Marketing Plan Nokia

8/9/2019 Marketing Plan Nokia

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Marketing principles

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There are many priorities within a business, but in a marketing

orientated company like Nokia, many of the following principles willbe high on the agenda:

1. Customer satisfaction: Market research must be used to find outwhether customers' expectations are being met by current products

or services.

2. Customer perception: this is based on the images consumers haveof 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 futuretrends and forecasting forfuture sales. This is vital to any

organization if they wish to keep their entire current marketshare and develop more.

4. Generating income or profit: This principle clearly states thatthe need of the organization is to be profitable enough to

generate income for growth and to satisfy stakeholders in the

business. Although satisfying the customer is a big part of a

companies plans they also need to take into account their ownneeds, such as:

5. Making satisfactory progress: Organizations need to make surethat their product is developing along with the market, if a

product is developing well, then income should increase, if not

then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know

what is happening within their designated market, if it is

changing, saturation, technological advances, slowing down orrapidly growing, being up to date on this is essential for

companies to survive.

There are also certain external factors that a company should be very

aware of, such as P.E.S.T factors (political, environmental, social

and technological) and also S.W.O.T (strength, weakness, opportunityand threat). A business must take into account all these constraints

when designing and introducing a marketing strategy.

P.E.S.T:
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Political factors- Legal constraints (such as the G3 technology

constraints that Nokia have to take into consideration) must be takeninto account because many businesses aim to make a profit so they may

be tempted to mislead their customers about prices, quality of

products and the availability of their products. They may also try tocut expenditure by using lesser quality materials in their products

(such as weaker materials for Nokia cases and batteries), also some

companies may also dispose their waste in ways that damage theenvironment (pollution) and not ensuring high standards of hygiene and

safety in the workplace and outlet stores, all of these are illegal

and can leave companies in big legal trouble.

The governmental bodies in the U.K have introduced new laws into the

business environment, which ensure that none of these procedures take

place; if a company is to be successful they must follow all of these

laws.

Environmental social and ethical factors- some businesses view profitsare more valuable then a strong ethical code and this can govern

behaviour and business conduct. Some un-ethical practices are against

the law and companies can not become involved in them (I havementioned these above) but there are also some practices that aren't

illegal by law but are considered highly un-ethical by the consuming

public, companies who engage in these practice's can lose a lot of

market share if they are found out. An example of this is cosmetictesting on animals, it is legal but some of the consumingpublicare

not happy about it and boycott Certain products because of it,

companies must be very careful about how they conduct themselves.

Nokia have managed to be quite environmentally friendly and have not

done anything that the consuming public have taken huge offence to,they have been very careful about this and this is one of the reasons

they are such a popular brand of mobile phones.

Technological- In the communications market technology is perhaps themost important factor that companies like Nokia have to take into

consideration. They have to keep up to date with all the newest

technological advances (like camera and motion capture phones) if theyare going to capture the biggest market share and stay ahead of their

competitors (Sony and Seimens).

S.W.O.T

SWOT analysis is also another way of deciding on a successful

marketing scheme, we must look at strength, weakness, opportunity and
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threat.

Strength (internal factors)- Is looking at the companies currentmarket share and researching how recognised Nokia is amongst consumers

in the target market. Nokia is currently one of the most popular

Mobile communications companies in the industry, generating over52,000 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 FIM

15 857 million (FIM 12 669 million in 1996).

Weakness (internal factors)- This is basically looking at where the

product is failing or not doing as well as it should in the market.

Nokia's problems are that:

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 arecurrently paying.

Opportunity (external factors)- This is the area in which Nokia can

make more profit, or gain more market share. There are 2 ways in whichNokia can currently do this:

1. Improve the technology that they are using to make their phones anduse in their products, for example, camera phones and advanced picture

messaging would attract new consumers to purchase phones under the

Nokia brand name.

2. Using innovation to re-invent their products, change and develop

within the market to offer something none of the competitors have.

Also the fact that phone call charges are being forced to fall shouldprove to be an opportunity for Nokia to sell to the people, who

previously may have not purchased a phone because of higher call

charges.

Threat (external factors)- This is looking mainly at the competition

that are taking away Nokia's current market share and also governmentlegislations (the total costs of 3G licensing in Europe is 110 billion

euros) that could hinder Nokia's development as a company.

For an existing product it is often useful to draw up an Ansoff's


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matrix, in order for Nokia to grow as a business we must look at:

Market penetration

Market development

Product development and

Diversification

Market penetration- the aim of market penetration is to sell existing

products to an existing market, to do this Nokia must do a few things:

1. Change the pricing scheme (for example, penetration or competitor

based)

2. Introduce discounting

3. Start up a different advertising campaign or consider changing anexisting one.

Market development- To complete market development successfully, Nokiamust look into the following:

Researching and selling to a different market (in case of saturation

or poor market share)

Change times that television adverts are aired at and alter the

places in which print adverts are being displayed (this can help yourproducts appeal to a whole new market segmentation)

Lower current prices to help the products appeal to a wider range ofconsumers.

Product development- This area of the Ansoff's matrix involves keeping

up to date with the latest technologies available in your chosenmarket and using them to appeal to different people (for example, WAP

phones are aimed at more professional people while Camera phones are

aimed at the youth market)

Diversification- This refers to developing technology that offers

consumers something new or different, this is the most common way ofcompanies trying to gain greater market share and increase their

profits.

Market research


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A businesses success is based on whether they can give the customer

what they want and when they want it. Market research involves thecollection, collation and analysis of data relating to the consumption

and marketing of relevant goods and services.

The purpose of market research is really to find out whether there is

a gap in the market for your product or service or whether you can

make customers want your product through persuasive adverting. Wealready know that there is a market for mobile phones but the current

market gap has become saturated (or if not saturated, almost

saturated) so Nokia need to find a new market segment to aim their

products at. In order to classify the wants and needs of the consumingpopulation, companies need to gather information on the following:

Consumer behaviour- How do customers react to advertising? Whether

they are partial to prize give-aways or free gifts? What are theirreactions to new and developed products?

Buying patterns and sales trends- Organizations need to look at how

buying trends and patterns are affected by class, gender, religion and

region. They also need to understand how buying patterns change overtime and what markets are expanding and are worth trying to enter and

obviously which markets are contracting and companies shouldn't aim to

enter into.

Consumer preferences- What customers are looking for in a product,

for example, style, colour, technology, amount of outlets, customer

service and promotional styles.

Activities of competitors in the market- Nokia need to examine how

their rivals are adapting their prices and products to meet theconsumers need's, how well the rivals are selling and what marketing

strategies they are using.

Market research should supply the company with all the informationthey require about consumers preferences, whether they buy certain

products, what design features are preferable and what kind of retail

outfits are most frequently used for purchasing certain products.

Sources of marketing information

The information that companies collect through market research can be

in one of two forms, either quantitative or qualitative data.

1. Quantitative data refers to data presented in numerical form,


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usually figures, for example, Nokia's operating profit in the 4th

quarter of 1997 was 830 million.

2. Qualitative data is the information concerning the motives and

attitudes of consumers; for example, more people buy Nokia phones then

Sony phones because Nokia phones are more reliable.

The two main sources of market research information are primary

research (where the company has gathered the information about themarkets themselves) and secondary research (when researchers use

information that has been discovered by other companies).

Methods of collecting primary data:

Face to face survey

Open ended interview

Telephone survey

Postal surveys

Consumer panels

Observations

Experiments

Methods of collecting secondary data:

Internal sources:

Existing reports

Distribution data

Shopkeepers opinions

Stock records

Sales records

Accounting records

External data:


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Government statistics

Specialist business organization, for example, Mintel or Neilsonsretail audit.

Consumer databases.

To help decide what market segment to aim at companies can also look

at the buying habits of customers. In order to make decisions aboutthe type of products to make, what advertising to use, promotional

tactics, pricing and packaging. Nokia will need to know about the

following:

1. The types of goods customers buy

2. How much they buy

3. How often they buy

There are also certain variables that can affect peoples buying

habits, they include:

1. Age

2. Gender

3. Area they live in

4. Religion

5. Lifestyle

6. Taste

7. Fashion and preferences.

Nokias current marketing strategy

The marketing mix

Price- The phones that Nokia produce are usually sold at high prices

(new phones can be expected to enter the market at around 200+, ifthey carry the latest technology). The price of the new phones usually

decreases after an introductory period, which is usually around 2

months long. Nokia's prices are usually competitor based, in such away as, they try to keep their prices a bit lower then those of the


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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.

Place- Nokia phones are generally sold at all established mobile phone

dealerships such as Carphone Warehouse and The Link, although they arealso sold at other retailers such as Dixon's and other electrical

suppliers. The products are only sold in the electrical suppliers and

stores other then dedicated phone dealerships after the introductoryperiod so the phones can remain limited edition, as this will

encourage younger consumers to buy them.

Promotions- Nokia tend to promote the new technologies and mobiledevices 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.

Product- Nokia phones tend to include all the latest technology and a

lot of the consumers favourite aspects such as text messaging andgames 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 with phones now getting small enough to fit in the palm ofyour hand as standard. Most of the phones produced nowadays have

accessories that consumers must buy with them (carry cases, hands free

kits and in-car chargers) these generate Nokia a lot of profit, as

they are very high priced.

Nokia's marketing mix has worked very well until recently as the

market they are aiming at has become more and more saturated and afterlooking at all the mobile phone sales figures, it looks as if the

phone companies can aim at this same youth market for about another 2

years until they need to change, but they should change sooner so theycan start making a bigger profit and get a head start on the

competition who will also have to change the market they are aiming

at. Nokia's current promotional strategy is working very well as they

are able to "talk to" a large number of consumers in different marketsrather then the niche markets the old promotional strategies where

restricted to.

Market segmentation

In order to plan their product Nokia must look at what area of the

market they want to aim the products at, as the current youth market

is more or less saturated Nokia will have to research into a new

market, I suggest the 55+ market as they will have lots of disposable


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income and my research shows that most people aged 55+ do not

currently own a mobile device and could be persuaded to buy one by

certain promotions and a good advertising campaign, also the drop incall prices should attract a lot of people who may have previously

been hesitant due the high costs.

Below is a table showing the population in terms of social grouping of

the U.K in 1999:

Socio-economic group

% Of population

A-Upper class

2.8%

B- Middle class

18.6%

C1- Lower middle class

27.5%

C2- Skilled working class

22.1%

D- Working class

17.6%

E-Low income earners

11.4%

I think that Nokia should aim their products at the socio-economic

group B (middle class) event though they aren't the biggest group theyare the group that is most likely to spend their money on a mobile

telephone as my questionnaire results showed.

Investigating consumer trends

As the main aim of market research is to develop an idea of market

opportunities, an important part of this research must be to track


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sales in order to identify those products, which are likely to

experience a rise in sales and to look at those in which the sales are

likely to fall.

Changes in customer demand, which continue in the same direction for

more then 2 years, show a long-term trend or saturation is occurringwithin the market. This is definitely a bad market for businesses to

be in (the mobile phone market is in the first year of a continuing

trend) and the company must consider changing their market or productto a market or product that is currently showing a continuing upwards

trend.

The marketing mix

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The marketing mix refers to the combination of elements within acompanies marketing strategy, these are designed to give the customer

what they want and in the long term are designed to maximise profits.The marketing mix is based around the idea of the 4 P's:

Product-The product is the centre of the marketing mix and the otherthree P's are based around it. Consumers purchase goods and services

for a variety of individual reasons and a company must be aware of all

of these when selling a product (that is why they conduct market

research).

Price-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 pricingstrategies, for example, competitor based, penetration or skimming.

The three main factors affecting the amount charged for a product or

service, are; the cost of production, customer demand and competition.

Place-This refers to the chosen outlets for a product or service, for

a product to be very successful it must be easy to access, Mobile

phones are very easy to access nowadays, they are sold insupermarkets, specialised outlets (either by network or brand) and all

major department stores.

Promotion-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 "moneyoff deals" and "free giveaways".

The stages of marketing


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1. Market and product research:

* Finding out what your customers want

* Technical research

2. Product launch

* Test market

* Pricing

* Branding

* Packaging

3. Product promotion

* Advertising

* Merchandising

* 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 analysing the sales

* Meeting customer satisfaction?

* Does the product need modifying or replacing?

* Is a profit being made?


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* Is customer service satisfactory?

* Have the sales targets been met?

* Is the promotion and distributionpolicy effective?

If a company gets to section 5 of the marketing cycle and a

substantial amount of the goals haven't been met then they will have

to consider re-launching the product or taking it out of the marketcompletely and placing it in a different market or changing it to meet

the needs of the current market.

Product life cycle- Mobile phones

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Introduction

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 hadto be persuaded to buy mobile telephones, as they were not yet

established as a necessity. When products are first released,

companies can expect high promotion fee's as the public are probably

not yet familiar with the product.

Also when mobile phones were first released they were bulky and hard

to use, as product design and development are a key figure in success,Nokia had to design phones that were smaller and simpler for consumers

to use. As people had paid a lot for earlier, more primitive products

they were obviously not going to pay the same high prices for laterproducts so Nokia had to develop phones that could be sold for less

and would last longer, this is where companies can expect to pay high

production costs.

When Mobile phones were first introduced they were not such a popular

item and there weren't as many competing companies in the market. So

Nokia and a few other companies (Sony and Panasonic) could chargehigher prices then they would in the highly competitive market that

they are in today, as there aren't so many companies competing for

market share.

Growth
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In the growth stage of the product life cycle companies can expect

advertising and promotional costs to be as high as in the introduction

stage as more companies will enter the market and competition formarket share will increase. Advertising is a proven way of promoting

technological advances within a market (as with the new company 3

promoting their new technology that allows people to watch video's ontheir handsets) so higher advertising costs can be expected as the

technologies available get better and more advanced.

The growth stage is also the stage that companies will (hopefully)

start to make a profit, based on good market research and a strong

sense of branding and a successful marketing scheme. In the growth

stage profit isn't the only thing that will start to develop, as thereare more companies in the market it is obvious that more technology

will be developed and that will drive prices higher, this is how

companies start to make profits (because consumers have accepted the

product, in Nokia's case, mobile phones, as a necessity they will bemore willing to pay higher prices for new phones that emerge in the

market).

Maturity

When a product enters the maturity stage, advertising and promotional

prices should decrease, as consumers are more aware of the product and

will research new additions to the market instead of being told whatis new (this is because phones have been promoted as fashion items and

will be desired by the consumers). At this point in the product life

cycle the main producers (Nokia, Siemens, Sony etc) should be clear asthey will have the most money to develop and promote their phones

while the other, less popular producers of phones (Panasonic, Toplux

and NEC) will be struggling to survive and will drop out of the marketeither here or they will seriously struggle in the next stage,

decline.

Decline

This is the stage that Mobile phones have entered (Nokia had recordedtheir first drop in sales earlier this year), and all the remaining

companies are trying to re-launch their products by either developing

their products or entering new markets. At this point phone sales willbe decreasing and promotion and advertising costs will start to rise

again as companies fight for the remaining market share and struggle

to make a profit.

Market research


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Nokia's business strategy (statement taken from www.nokia.com)

"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 personalised communication technologythat enables people to shape their own mobile world.

Nokia are currently creating innovative technology to allow people toaccess Internet applications, devices and services instantly,

irrespective of time or place. Achieving interoperability of network

environments, terminals and mobile services is a key part of our

intent.

Nokia need to capitalise on our leadership role by continuing to

target and enter segments of the communications market that we believe

will experience rapid growth or grow faster then the industry as awhole.

By expanding into these segments during the initial stages of their

development, Nokia have established themselves as one of the worlds

leading player's in wireless communications and significantlyinfluenced the way in which voice and other services have been

transferred to a wireless, mobile environment.

As demand for wireless access to an increasing range of servicesaccelerates, Nokia are planning to lead the development and

commercialisation of the higher capacity networks and systems required

to make wireless content more accessible and rewarding to the enduser. In the process, we plan to offer our customers unprecedented

choice, speed and value.

Nokia has a history of contributing to the development of new

technologies, products and systems for mobile communications. Recent

examples include: the commitment to the open mobile alliance; the

co-development of the new operating system for the future terminalswith symbian; short-range wireless connectivity with bluetooth; the

development of wireless LANs for enabling local mobility in fixed

LANs; and MMS for enabling mobile multimedia messaging.

In addition, Nokia have continued to be active in IP convergence. They

have established alliances with other service providers in order tomake mobile access services easier for the end user.

Market segmentation


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Market segmentation refers to the different areas of the population

that companies can aim their products towards. The market segment thatNokia has chosen to aim is the youth market focusing on students aimed

13-19 as market research has shown that some of the youth market are

receiving large amounts of pocket money and most have no realcommitments to spend it on and that means they have lots of disposable

income and will be able to spend a lot money on new mobile phones.

As a big company Nokia are able to do a lot of promoting and

advertising that smaller, less successful companies, may not be able

to afford, such as television advertising and sponsoring lots of

events that will be viewed or heard by large amounts of people intheir chosen market segment (events such as music festivals and music

awards are a goldmine for companies as they are viewed by millions of

people worldwide). Adverts such as television and print adverts will

be put into certain areas so that they can attract their chosen marketsegment, Nokia tend to put a lot of their print adverts in men's

magazines such as FHM and Loaded so they can appeal to all of theirreaders instead of a smaller percentage of the readers they would

attract in magazines such as Lifestyle and Good Housekeeping. I think

Nokia's way of promoting is very good as they can appeal to massmarkets and large amounts of people in their chosen market

segmentation with certain advertisement's and with sponsoring large

events like the ones I have previously mentioned.

Pricing strategy

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 newmarket, 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 productsfor 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.

Nokia's pricing strategy has proven very effective, this is down to

the fact that they first sell their products for high prices and have

very limited sales but make big profits on each sale, they then lower


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the price of their product and have lots more sales but they make less

profit, but they still make a large profit due to the amount of sales,

the other reason that they are so successful is that they offer highquality products and they sell them for the same price and sometimes

even lower prices then the competition and have now built up the

highest market share, they currently have 37.2% of the mobile phonemarket share and are the biggest selling mobile phone company in the

world.

Branding

Nokia phones are seen as being of the highest quality and this isreflected in their massive sales figures. The fact that they are seen

to be such high quality products is partly down to successful

branding, they have a highly recognisable packaging style and the

style of their handsets is similar in every line of production withthe company name printed just above the screen and just below the

earpiece. The fact that Nokia operate such an aggressive marketingstrategy has elevated them above the competition as consumers are

fooled into believing that branded products are "better" then

un-branded products or products produced by lesser-known brands suchas One Tel and other lesser-known phone producers in the market.

Documents

Marketing Plan Nokia