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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

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....... 13 Bibliography ................................................... 11 Suggested strategies for Nokia........................................................................................................................... 05 Corporate Development strategy.................................................................. 14 2|Page ............................................................................. 05 Mission Statement ................................................................................................................................. 04 SWOT ............................................... 10 Marketing Mix ................................................................................................2 |Page Table of Contents Abstract...............................03 Background of Nokia .....08 McKinsey 7s .................................................

In the midst of these chaos it is remarkable to see how the world’s largest mobile phone manufacturer able to maintain its competitive edge whilst maintaining its consumer loyalty and brand image.org/wiki/Nokia whilst mobile phone devices are increasingly becoming the necessary commodity. it is the art of creating the genuine customer value”. Philip Kotler ABSTRACT Presently Nokia is the world’s largest mobile telephone device manufacture http://en.wikipedia. With new entrants in the market and heavy investments are needed to upgrade. Besides analysing of how the factors like globalisation. as part of this assignment we shall analyse and focus on the marketing strategy of Nokia. and Ebusiness has been incorporated in their market planning 3|Page .3 |Page “Marketing is not the art of finding clever ways to dispose of what you make.

within the next 30 years it has become the world leader in mobile phone market. As the company products are technologically driven. competitors. resource deployments. and interactions of an organisation with markets. 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.09 ] Strategy: a definition “A strategy is fundamental pattern of present and planned objectives. Nokia has to keep the pace and satisfy the consumer .( http://en. [http://www. “Nokia’s promise is to connect people in new and better ways. so the user requirements are highly volatile.nokia.org/wiki/Nokia) presently it is the world’s largest mobile phone manufacturer with market share up to 39% Globally. CDMA. In 1967 it entered into mobile communications catering niche market i. ranking 5th position. It is the most admired brand.4 |Page Background of Nokia:Nokia produces mobile devices for every major market segment and protocol. Increasingly the modes of communication are broadening. Finnish military. and W-CDMA (UMTS). 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. including GSM.03.There is always a progressive and continuous increase in customer involvement with technology and communications globally. Nokia’s strategy is to build trusted consumer relationships by offering compelling and valued consumer solutions that combine beautiful devices with context enriched services”..com/about-nokia/company/vision-and-strategy accessed on 7.e. Initially Nokia started as pulp industry in 1865 then in next 100 years it emerged as a powerful industrial conglomerate. and other environmental 4|Page .wikipedia.

com/best_global_brands.03..interbrand. with its mission statement. 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”.aspx accessed on 07.5 |Page factors. The mission statement defines the essential nature of its business and what it is planning to be in future S.OT:Strengths: Nokia is one of the most popular mobile communications manufacturers. Pg 8.com/aboutnokia/company/vision-and-strategy accessed on 07.  Strong Nokia Siemens tie-up 5|Page . It covers almost all the market segments it competes in.  Scalability of products.nokia. new product innovations designed to satisfy user preferences.( http://www.W. (http://www.e. 1992 Marketing strategy: Planning and Implementation. and scalability of their product lines. Its greatest strength is its strong brand image. Walker et al. the type of the industry it is operating in.” Cited in Orville C.10) as compiled by Inter band-Business Week in 2009 (Inter brand. Richard D. Its brand equity is rated as top 5th in best global brands and valued at 34.  Strong supply chain network.03.864$ million. 2009)  Nokia Offering high product quality well built and durable handsets.10) Thus the scope of Nokia refers to the breadth of its strategic domain i. Nokia has an extensive marketing and distribution network by offering its products through its own retail outlets and also through network service providers.

and 3 networks has started to market their own branded products making use of their brand fame  Higher import charges. Orange. balancing deep penetration into existing markets with 6|Page .  Mobile phone service providers like Vodafone O2. 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. Nokia has introduced products. balancing short term profit versus long term growth. 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. This causes serious damage to the Nokia brand name.  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.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%.

2001.7 |Page development of new markets for instance. 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. Nokia Networks. 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 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. which are being catered to most of mobile phone market. Nokia is excellent in understanding customer requirements and meeting them accordingly. Nokia Mobile Phones. p. Nokia is organised into four operating divisions they are.47) In view of Michael porters condensed three generic marketing strategies. 2001. “Every business strategy consists of a marketing strategy plus compatible technology strategy and sourcing strategy” (Philip Kotler.48. p. 2001. Nokia has been developing its numbered series with all the core and conventional requirements of a mobile phone device. p. and Nokia Research Centre. “In focus business strategy business focuses on one or more narrow market segments” ”(Philip Kotler. Nokia is Flat-networked organization with a blend of bureaucracy Enhanced shareholder value 7|Page • .) Nokia differentiates itself through leadership in developing user friendly phones. Nokia Ventures Organizations.48. 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.

Respect.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.8 |Page • The Nokia Values are Customer Satisfaction. Diversification:Diversification through vertical integration “vertical integration is one way for corporation to diversify their operations. Illinois-based provider of Geographic Information Systems (GIS) data and is a dominant company in providing the base electronic navigable maps. p. “NAVTEQ is a Chicago. mature business may decline as they get older. and Renewal. I. Corporate development strategy:Since some high growth markets are likely to mature over time. C series and numbered series etc.” (Orville C. offering new product line to existing customers. Walker et al. “Another way to expand existing business is to develop product line extension or new product extensions or new product offerings for existing customers. 1992. Integration gave firm access to tighter control over marketing distribution and servicing of its products 8|Page . The company is a wholly-owned subsidiary of Nokia but operates independently” [http://en. With respect to these limitations Nokia has Nokia has applied two business strategies seeking future business growth. Walker et al. E-series.03. Nokia was engaged in backward integration by acquiring its suppliers as a part of its corporate strategic decisions for instance NAVTEQ. and some high profit.wikipedia.org/wiki/Navteq accessed on 07.49).10]. p.e. Expansion and diversification Expansion: Presently Nokia is extending its business activities into computer tablet manufacturing. Achievement. 1992.”(Orville C.

3210. Nokia has to be more creative and should be able to innovate new product lines to attain its position as a star. all the entry level mobile phones can be placed as cash cows like 7610. 6600.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. One of the best portfolio is Growth.9 |Page Portfolio Models– BCG Matrix These models help to classify and review the current and prospective SBU’s. Although Nokia has a high market share 39% with some of its products ranges has a very low market growth rate for instance Nokia’s N-gage series. 3310 2100 etc. As it has gained significant market share besides gaining leadership in that target market Limitations of Growth –Share Matrix:- 9|Page . 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. Walker et al. 1992. The Nokia brand can be placed as a fusion of star and cash cows. p.at present Nokia..51) With regards to the BCG model. Nokia’s hot selling N-series would be classified as a star.

Besides Nokia offers a Competitive pays and perks including flexible work patterns pension schemes etc 10 | P a g e . Nokia Ventures Organizations. Indeed strategy is only one of the seven elements” ”(Philip Kotler. with its well organised structure Nokia Mobile Phones. 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 Networks.). It has developed innovative services such as predictive texting in mobile phone voice dialling etc  Systems Nokia is decentralised organisation. 2001. 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.10 | P a g e  Growth share matrix uses only two variables to define the firm’s 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.48. in recent times Nokia is facing challenge to sustain its position as a leader in mobile phones. Thus Mc Kinsey has added strategy as only one of the element in their 7’s frame work. Its corporate structure reflects the global nature operations. p.  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. However. Thus 7`s frame work implementation is vital for affective business management  Structure Nokia is a global organization. Nokia is the leader in Europe and number one in American and Asian market. Nokia aims to sustain its leadership position with innovative and user friendly design.

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 .

Place.” (Philip Kotler.) Marketing mix signify the generic strategic tools of a marketing plan. p. These tools are classified into four broad clusters and they are well known as the 4P’s – Product.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. 2001. and Promotion Marketing Mix Target Market Product  Product variety Quality Price   List price Discounts Promotion  Sales promotion Advertising Place   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 .9. Price.

Retailer – and final to Customer However Online retailers such as Amazon. Nokia 1100 is the market penetration and Nokia n-95 is the market skimming. It almost upgrades every six months. phones4u. 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. Place  Nokia does not sell products on its websites. of mobile phone models Nokia offers a variety of prices to suit different segments. highprestige and high performance. The model. 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 . Nokia is good in producing the phone with added innovative features. 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. The company uses the Pricing Strategy that best suits its models for instance. . Nokia Across its entire range. and Nokia offers high quality well built durable.Whole seller .13 | P a g e Price: The product group is the heart of the marketing mix and the other 3p’s follow the first one.

Nokia’s business marketing is actually the driving force behind these micro sites Use of information in marketing:. improve its ability to win new customers who might otherwise be attracted to competitors offering. Nokia has to employ confrontation strategy to maintain its leading share position. 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. 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 . Nokia is marketing its products to the customers that fall under younger. 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. and educated segment. 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. prices and features.330) Internet has enabled companies to decentralize the Global communications possible. 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. These audiences get information about multiple brands.The Nokia webpage is appealing . p.14 | P a g e Suggested marketing strategies for Nokia:- To sustain a leadership position in the industry. 2001. more affluent. capable of comparing costs. Managing E commerce and online marketing:“Electronic commerce describes a wide variety of electronic platforms” (Philip Kotler.

co. www. Best Global Brands 2009 Rankings.com (Accessed 01/03/10).interbrand. Interbrand (2009).org(Accessed 01/03/10). Philip.rdi.15 | P a g e Bibliography 1.(1992) Marketing Strategy: Planning and implementation: Irwin Inc Websites:www.com (Accessed 03/03/10) www. Philip. www.com (Accessed 01/03/10).uk (Accessed 03/03/10) 15 | P a g e . Walker.nokiasiemensnetworks.nokia. Marketing and Corporate Strategy 2010 www.wikipedia. Orville c. K (2001) A Frame Work For Marketing Management: Prentice and Hall 2. K(2001) Kotler on Marketing: Free press 3.

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