This document discusses Nokia's pricing strategy for its mobile phones. It analyzes how Nokia prices its products competitively to ensure profit margins while maximizing revenue. Nokia segments the market and positions its products differently - as premium for high-end customers, best alternative for middle segment, and good value for low-end customers. The pricing strategy follows a skimming approach, starting high and gradually lowering prices over time as products move down segments. Examples are given of Nokia phone models from 2000-2005 to illustrate how prices decreased significantly over the years as competition increased and markets evolved.

1. Case study 1
Amul butter- a marketing success story
The run away success of the brand amul is one of the best case studies about the product, pricing
positioning and delivery.
Amul is delivered from the Sanskrit word amulya which means ‘priceless’. Amul is also the acronym
for anand milk union ltd. Amul butter has lived up to its name for sure. Such as been the growth and
popularity of the brand, which has given MNCs a run for there money, has a long history to it. It is also
intrusting to note that a co-operative movement has become one of the best examples of brand building.
Amul as a brand presents a case of effective and smart communication. It also exemplifies the power of
good and deep-rooted distribution as well as value for money.
Amul butter is processed at eight plants. With 48 sales offices, 3000 distributors and 2.5 lakh outlets, it has a
robots marketing net working. It is also exported to over 30 countries, including U.S. amul butter account
for over 90 percent of the rs 500 corer domestic market (2005). Clearly it has the infrastructure that is
needed for an organization of its size and kind.
The history of amul can be traced to December 1946, when some dairy farmer under the legendary
leadership of tribhuvandas Patel registered the kaira district co-operative milk producers’ union. The father
of the white revelation in India, verghese kurien joined the union as GM IN 1950. IN 1957, kaira co-
operative registered the brand amul’. In 1973, the Gujarat co-operative milk marketing federation was set
up, and today it is the country’s largest dairy marketing organization.
The co-operative movement not only assured good returns to farmers but also provided consumer with
quality products under the brands names of amul and sugar. To make it distinctive from the butter available
in the market those day’s and also to convey the message that amul butter was produced using buffalo milk,
additional co lour was added to it.
The amul girl a bubbly mischievous little girl with an orange face, blue hair and polka ditz on her frock has
been the amul mascot since 1966. Amul campaigns were all light-hearted advertising with hard-sell.
Amul was the market leader all over India, barring Bombay. Hence, in 1966 the amul account was given to
advertising and sales promotion company with the simple brief: “disoldge’polson’from its ‘oremer brand’
position in Bombay” Polson butter was started by pestonjee edulji in 1926. The ‘utterly butterly delicious’
campaign was started after research in early 1966 had found that 50 percent of Bombayites had not tasted
amul butter. This hinted at a lack of awareness.

2. The media, because of lack of color printing facility, offered little help as a vehicle for advertising. They
searched for a vehicle that allows them a large impact. It was noticed that just one hording at bobby’s kemps
corner used to give air India a lot of publicity mileage. So they sdecided:’way not try something like the air
India campaign? They had a media plan that included about 17 hoardings. Bus panels were also used
effectively. Justification for hoarding and bus panels as media vehicles was that such a judicious mix would
give the brand advertising ‘frequency of the clock’ as different from the ‘frequency of the calendar in the
case of the press.’ The hoarding and bus panels also offered them the choice of color. The campaign was a
roaring success. It gave amul a strong foothold in the market. It was also the first ad that used outdoor so
intensively, bus panels and posters.
The path breaking ‘utterly bitterly delicious’ campaign (created by advertising and sales promotion
company) established the fact amul is not as expensive as consumer think. And since then amul was on the
road to success. Polson dairy lost it supremacy in Bombay. Many other butter brands entered the market, but
none was able to get any significant market share. Amul’s brute dominance created a big entry barrier for
others. Such was the dominance that even companies like the Swiss dairy major nestle had to make a hasty
from the domestic market.
Even today amul hording continues to dot the skies, with smart spoof ads on topical issues. And being
ahead of others in creating interesting tag was lines were its strength. After the bambini break-up, amul
hoarding read ‘sharer the bread equally’. The success of bounty aur bubbly was captured in ‘bun’ tea aur
bitterly’. Amul’s spoof ads are much like R.K laxman’s ‘common man ‘cartoons. The amul hoarding
campaigns are also in the business recorder for being the longest running advertising campaigns- for over
four decades. Amul ads have become a mirror of life, reflecting the myriads of festivals, cricket events and
even politics!
It is not mere smart communication that has led to the runaway success of the brand. Distribution and value
for money seem to be the major strengths on which the brand’s popularity rests. About 12 lakh units of
butter (all packs put together) are sold daily. They need to ensure that the same quality product is available
to a consumer at his nearest outlet and in the pack sizes required by him.
Availability assumes a greater significance when one considers the availability of several alternatives of
several alternatives to butter. They ensure that their distributors strive to improve the net work, availability
market presence and hygiene. Amul’s advantages are the loyal consumer base and the value for money
proposition that it offers. That apart, it enjoys a tremendous distribution net work edge over the competition,
if any.

3. Another notable feature of the brand is its deep social concept .the brand has also done its bit in terms of
serving good causes whenever needed. During the chariness aggression in 1962 amul diverted all the milk
and milk powder collect to the army to meet their requirement.
The brand amul butter signifies various success stories be its massive distribution net work or catchy
advertising and its value for money nature .the four decade long leadership is a shining examples of how a
good operating model can create brands like amul that surely has made sense of its name-utterly priceless!
QUESTIONS:
1. Discuss the factors that contributed to the success of amul brand?
2. How did amul solve the media problem?

4. Case study 2
Nokia’s pricing strategy
Nokia is the one brand name that inspires all those who are in to the mobile culture. Of the different brands
that touch our lives, Nokia stands out significantly. It has taken mobility a step forward by creating products
with continuous innovation, flooding the market with mobile for every segment. Moreover, the
technological innovation in this industry has made it imperative that every player keeps pace with change,
and Nokia has always been one step ahead in anticipating future market moves and strategizing accordingly.
Interestingly, the company prices its products competitively that it not only ensures that its margins are
covered, but also assures revenue maximization.
Let as sea how Nokia leveraged its segmentation strategies, appealed to various segments with uniquely
designed massages and differentiated between its products at every level to communicate and connect
effectively with the intended target audience. When Nokia position its product to the top end segments, it
does it as a classy product. To the middle segment customer it is in the form of the best alternative. To the
low end segment, the carrot is that Nokia gives real value, as a high-tech product, at a low affordable price.
The pricing strategy of Nokia can be better under stood when juxtaposed with the skimming strategy and
further interposed on Phillip kotler’s nine price/quality strategies model.
With a vast family of brands that caters to every segments, one can clearly see how Nokia, yielding to the
pressure due to the competitive and innovative mobile hand set market, slides each brand down the segment,
one at time by reducing its prices carefully and consistently.
Here are some live examples of Nokia’s skimming pricing strategy:
Price
High
High Medium Low
1.Premium strategy 2.High value strategy 3.Super value strategy
4.Overchanging strategy5. Medium value strategy 6.Good value strategy
7. Rip of strategy 8. False economy strategy 9. Economy strategy

5. Medium
Low
Classic nokia 8250
The nokia phone model 8250, which was available with vendors during the year 2000, was priced at RS
18000 it was with out modern features like camera and MMS. The telecommunications infrastructure of the
country was in its initial stages and so were the service provides’ fares. Hence, only the premium segment
could have afforded the phone.
However, with easing of government regulations and increased competition, market
dynamics changed, and during 2004, the price of the model took a nosedive and was made available for
Rs.8000-10000.
Now, the model has been completely phased out. Only second hand products are available. Here
was one product which despite market forces, maintained its price distinction and continued to carry a
premium connotation to it.
Neo-classic Nokia 6600
This model from Nokia was made available in 2003, complete with a colour screen,
integrated camera and other contemporary features in the beginning, the product was priced in the range of
Rs.21,000-22,000. by November 2004, it was available in the much lower Rs.15,000-16,000 range the
model is currently available for a price of Rs.9,000-10,000 only.
Modern Nokia 9500 communicator
This is known as the snazziest model ever launched by Nokia in India the Nokia 9500
communicator comes with office features and large screen, coupled with increased memory and Bluetooth
technology. Available in the market since 2005, it was initially priced at Rs.42, 000. But can be currently
bought for just Rs.26, 000.
All the above models were produced in quick succession and Nokia’s strategy was to
deliberately allow them to eat into each other’s market share. At the same time Nokia proliferated the

6. market with as many models as possible by 2006, at virtually every price point. Each one of Nokia’s models
played a role in catapulting Nokia to the top of the head, in the Indian mobile hand set market.
It would be apt to map Nokia’s pricing strategy on the line of premium, high value, and
super value strategy, especially on the price-quality model.
On the flip side, consistent price cuts in rapid succession have the potential of smearing
the brand image. But, in the buoyant telecom sector, where change is the name of the game, the consumer is
discerning enough to have a rational out look towards a particular brand and its attributes, irrespective of the
pricing strategy.
After all skimming or no skimming, customer benefit is almost always guaranteed in a price-sensitive
competitive market.
Questions:
1. Discuss the segmentation strategy of Nokia of comment on it’s efficacy.
2. Explain how Nokia used the skimming pricing strategy for its products. Give your comments
on the strategy.
3. what would have happened if Nokia had used penetration pricing strategy instead of
skimming?

7. CASE STUDY:3
Lux - Strong Differentiation
The personal wash market is valued at Rs.45 billion (ORG-MARG). The market has seen stagnant
sales over the last four years and the low entry barriers have led to intense competition between national and
local brands.
Lux is the largest personal wash brand in the country with a value share of 17%. Consumer’s
preference has led to Lux becoming one of the most trusted brands in the country. Lux has retained its
leadership status by strongly differentiating itself – no soap brand can claim to be more asp rational for the
Indian consumer than Lux – ‘the beauty soap of film stars’.
The last three years have seen Lux continue to grow far ahead of the market. It has gained close to 4%
share in the period. A key initiative that has fuelled this growth has been the launch of mini Lux –
strategically priced at Rs.5 to bring it with in the reach of 300 million rural consumers. The introduction of
new perfume and ingredient variants, addressing new benefit segments, has been the other growth driver.
Lux soap was launched in India in 1929. The first bar of Lux was made in India and sold for a sum of
two annas in 1934. From the every first advertisement in 1929 featuring Leela Chitins’, the gorgeous faces
of the silver screen have come out in the open with their beauty secret – LUX. Popularly known as ‘the
beauty soap of film stars’, Lux has been a favorites with generations of users for the experience of sensuous,
luxurious bathing. The brand name, Lux, has been taken from the word, ‘Luxury’.
Since it launched it India, Lux has offered a range of soap in different colours and fragrances. The
benefit offered by all was the same – beautiful skin. Desirable product sensorial (applying to all senses), its
world classes fragrances and nourishing ingredients have made a strong product differentiation for Lux,
making the Lux bath a pleasurable experience.
But Lux being the market leader has evolved along with the changing need of its consumers. The late
1980s saw the emergence of a premium segment in the soap category – a new consumer set whose beauty
and bathing needs began to evolve. In 1989, to tap this segment. Lux launched a range of premium soaps to
suit different skin types.

8. With icons of beauty endorsing the brand, the offering made by Lux have always been superior and
have always led the market, setting benchmarks for competition. Lux has beauty offering in two of the four
market segments – popular and premium, spanning the need of varied consumers. Lux Toilet soap in the
popular segment has, in the past four years (since 2001), offered its customers a range of soaps enriched
with the goodness of variety of nourishing ingredients – rose extracts, almond oil, milk cream, fruit extracts,
and honey, which are known to harbour the secrets of incredibly perfect skin. At the upper end of the market
is the premium range which continuous to offer specialized skincare to its customers in the form of
international Lux – a range of moisturizing, deep cleansing, and sunscreen soaps. Keeping in tune with the
changing times, it has also launched Lux body wash which offers superiors bathing benefits.
In April 2003, Lux relaunched its lower- tier range to offer even better product quality in comparison
with other soaps in the competitive set. It is now superbly poised to deliver the brand promise of beauty care
and bathing pleasure.
To establish the presence of nourishing ingredients in the new Lux (stronger product differentiation), a
unique concept, ingredients you can see in a soap, was born. A novel metallic substrate packing beautifully
showcased the ingredients, and its globally accepted ingredients-linked perfumes heightened the sensory
experience. Each of the soaps in the ranged has milk cream, with the active ingredients of rose extracts,
sandal, saffron, almond oil and fruit extracts. The create an experience in pampering indulgence and luxury
designed to bring out the star in every women.
Lux campaigns have wooed millions of people over the decades. Popularly known as the beauty soap
of film stars, Lux has been a intimate partner of the brightest stars on the silver screen. For decades. An ode
to their beauty, an announcement of their stardom, advertising campaigns on Lux have feature film stars
across the nation, promising their beauty and complexion to ordinary women, with top movie stars – from
Madhubala to Madhuri, from Babita to Karishma and Kareena, inter spaced with leading film stars, Hema
Malini, Juhi Chawla and sreedevi-having endorsed the goodness of Lux over generations, it was the natural
that the brand has built equity has the best beauty soap in India. In the global market, some of the inter
national film stars who endorsed Lux include Elizabeth Taylor, Sophia Loren, Penelope Cruz, Catherine
Zeta Jones, Racquel Welch and Charlize Theron.
From the beginning, Lux, by using a leading film star of the time, has fulfilled the consumer’s
aspirations of using beauty via the rationable. ‘If it’s good enough for me’. The later moved into a

9. transformational role of having a bath with Lux, which transports the user in to a fantasy world of icons,
film stars and fairylands.
However the communication was slowly seen to be losing relevance, as consumer were beginning to
question if the film stars actually used the brands. In addition to this, several competitive beauty soap brands
had begun advertising using similar methods of communication. In this context, the global brand team for
Lux developed a new communication strategy. The strategy- bring out star in you-for the first time moved
the brand away from the –long running film star route. The film star still features in the new communication
but not as her gorgeous self but rather as an alter ego or projection of the protagonist, for a few seconds of
the entire ad.
Thus for the first time the film star was used as a communication device and not as the main feature of
the ad. The new ad theme – bring out the star in you – puts the customers at the heart of the brand’s
promise.
Lux beauty is glamorous, sophisticated and luxurious. Lux believes in a women taking pleasure in her
self, with out feeling guilty. Lux recognizes that wanting to look and feel beautiful is one of the most
fundamental aspirations. Lux knows better than any other brand the meaning and importance of beauty of
women. This knowledge is used skillfully to strengthen the differentiation for Lux.
Lux continuous to dazzle and captivate millions even after 75 years. New fragrances like ‘chocolate’
and new gimmicks like the superstar Shah Rukh Khan in a bathtub, surrounded by five Bollywood stars –
we can expect, many more surprises. After all, Lux is here to stay, forever.
Questions:
1. Discuss the product differentiation strategy of Lux. Do you concur with the approach? Give
reasons?
2. What factors contributed to the success of the Lux promotional campaign.
3. Why the communication was changed giving your comments to the new theme

10. Case study :4
Luggage becomes a Lifestyle Statement
Travel is part and parcel of today’s life. It may be business travel, a family holiday trip,
pilgrimages, vacation in native place or a close cousin’s wedding-travelling goes on. Once the destination is
decided, the family members usually start working on the luggage they will carry. Earlier luggage meant
steel trunks, unbranded bags and the ubiquitous hold all. Today, luggage has become a lifestyle statement,
and one takes a lot of pride in walking down the lane with a sleek VIP or a samsonite bag. Baggage rules
that restrict heavy luggage also have seen the big players of soft luggage sport a smile. Most of the market is
still unorganized but given the BPO boom, the spending syndrome and rising income levels, coupled with
affordable air travel, the luggage industry has been having a growth spree. The industry is also dishing out
more stylish products and new revenue streams are also opening up- what with aggressive plans to cater to
ladies’ bags segment.
The branded luggage market in India is shared by leading brands like VIP, Samsonite,
Aristocrat and Safari. In 1971, Dilip Piramal bought VIP industries from Jal Engineers. In 1988, he bought
Universal, which is the company owning the Aristocrat brand. The two firms, however, were not merged.
While Saamsonite is positioned well in the premium segment and is the global leader in the segment, Safari
and Aristocrat are relatively smaller brands.
While the total luggage market is to the tune of Rs.1550-1600 crore, nearly 60 percent of it
is still unorganized. In branded luggage, soft luggage has a share of approximately 25-30 percent and the
balance is hard luggage. The soft luggage market is growing at a rate of 30-35 percent annually.
Based on toughness, the luggage market can be classified into soft luggage and hard luggage. Evidently,
there is more movement in the soft luggage segment while the hard luggage is near saturation.
If one considers need-based segmentation, there can be categories like business segment, holiday segment
and casual segment. Such a segmentation would help players draft communication strategies that focus on
the proverbial ‘ why buy ‘ question. Of late, it is not rare to see families and like-minded groups taking off
for a short holiday- the reasons may be varying but the frequency is definitely high. This seems partly due to
the high-pressure work environment which makes such decisions absolutely natural.
The industry can be segmented based on size and price , into premium, medium and low-price segment.
The corresponding market sizes are pegged at Rs.120 crore,Rs.250 crore and Rs.130 crore, approximately.

11. VIP is the clear market leader with a share of around 61 percent. Of this, 54 percent is held by the VIP
brand and 7 percent is attributable to the ‘Alfa’ brand . however, in the premium segment, Samsonite is
believed to be having a share of close to 80 percent. Samsonite is planning to venture into the medium
segment with its ‘American Tourister’ brand. Safari and Aristocrat hold smaller percentage of shares.
One favourable factor is that Indians are increasingly spending more on lifestyle products. Soft luggage is
slowly becoming a lifestyle product and people do like to make a fashion statement. Further, there is a big
BPO population that likes to feed itself on modern products and follow the philosophy of ‘have money, will
buy’. The richer middle class is also a clear sign of better times for luggage segment. The mushrooming
malls and higher interest of consumers and investors in the organized retail space is also helping the
segment in a big way.
Blowplast handles the retail sales and distribution of VIP. After the buyout from Jal engineers, VIP was
initially converted into a 100 percent subsidiary of Blowplast. VIP incurs around Rs.18-20 crore on
adspends across various brands and it has a share of 65-70 percent of the industry.
Samsonite recently had an advertisement featuring none other than the chairman of virgin Airlines,
Richard Branson. Samsonite has also done away with its old logo and has a new tagline today. The swirl at
the end in the logo has moved to the centre of the brand now. The ad shows Branson as quoting, “ To me ,
business isn’t about wearing suits or pleasing stockholders. It’s about being true to yourself, your idea and
focusing on the essentials”, while the new base line signs off saying, ’Life is a journey’. Evidently, the
communication seems to position soft luggage as a style statement.
Samsonite has come out with its premium line ‘Black Label’ and is also focusing on
marketing its ‘American Tourister’ range. American Tourister would bring revenues for samsonite through
its sales in the medium segment. They are planning to set up exclusive own stores. Samsonite is looking at
Rs.4 crore sales revenue from the Black Label collection in premium segment alone.
VIP has also got its act together. Last year, it acquired the carlton brand based in Britain and
plans to set up exclusive retail outlets for selling its high-end products. It has launched three ‘VIP Lounges’,
its retail outlets in Ahmedabad. The company also sells the premium ‘Delsey’ brand. VIP has targeted sales
of Rs.90 crore from its soft luggage portfolio during 2006.
Blowplast believes that the key to maintaining leadership is to be relevant to the consumers
across time frames. VIP has always ensured this and the new brand identity makeover is another step
towards this objective. They will launch products that are category leaders. Their new campaigns are aimed
at presenting the new look and profile of VIP of today’s consumer so that they can relate to the brand as

12. always. They are even updating their retail identity to present a new shopping and brand experience to their
consumers.
Both VIP and Samsonite are having plans to venture into the ladies’ bags segment. This
seems to be a green pasture for them as well as an additional revenue stream. The returns and growth rate
are believed to be huge in this area.
As more and more people become conscious of the world being a connected village,
frequent travel is the immediate fallout. As luggage slowly moves up to become a lifestyle segment, style is
becoming a key. The luggage segment clearly is on a growth track. The rich BPO employee, progressing
economy, blooming malls as well as growing organized retail are all busy laying the foundations of
sustainable growth for this industry.
Questions:
1. Explain how the leading brands are utilizing market opportunities to achieve growth.
2. Compare the Products and strategies of VIP and Samsonite and bring out their strong points in
brand building.

13. Case study: 5
RURAL BUYING BEHAVIOUR
Excessive competition and saturation urban markets are driving many FMCG and consumer durables
companies into the rural market of India for survival and growth.
Hindustan liver limited has under taken two projects-Bharat1&2- to take its products deeper into the rural
areas. this is in spite of the fact that they are pioneers in rural marketing in India. Henkel spic India has
started project called hariyali Safar, or’ green journey’, aimed at rural marketing. Maharaja Appliances
Ltd.has launched a range of no frill’ home appliances meant specially for the rural and semi- urban markets.
Sony has entered the rural market without reducing its prices or even offering lower-end models for
potential buyers. Mobile handset companies and mobile service providers have also started wooing rural
consumers in a big way.
All are confident that these strategies will definitely work. It may not bring in quick results in the short-term
period. But in the long term there is no doubt that rural purchasing power has steadily expanded over the
past decade with the help of large increase in rural plan outlays, agricultural production and higher support
prices for farm produce. The rural market potential is growing by leaps and bounds. During the decade, the
procurement price of Paddy and wheat has doubled, and there has been a four-fold increase in outlays for
rural development between the seventh and ninth has changed rural lifestyles and spending habits. the
higher disposable income has made rural consumers go for urban products to improve their quality of life.
Marketers have mostly been limiting their concentration on supplying goods that are needed for the entire
rural family or rural household. However a few of the marketers have also been Launching products aimed
at individual needs and desirers of rural consumers. A survey was conducted by a research team in rural
Pondicherry to find out how well some of these products have been marketed, and to gather insights on
buying behaviour.through the survey focused on only two products-wristwatches and footwear-some of the
insights gathered could be of a broader relevance, capable of generalizing.
The conclusion of the study is that rural consumers consider only one brand, and visit only one shop before
making a purchase decision. Titan was found to be most preferred brand in watches. The imported Casio
(grey market one), HMT and Citizen were found to be the other favorites.

14. It was found that through most decisions about buying a watch are taken by the buyer himself, retailers and
advertisements are important influences .Unlike urban areas, where watches have become gift items and
may, therefore, face seasonal spikes in demand, in rural areas, watches are brought as and when necessary.
and many buyers think that price is an important factor to consider.
When it comes to footwear, however, brands appear to be less important than perceived quality and price.
The rural buyers are also aware of the different brands of footwear .Most of the buyers buy chappals from a
nearby town and tend to visit only one shop for making the purchase. they buy footwear when the last one
wears out, indicating that utility and longevity are the prime considerations in purchase decisions.fiftty
rupees were found to be the cut off point up to which rural consumers would consider spending to buy
footwear.
This study covered only villages that had a population more than thousand. Pondicherry region has 164
villages spread over 6 communes. Through the villages were randomly selected, respondents from a village
where chosen based on quota and convenience. The final sample size was 102&91 respondents for
wristwatches and footwear respectively; spread over 70villages.the study was based on both primary and
secondary data, with primary data collected with the help of specially designed schedules to suit the selected
products.
The main objectives of the study were:
1. To find out whom influences the buying decisions of the product.
2. To find out various factors considerable by rural customers.
3. To find the occasion/time of purchase of the products.
The limitations of the study are its relatively small sample size, its focus on one geographical area, and the
fact that only two products were included for scrutiny.
Within these limitations of the survey, some broad conclusions emerge. one can say that the survey rural
customers were found to consider brand name and price as important elements in buying wristwatches. they
also attach importance to the quality of footwear. rural customers are also found to prefer to shop only at
one place. they buy wristwatches and footwear as and when they require them without waiting for any offer
or festive seasons.

15. The findings suggest that manufacturers should make available quality products at affordable prices on
towns that are accessible to the maximum number of villages, to cater to the rural market.
QUESTIONS:
1. Will the strategies of FMGS companies to go rural work? Justify your answer.
2. Discuss the adequacy and appropriate of the research in the congest the given of the objectives.
3. Explain the finding the study pertaining to watches and footwear.
4. Can the findings based on the two products the generalized? Justify you’re a answer.