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Overview of Nokia
Market share with its Competitor
Board of directors
Nokia Mission and Vision
OLD Marketing Strategy for Nokia
Introducing the product
Current Competition in the market
Sources of marketing information
The marketing mix
The stages of marketing
Product life cycle- Mobile phones
Types of pricing strategies
External factors affecting pricing decisions
Nokia’s current marketing strategy
Current Market segmentation
Current Pricing strategy
Current Product life cycle-Nokia
By analyzing S.W.O.T is that Nokia's main weaknesses are
Current Market research
Employee value Proposition
The company was founded in 1865 in Finland and was
named Nokia in 1871 (Nokia, story). President and CEO of
Nokia Corporation at the moment is Stephen Elope.
Nokia serves World wide demand for its products, which are
feature phone sand Smart phones.
The company offers also services such as maps, navigation
Currently Nokia has about 90981 (2-jan-2013) employees
around the world.(Nokia, people and culture)
Revenue is 12.70 billion Euro.
Assets 25.19 billion Euro.
Net income 615 million Euro.
Market share 8.2%(smart phone)
The members of the Board of Directors were
elected at the Annual General Meeting on May 7,
2013, based on the proposal of the Board’s
Corporate Governance and Nomination Committee.
CHAIRMAN RISTO SIILASMAA-Born-1966
Chairman of the Board of Directors of Nokia Corporation.
Interim CEO of Nokia Corporation from September 3,2013
until May1,2014 Board member since Chairman since
Chairman of the Corporate Governance and Nomination
Committee until September.
Chairman of Nokia
Rajeev Sure President
"Build a new winning mobile ecosystem in partnership with
Bring the next billion online in developing growth market.
Invest in next-generation disruptive technologies. increase
our focus on speed, results and accountability"
In 2007 the launching of the I phone by Apple Inc created the
Smartphone market for the average person, before that the product was
targeting only business users.
Since then Apple’s I phones and Android phones, which have been
offered by Motorola, Samsung, HTC and others have tried hard to
compete in this fast growing market and have succeeded to be the big
players in the industry.
Alison Donnelly (2008) points out the situation are already changed in
She stresses the fact that not so long ago it was very popular to own
Nokia, but at this time the company was loosing customers to rivals. The
Finnish company had troubles adapting to the market changes.
For this project, we have been instructed to come up with a
marketing strategy for an existing company/product We have
chosen to do Nokia communications, particularly the mobile phone
sector of Nokia's business. To do this properly we 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.
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.
Nokia is a communications based company, which focuses
on mobile telephone technology. Given as
* WAP (internet)
* Polyphonic ringtones
* Predictive SMS (where the phone will finish off a word for you if it can
guess what you are typing)
* Camera phones and
* Video recorders
With all this technology available in the communications
market it is obvious that Nokia will have lots of competition,
* Sony Ericsson
* Q mobile
Strength (internal factors):
Nokia is currently one of the most popular Mobile communications
companies in the industry, generating over 52,000 sales in 1997,
which was a 34% increase from 1996. Nokia's net sales for the
October-December period in 1997 came to a total of 857 million
669 million in 1996).
Weakness (internal factors):
1. They are currently aiming their products at a saturated market segment.
2. Their wage costs are forever rising.
3. Higher import charges have now been put into place.
4. There are some quite high supply chain costs that Nokia are currently
Opportunity (external factors):
1. Improve the technology that they are using to make their phones
and use in their products.
2. Using innovation to re-invent their products, change and
develop to offer something none of the competitors have.
Threat (external factors):
This is looking mainly at the competition that are taking away
Nokia's current market share and also government legislations (the
total costs of 3G licensing in Europe is 110 billion Euros.
1. Customer satisfaction
Market research must be used to find out whether
customers' expectations are being met by current products
2. Customer perception:
This is based on the images consumers have of the
organization and its products, this can be based on; value for
money, product quality, fashion and product reliability.
3. Customer needs and expectations:
This is anticipating future trends and forecasting for future
sales. This is vital to any organization if they wish to keep
their entire current market share and develop more.
4. Generating income or profit
Satisfy stakeholders in the business. Although satisfying the
customer is a big part of a companies plans.
5. Making satisfactory progress
Organizations need to make sure that their product is developing
along with the market, if a product is developing well, then income
6. Be aware of the environment
There are also certain external factors that a company should be
very aware of, such as P.E.S.T and S.W.O.T.
· Market penetration
· Market development
· Product development and
Nokia need to find a new market segment to aim their products at. In order
to classify the wants and needs of the consuming population, companies
need to gather information on the following:
How do customers react to advertising? Whether they are partial to prize
give-awes or free gifts? What are their reactions to new and developed
Buying patterns and sales trends- Organizations need to look at how buying
trends and patterns are affected by class, gender, religion and region.
What customers are looking for in a product, for example, style,
color, technology, amount of outlets, customer service and
Activities of competitors in the market:
Nokia need to examine how their rivals are adapting their prices
and products to meet the consumers needs.
The information that companies collect through market
research can be in one of two forms.
1. Quantitative data refers to data presented in
2. Qualitative data is the information concerning the
motives and attitudes of consumers.
The marketing mix is based around the idea of the 4 P's:
The product is the centre of the marketing mix and the other
three P's are based around it.
Is a key factor in the selling of a product, and is usually the
one that is open to the most change based on different
pricing strategies, for example, competitor based,
penetration or skimming.
This refers to the chosen outlets for a product or service, for a
product to be very successful it must be easy to access.
This involves providing information to the customer over a variety
of media platforms, using radio, television and print advertising as
well as using other promotional tools such as "money off deals"
and "free giveaways".
1. Market and product research:
* Finding out what your customers want
* Technical research
2. Product launch:
* Test market
3. Product promotion:
* Publicity and P.R
* Sales promotion
4. Sales and distribution:
* Managing the sales force
* Type and amount of sales outlets
* Local, national or international sales?
* Transportation of goods
5. Monitoring and analyzing the sales:
* Meeting customer satisfaction?
* Does the product need modifying or replacing?
* Is a profit being made?
* Is customer service satisfactory?
* Have the sales targets been met?
* Is the promotion and distribution policy effective?
When mobile phones where first introduced they were low quality
technology (bad reception, poor reliability and had a short battery life),
high priced (around £100 for a basic model) and consumers had to be
persuaded to buy mobile telephones.
In the growth stage of the product life cycle companies can expect
advertising and promotional costs to be as high.
In Nokia's case, mobile phones, as a necessity they will be more willing to
pay higher prices for new phones that emerge in the market).
When a product enters the maturity stage, advertising and
promotional prices should decrease, as consumers are more aware
of the product. At this point in the product life cycle the main
producers (Nokia, Siemens, Sony etc).
This is the stage that Mobile phones have entered (Nokia had
recorded their first drop in sales earlier this year), and all the
remaining companies are trying to re-launch their products by
either developing their products.
Most forms of promotion are based around the idea of having an
image to go with the product. Brand imaging plays a dominant part
in an organizations marketing strategy.
Cost based pricing:
Marginal cost pricing:
Demand based pricing:
* Market conditions
How much are the customers willing to pay? Can advertising increase
product image and price? Is the product aimed at a mass market or a
niche market? (a niche market refers to when a company aims a product
at a very small, select segment of the market).
* Production costs-
Prices must cover the costs spent in production if a profit is to be made.
The price must cover variable costs (for the short term) and fixed costs
(for the long term) otherwise a company will face closing.
* Taxes and subsidies-
VAT and customs duties will raise the price of a product. Government
subsidies will allow businesses to charge lower prices.
* Business objectives-
Is the business looking to maximize profits? Or is the company
looking to increase its market share?
* Marketing mix-
What stage is the product at in the life cycle? What forms of
promotion are being used? Where is the product being sold?
* Marketing structure-
How much competition is there in the market? What prices is the
The marketing mix:
Nokia's prices are usually competitor based, in such a way
as, they try to keep their prices a bit lower then those of the
closest competitors, but not as low as the "smallest"
competition as consumers do not mind paying the extra
money for the "extra quality" they will receive with a well
known brand, such as Nokia.
Nokia phones are generally sold at all established mobile
Nokia tend to promote the new technologies and
mobile devices they create using one big advertising
campaign that focuses on a singular technology
instead of each individual handset so they can appeal
to a lot of different markets with one campaign.
Nokia phones tend to include all the latest technology and
a lot of the consumers favorite aspects such as text
messaging and games like Snake and Memory. When the
phones came out they were big and bulky and quite
unattractive but now they are all quite sleek and stylish.
Market segmentation refers to the different areas
of the population that companies can aim their
products towards. The market segment that Nokia
has chosen to aim is the youth market focusing on
Nokia's current pricing strategy is based on 2 main theories:
1. Penetration pricing:
Although this strategy is usually for companies that are trying
to gain instant market share in a new market, companies who
are already well known in the market still do it with new
products that carry new technologies so they can take more
market share form their competitors.
2. Competitor based pricing:
This is used when there is a lot of competition in the market
and a company is looking to take another companies market
share by offering the same or similar products for a lower
price, this happens a lot in the communications market and
this strategy is used by every mobile phone producing
company that is still in business.
When Nokia phones were first introduced they required a lot of
promoting and advertising as they weren't established enough to
sell based on their quality and what they offer to the consumer, so
this is where Nokia spent the largest amount of money promoting
their products and establishing their brand as a leader in the
This stage of the life cycle also has high promotion costs involved
in it, this is due to the fact that mobile phones are becoming
established as a consumer necessity and lots of other companies
decide to enter the growing market, although companies do not
need to assure customers that they need a mobile phone, Nokia
have to assure the customers that they want a Nokia phone and
this is where the high promotional costs come from.
In this stage the promotional costs do decrease as the more popular
brands, such as Nokia and Samsung, have gathered the majority of the
market share and only have to show customers that they have a new
model out and it will sell well, as they have been established as a quality
brand and customers no-longer need to be persuaded to buy Nokia brand
This is the stage that the mobile communications market, including
Nokia, have recently entered (Nokia had reported the first drop in sales in
the first quarter of 2002), and companies are now promoting, heavily,
their new MMS products to the market in an attempt to get out of decline
and back into growth.
1. They are currently promoting their products to a market that is
verging on saturation- Nokia need to re-launch some of the older
models to a different market and only promote new products to the
existing market segment.
2. Their wage costs are already high, and are always rising.
3. High import charges are being implemented by the government.
Legal factors, such as the 3G technology licensing which has
cost companies a total of 110 billion Euros so far, are always
around to stop Nokia from properly developing strategies.
Environmental, Social and ethical factors:
Many companies may view profit as more important then
ethical practice and this can lead them to making illegal
decisions and this has been a big contribution to many
companies going out of business or loosing their entire
market share to eco-friendly companies.
Nokia marketing strategy as they must always keep up to
date with every change within the market if they are to be
successful and hold on to their market share ad hopefully
Nokia's business strategy (statement taken from
"Our business objective is to strengthen our position as a
leading communications systems and products provider.
Our strategic intent, as the trusted brand, is to create
personalized communication technology that enables
people to shape their own mobile world.
Nokia are currently creating innovative technology to allow
people to access Internet applications, devices and
services instantly, irrespective of time or place
Nokia need to capitalize on its leadership role by
continuing to target and enter segments of the
communications market that we believe will experience
rapid growth or grow faster than the industry as a whole.
The adaptation of this has already started at
country levels to reflect respond to local
employee needs and expectations. The four
fundamentals of the proposition are:
(1) The Nokia Way and Values,
(2) performance-based rewarding,
(3) Professional and personal growth, and
(4) work-life balance.
The style of the phone
Suggested revised strategy has a lot of advantages over
Nokia's previous strategy, listed them below:
Our target market is one that has never been entered before,
so Nokia will instantly gain 100% market share, whereas the
current target market is saturated and competition for market
share is very strong.
The products that are being released do not need to be as
technically advanced as the ones in the current market,
because my market research showed that the 40+ market do
not want phones that are too complicated and hard to use.
· If product research and development is not needed as much
anymore then Nokia can afford to decrease its employment
numbers and this would save Nokia a lot of money every year.
· When entering a new market with no competition a company
can charge whatever prices they want, Nokia's prices can be
higher than they currently are and this will increase income