clearly states that it aims to lead the mobile phone manufacturing industry Taking leadership in the mobile phone production. Nokia is the leader in Europe and number one in American and Asian market. However, in recent times Nokia is facing challenge to sustain its position as a leader in mobile phones. Nokia aims to sustain its leadership position with innovative and user friendly design. It has developed innovative services such as predictive texting in mobile phone voice dialling etc Systems Nokia is decentralised organisation. Its corporate structure reflects the global nature operations. Nokia mainly benefits in delivering products by understanding the local culture Style The act of incorporating new techniques and new ideas and the investment in developing new products is the core success of the organisation. Skills Nokia has build-up strong relationship with the top rated universities and place the students into the business and provide them in training and development throughout their career with the company skilled Staff. Besides Nokia offers a Competitive pays and perks including flexible work patterns pension schemes etc
10 | P a g e

11 | P a g e

Shared Values Nokia is customer oriented organisation it has continuous focus on volatile customer requirements as it is technologically driven industry Nokia R&D department is committed to meet the customer demands rightly.

11 | P a g e

12 | P a g e

Implementation of marketing plans

Marketing Mix The marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. (Philip Kotler, 2001, p.9.) Marketing mix signify the generic strategic tools of a marketing plan. These tools are classified into four broad clusters and they are well known as the 4Ps Product, Price, Place, and Promotion

Marketing Mix

Target Market

Product variety Quality

List price Discounts

Sales promotion Advertising

Channels Coverage Assortments Locations Inventory Transport

Allowances Payment period Credit terms

Sales force Public relations Direct marketing

Design Features Brand name Packaging Sizes Services

12 | P a g e

13 | P a g e

Price: The product group is the heart of the marketing mix and the other 3ps follow the first

one. Nokia is good in producing the phone with added innovative features. It almost upgrades every six months, and Nokia offers high quality well built durable, highprestige and high performance, besides to these attributes Nokia offers a wide range of products that suits different customer market segmentation Price: The next P that comes in the order is price which also has significance as that of

product, Nokia Across its entire range, of mobile phone models Nokia offers a variety of prices to suit different segments. The company uses the Pricing Strategy that best suits its models for instance. The model, Nokia 1100 is the market penetration and Nokia n-95 is the market skimming. . Place
Nokia does not sell products on its websites, Traditional retail outlets still make up a

large share of Nokia products sold and include Nokia priority shops and individual mobile phone retailer The supply chain network consists of Nokia Distributer- Whole seller - Retailer and final to Customer However Online retailers such as Amazon, phones4u, e-bay offering Goods through their websites Promotion Nokia promotes its products in a traditional way using most of the media platforms

13 | P a g e

14 | P a g e

Suggested marketing strategies for Nokia:-

To sustain a leadership position in the industry, Nokia has to employ confrontation strategy to maintain its leading share position. According to this strategy the primary objective of Nokia is it should protect against loss of share by meeting or beating a head to head competitive offering such as i phone, improve its ability to win new customers who might otherwise be attracted to competitors offering, however in recent times Nokia has come up with this strategy to beat I-phone market by introducing a cutting edge technology mobile device called N900. Managing E commerce and online marketing:Electronic commerce describes a wide variety of electronic platforms (Philip Kotler, 2001, p.330) Internet has enabled companies to decentralize the Global communications possible. Nokia is marketing its products to the customers that fall under younger, more affluent, and educated segment. These audiences get information about multiple brands, capable of comparing costs, prices and features, without relying on the manufacturer or the retailers Nokia has established an electronic presence in the web in three ways: Buying space on commercial online service
Selling through another site(like amazon, etc) Opening its own website/ micro site

Nokia on the other hand operating a online store called OVI store which sells applications for the enthusiastic customers. Nokias business marketing is actually the driving force behind these micro sites Use of information in marketing:- The Nokia webpage is appealing , relevant and up to date to attract repeat vists Nokia encourages customers to subscribe them to podcast where by it can add weekly news or any new product arrivals

14 | P a g e

15 | P a g e

Bibliography 1. Philip, K (2001) A Frame Work For Marketing Management: Prentice and Hall 2. Philip, K(2001) Kotler on Marketing: Free press 3. Orville c. Walker,(1992) Marketing Strategy: Planning and implementation: Irwin Inc 01/03/10). (Accessed 01/03/10).
Interbrand (2009). Best Global Brands 2009 Rankings. (Accessed 03/03/10) (Accessed 01/03/10).

Marketing and Corporate Strategy 2010 (Accessed 03/03/10)

15 | P a g e

16 | P a g e

16 | P a g e