PROJECT

ON

“Digital Media Marketing

Nokia Channel of Distribution”

MASTER OF BUSINESS ADMINISTRATION

(APPLIED MANAGEMENT) SESSION 2008-10

UNDER SUPERVISION OF
SUBMITTED BY
Mr. Akhilesh Kumar Srivastava Sumit Gupta
Faculty MBA
(AM) IInd Year
Nis Academy Enroll. No.
4740800927
Varanasi NIS
Academy Varanasi

1
 A
PROJECT
ON
Digital Media Marketing

“NOKIA CHANNELS OF DISTRIBUTIONS”

SUBMITED TO ANNAMALAI UNIVERSITY

CHENNAI
MASTER OF BUSINESS ADMINISTRATION
SESSION 2008-2010

Submitted To:
Submitted By:
Mr. Yogesh Pandey Sumit
Gupta
Faculty Guide
Enroll. No. 4740800927

2
NIS Academy NIS
Academy Varanasi
Varanasi

ACKNOWLEDGEMENT

I express my thanks to Mr. AKHILESH KUMAR SRIVASTAVA

(faculty Guide) for granting me the permission to work on the

brand Nokia. Who guided and helped me in all possible ways they

could, at every stage of the project.

I would like to express my thanks to my company guide to Mr.

Shishir Priyadarshi (HCL-ASM) and Mr. Abhishek Jain (Nokia-ASM)

who helped me in my S.I.P. as well as to completion of this report.

I would also like to thank all the team members of Nokia who

provided all the relevant information and their kind support, on

the basis of which this report has been prepared.

Lastly I would like to pay our special regards to our parents for

their encouragement and full support for completion of this

project work.

Sumit Gupta
3
MBA 2008 – 2010

4740800927

STUDENT DECLARATION

I Sumit Gupta student of MBA at NIS Academy Varanasi of hereby

declare that the Project work entitled “NOKIA-CHANNELS OF

DISTRIBUTIONS" is compiled and submitted under the guidance of

Mr. AKHILESH KUMAR SRIVASTAVA (faculty guide), Mr.

Shishir Priyadarshi and Mr. Abhishek Jain (Company

guide), is my original work.

Whatever information furnished in this project report is true to the

best of my knowledge.

SUBMITTED BY:

Sumit Gupta

4
 MBA (2008 –

2010)

4740800927

PREFACE

As a student of management in Business

administration, it is very important to understand the
practical way of doing work in an organization. The
project report provides student the opportunity to study
the organization and try to correlate the theoretical and
practical aspects of working in a real business
environment.

A distribution system is a key external resource for

any company or firm. Normally it takes years to build,
and it is not easily change. The choice before an
organization to have, indirect or joint distribution depends
upon the degree of control; flexibility depends upon the

5
degree of control, flexibility, cost and financial
requirements.

For example, indirect distribution, there is less of

control but is more economical. In this sort of distribution
lesser funds are tied up and there is low fixed variable
cost of managing the channel. On the other hand in
personal selling, there is better control but is more
expensive.

Today most of the TELECOM companies including

Nokia used intensive distribution, which consists of
manufacture placing the goods or services in as many
outlets as possible. Generally for the product it requires
great deal of location convenience. Management
generally needs to search for distribution economics in
inventory control, warehouse location and transportation
modes. Distribution play the vital for the success of any
product in the market, out of 4 p’s of marketing mix one
is place which clearly indicate that consumers and
customers needs, wants and demand.

6
7
 Table of content

Topic

Page No.

1. Introduction……………………………………………………….

…………………………11

2. Device Business

…………………………………………………………………………12

2.1 Service Business

……………………………………………………………….13

2.2 Infrastructure Business……………….

……………………………………….12

3. R & D Centers…….

………………………………………………………………………..14

4. Industry

Overview……………………………………………………………………

….14

8
5. Some Firsts for Nokia In

India………………………………………………………..17

6. Some Achievements for

Nokia…………………………………………………………18

7. Total Market

size………………………………………………………………………….

…19

7.1 Handset Market

share…………………………………………………………….19

7.2 The Stat of the world wide mobile phone market

…………………….21

7.3 World wide mobile terminal sales to end

users………………….……22

7.4 World wide smart phones

sales…………………………………..………….23

7.5 Nokia still top dog in smart phone

market……………………………....24

8. Networking

equipment………………………………………………………….28

9
9. First mobile phones……………….

……………………………………………..29

10. Involvement in GSM……………….

……………………………………….…….31

11. Milestones and

releases………………………………………………………..33

12. Devices………………………………….

…………………………………………….36

13. Services……………………………….

……………………………………………...37

14. Solutions……………………………………………………………

……………….38

15. Markets………………………………………………………………

………………38

16. Subsidiaries……………………….

……………………………………………….39

17. Online

Services…………………………………………………………………..4

10
 17.1 mobi and mobile

web………………………………………………………….40

17.2 OVI……………………………………………………………………

………………41

17.3 My

Nokia…………………………………………………………………

……… .42

17.4 Comes with

Music……………………………………………………………..42

17.5 Nokia

Messaging…………………………………………………………

…….43

18. Controversy…………………………………………………………

………......44

19. Nokia Interactive

advertising…………………………………………….46

20. Nokia

Corporation………………………………………………………………..

49

11
21. Channel Support and coordination to sales strategies

………….52

22. Intensive

distribution…………………………………………………………53

22.1 Extensive

distribution………………………………………………………..5

22.2 Selective

distribution…………………………………………………………

53

22.3 Exclusive

distribution……………………………………………………..…

53

23. Vertical

Integration……………………………………………………….….54

24. Market strategy for

Nokia………………………………………………….55

25. Nokia Succeed in the Indian Mobile

Market……………………….56

12
26. The Power of

focus…………………………………………………………….58

27. The distribution

Age…………………………………………………………..59

28. Investment in

manufacturing…………………………………………….62

29. Building the

Brand……………………………………………………………..64

30. Product for

India………………………………………………………………..67

31. An Expanding

Market………………………………………………………..70

32. Work performed by marketing

channels…………………………....71

33. Distribution Channel

flows………………………………………………..73

33.1 Physical

flow……………………………………………………………………

…73

13
 33.2 Title

flow……………………………………………………………………

……….73

34. Channel

level…………………………………………………………………..74

34.1 One level

channel…………………………………………………………….7

34.2 Two level

channel……………………………………………………………74

34.3 Three level

channel…………………………………………………………74

35. Research

Methodology……………………………………………………75

36. Research

process……………………………………………………………76

37. Method of data

collection………………………………………………..84
14
38. Collection of data through

questionnaire………………………….91

39. Conclusion…………………………………………………………

…………...93

40. Limitations…………………………………………………………

……….….95

41. Suggestion…………………………………………………………

……………97

42. Questionnaire………………………………………………………

………….98

43. Biblography…………………………………………………………

…………101

15
 INTRODUCTION

Nokia has played a pioneering role in the growth of cellular

technology in India, starting with the first-ever cellular call a

decade ago, made on a Nokia mobile phone over a Nokia-

deployed network.

Nokia started its India operations in 1995, and presently operates

out of offices in New Delhi, Mumbai,

Kolkata,Jaipur,Lucknow,Chennai, Bangalore, Hyderabad, Pune and

Ahmedabad. The Indian operations comprise of the handsets

business; R&D facilities in Bangalore, Hyderabad and Mumbai; a

manufacturing plant in Chennai and a Design Studio in Bangalore.

Over the years, the company has grown manifold with its

manpower strength increasing from 450 people in the year 2004

to over 15000 employees in March 2008 (including Nokia Siemens

Networks). Today, India holds the distinction of being the second

largest market for the company globally.

Devices business
16
Nokia has established itself as the market and brand leader in the

mobile devices market in India. The company has built a diverse

product portfolio to meet the needs of different consumer

segments and therefore offers devices across five categories ie.

Entry, Live, Connect, Explore and Achieve. These include products

that cater to first time subscribers to advanced business devices

and high performance multimedia devices for imaging, music and

gaming.

Nokia has been working closely with operators in India to increase

the geographical coverage and lower the total cost of ownership

for consumers. Today, Nokia has one of the largest distribution

network with presence across 1,30,000 outlets. In addition, the

company also has Nokia Priority Dealers across the country and

Nokia ‘Concept stores’ in Bangalore, Delhi, Jaipur, Hyderabad,

Chandigarh, Ludhiana, Chennai, Indore and Mumbai to provide

customers a complete mobile experience.

17
 Services business

With the global launch of Ovi, the company's Internet services

brand name, Nokia is renewing itself to be at the forefront of the

convergence of internet and mobility. From being a product

centric company, Nokia is now focusing to become solutions

centric. The strategic shift is built on Nokia’s bid to retain

consumers and empower Nokia device owners to realise the full

potential of the Internet. Nokia will build a suite of Internet based

services like Nokia Maps, the Nokia Music Store and Nokia N-Gage

around its Ovi brand.

Infrastructure business

Nokia Siemens Networks is a leading global enabler of

communications services. The company provides a complete,

well-balanced product portfolio of mobile and fixed network

infrastructure solutions and addresses the growing demand for

services with 20,000 service professionals worldwide. Its

operations in India include Sales & Marketing, Research &

Development, Manufacturing and Global Networks Solutions

18
Centre. Headquartered in Gurgaon, Nokia Siemens Networks has

47 offices and presence in over 170 locations across the country.

R & D centers

Nokia has three Research & Development centers in India, based

in Hyderabad, Bangalore and Mumbai. These R&D hubs are

staffed by engineers who are working on next-generation packet-

switched mobile technologies and communications solutions to

enhance corporate productivity.

The Center in Bangalore, the biggest R&D site in the country

comprises S60 Software Organization, Common Technologies,

Next Generation now called Maemo Software, Productization and

Software & Services.

INDUSTRY OVERVIEW

Nokia Corporation is a Finnish multinational communications

corporation that is headquartered in Keilaniemi, Espoo, a city

neighboring Finland's capital Helsinki.Nokia is engaged in the

manufacturing of mobile devices and in converging Internet and

communications industries, with over 123,000 employees in 120

19
countries, sales in more than 150 countries and global annual

revenue of EUR 41 billion and operating profit of €1.2 billion as of

2009 It is the world's largest manufacturer of mobile telephones:

its global device market share was about 39% in Q4 2009, up

from 37% in Q4 2008 and 38% in Q3 2009, and its converged

device market share was about 40% in Q4, up from 35% in Q3

2009. Nokia produces mobile devices for every major market

segment and protocol, including GSM, CDMA, and W-CDMA

(UMTS). Nokia offers Internet services such as applications,

games, music, maps, media and messaging through its Ovi

platform. Nokia's subsidiary Nokia Siemens Networks produces

telecommunications network equipment, solutions and services

Nokia is also engaged in providing free digital map information

and navigation services through its wholly-owned subsidiary

Navteq.

Nokia has sites for research and development, manufacture and

sales in many countries throughout the world. As of December

2009, Nokia had R&D presence in 16 countries and employed

37,020 people in research and development, representing

approximately 30% of the group's total workforce. The Nokia

20
Research Center, founded in 1986, is Nokia's industrial research

unit consisting of about 500 researchers, engineers and scientists.

It has sites in seven countries: Finland, China, India, Kenya,

Switzerland, the United Kingdom and the United States. Besides

its research centers, in 2001 Nokia founded (and owns) INdT –

Nokia Institute of Technology, a R&D institute located in Brazil.

Nokia operates a total of 15 manufacturing facilities located at

Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan

and Suzhou, China; Farnborough, England; Komárom, Hungary;

Chennai, India; Reynosa, Mexico; Jucu, Romania and Masan, South

Korea Nokia's Design Department remains in Salo, Finland.

Nokia is a public limited liability company listed on the Helsinki,

Frankfurt, and New York stock exchanges. Nokia plays a very

large role in the economy of Finland; it is by far the largest Finnish

company, accounting for about a third of the market capitalization

of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a

unique situation for an industrialized country. It is an important

employer in Finland and several small companies have grown into

large ones as its partners and subcontractors. Nokia increased

Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's

21
share of the Finnish GDP was 3.5% and accounted for almost a

quarter of Finland's exports in 2003.

In recent years, Finns have consistently ranked Nokia as one of

the best Finnish brands. In 2008, it was the 27th most respected

brand among Finns, down from sixth place in 2007.] The Nokia

brand, valued at $34.9 billion, is listed as the fifth most valuable

global brand in the Interbrand/BusinessWeek Best Global Brands

list of 2009 (first non-US company). It is the number one brand in

Asia (as of 2007) and Europe (as of 2009), the 41st most

admirable company worldwide in Fortune's World's Most Admired

Companies list of 2010 (third in Network and Other

Communications Equipment, seventh non-US company), and the

world's 85th largest company as measured by revenue in Fortune

Global 500 list of 2009, up from 88th the previous year. As of

2009, AMR Research ranks Nokia's global supply chain number six

in the world.

Some firsts for Nokia in India

1995 – First mobile phone call made in India on a Nokia phone on

a Nokia network

22
1998 - Saare Jahaan Se Acchha, first Indian ringtone in a Nokia

5110

2000 - First phone with Hindi menu (Nokia 3210)

2002 - First Camera phone (Nokia 7650)

2003 - First Made for India phone, Nokia 1100

2004 - Saral Mobile Sandesh, Hindi SMS on a wide range of Nokia

phones

2004 - First Wi-fi Phone- Nokia Communicator (N9500)

2005 – Local UI in additional local language

2006 – Nokia manufacturing plant in Chennai

2007 – First vernacular news portal

Some Achievements for Nokia

• Ranked No 1 Most Trusted Brand Survey by Brand

Equity, 2008

23
 • Ranked the No 1. MNC in India by Businessworld, India’s

leading business weekly, 2006

• Ranked as the No. 1 telecommunications equipment

vendor in the country by Voice & Data for five consecutive

years –2008, 2007, 2006,2005 and 2004

• Ranked as the 9th most powerful brand by Millward

Brown’s BrandZ 2008

• Ranked world’s 4th most valuable brand by Interbrand,

2007

• Ranked Asia’s most trusted brand by the Media-

Synovate, 2006

Total market Size:

Handset Market Share

• Nokia: 59.5%

• Sony: 8.1%

• Samsung: 7%

24
• Motorola: 5.9%

• Nokia said on Friday the cellphone market totaled 1.26

billion phones last year, above its earlier forecast of 1.14

billion, and reduced its share of sales to 34 percent from an

earlier forecast of 38 percent.

• Research group Gartner said the grey market -- mostly in

China, India and Latin America -- totaled 145 million phones

last year.

• Nokia said new measurement tools enable it to better

estimate the number of handsets being sold by some new

players.

• "These include vendors of legitimate, as well as unlicensed

and counterfeit, products with manufacturing facilities

primarily centered around certain locations in Asia and other

emerging markets," Nokia said.

• Nokia repeated it expected the overall 2010 phone market to

grow 10 percent while its market share would be unchanged

at 34 percent.

25
• The comments boosted Nokia shares, which trimmed an

earlier high of 10.91 euros to settle at 10.80, up 2 percent,

by 1539 GMT.

• "This is a good thing for Nokia because it is really showing

that they want to measure the real market and grey market

has been a big driver in 2009," said Gartner analyst Carolina

Milanesi.

• "It is an opportunity for them to go after and try and actually

win over users in that segment as well," he said.

26
The State Of The Worldwide Mobile Phone Market,

2009

Gartner just released a report highlighting the state of

the mobile phone worldwide market for 2009. In terms of units

sold, Nokia leads, unsurprisingly, given its history. In the

smartphone market share segment, Nokia, through its Symbian

operating system, leads again, again unsurprisingly. What is

again unsurprising is the fact that Nokia lost market share both in

terms of the units shipped, as well as smartphone market share.

In terms of units shipped, Nokia lost 2.2%, and 5.5% in terms of

its smartphone market share.

27
 Worldwide Mobile Terminal Sales to End Users in 2009

(Thousands of Units)

2009 2008

Market Market

2009 2008
Share Share
Company Sales Sales
(%) (%)
Nokia 440,881.6 36.4 472,314.9 38.6

Samsung 235,772.0 19.5 199,324.3 16.3

LG 122,055.3 10.1 102,789.1 8.4

Motorola 58,475.2 4.8 106,522.4 8.7

Sony

Ericsson 54,873.4 4.5 93,106.1 7.6

Others 299,179.2 24.7 248,196.1 20.3

1,211,23 1,222,25

Total 6.6 100.0 2.9 100.0

28
Worldwide Smartphone Sales to End Users by

Operating System in 2009 (Thousands of Units)

2009 2008

Market Market

2009 2008
Share Share
Company Units Units
(%) (%)
Symbian 80,878.6 46.9 72,933.5 52.4

Research In Motion 34,346.6 19.9 23,149.0 16.6

iPhone OS 24,889.8 14.4 11,417.5 8.2

Microsoft Windows

Mobile 15,027.6 8.7 16,498.1 11.8

Linux 8,126.5 4.7 10,622.4 7.6

Android 6,798.4 3.9 640.5 0.5

WebOS 1,193.2 0.7 NA NA

Other Oss 1,112.4 0.6 4,026.9 2.9

172,373. 139,287.

Total 1 100.0 9 100.0

29
 Nokia Still Top Dog In Smartphone Market, But Is

Bleeding Share

Gartner, a global market research firm, reported the

smartphone market segment results recently for the whole of

2008. As expected, Nokia shipped the most units, with around 61

million units (that’s not a lot is it, judging by the fact that a high

percentage of the world’s population now own cellphones, but this

is the smartphone market we’re talking about, so the market is

much smaller). This translates to around 44% market share,

more than twice the share of its closest competitor, Research in

Motion – “RIM” (makers of the Blackberry) with around 17%.

However, Nokia’s market share has been declining of late, as in

2007, its market share was around 49% and has been in steady

decline recently. Bad news for Nokia indeed, but not especially

surprising, given that its competitors have introduced a slew of

new products and new competitors have been slowly building

their own momentum.

30
In particular, Apple and RIM recorded impressive year-on-year

growth, which mainly came at Nokia’s expense. Gartner reports

that Nokia higher end N-series smartphones are facing

increasingly stiff competition from RIM’s Blackberries as well as

Apple’s iPhone. When Palm’s Pre is finally unleashed, I think it’s

31
safe to say that Nokia’s market share is going to decline even

further. It’s probably in Nokia’s best interests to get the latest N

series phones out the door as quickly as possible. Perhaps its

flagship E series phones need to be refreshed as well. The other

challenge comes in the form of the very gloomy outlook for the

global economy – so it looks like Nokia is facing a double whammy

of increasingly serious competition and a tough operating

environment (although, to be fair, its competitors are facing this

as well). The surprising item in the market share list was the

inclusion of Samsung – from a share of 1.8% the previous year, it

jumped to 4.2% last year, due to the success of its Omnia

handset. If that’s what they can do with only one handset,

imagine what can happen if Samsung put their minds to it and

releases more smart handsets. More headache for Nokia,

especially seeing that Samsung is going to position its OmniaHD

product directly against the Nokia N97. If Samsung manages to

make this happen quickly, and a reasonable price point, I foresee

Nokia’s mindshare in the eyes of consumers quickly evaporate.

Come on Sammy – get it out the door quickly, and show us what

32
the OmniaHD can do, and if it can do it better than Nokia’s own

N97!

Fredrik Statesman

Idestam, Leo Mechelin,

founder of co-founder of

Nokia. Nokia.

The Nokia House, Nokia's head office located by the Gulf of

Finland in Keilaniemi, Espoo, was constructed between 1995 and

1997. It is the workplace of more than 1,000 Nokia employees.[23]

33
 Networking equipment

In the 1970s, Nokia became more involved in the

telecommunications industry by developing the Nokia DX 200, a

digital switch for telephone exchanges. In 1982, a DX 200 switch

became the world's first microprocessor controlled telephone

exchange and the first fully digital exchange to be taken into

service in Europe. The DX 200 became the workhorse of the

network equipment division. Its modular and flexible architecture

enabled it to be developed into various switching products. In

1984, development of a version of the exchange for the Nordic

Mobile Telephony network was started.

For a while in the 1970s, Nokia's network equipment production

was separated into Telefenno, a company jointly owned by the

parent corporation and by a company owned by the Finnish state.

In 1987, the state sold its shares to Nokia and in 1992 the name

was changed to Nokia Telecommunications.

In the 1970s and 1980s, Nokia developed the

Sanomalaitejärjestelmä ("Message device system"), a digital,

34
portable and encrypted text-based communications device for the

Finnish Defence Forces. The current main unit used by the

Defence Forces is the Sanomalaite M/90 (SANLA M/90).

First mobile phones

The Mobira Cityman 150, Nokia's NMT-900 mobile phone from

1989 (left), compared to the Nokia 1100 from 2003. The Mobira

Cityman line was launched in 1987.

The technologies that preceded modern cellular mobile telephony

systems were the various "0G" pre-cellular mobile radio telephony

standards. Nokia had been producing commercial and some

35
military mobile radio communications technology since the 1960s,

although this part of the company was sold some time before the

later company rationalization. Since 1964, Nokia had developed

VHF radio simultaneously with Salora Oy. In 1966, Nokia and

Salora started developing the ARP standard (which stands for

Autoradiopuhelin, or car radio phone in English), a car-based

mobile radio telephony system and the first commercially

operated public mobile phone network in Finland. It went online in

1971 and offered 100% coverage in 1978.

In 1979, the merger of Nokia and Salora resulted in the

establishment of Mobira Oy. Mobira began developing mobile

phones for the NMT (Nordic Mobile Telephony) network standard,

the first-generation, first fully-automatic cellular phone system

that went online in 1981. In 1982, Mobira introduced its first car

phone, the Mobira Senator for NMT-450 networks.

Nokia bought Salora Oy in 1984 and now owning 100% of the

company, changed the company's telecommunications branch

name to Nokia-Mobira Oy. The Mobira Talkman, launched in 1984,

was one of the world's first transportable phones. In 1987, Nokia

36
introduced one of the world's first handheld phones, the Mobira

Cityman 900 for NMT-900 networks (which, compared to NMT-

450, offered a better signal, yet a shorter roam). While the Mobira

Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman just

under 5 kg (11 lb), the Mobira Cityman weighed only 800 g

(28 oz) with the battery and had a price tag of 24,000 Finnish

marks (approximately €4,560). Despite the high price, the first

phones were almost snatched from the sales assistants’ hands.

Initially, the mobile phone was a "yuppie" product and a status

symbol.

Nokia's mobile phones got a big publicity boost in 1987, when

Soviet leader Mikhail Gorbachev was pictured using a Mobira

Cityman to make a call from Helsinki to his communications

minister in Moscow. This led to the phone's nickname of the

"Gorba".

In 1988, Jorma Nieminen, resigning from the post of CEO of the

mobile phone unit, along with two other employees from the unit,

started a notable mobile phone company of their own, Benefon

37
Oy (since renamed to GeoSentric). One year later, Nokia-Mobira

Oy became Nokia Mobile Phones.

Involvement in GSM

Nokia was one of the key developers of GSM (Global System for

Mobile Communications), the second-generation mobile

technology which could carry data as well as voice traffic. NMT

(Nordic Mobile Telephony), the world's first mobile telephony

standard that enabled international roaming, provided valuable

experience for Nokia for its close participation in developing GSM,

which was adopted in 1987 as the new European standard for

digital mobile technology.

Nokia delivered its first GSM network to the Finnish operator

Radiolinja in 1989. The world's first commercial GSM call was

made on July 1, 1991 in Helsinki, Finland over a Nokia-supplied

network, by then Prime Minister of Finland Harri Holkeri, using a

prototype Nokia GSM phone. In 1992, the first GSM phone, the

Nokia 1011, was launched The model number refers to its launch

date, 10 November. The Nokia 1011 did not yet employ Nokia's

38
characteristic ringtone, the Nokia tune. It was introduced as a

ringtone in 1994 with the Nokia 2100 series.

GSM's high-quality voice calls, easy international roaming and

support for new services like text messaging (SMS) laid the

foundations for a worldwide boom in mobile phone use. GSM

came to dominate the world of mobile telephony in the 1990s, in

mid-2008 accounting for about three billion mobile telephone

subscribers in the world, with more than 700 mobile operators

across 218 countries and territories. New connections are added

at the rate of 15 per second, or 1.3 million per day.

Milestones and releases

Reduction in size of Nokia mobile phones.

39
Evolution of the Nokia Communicator. Models 9000, 9110, 9210

and 9500 shown.

Nokia opened its Komárom, Hungary mobile phone factory on

May 5, 2000.

In March 2007, Nokia signed a memorandum with Cluj County

Council, Romania to open a new plant near the city in Jucu

commune. Moving the production from the Bochum, Germany

factory to a low wage country created an uproar in Germany.

In May 2007, Nokia announced that its Nokia 1100 handset,

launched in 2003, with over 200 million units shipped, was the

best-selling mobile phone of all time and the world's top-selling

consumer electronics product.

40
In November 2007, Nokia announced and released the Nokia N82,

its first (and currently, only) Nseries phone with Xenon flash.

At the Nokia World conference in December 2007, Nokia

announced their "Comes With Music" program: Nokia device

buyers are to receive a year of complimentary access to music

downloads. The service became commercially available in the

second half of 2008.

In April 2008, Nokia began finding new ways to connect people,

asking the "audience" to use their creativity and their mobile

devices to become Nokia’s production company – to take part in

filming, acting, editing and producing a collaborative film. Nokia

Productions was the first ever mobile filmmaking project directed

by Spike Lee. This was a collaborative experience that existed

across borders and perspectives, working off a common script.

The film premiered in October 2008.

In 2008, Nokia released the Nokia E71 which was marketed to

directly compete with the other BlackBerry devices offering a full

keyboard and cheaper prices.

41
Nokia announced in August 2009 that they will be selling a high-

end Windows-based mini laptop called the Nokia Booklet 3G.

On September 2, 2009, Nokia launched two new music and social

networking phones, the X6 and X3. The Nokia X6 features 32GB of

on-board memory with a 3.2" finger touch interface and comes

with a music playback time of 35 hours. The Nokia X3 is a first

series 40 Ovi Store-enabled device. The X3 is a music device that

comes with stereo speakers, built-in FM radio, and a 3.2

megapixel camera.

On September 10, 2009, Nokia unveiled a new handset 7705

Twist, a phone with a sports square shape that swivels open to

reveal a full QWERTY keypad.[77] The new mobile, which will be

available exclusively through Verizon Wireless, features a 3

megapixel camera, web browsing, voice commands and weighs

around 3.44 ounces.

42
 Devices

The Nokia N900, a Maemo 5 Linux based mobile Internet device

and touchscreen smartphone from Nokia's Nseries portfolio.

The Devices division is responsible for developing and managing

Nokia's mobile device portfolio, including the sourcing of

components, headed by Kai Öistämö. The division consists of the

previous mainline Mobile Phones division with the separate

subdivisions Multimedia (Nseries devices) and Enterprise

Solutions (Eseries devices) as well as formerly centralized core

devices R&D – called Technology Platforms.

This division provides the general public with mobile voice and

data products across a wide range of mobile devices, including

high-volume, consumer oriented mobile phones and devices, and

43
more expensive multimedia and enterprise-class devices. The

devices are based on GSM/EDGE, 3G/W-CDMA and CDMA cellular

technologies. Nokia's Nseries Multimedia Computers extensively

uses Symbian OS.

In the first quarter of 2006 Nokia sold over 15 million MP3 capable

mobile phones, which means that Nokia is not only the world's

leading supplier of mobile phones and digital cameras (as most of

Nokia's mobile telephones feature digital cameras, it is also

believed that Nokia has recently overtaken Kodak in camera

production making it the largest in the world), Nokia is now also

the leading supplier of digital audio players (MP3 players),

outpacing sales of devices such as the iPod from Apple. At the

end of the year 2007, Nokia managed to sell almost 440 million

mobile phones which accounted for 40% of all global mobile

phones sales.

Services

The Services division operates in five areas of consumer Internet

services: music, maps, media, messaging and games. The division

44
consists of the previous enterprise and consumer driver services

businesses previously hosted in Multimedia and Enterprise

Solutions divisions, as well as a number of new acquisitions

(Loudeye, Gate5, Enpocket, Intellisync, Avvenu and OZ

Communications), headed by Niklas Savander.

The group works with companies outside the telecommunications

industry to make advances in the technology and bring new

applications and possibilities in areas such as online services,

optics, music synchronization and streaming media.

Solutions

Solutions is responsible for Nokia's offering of solutions, where the

mobile device, personalized services and content are integrated

into a package for the consumer. The unit is led by Alberto Torres.

Markets

The Markets division, the successor organization to Nokia's

Customer and Market Operations division, is responsible for the

45
management of the supply chains, sales channels, brand and

marketing functions of the company, headed by Anssi Vanjoki.

Subsidiaries

The Nokia 5800 XpressMusic, a touchscreen smartphone and

portable entertainment device which emphasizes music and

multimedia playback.

Nokia has several subsidiaries, of which the two most significant

as of 2009 are Nokia Siemens Networks and Navteq. Other

notable subsidiaries include, but are not limited to Vertu, a

British-based manufacturer and retailer of luxury mobile phones;

46
Qt Software, a Norwegian-based software company, and OZ

Communications, a consumer e-mail and instant messaging

provider.

Until 2008 Nokia was the major shareholder in Symbian Limited, a

software development and licensing company that produced

Symbian OS, a smartphone operating system used by Nokia and

other manufacturers. In 2008 Nokia acquired Symbian Ltd and,

along with a number of other companies, created the Symbian

Foundation to distribute the Symbian platform royalty free and as

open source.

Online services

mobi and the Mobile Web

Nokia was the first proponent of a Top Level Domain (TLD)

specifically for the Mobile Web and, as a result, was instrumental

in the launch of the .mobi domain name extension in September

47
2006 as an official backer. Since then, Nokia has launched the

largest mobile portal, Nokia.mobi, which receives over 100 million

visits a month. It followed that with the launch of a mobile Ad

Service to cater to the growing demand for mobile advertisement.

Ovi

Nokia Ovi logo.

Ovi, announced on August 29, 2007, is the name for Nokia's

"umbrella concept" Internet services. Centered on Ovi.com, it is

marketed as a "personal dashboard" where users can share

photos with friends, download music, maps and games directly to

their phones and access third-party services like Yahoo's Flickr

photo site. It has some significance in that Nokia is moving

deeper into the world of Internet services, where head-on

competition with Microsoft, Google and Apple is inevitable. The

services offered through Ovi include the Ovi Store (Nokia's

application store), the Nokia Music Store, Nokia Maps, Ovi Mail,
48
the N-Gage mobile gaming platform available for several S60

smartphones, Ovi Share, Ovi Files, and Contacts and Calendar.

The Ovi Store, the Ovi application store was launched in May

2009. Prior to opening the Ovi Store, Nokia integrated its software

Download! store, the stripped-down MOSH repository and the

widget service WidSets into it.

My Nokia

Nokia offers a free personalised service to its subscribers called

My Nokia (located at my.nokia.com). Registered My Nokia users

can avail free services as follows:

• Tips & tricks alerts through web, e-mail and also mobile text

message.

• My Nokia Backup: A free online backup service for mobile

contacts, calendar logs and also various other files. This

service needs GPRS connection.

• Numerous ringtones, wallpapers, screensavers, games and

other things can be downloaded free of cost.

49
 Comes With Music

On December 4, 2007, Nokia unveiled their plans for the "Nokia

Comes With Music" initiative, a program that would partner with

Universal Music Group International, Sony BMG, Warner Music

Group, and EMI as well as hundreds of Independent labels and

music aggregators to bundle 12, 18, or 24 months worth of

unlimited free music downloads with the purchase of a Nokia

Comes With Music edition phone. Following the termination of the

year of free downloads, tracks can be kept without having to

renew the subscription. Downloads are both PC and mobile-based.

Nokia Messaging

On August 13, 2008, Nokia launched a beta release of "Nokia

Email service", a new push e-mail service, since graduated as part

of Nokia Messaging.[135]

Nokia Messaging operates as a centralised, hosted service that

acts as a proxy between the Nokia Messaging client and the

user's e-mail server. It does not allow for a direct connection

between the phone and the e-mail server, and is therefore

50
required to send e-mail credentials to Nokia's servers. IMAP is

used as the protocol to transfer emails between the client and the

server.

Controversy

NSN's provision of intercept capability to Iran

51
A cartoon about Nokia's provision of intercept capability to Iran

and people who were arrested in Iran by IRI regime using

intercept capabilities

In 2008, Nokia Siemens Networks, a joint venture between Nokia

and Siemens AG, reportedly provided Iran's monopoly telecom

company with technology that allowed it to intercept the Internet

communications of its citizens to an unprecedented degree. The

technology reportedly allowed it to use deep packet inspection to

read and even change the content of everything from "e-mails

and Internet phone calls to images and messages on social-

networking sites such as Facebook and Twitter". The technology

"enables authorities to not only block communication but to

monitor it to gather information about individuals, as well as alter

it for disinformation purposes," expert insiders told The Wall

Street Journal. During the post-election protests in Iran in June

2009, Iran's Internet access was reported to have slowed to less

than a tenth of its normal speeds, and experts suspected this was

due to the use of the interception technology.

52
The joint venture company, Nokia Siemens Networks, asserted in

a press release that it provided Iran only with a 'lawful intercept

capability' "solely for monitoring of local voice calls". "Nokia

Siemens Networks has not provided any deep packet inspection,

web censorship or Internet filtering capability to Iran," it said.

In July 2009, Nokia began to experience a boycott of their

products and services in Iran. The boycott was led by consumers

sympathetic to the post-election protest movement and targeted

at those companies deemed to be collaborating with the Islamic

regime. Demand for handsets fell and users began shunning SMS

messaging.

Nokia Interactive Advertising

53
 Nokia mobile phones by series

Nokia 1000 1011 · 1100/1101 · 1110/1110i · 1112 ·

series 1200 · 1208 · 1600 · 1610 · 1650

2110i · 2115i · 2310 · 2600 · 2600 classic ·

Nokia 2000
2610 · 2630 · 2650 · 2651 · 2700 classic ·
series
2730 classic · 2760

3100/3100b/3105 · 3110 · 3110 classic ·

3120 · 3120 classic · 3155 ·

3200/3200b/3205 · 3210 · 3220 · 3230 ·

Nokia 3000
3250 · 3310 · 3315 · 3330 · 3410 · 3500
series
classic · 3510/3590/3595 · Nokia 3530 ·

3510i · 3600/3620/3650/3660 · 3600 slide ·

3720 classic

Series skipped as a sign of politeness from

Nokia 4000
Nokia towards Asian customers. See
series
tetraphobia.

54
 5070 · 5100 · 5110 · 5130 Xpress Music ·

5200 · 5210 · 5220 Xpress Music ·

Nokia 5000 5230/5235 · 5300 · 5310 Xpress Music ·

series 5320 · 5330 Mobile TV Edition · 5500

Sport · 5510 · 5530 · 5610 · 5630 · 5700 ·

5730 · 5800

Nokia 6000 6010 · 6020/6021 · 6030 · 6070 · 6085 ·

series 6100 · 6101 · 6103 · 6110/6120 · 6110

Navigator · 6111 · 6120/6121/6124

classic · 6131/6133 · 6136 · 6151 · 6170 ·

6210 · 6210 Navigator · 6220 classic ·

6230 · 6233/6234 · 6255i · 6260 Slide ·

6260 · 6265 · 6270 · 6275i · 6280/6288 ·

6290 · 6300 · 6300i · 6301 · 6303 classic ·

6310i · 6315i · 6500 classic · 6500 slide ·

6555 · 6600 · 6600 fold · 6600 slide ·

6610/6610i · 6620 · 6630 · 6650 · 6650

fold · 6670 · 6680 · 6681/6682 · 6700

55
 classic · 6710 Navigator · 6720 classic ·

6730 · 6800 · 6810 · 6820 · 6822

7110 · 7160 · 7210 · 7250 · 7280 · 7360 ·

Nokia 7000
7380 · 7390 · 7500 Prism · 7600 · 7610 ·
series
7650 · 7700 · 7710 · 7900 Prism

Nokia 8000 8110 · 8210 · 8250 · 8310 · 8600 Luna ·

series 8800 · 8850 · 8910

Nokia 9000/9110/9110i · 9210/9290 · 9210i ·

Communicator 9300/9300i · 9500

Nokia Cseries C3 · C5 · C6

E5 · E50 · E51 · E52 · E55 · E60 ·

Nokia Eseries E61/E61i · E62 · E63 · E65 · E66 · E70 ·

E71 · E72 · E75 · E90 Communicator

Nokia Nseries N70 · N71 · N72 · N73 · N75 · N76 · N78 ·

N79 · N80 (Internet Edition) · N81 (N81

56
 8GB) · N82 · N85 · N86 8MP · N90 · N91

(N91 8GB) · N92 · N93 · N93i · N95 · N95

8GB · N96 · N97 · N8

Nokia Xseries X3 · X6

Internet Tablet 770 · N800 · N810 (WiMAX Edition) · N900

N-Gage Classic · QD · QD Silver Edition

Nokia Corporation

Industry Telecommunications

Internet

57
 Computer software

Tampere, Finland

(1865)
Founded
incorporated in Nokia

(1871)

Founder(s) Fredrik Idestam

Headquarte
Espoo, Finland
rs

Area
Worldwide
served

Jorma Ollila

(Chairman)

Olli-Pekka Kallasvuo

Key people (President & CEO)

Timo Ihamuotila (CFO)

Mary T. McDowell

(CDO)

Products Mobile phones

Smartphones

58
 Mobile computers

Networks

(See products listing)

Services and Software

Services
Online services

▼ €40.99 billion
Revenue
(2009)[1]

Operating ▼ €1.197 billion

income (2009)[1]

▼ €891 million (2009)

Net income
[1]

Total ▼ €35.74 billion

assets (2009)[1]

Total ▼ €14.75 billion

equity (2009)[1]

Employees 123,171 (2009)[1]

Divisions Devices

Services

Solutions

59
 Markets

Nokia Siemens

Networks

Navteq
Subsidiarie
Symbian
s
Vertu

Qt Development

Frameworks

Website Nokia.com

Channel support and coordination to sales

strategies :

This is an import consideration for the formula of sales strategy.

If indirect distribution is adopted it is imperative that sales

organization indicated dealer cooperation programmes. Support is

to be given for maintenance of adequate stocks, local promotions

in the form of P. O. P. (Point of Purchase) displays and for local

60
advertising. Feed back from the dealer is an important area of

support and can’t be ignored. In the dealer management

programmes, for the success of channel support an d

coordination.

• Adequate incentives for a dealer are must.

• Proper feedback and communication is important.

• Measures have been taken to promote dealer loyalty

The degree of coverage and support you want from the

channel depends on how intensively or extensively you want to

distribute your products.

INTENSIVE DISTRIBUTION

In this the distribution is made to all the outlets, which are many

in number and spread in big area. Maximum exposure to the

product is given.

EXTENSIVE DISTRIBUTION

61
It is the distribution in which we will cover a great area but do not

concentrate on all customers in the area.

SELECTIVE DISTRIBUTION

Here goods are distributed to selects outlets. These may be

specially stores or prominent stores in one area. The distribution

is done through more than one outlet but less than all e. g.

designer shirts, cosmetics, T. V. electrical equipments.

EXCLUSIVE DISTRIBUTION

This is done exclusively be one dealer who provides after

sales service like in automobiles. This is done for the cultivation of

an exclusive image.

VERTICAL INTEGRATION

It is a process of requirement membership rights at various

levels of distribution channel. It is costly affair for absolute

62
channel control. Business has been maintained between desire

for market control, coordination and distribution costs and

specialization. A balance should be maintained between channel

control and the cost incurred in it.

Marketing Strategy for Nokia

For this project I have been instructed to come up with a

63
marketing strategy for an existing company/product I have

chosen to do Nokia communications, particularly the mobile

phone sector of Nokia's business. To do this properly I will need

to:

* Appropriately identify, collect and use primary and secondary

data that is relevant to the marketing strategy of Nokia.

* Produce a clear analysis of the external influences affecting the

development of a marketing strategy.

* Complete a realistic rationale for the development of a coherent

marketing mix for Nokia communications.

* Show a full understanding of a marketing strategy for Nokia with

a clear understanding of marketing principles.

* Produce a full, well-balanced marketing strategy that reflects

appropriate use of marketing models and tools.

64
How Did Nokia Succeed in the Indian Mobile

Market, While Its Rivals Got Hung Up?

By most accounts, India is among the world's fastest-growing

markets for mobile phones. The country has some 170 million

subscribers and adds 6 million to 7 million more each month.

(China, in contrast, adds 5 million subscribers, and the U.S. 2

million subscribers a month.) Recognizing this potential, several

global telecom giants jumped into the fray when the Indian

government first opened up the country's telecom market to

private enterprise in 1994. Among them, one company -- Finland-

based Nokia -- forged ahead of rivals and today commands a

58% market share for mobile phones (also called "handsets"). In

specific segments, such as GSM telephony, Nokia's market share

in India is as high as 70%. (GSM, which stands for Global System

for Mobile, is the world's most popular standard for mobile

communications.)

65
How did Nokia take the lead in the Indian mobile phone market,

ahead of companies such as Ericsson, Motorola, LG and

Samsung? According to company executives and industry

experts, Nokia's strategy combined focusing on the mobile phone

market, establishing crucial distribution partnerships, making

early investments in manufacturing and brand-building, and

developing innovative product features -- such as mobile phones

that could double as flashlights. Ravi Bapna, professor of

information systems at the Indian School of Business in

Hyderabad, says, "As far as Nokia's India strategy is concerned,

the numbers speak for themselves. The company is a key cog in

India's wireless value chain, and it has used India as its emerging

market lab."

The Power of Focus

66
D. Shivakumar, Nokia India's vice president and country

manager, believes that focus played a key role in the company's

growth in India. "If you look at the [mobile phone] landscape in

1995, anybody could have succeeded if they had done the same

things as Nokia did," he says. "But all the other companies had

something else to focus on, some other business. Nokia was

completely focused on mobile phones; others had consumer

electronics, home appliances, etc." Nokia's focus was not just on

handsets, of course. The mobile infrastructure business -- then

part of Nokia India -- was equally important. But, as of April 1,

2007, Nokia's joint venture with Siemens for mobile infrastructure

has become an independent entity. Thus, Nokia India has become

even more sharply focused.

Being ahead of the curve was another component of Nokia's

strategy. "We invested before everybody else -- in the brand, in

people, in distribution," says Shivakumar. Adds Pankaj

Mahendroo, president of the Indian Cellular Association: "Nokia

invested in each vertical of the handset ecosystem --

manufacturing, distribution and design R&D."

67
Nokia has invested more than $1 billion in India so far, and

company headquarters at Helsinki has repeatedly said that more

funds will be made available if required. The Indian company had

revenues of more than $3.5 billion in 2006, which means there is

also money to be reinvested. (The company does not disclose its

profit numbers.)

The Distribution Edge

Investment in people is difficult to judge; every company claims

to have the best talent in the business. But when it comes to

distribution, Nokia's lead is clear. Today, India has some 95,000

outlets that sell mobile phones. "In 50,000 of them -- and that's

a conservative estimate -- only one brand is available, Nokia,"

says Shivakumar.

Nokia started distributing its phones through a partnership with

HCL (formerly Hindustan Computers Ltd.), which had already

built an extensive network for its own products. Recently, Nokia

has decided to supplement that with its own distribution efforts.

"Both companies realized that there was a tremendous growth

68
opportunity and it was best that we utilized the resources of both

organizations in an optimum manner," says Nokia India director

of sales Sunil Dutt. "We decided that we would address some

markets jointly, and that we would individually address some of

the other markets."

While Dutt does not spell out how the two partners will divide the

markets, some clues exist in the way demand is shaping up. In

the cities where the market is maturing, buyers are looking at

more sophisticated mobile phones, such as Nokia's E-series

phones (which serve business users) and the N-series (which

have multimedia features). In rural India -- which constitutes

70% of the population -- affordability is an issue. So there is a

different range for this constituency.

The price points sometimes dictate the type of outlet. "As the

[telecom] operator footprint expands into different markets, all

kinds of retail outlets get into selling mobile phones and airtime

connections," says Dutt. "People who have been selling consumer

electronics, STD booth owners and even cloth merchants get into

69
this business." A stationery store stocks mobiles in a corner; a

mom-and-pop grocery store moves beyond rice and lentils. "Then

there are people with existing businesses who decide to set up a

separate shop only for mobile phones," he continues. "And why

do they feel the need to set up a different outlet? In this

business, customer engagement … requires a completely different

approach. Even the retail outlets realize this and [have started]

separating the two businesses."

Dutt notes that in the mature urban markets, "such as the metros

and Tier I towns where mobility has been around for a few years,

customer expectations are more evolved, and are continuously

evolving. Our task here is to provide our people with relevant

competency and skills sets." Nokia has begun to set up concept

stores -- seven so far -- in Indian cities. "At our concept stores,

we have tried to bring to life all the experiences that we offer at

Nokia experiential zones across the world," he adds.

Investment in Manufacturing

70
The other big investment area that has set Nokia apart from

other telecom firms is manufacturing facilities and R&D. Nokia

has several R&D centers and labs in India. More importantly, it

established a $150 million handset manufacturing facility in

Chennai in 2005. The total production at this unit has crossed 25

million handsets. "Some 30% of our production is being exported

to neighboring countries," says Sachin Saxena, Nokia India

director of operations in charge of the factory.

Other companies, such as Motorola, LG and Samsung, have also

lined up similar investments or are in the process of setting up

manufacturing units, but Nokia has had a clear head start. Also,

the Chennai factory is devoted to handsets, whereas other

companies are planning to make a whole range of consumer

electronics products. "Domestic manufacturing has worked to

Nokia's advantage," says Ravinder Zutshi, deputy managing

director, Samsung India Electronics. "Samsung India is looking at

making its Chennai facility a global hub for its consumer

electronics products."

71
Industry analysts note that Nokia's strategy is potentially risky.

When the going is good -- as it is now -- the company can do

well. But Samsung's approach is more flexible, these analysts

note. If demand for mobile phones were to slump, Samsung could

switch its manufacturing lines to other products. In contrast,

Nokia India's focus on mobile phones mirrors the priorities of its

parent company. Nokia traditionally was in a whole range of

businesses -- from toilet paper to power. But in 1993, CEO Jorma

Ollila decided to sell off everything else and concentrate on

mobile telephony.

Building the Brand

Another crucial aspect of Nokia's investment strategy focused on

building its brand. Here, the company ran into a problem. The

Nokia range available in India extends from Rs 1,499 ($37) at the

72
lower end to Rs 45,000 ($1,125) at the high end. Marketing

theory says a brand cannot be all things to all people. This is the

reason that Hindustan Unilever, with quality built around its

brand, refused to match Nirma, which came out with a cheap

detergent. This is also why Eveready, the battery manufacturer,

refused to lower prices when faced with a Chinese challenger in

the dry cell market.

But Nokia has a problem promoting other brands under its

corporate umbrella. "Unlike the FMCG (fast-moving consumer

goods) market -- where the product lifecycle is at least 10 and

sometimes 50-100 years -- models have a lifespan of 15-24

months here," says Devinder Kishore, Nokia India's director of

marketing. With such a lifecycle, promoting various models would

mean watching money go down the drain in a couple of years.

Instead, Nokia is promoting platforms -- music, for instance. With

this approach, one model can replace another while the branding

remains the same, or is extended slightly with the E series and N

series. "Nokia has done well to focus on the 'mother' brand rather

73
than on 'another' brand," says Jagdeep Kapoor, chairman and

managing director of Samsika Marketing Consultants. Kapoor,

who has written several books on brand management, says that

Nokia has understood the Indian market by straddling all

segments: the high, the middle and the low end. "The company

has created a ladder for consumers to climb from the low end to

the middle end to the high end, while being fully assured that

they will be with the mother brand Nokia."

Kapoor views the Nokia brand in terms of his proprietary "REAPS"

model, which takes into account five needs -- rational, emotional,

aspirational, physical and spiritual -- of the Indian consumer.

"Nokia as a brand has been able to address all the five needs to

various degrees at various stages," he says. "The rational need of

quality versus price has been met across price segments with

options. The emotional need of being able to keep in touch with

near and dear ones during times of joy and sorrow is being

adequately fulfilled. The aspirational need with the new models

and features and the look-good approach has helped the brand

become a sought-after, must-have brand. The physical need has

74
been taken care of through size and comfort. And, finally, the

spiritual need has been met through (local) languages and people

--whether they are 18 or 80 -- being able to greet one another

via SMS [text messages] during religious festivals."

ISB's Bapna offers a prescription for Nokia. "Going forward with

the premise that the mobile infrastructure will serve as India's

information infrastructure -- given the lack of substitute physical

and digital infrastructure -- I would encourage Nokia to take a

more active role in nurturing content and application-creation

communities that bring a range of services to all layers of the

population," he says. "It's in [Nokia's] own interest to do so."

Products for India

The Nokia story in India has not been about grafting a model that

has worked abroad. In fact some of its models -- the handsets,

not the strategies -- are unique to India. Consider this example:

It would probably be inconceivable to mobile phone users in the

75
U.S. or Europe that their mobile phones should incorporate a

flashlight, or torch. But in India -- where large numbers of the

rural population do not have electricity, and power cuts are

commonplace even in the cities -- having a torch built into a

mobile phone is a distinct and tangible benefit. The Nokia 1100,

the first made-for-India phone, has been a runaway success.

Manufactured at Chennai, it is also being exported. The 1100

incorporates a torch, an alarm clock and a radio. "Innovation is

something which consumers reward in this market," says

Shivakumar.

Similar plans are in the works at Nokia's three India R&D labs,

which employ 700 people. For obvious reasons, most of the

activity is under wraps. Nokia is, however, willing to talk about

the "shared" phone. This is, again, something that mobile phone

users in affluent countries might find puzzling, but the concept is

simple. For reasons of affordability, in rural areas a phone may be

shared by several people. The models being launched to cater to

this need will have separate address books, individual billings and

76
more. Will it work? People initially doubted the torch phone, too,

but it became a popular product.

Shivakumar offers some reasons to explain why he thinks the

Indian market is different and needs out-of-the-box thinking.

"Fundamental consumer differences exist between India and

other countries," he says. "A cell phone is a huge style icon for

the Indian masses: 62% of Indians buy a cell phone because of

its looks. That is something that is not true anywhere else in the

world. It's as huge a style statement as your watch, pen, cufflinks

or bag. Hence, the brand matters quite a lot.

"Second, it is a safety product for women in small towns, because

with a cell phone you are in touch all the time; you're accessible.

Next, it is a huge productivity vehicle. When somebody calls you,

you do not need to take your bike out; you don't need to take

your car out. You make a phone call and it's over.

"It is also a driver of a lot of economic activity. If you go down

the roads of Gurgaon and Delhi, you will find that lots of people

have written their [mobile] phone numbers on the walls -- a

77
plumber, an artisan, a carpenter, a tailor. I think the whole

service sector has gotten a huge lift, thanks to this. This has

killed the visiting card business…. It is also the ultimate

entertainment device. You have music on it now, in terms of radio

and stored music. The day is not far when you will see movie

clips and TV. One of our products has that, so that's TV on the

go."

An Expanding Market

The Indian market for mobile phones, in addition to its base of

170 million subscribers, is also one of the most cost-effective in

the world. Call rates in India are among the lowest anywhere --

making a mobile phone call costs two cents in India, compared

with about four cents in China. The market also has tremendous

78
growth potential. So far, most of the growth has been

penetration-led, which means placing devices in consumers'

hands. The bulk of the growth going forward will be replacement-

led, where consumers come back for more. In India, consumers

tend to change their phones faster than in most other places. And

whenever they change their phone, 60% are willing to pay a

higher price.

Shivakumar offers examples of future services that might be

delivered over cell phones. "The cell phone could be the future

bank -- a full branch of the bank. You don't need 20 people, a

security guard or a vault. This is a passbook plus bank rolled into

one. It can be your payment system." Another possible use is

navigation, where cell phones could be used to provide maps of

an area where the user is based. Such services, whenever they

are launched, could help Nokia keep going and growing in India.

Work Performed By Marketing Channels

79
 Today, the markets use to delegate some of the selling jobs,

to intermediaries for the effective distribution of the products at

the right time, at right place and right customers.

Delegation means relinquish some control over how and

whom the products are sold, but producers do again several

advantages by using intermediaries :

• Many producers lack the financial resources to carry out

direct marketing. For example, General Motors sells its cars

through more than 8,100 dealer outlets in North America

alone. Even General Motors would be hard-pressed to raise

the cash to buy out its dealers.

• In some cases direct marketing simply is not feasible. The

William Wrigley Jr. Company would not find it practical to

establish small retail gum shops through the world or to sell

gum by mail order. It would have to sell gum along with

many other small products and would end up in the

drugstore and grocery store business. Wrigley finds it easier

to work through the extensive network privately owned

distribution organizations.
80
 • Producers who do establish their channels can often earn a

greater return by increasing their investment in their main

business. If a company earns a 20 percent rate of return on

manufacturing and only a 10 percent return on retailing. It

does not make sense to undertake its own retailing

Intermediaries normally achieve superior efficiency in

making goods widely available and accessible to target

markets. through their contracts, experience, specialization,

and scale of operation, intermediaries usually offer the firm

more than it can achieve on its own.

Intermediaries smooth the flow of goods and services. This

procedure is necessary in order to bridge the discrepancy

between the assortment demanded by the produce a large

quantity of a limited variety of goods, whereas consumers usually

desire only a limited quantity of a wide variety of goods.

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 Distribution Channel Flows :

1. PHYSICAL FLOW

Supplier Transporters Manufacture Warehous Distrib Dealers Customer

s e uters

2. TITLE FLOW

Supplier Manufacture Distrib dealers Customers

s uters

Channel Levels :

The producer and the final customer are of part of every

channel. We will use the number of inte4rmediary levels to

designate the length of a channel. The above figure illustrates

several consumer goods marketing channels of different lengths.

Collectibles through mail order. Shearson-Lehman brokers use

the telephone to prospect for new customers some exercise

equipment manufacturers sell through TV commercial or hour-

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long “information’s”. Amazon sells books on line, and Gateway

sells computers through its own stores.

3. One Level Channel : It contains one selling intermediary,

such as a retailer.

4. Two- Level Channel : It contains two selling intermediaries.

In consumer markets, these are typically a wholesaler and a

retailer.

5. Three-Level Channel : It contains three intermediaries.

About end users and exercising control becomes more difficult

as the number of channel levels increases.

End users and exercising control becomes more difficult as the

number of channel levels.

83
 Research Methodology

Research methods may be understood as all those

methods or techniques that are used for the conduction of

research. Research methods and techniques, thus refer to the

methods are researcher use in performing research operations.

In other words, all those methods, which are used by

the researcher during the course of studying his research

problem, are termed as research methods. Since the object of

research, particularly the applied research is to arrive at the

solution for a given problem, the available data and the

unknown aspects of problem have to related to each other

make a solution possible.

Research methodology is a way to systematically solve

the research problem. It may be understood as a science of

studying how research is done scientifically. In it we study the

various steps that are generally adopted by a researcher in

studying his research problem along with the logic behind

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them. It is necessary for the researcher to know not only the

search methods or techniques but also the methodology.

Research Process

Research process consists of a number of closely related

activities. The various steps in a research process are as

follows:

1. FORMULATING THE RESEARCH PROBLEM ;- The first

step in research is formulating a research, as poorly defined

problem. It is most important stage in applied research, as

poorly defined problems will not yield useful results. It is

rightly said that “a problem well defined is half-solved”.

Poorly defined problems cause confusion and do not allow

the researcher to develop a good research design.

2. EXTENSIVE LITERATURE SURVEY ;- Once the problem is

formulated, the next step is to write down a brief summary.

For this the researcher should undertake extensive literature

survey connected with the problem. For this purpose, the

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 abstracting and indexing journals and published and

unpublished bibliographies are the first place to go to.

3. DEVELOPMENT OF WORKING HYPOTHESIS :- Working

hypothesis is attentive assumption made in order to draw

out and test its logical or empirical consequences. As such

the manner in which research hypothesis are developed is

particularly important since they provide the focal point for

research.

Working hypothesis can be developed by using the following

approach.

• Discussion with colleagues and experts about the problem,

its origin and the objectives in seeking a solution.

• Examination of data and records.

• Review of similar studies in the area or of the studies on

similar problems; and

• Exploratory personal investigation, which involves original

field interviews on a limited scale with interested parties and

86
 individuals with a view to secure insight into the practical

aspects of the problems.

4. PREPARING THE RESSEARCH DESIGN :- Research

design is the conceptual structure with in which research

should be conducted. A research design specifies the method

and procedures for conducting a particular study. It is of three

types :-

• EXPLORATORY RESEARCH :- An exploratory research

focuses on the discovery of ideas and is generally based on

secondary data. It is preliminary investigation, which does

not have a rigid designs.

• DESCRIPTIVE RESEARCH :- A descriptive study us

undertaken when the researcher wants to know the

characteristics of certain groups such as age sex,

educational level, income occupation, etc.

• CASUAL RESEARCH :- A casual research is undertaken

when the researcher is interested in knowing the cause and

87
 effect relation between two or more variables. Such studies

are based on reasoning along well-tested lines.

Consideration should be made during the preparation of

research design

• The means of obtaining the information.

• The availability and skills of the researcher and staff (if any)

• Explanation of the way in which selected means of obtaining

information will be organized and the reasoning leading to

the selection.

• The time available for research.

• The cost factors relating to research, i.e., the finance

available for the purpose.

5 Determining Sample Design: All the items under

consideration in any field of inquiry constitute a ‘universe’ or

population’. Some important sample designs which should be

consider for the research are:

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• Deliberate Sampling: Also known as purposive or non-

probability sampling this sampling method involves

purposive or deliberate selection of the particular unit of the

universe for constituting a sample which represents the

universe.

• Convenience sampling: When Population elements are

selected for inclusion in the sampling based on the case of

access, it can be called as convenience sampling.

• JUDGEMENT SAMPLING ; The researcher’s judgment is

used for selecting items, which he considers as

representative of the population.

• SIMPLE RANDOM SAMPLING ; Also called as “Chance

Sampling” or ‘Probability Sampling’ wherfre each and every

item in the population has an equal chance of inclusion in

the sample and each one of the possible samples.

• SYSTEMATIC SAMPLING; Where an element of

randomness id introduce by using random numbers to pick

up the unit with which to start, this process of sampling

known as systematic sampling

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• STRATIFIED SAMPLING; In this method, the population is

stratified into a number of non-overlapping subpopulation or

strata and samples items is based on simple random

sampling the entire procedure, first stratification and the

simply random sampling, is known as strategies random

sampling.

• QUOTA SAMPLING: In stratified sampling the cost of

taking random samples from individual strata is often so

expensive that interviewers are simply given quota to be

filled from different strata, the actual selection of items for

sample being left to the interviewer’s judgment. This is

called quota sampling.

• CLUSTER SAMPLE : Cluster sampling involves grouping

the population and then selecting groups or the clusters

rather than individual element for inclusion in the sample.

• AREA SAMPLING : When the total geographical area of

interest is big one, then area sampling method is taken. We

first divide the total area into a number of smaller non-

overlapping areas, then a number of these smaller areas are

90
 randomly selected and all units in these small areas are

included in the sample.

• MULTI-STAGE SAMPLING : This technique is meant fir big

inquires extending to a considerably large geographical area

like an entire country. The first stage is to select large

primary sampling units such as states, then districts, then

towns and finally certain families within towns.

• SEQUENTIAL SAMPLING : In this the ultimate size of the

sample is not fixed in advance but is determined according

to mathematical decisions on the basis of information

yielded as survey progresses. This design is usually adopted

under acceptance sampling plan in the context of statistic

quality control.

6. COLLECTION OF DATA ; The next step is to determine the

source of data to be used. The researcher has to decide

whether he has to decide whether he has to collect primary

data or depend exclusively on secondary data. Sometimes

the research study is based on both secondary and primary

data.

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7. EXECUTION OF THE PROJECT : The researches should see

that the project is executed in a systemmatic manner and in

time. A careful watch should be kept for unanticipated

factors in order to keep the survey as such realistic as

possible. This means that steps should be taken to ensure

that the survey is under statistical control so that the

collected information is in accordance with the pre-defined

standard of accuracy.

8. ANALYSIS OF DATA : The analysis of data requires a

number of closely related operations such as establishment

of categories, the application of these categories to raw date

through coding, tabulating and then drawing statistic

inferences.

9. HYPOTHESIS TESTING : In this , the researcher has to test

the hypothesis, various tests, such as Chi-Square test, t-test,

f-test, have been developed by statisticians for the purpose.

10. GENERALIZATION AND INTERPRETATION: When

hypothesis is tested and upheld several times, it may be

possible for the researcher to arrive at generalization, i.e. to

92
 build a theory. If the researcher had no hypothesis to start

with, he might seek to explain his finding on the basis of

some theory.

11. PREPARATION OF THE REPORT : For the preparation of

the report following principles should be adopted by the

researcher.

• There should be objectivity, coherence and clarity in the

presentation of ideas.

• Report should be written in a concise and in simple language

• Charts and illustrations in the report should be used.

93
 Methods Of Data Collection

The task of data collection begins after a research problem has

been defined and research design/planed out. The primary data

are those , which are collected a fresh and for the first time, and

thus happen to be original in charracter..d The secondary data.

on the other hand, are those which have already been collected

by someone else and which have already been through the

statistical process.

Collection Of Primary Data

We collect primary data during the course of doing

experiments in an experimental research but in case we do

research of the descriptive type and perform surveys, whether

sample surveys or census survey, then we can obtain primary

data either through observation of through direct communication

94
with respondents in one form or another or through personal

interviews. This in another words means that there are several

method of collecting a primary data particularly in surveys and

descriptive researches important ones are, collecting primary

data, particularly in surveys and descriptive researches. Some

important ones are :-.

1. Observation Method.

2. Interview Method.

3. Through Questionnaire.

4. Through Schedules.

Observation Methods :

The observation method is the most commonly used method

especially in studies relating to behavioral science. In a way we

all observe things around us, but this sort of observation is not

scientific observation. Observation becomes a scientific tool and

the method of data collection for the researcher, when it serves a

95
formulated research purpose , is systematically planned and

recorded and is subjected to checks and controls on validity and

reliability. Under the observation method, the information is

sought y way of investigator’s own direct observation without

asking from the respondent.

The main advantages of this method are :

• Subject bias is eliminated, if observation is done accurately.

• The information obtained under this method relates to what

is currently happening : it is not complicated by either the

past behavior or future or attitudes.

• This method is independent of respondent’s willingness to

respond.

Such is relatively less demanding of active cooperation on the

part of respondents as happens to be the case in the interview or

the questionnaire method. However, observation method has

various.

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 Limitations :

• It is expensive method.

• The information provided by this method is limited.

• Sometimes unforeseen factors may interfere with the

observational task. If the observer observes by making

himself, more or less, a member of the group experience,

the observation is called as the participant observation.

97
 Emissary without any attempt on his part to experience

through participation what other feels, the observation of this

type is often termed as non – participant observation. There are

several merits of the participant type of observation.

• The research is enabled to record the natural behavior of the

group.

• The research can even gather information, which could not

easily be obtained if he observes in a disinterested fashion.

• The researcher can even verify the truth of statements made

by informants in the context of a questionnaire or a

schedule. But there are also certain demerits of this type of

observation viz.

• The observer may lose the objectivity to the extent he

participants emotionally; the problem of observation control

is not solved; and may narrow-down the research’s range of

experience.

Interview Methods :
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The interview method of collection data involves presentation of

oral-verbal stimuli and reply in terms of oral-verbal responses.

This method can be used through personal interview and, if

possible, through telephone interview.

Personal Interviews : Personal method requires a person

known as the interviewer asking questions generally in a face-to-

face contact to the other person or persons. This soft interview

may be in the form of direct personal investigation or it may be

an indirect oral investigation. In the case of direct personal from

the source concerned. He has to be on the spot and has to meet

people from whom data have to be collected.

The method of collecting information through personal

interviews usually carried out in a structured way. As such we call

the interview as structured interviews.

The chief merits of the interview methods are as follows:

1. More information and that too in greater depth can be

obtained.

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2. Interviewer by his own skill can overcome the resistance, if

any, or the respondent; the interview method can be made

to yield an almost perfect sample of the general population.

3. There is grater flexible under this method as the opportunity

to restructure questions is always there, especially in case of

unstructured interviews.

4. Samples can be controlled more effectively as there arise no

difficulty of the dismissing returns: non-response generally

remains very lows.

5. The language of the interview can be adapted to ability or

education level of the person interviewed and as such

misinterpretations concerning questions can be avoided.

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 Weakness Of Interview Method :-

1. It is a very expensive method, especially when large and

widely spread geographical sample is taken.

2. There remains the possibility of the bios of interviewer as

well as that of the respondent, there also remains the

headache of supervision and control of interviewers.

3. This method is relatively more time consuming, especially

when the sample is large and re-calls upon the respondent

are necessary,. Interviewing at times also introduce

systematic errors.

4. Effective interview presuppose proper report with

respondents that would facilitate free and frank response.

This is often very difficult requirement.

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 Collection Of Data Through Questionnaire :

This method of data collection is quite popular, particularly

in case of big enquires. It is being adopted by private

individuals, research workers, private and public organizations

and even by government. A questionnaire consists of a number

of questions printed or typed in a definite order on a form or set

of form. The questionnaire is mailed to respondents who are

expected to read understand the questions and write down the

reply in the space meant for the purpose in the questionnaire

itself. The respondents have to answer the questions on their

own.

The merits are :

• There is low cost even when the universe is large and is

widely spread geographically.

• It is free from the bias of the interviewer, answers are in

respondents.

• Respondents have adequate time to give well through out

answers.
102
 • Large samples can be made use of thus the result can be

made more dependable and reliable.

Demerits Are :-

• It can be used only when respondents are educate and

cooperating.

• The control over questionnaire may be lost once it is sent.

• It is difficult to known to whether willing respondents are

truly representative.

103
 CONCLUSIONS

On the basis of above analysis with reference of tables and

charts, I reached to the conclusion that distribution system is a

key external resource for any company or firm including Nokia

Normally distribution channel takes several year to build and

it is not easily changed. From all the above tables and charts it

is clear that distribution or availability of Nokia is on the top.

I also conclude that the Nokia has to target on that

distributors, sub-distributors and retailers who has closed his

selling’s , they have to

find out the problems of switching off and switching to other

brands.

So that the customer and consumer remain brand loyal

to their products.

To achieve and to maintain the goodwill of the Nokia and its

products, Nokia has to discover some innovative products which

will maintain the brand loyalty and goodwill of the Nokia with
104
 the help of distributors, sub-distributors, retailers and

customers/consumers.

For raising the sells of Nokia, the distribution channel must

be kept tight so that each and every channel of distribution ( i.e.

Distributors, Sub-Distributors, retailers and

customers/consumers ) will be benefited maximum from the

Nokia and its products.

105
 LIMITATIONS

• Generally our outlets use to purchase Nokia mobiles daily,

so there is a possibility that my visiting day is not alternate

day.

• Sometimes the delivery Van has delayed the stock delivery

etc. but outlets demanding so under this situation are quite

difficult to get exact figure of availability.

• Since most of the person of the outlets is not aware of

English language so questions of questionnaire are asked to

them and then filled by me. So there may be a chance of

communication gap or biasness.

• Most of the outlets are busy to there customers. So there is

possibility of some irrelevant answers. Some retailers were

not in the mood to give response. So some refuse while did

not give answer to some questions.

106
• Some retailers give response half-heartedly of error.

• Through at most care has been taken for collecting the data

yet it is not as final proof elimination the error of sampling.

• Dealers do not cover all area of the own region.

• Fair dealers cover 20 % area of the market and they created

problem to the dealers.

• Sales man does not cover the each retailers or shopkeepers.

They cover only daily purchases retailers.

107
 Suggestions

• Dealer’s relationship should be improved. They should be

given more facility and should be provided with novelties.

• Company repetitive should give regular visits to the dealers.

Annual or half yearly meeting should be hold by the

company of all the dealers where they can put up their

problems.

• Publicity should be done heavily so as to make people aware

of the products and painting, hoarding, television and radio

are the best media for advertising.

• Dealers network should be properly available to the dealers.

• Dealer’s liabilities to cover all area through the area sales

man each retailers or shopkeeper.

108
 QUESTIONNAIRE

Name of Retailers :…………………………………..

Address :…………………………………..

Phone Number :…………………………………..

1) Nokia Sales Man is coming to your shop everyday.

a) Yes [ ] b) No [ ]

2) Sales man gives the full information about the

product scheme.

a) Yes [ ] b) No [ ]

3) Whose delivery is good ?

a)Nokia [ ] b) Samsung [ ]

c)Lg [ ] d) Other [ ]

4) Which company fulfills the requirements of you ?

109
 a)Nokia [ ] b) Samsung [ ]

c)Lg [ ] d) Other [ ]

5) Different SIS(Shop in Shop) units available which one

would prefer to use

a) Nokia [ ] b) Samsung [ ]

c) LG [ ] d) Other [ ]

6) Which feature do you think are very satisfactory in

Brands.

a. On time Delivery [ ]

b. Communications [ ]

c. Daily visit of S.E [ ]

d. Goods after sales service [ ]

e. Others [ ]
110
7) Are you satisfied with existing Service?

a) Yes [ ] b) No [ ]

8) Are you facing any following problem

a)yes [ ] b)No

9) Supply of which product is insufficient

a. Nokia [ ]

b. Samsung [ ]

c. LG [ ]

d. Other [ ]

10) How many times in a month, officials from

company come to your shop to listen your problem

a.One [ ]

b.Two [ ]

c. Sometimes [ ]

111
 BIBLIOGRAPHY

• www.Nokia.com

• www.wekipedia.com

• www.google.com

BOOKS:

• Marketing Management -Study Material

• Principles of Marketing-P.Kotler & Armstrong

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