Marketing Plan Nokia Nokia
Marketing Strategy
Mission & VIsion of Nokia
Mission Statement:
1-To guide and focus decision making
2-To create a balance between the competing interest of various
stakeholders
3-To motivate and inspire organizational members
However, it is important to point out that mission statements do
not always deliver the promised benefits. In reality, mission
statements are often unreadable and uninspiring, and articulate
values that are unrealistic or are not aligned with day-to-day
organizational behaviour.
Previous mission statement research focused primarily on the
content of mission statements and/or on the manager’s perception
of the mission statement. Meanwhile, the mission statement
perception of individual organizational members received little
attention.
Vision Statement:
Nokia wants to create a new world; to transform a big planet to a
small village. Their vision is to create, build, and encourage people
from all countries to communicate with each other in order to
create a world where everybody is connected.
Humans learn from people around them, but men also seem to
forget that beliefs and thoughts differ from person to person. The
way of thinking, experiences, believes are simultaneously related
in a logic approach. Similarly, Nokia wants to create a world of
creativity
and
experience,
shared
experiences. mill
in
Tammerkoski in southern Finland. Frederick Idestam then built
another mill by the Nokiavirta River where he gave the name Nokia
to the mill in 1871. Originally, the Nokianvirta River was named
after a dark furry animal, locally known as the Nokia – a type of
marten.
Following a major industrial force, the company merges with a
cable company (founded by Eduard Polon) and a rubber firm
(founded by Arvid Wickstrom) which sets Nokia on the new path of
electronics. Nokia’s first electronic device was a pulse analyzer
designed for use in nuclear power plants in 1962. Their interest in
telecommunication systems began in 1963 when they started
developing radio telephones for the army and the emergency
services, prior to the manufacturing of televisions, radio phones,
data transfer equipment, radio link, analyzers and digital telephone
exchange. Nokia will change its production and focus on the
telecommunication expertise until it
becomes the core of its future work.
To move to mobile:
In 1979 Mobira Oy was the first phone maker. They begin life as a
joint venture between Nokia and leading Finnish television Salora.
The Mobile phone revolution started in 1981 with the launch of the
first Nordic Mobile Telephone (NMT) service. The phone industry
began to expand rapidly and Nokia introduces its first car phones
followed by the portable in 1986.
Mobile revolution:
In 1992, Nokia decides to focus on its telecommunications
business. This happens when Jorma Ollila becomes CEO of Nokia
and he chooses to concentrate on telecommunication industry. In
the 1990’s, the rubber, cable, and consumer electronics divisions,
were therefore sold. Nokia’s only business turned towards the
manufacturing of mobile phones and telecommunications
systems. The strategy of Jorma Ollila was to create a new era of
telecommunication on a long term vision.
In 1992, the company launched its first GSM handset and then
introduced their famous Nokia Tune in 1994. During that year, the
world’s first satellite was made using a Nokia GSM handset.
In 1997 the world famous mobile game “Snake” was presented in
the Nokia 6110. Soon after, in 1998, the company became the world
leader in mobile phones. Following a good deal of research, they
launched the first mobile phone “Nokia 7110” which included a
WAP.
Nokia Now:
Presently, Nokia is creating more and more mobiles phones with
differing functions. The company also makes sure into diversifying
and segmenting its products. Their leading position pushed the
company to go forward in their research. They came up with the
first 3G Phone in 2002, and the multi-player Nokia N-Gage. In 2005,
the N-series were born with their sophisticated mobile phones.
In 2006, Olli-Pekka Kallasvuo became the new CEO of Nokia and
Jorma Ollila shifted to being the Chairman of Nokia’s board. At
that time Nokia and Siemens announced plans for Nokia siemens
network the leading operations of Nokia. In 2007, Nokia launched
its new internet services brand.
In order to achieve its goals, Nokia developed strategies. These
strategies differ from country to another, from a culture to another.
Companies are always creating a vision and a mission statement
to make everything tacit. Evidently, Nokia has set up its specific
missions and visions
Nokia at Present
In 1992, the company launched its first GSM handset and then
introduced their famous Nokia Tune in 1994. During that year, the
world’s first satellite was made using a Nokia GSM handset.
In 1997 the world famous mobile game “Snake” was presented in
the Nokia 6110. Soon after, in 1998, the company became the world
leader in mobile phones. Following a good deal of research, they
launched the first mobile phone “Nokia 7110” which included a
WAP.
Nokia Now:
Presently, Nokia is creating more and more mobiles phones with
differing functions. The company also makes sure into diversifying
and segmenting its products. Their leading position pushed the
company to go forward in their research. They came up with the
first 3G Phone in 2002, and the multi-player Nokia N-Gage. In 2005,
the N-series were born with their sophisticated mobile phones.
In 2006, Olli-Pekka Kallasvuo became the new CEO of Nokia and
Jorma Ollila shifted to being the Chairman of Nokia’s board. At
that time Nokia and Siemens announced plans for Nokia siemens
network the leading operations of Nokia. In 2007, Nokia launched
its new internet services brand.
In order to achieve its goals, Nokia developed strategies. These
strategies differ from country to another, from a culture to another.
Companies are always creating a vision and a mission statement
to make everything tacit. Evidently, Nokia has set up its specific
missions
History of Nokia
Nokia’s first century:
The company was founded in 1865 by Frederick Idestam. The company
began a paper mill in Tammerkoski in southern Finland. Frederick
Idestam then built another mill by the Nokiavirta River where he gave the
name Nokia to the mill in 1871. Originally, the Nokianvirta River was
named after a dark furry animal, locally known as the Nokia – a type of
marten.
Following a major industrial force, the company merges with a cable
company (founded by Eduard Polon) and a rubber firm (founded by
Arvid Wickstrom) which sets Nokia on the new path of electronics.
Nokia’s first electronic device was a pulse analyzer designed for use in
nuclear power plants in 1962. Their interest in telecommunication
systems began in 1963 when they started developing radio telephones
for the army and the emergency services, prior to the manufacturing of
televisions, radio phones, data transfer equipment, radio link, analyzers
and digital telephone exchange. Nokia will change its production and
focus on the telecommunication expertise until it becomes the core of
its future work.
To move to mobile:
In 1979 Mobira Oy was the first phone maker. They begin life as a joint
venture between Nokia and leading Finnish television Salora. The Mobile
phone revolution started in 1981 with the launch of the first Nordic
Mobile Telephone (NMT) service. The phone industry began to expand
rapidly and Nokia introduces its first car phones followed by the
portable in 1986.
Mobile revolution:
In 1992, Nokia decides to focus on its telecommunications business.
This happens when Jorma Ollila becomes CEO of Nokia and he chooses
to concentrate on telecommunication industry. In the 1990’s, the rubber,
cable, and consumer electronics divisions, were therefore sold. Nokia’s
only business turned towards the manufacturing of mobile phones and
telecommunications systems. The strategy of Jorma Ollila was to create
a new era of telecommunication on a long term vision.
Nokia features & four V's
Features
Quality: Nokia phones are solid. The quality of sound and the
button make you feel ill at ease with the phone. Its materials and
components are one of the most important factors that push the
customers to buy it, the design too.
Speed: A Nokia phone response and transfer quickly items for a
phone to another. Also the short cut, easy, evident and simple to
use.
Dependability: Nokia phone will never let you down because of the
high autonomy of the battery. In some phones, especially
professional ones, they offer an extra battery to be always
available.
Flexibility: They produce cell phone suitable to every kind of
person. They have a wide range of style, from the basic use to the
professional one. Depending on the status, the software’s are not
the same. The features of phones for young people are not the
same as the professional one as they differ in the complexity of
their systems.
Cost: They produce a wide variety of products ranging from cheap
to very expensive. Most of the people can buy a Nokia starting
from 300 Dh, for e.g. Nokia 3310, to the expensive one like the
Nokia Sapphire that cost around 14,000 Dh.
Nokia’s 4 V’s:
Volume: Nokia has a medium to high volume because its produces
a large quantity of cell phones but not everyday. People buy a cell
phone once generally for a year or two.
Variety: Nokia produces only cell phone and other software. The
variety of the company is very low.
Variation: The variation in demand is very high. Nokia attempts to
meet the requirements of their customers both professional and
ordinary ones.
Volume: Nokia is located over 40 countries all over the world
including shops. We can see the brand name everywhere and it’s
much known.
The company has a mass and cell production process. It’s a mass
because it produces a large quantity of cell phones and it’s a cell
production because each cell phone is produced in a plant in
China, Finland and Brazil. The manufacturing of each phone is
done separately
Nokia success
Regaining Strategic Agility Success and market leadership often turn strategic
agility into strategic rigidity. Cognitive Broadening Through the 1990s and into
the early 2000s, Nokia was characterized by a tension between the focused
cognition on operational success in the core business and the broadened
cognition of planting seeds of renewal. The narrow focus jeopardized strategic
sensitivity, while the broadened focus fostered strategic sensitivity.
Corporate ventures, and their informal equivalent within NMP,
allowed experiential learning around, and away from, the core businesses.
Some of these ventures were positioned, and justified, as fitting with the core
3G trajectory of Nokia’s development. They obtained commitment and
resources, but in fact were used to explore new growth avenues.23 By giving
enough independence to Through the 1990s and into the early 2000s, Nokia
was characterized by a tension between the focused cognition on operational
success in the core business and the broadened cognition of planting seeds
of renewal. The narrow focus jeopardized strategic sensitivity, while the
broadened focus fostered strategic sensitivity.
The relative informality of the process and the variety and number of ventures
launched over a relatively short time frame called for intense discussions. The
structuring of these discussions around the forums described earlier allowed
for a richer strategic dialogue among a wider group of executives
and professionals than just top management or a separate venture group. In
the NMP process, the dialogue was even more direct and intense as the
innovative efforts were run informally within the same organization as the core
business,
under the sponsorship of the executive also leading Sales and Marketing
for Europe (Nokia’s core region at that time). The ongoing strategic dialogue
around ventures maintained a level of strategic sensitivity across a broad
cadre of people who might otherwise have been fully absorbed with
operational concerns. The co-existence within NMP of pressures for
operational excellence and of seeds of renewal created a healthy tension.
Although the belief in 3G primacy was strong and central, it was not totally
overwhelming. Sometimes, as with WLAN, Nokia was too early, losing
its interest to this technology for a while only to learn later that this was indeed
an important area. Sometimes, as with the first “communicator,” products did
not succeed commercially, but the learning and understanding they brought
were acknowledged and used
Nokia Supply chain
Nokia Supply chain:
For Nokia, the reality of a supply chain management is a fact; and the
commercial organisation chosen and the levels of service displayed are
proving it. Nokia doesn’t sale its cell phones directly to individuals, they sale
them through operators such (Bouygues, SFR, Maroc Telecom) and to
distributors (Cora, Auchan, Carrefour…) also to traders who are intermediate
who are responsible for the marketing of Nokia products with the small
distributors.
The supply chain management of Nokia is very strategic because of the
market expansion. It’s a market who grows slowly, so they should optimize
resources and the capacity of production. Another point that shows the
importance of supply chain manager holds that the competition is
exacerbated. One of the operators have manufactured in the Scandinavian
countries, so Nokia has to take decisions to optimize the supply chain to
counter their offer.
As a big MNC, it should be much organised. In the beginning it plans forecast.
Nokia looks to the market three years. Then, they make a forecast in their
sales over 12 months. Every subsidiary develops previsions of their market. In
their prevision of sale, things aren’t simple. It does not only make a historical
observation and then have a prevision, no; it must be taken into account the
rate of penetration in the country and its level of growth in the future. It looks
the part of the market that needs improvement.
These 12 months forecast and the daily schedule in the very short term allows
two things. It allows Nokia to know it needs for the next weeks and for the
next months, per 14 country, per family products. Then Nokia will optimize the
capacity of production which is then distributed. Each country will be given a
part of production.
Nokia is organised in the base of two teams. There is one team of prevision
and sales planning (logistics team), working against a team to optimize the
daily production capacity and supply (supply team).
Mktg plan of Nokia - Phase 1 (1)
PHASE 1:
EXECUTIVE SUMMARY:
Nokia is a leading mobile device manufacturer globally and has a high market
share. Maximum population in India prefers using Nokia handsets as it is user
friendly. It can use its customer’s goodwill and loyalty to diversify in the mobile
network market in India.
The communications sector in India has transformed into a multi-player
and multi-product market that has diverse market size and segments. In order
to diversify in to new market, Nokia needs to develop a marketing plan which
will give them the idea what factors to be considered before entering the
mobile network sector. The marketing plan includes all the factors that need to
be undertaken. They are market analysis, competitor analysis,
environmental analysis, customer analysis, internal and external factors.
The mobile network market is growing rapidly and has good opportunities for
new entrants to enter market and gain market share. Though there is
much opportunity in this market, there are some threats such as threat from
existing competitor, high customer churn rates, etc.
BACKGROUND OF NOKIA:
Nokia was incorporated by Fredrik Idestam’s on the banks of Nokianvirta river
in 1865. From its incorporation to till date Nokia had gone through four phases
(see figure 1). Nokia started as a paper mill company and by 1967 merged
with cable company and rubber enterprise to place Nokia in to
electronics. Between 1968-1991, it was positioned to take initiative in the
advancement towards mobile communications. During the period 1992-1999,
Nokia concentrated primarily on its telecommunications unit and became
market leader before the start of millennium. In the last decade, Nokia
continues to be the market leader with 3G, mobile gaming, multimedia
devices and with future challenges to be achieved.
Fig. 1: Timeline of Nokia
YEAR
PHASE
1865-1967
Phase I - Nokia’s First Century
1968-1991
Phase II - The move to mobile
1992-1999
Phase III - Mobile Revolution
2000-Till
date
Phase IV - Market Leader and
new technology
- Source: http://www.nokia.com/aboutnokia/company/story-of-nokia
Nokia’s Vision:
Their ‘Connecting People’ tagline states their vision to create a world where
everybody is connected every moment, everywhere and at any time.
Mktg plan of Nokia - Phase 1 (2)
MARKETING PLAN:
A marketing plan is a written document that outlines the marketers’
knowledge about the market place and point out how the company plans to
achieve its marketing objectives. Kotler (1991) states that marketing plan is
one of the most important output of marketing process.
PROPOSED PRODUCT
I have selected Nokia sim-cards as their new product extension. As they are
not in the service provider market, it will help them to diversify and gain
market share through the goodwill they have created over decades.
COMPETITOR ANALYSIS:
In order to enter in to the sim card market, Nokia will have to face competition
from already existing service providers such as Bharti Airtel which is the
market leader with over 93.92 million subscribers and market share of
21.73%. Followed by this is reliance and Vodafone with market share of
17.49% and 17.46% respectively. Whereas, new entrant Aircel has bagged
18.48 million subscribers and market share of 6.40% within a short span of
time. This indicates there is increasing demand in this market.
Hence, Airtel, Vodafone, Reliance, and Aircel are major competitors which
can dissuade
the growth of Nokia.
MARKET ANALYSIS:
It is a tool that helps organization to better understand the environment in
which they function (Kress, Webb, and Synder, 1994). It is critically assessing
the market in which the organization is launching a product. And is a vital step
in development of marketing plan. One of the methods used in market
analysis is Porter’s five forces framework. It implements five forces that show
competitive force and attractiveness of the market.
Bargaining power of Buyers (Customers): The customers in the service
provider market have high bargaining power because of following reasons:
· Availability of many service providers.
· The service is undifferentiated as most of the service providers provide
same service.
Bargaining power of Suppliers (Service Providers): The service providers
have limited bargaining power due to following reasons:
· Existence of many service providers.
· Fewer margins to differentiate service from other service providers.
Threat of New Entrants:
As there is significant growth in this market for the past few years,
which results in increasing threat from new entrants.
· Growing interdependence between service provider and cell phone
manufacturer.
· Low entry barrier.
Threat of Substitutes:
There is much threat from substitutes due to availability of many service
providers and also due to less scope to differentiate from the competitors.
Mktg plan of Nokia - Phase 1 (3)
ENVIRONMENTAL ANALYSIS:
It deals with scanning the business environment through collecting, analyzing
and implementing the available information for developing a market plan. The
tool used to scan the business environment is through PEST analysis.
Pest Analysis
Political Factors: It includes government rules and regulations under
which an organization must operate. It differs from one organization to
another as per the market in which it functions. In India, there is partial
regulation of government policies for service providers in the
telecommunications industry. As market is deregulated, it gives an opportunity
for Nokia to enter the service provider market with better service plans to its
customers.
Economic Factors: It affects the buying power of customers and also has
an impact on the company’s cost of capital. In current market situation of
global recession, people are opting for service plans with cheaper rates (Call,
text messaging) and also internet connectivity of the service provider, Nokia
can introduce its sim-card with better coverage, cheaper rates,
internet connectivity and additional services for people using Nokia handsets.
This will give an edge to Nokia to penetrate in the service provider market.
Social Factors: It deals with customers profile such as demographic, culture,
occupation, etc. As the number of people using mobile phones in India
is growing every year, Nokia can penetrate the service provider
market by selecting its target market and offering service plans according
to the usage. Nokia can segment the market as per region, population, and so
on.
Technological Factors: Research and Development (R&D) plays a key role
in success of any organization. The more technological advance the firm is,
the better they have advantage to capture the market. As Nokia is well-known
for its wireless technology and is among the leading player. They can use
their advance technology in the service provider market and provide strong
network range. Also high internet connectivity will give an edge over the
existing network service providers.
Mktg plan of Nokia - Phase 1 (4)
CUSTOMER ANALYSIS
At present, almost everyone uses cell phone. Therefore, the target segment
for this market cannot be specific. Nokia needs to target population according
to their usage by providing customize service plans so that the customer can
select the plan which meets their requirements. They can also segment
customers regionally as the usage is much more in urban market.
SWOT ANALYSIS
Strengths:
Huge market share: Nokia has huge market share in the cell phone sector
and therefore can use its image to be successful in the service provider
market. World-class technology: Nokia can make use of its world class
research and development team to design better network coverage for its simcards.
Geographical Reach: As Nokia is one of the renowned brands globally, its
presence in the market is very high and can use this to provide its sim-cards
service to majority of population.
Weakness:
New in the market: As Nokia is new in the service provider market, it will be
difficult to attract customers towards its sim-cards and service plans.
High customer churn rate: Due to many competitors in the market and less
margin to differentiate the service from competitors, customers switch from
one service provider to other if they are not satisfied with its service.
Opportunities:
Untapped Market: Nokia is new to the service provider market and has an
opportunity to explore the market.
High market growth rate: As the number of people using mobile phones is
increasing rapidly. There is high growth rate in the market.
Increase Market Share: Nokia can increase its market share by untapping the
service provider market and increasing its customer base.
Threats:
Competitors threat: Nokia face competitors threat from market leaders such
as Airtel, Vodafone and also from new entrant Aircel which has been
successful to gain market share within a short period.
Global recession: It led to less amount of disposable income with the
customers. Hence, customers think twice before investing his money.
Market Saturation: It poses as another threat if the service provider market
saturates due to financial crisis caused by recession.
CONCLUSION
Nokia’s strategy to diversify from cell phone manufacture to Nokia mobile
network will be a great success. Moreover, it can use its goodwill and loyalty
of people towards Nokia cell phone to use its sim-cards. As majority of service
provider’s focus on urban areas, Nokia can use its geographical reach to
untap the rural market.
Mktg plan of Nokia - Phase 2 (1)
PHASE 2:
EXECUTIVE SUMMARY
After the completion of planning stage of marketing plan, an organization has
to go through next stage which is strategic options. It deals with various key
issues that a firm needs to look at. They are marketing objectives, Strategic
objectives, Marketing mix, STP (Segmentation, Targeting, Positioning)
process, Distribution process and Value chain.
The phase 2 of the marketing plan for Nokia SIM cards deals with each of
this. In order to diversify in to SIM cards market, Nokia needs to identify key
issues that it has to deal with and the competitive advantage it needs to focus
on to penetrate in the market and gain market share. The marketing
objectives deal with increase in sales volume and profitability. Strategic
objectives can be found out with the help of BCG matrix. Marketing Mix deals
with the 4 P’s (Product, Price, Place, and Promotion). Distribution process
deals with the ways in which Nokia can deliver its SIM cards to the customers
and Value chain deals with the steps that needs to be undertaken in order to
manufacture and deliver SIM cards to its customers.
MARKETING OBJECTIVES
It is defined as, ‘marketing goals that the business must achieve in order to
meet its wider business objectives’. Some of the main marketing objectives of
an organization are to increase its market share, differentiate its products from
competitors, develop brand value among its customers, and introducing new
products or services in the market. The strategic objectives of an organization
can be measured with the help of BCG matrix. BCG matrix helps to measure
an organizations business units or product lines.
Mktg plan of Nokia - Phase 2 (2)
After the completion of planning stage of marketing plan, an organization has
to go through next stage which is strategic options. It deals with various key
issues that a firm needs to look at. They are marketing objectives, Strategic
objectives, Marketing mix, STP (Segmentation, Targeting, Positioning)
process, Distribution process and Value chain.
The phase 2 of the marketing plan for Nokia SIM cards deals with each of
this. In order to diversify in to SIM cards market, Nokia needs to identify key
issues that it has to deal with and the competitive advantage it needs to focus
on to penetrate in the market and gain market share. The marketing
objectives deal with increase in sales volume and profitability. Strategic
objectives can be found out with the help of BCG matrix. Marketing Mix deals
with the 4 P’s (Product, Price, Place, and Promotion). Distribution process
deals with the ways in which Nokia can deliver its SIM cards to the customers
and Value chain deals with the steps that needs to be undertaken in order to
manufacture and deliver SIM cards to its customers.
MARKETING OBJECTIVES
It is defined as, ‘marketing goals that the business must achieve in order to
meet its wider business objectives’. Some of the main marketing objectives of
an organization are to increase its market share, differentiate its products from
competitors, develop brand value among its customers, and introducing new
products or services in the market. The strategic objectives of an organization
can be measured with the help of BCG matrix. BCG matrix helps to measure
an organizations business units or product lines.
Stars (Build): Stars represents an organization that has large market share in
a rapidly growing industry and focuses on increasing sales and market share.
In case of Nokia entering the mobile network market, they have dominated the
Indian cell phone market for many years. But to maintain this lead in the
service provider market they need to make huge investments to develop their
R & D and also their supply chain department so that it can utilize its
geographical reach to provide its mobile network service to people living in
rural areas also which is still an untap mobile network market up to a certain
extent.
Question Marks (Hold): It represents a firm which has a small market share
in a high growth market and the objective is to maintain market share. In case
of Nokia SIM cards, initially they need to penetrate in the market with cheaper
rates than their competitors and provide service plans as per the needs of the
customers. By implementing these strategies they will attract certain market
share but whether they will sustain in the market is unknown.
Cash Cows (Harvest): It represents an organization that has small market
share in a growing market and the objective is to maximize profit though its
sales and market share is falling. In case of Nokia entering mobile network
market, they will be new to the market and have a small amount of market
share. If its growth is stable or declining due to much competition from
competitors than it needs to maximize its profit by engaging into tie-ups with
existing players.
Dogs (Divest): It represents a firm which has very small market share in a
mature market. The objective is to wind up or sell its product rights to other
organization. In case of Nokia SIM cards, if it fails to gain market share then it
needs to sell its mobile network to other player in the market or else has to
completely wind-up its business from the market
Mktg plan of Nokia - Phase 2 (3)
Another tool to measure its marketing objective is through SMART i.e.
Specific, Measurable, Achievable, Realistic, and Time bound.
·
Specific: It refers to be precise about what organizations marketing
objectives. In case of Nokia SIM cards, Nokia needs to determine the target
market which it will be focusing. It also needs to specify it’s positioning of SIM
cards among the population such as teenagers, college students,
professionals, etc.
·
Measurable: It refers to quantify a firm’s objective. In case of Nokia SIM
cards, it needs to measure the growth rate of the market and plan its
strategies accordingly.
·
Achievable: It refers an organization to verify its objectives and to make
sure that they are not expecting too much growth from the market. In case of
Nokia SIM cards, it needs to have a detail market as well competitor analysis
so that they can accordingly plan its marketing objectives.
·
Realistic: It refers to availability of necessary resources to achieve the
objective of an organization. In case of Nokia SIM cards, Nokia has necessary
resources such as financial, R & D, Human resource, etc. Therefore, their
objective is realistic.
·
Time bound: It refers to state the time when the objective will be
achieved. In case of Nokia SIM cards, as they have necessary resources and
expertise R & D, they can enter the mobile network market within a short
period of time.
MARKET SEGMENTATION, TARGETING AND POSITIONING
Market Segmentation
It is process of dividing the market in to segments based on different
characteristics. The various ways to segment the market are: Demographic,
Psychographic, etc. Consumer based segmentation can be executed on
product specific basis. It is a process of segmenting customers on various
dimensions. Nokia has to target its customers based on their usage. For
instance, cheaper call rates and SmS for college students, faster internet
connectivity for professionals, etc.
In order to evaluate the market segment, Nokia needs to look at two major
factors: Overall attractiveness of the market and company’s objectives and
resources
Mktg plan of Nokia - Phase 2 (4)
Market Targeting
One of the key elements of marketing strategy is to select its target market. A
target market can be defined as a market or group of customers that the firm
has decided to target its products or services through its marketing strategies.
As Nokia is new in the SIM card market, it has to target its customers at the
lower end as to increase its customer base and ultimately market share.
Moreover, there is high usage rate in urban areas and among youngsters
therefore Nokia needs to select the target market accordingly. They can also
use undifferentiated marketing to target its selected market.
Market Positioning
It refers to position a firm’s product or service in customer’s mind so that
customers can differentiate a firm’s product from other. In order to position
product, a firm need to select its target segment and thereby position its
product. Nokia has position its SIM-cards in the same manner as it had done
to position its cell phones. It can position its SIM cards as better network
coverage, cheaper call rates, good customer service and so on. This will help
its customers to get emotionally connect to its service and thereby prefer
Nokia SIM cards over its competitors.
1.
STRATEGIES FOR GROWTH
Generic Strategy
The term generic strategy was introduced by Michael E. Porter to find ways
how companies compete in segmented market and gains advantage over its
competitors. The firm can achieve competitive advantage over other players
by differentiating its product and service offerings. There are three key generic
strategies that an organization can undergo to achieve competitive advantage
over other firms. They are cost leadership, differentiation and focus
Mktg plan of Nokia - Phase 2 (5)
·
Cost Leadership: A company who tries to gain competitive advantage
by pricing its product lower than competitors can achieve strategic growth
through cost leadership. In case of Nokia, the price of the SIM cards should
be kept low to target broad market and achieve cost leadership. They can
thus achieve competitive advantage among customers over its competitors.
·
Differentiation: It refers to an organization offering its product or service
that differentiates from its competitors to gain competitive advantage. In order
to differentiate its product a company has to incur higher cost in its R & D.
Nokia can differentiate its SIM cards by offering customize service plans to its
customers which they can select as per their usage.
·
Focus: The firm which focuses on a particular market tries to use niche
marketing to gain competitive advantage. It is done through targeting its
product offering to narrow market. Nokia can use this strategy to gain
competitive advantage over its competitors by targeting its SIM cards
particularly in rural market which is still untap to a certain market. It may also
involve a high cost but they can use their cell phone market geographical
reach to target that market.
Mktg plan of Nokia - Phase 2 (6)
MARKETING MIX
It is the most famous marketing term and is used by all organization to target
its customers. The elements of marketing mix are the basis of a marketing
plan. It includes 4 P’s for products and 7 P’s for services. They are Product,
Price, Place, Promotion and extended P’s i.e. Physical evidence, People and
Process for services.
Product
A product is a tangible thing that is sold by an organization to its customers in
order to gain market share. To gain market share a firm needs to differentiate
its products from competitors, be innovative, and eliminate the products which
are not doing well in the market. In case of Nokia, it is a market leader in cell
phone market. To gain market share and increase its customer base, Nokia is
diversifying into SIM cards market. To differentiate its product from the
competitors it has to use various strategies such as mass marketing. The
product offered by Nokia i.e. SIM cards can be described with the service that
they can offer.
Price
Price refers to the amount a customer is willing to spend. It is determined by a
number of factors such as market share, growth rate, competitor pricing, etc.
Nokia has to keep its SIM card prices low in order to penetrate into the mobile
network market. They need to offer service plans as per the usage of the
customers. While pricing, Nokia needs to keep in mind different segments that
they are targeting. For instance, different plan for youngsters, corporate,
businesses, SBUs. They also need to constantly update its pricing in order to
compete with its competitors.
Place
It refers to geographical area where the product is placed. It also includes
outlets, distribution channel. Nokia needs to make available its SIM cards both
in rural and urban areas. It can also use its geographical reach to untap the
rural markets which is still not properly covered by the existing competitors.
Nokia can also use its customer care centres to sell its SIM cards. Apart from
this, they can provide its SIM cards to retailers and dealers.
Promotion
It represents all the marketing activities that are carried to promote a product
in the market. There are various mediums to promote products such as
advertisements, hoardings, etc. Nokia can use various mediums to promote
its SIM cards. It can use celebrities, advertisements, hoardings, sponsoring
events, etc. They can also spread awareness about its SIM cards by using
canopies outside colleges.
Mktg plan of Nokia - Phase 2 (7)
1.
NOKIA SIM CARDS VALUE CHAIN
The value chain was developed by M. E. Porter in 1980. It is a systematic
approach to study the growth of competitive advantage. It consists of a chain
of activities that create and build value. These factors ultimately contribute to
the total value delivered by a firm.
The value chain of Nokia SIM cards consists of 5 steps before it is made
available to the customers. The first step consists of platform provider. It deals
with license to install mobile network. In India, this license is provided by TRAI
(Telecom Regulatory Authority of India). The next step is R & D; Nokia has
the necessary resources in order to diversify in to SIM cards market. Some of
the resources required are finance, technology, human resource,
infrastructure, etc. The next step in the value chain is content and services. In
this, the companies R & D has to analyze the market and then decide the
necessary content and service to provide with its SIM cards. The next step is
manufacturing of SIM cards which is to be decided whether Nokia will use it
resources or outsource it. The next step deals with distribution of SIM cards in
the market which can be done in two ways: through franchises and through
distributors. And at last the SIM cards will be available for the customers to
make use of it and derive the value in comparison to its competitors.
Distribution Process
The distribution process of Nokia SIM cards is through two ways:
·
Franchise – Dealer – Customer: Nokia can sell it SIM cards to the
franchise which will sell the SIM cards in the outlet and also through providing
to dealers which will then make available to the customers.
·
Distributor – Dealer – Customer: Nokia can also use this distribution
channel by providing the SIM cards to regional distributors which will sell
directly to customers and also provide it to dealers who will ultimately sell to
customers
Mktg plan of Nokia - Phase 2 (8)
SIPOC Process
There are five steps in the SIPOC process. They are Supplier, Inputs,
Process, Output, and Customer.
While considering the manufacturing of Nokia SIM cards in the market, Nokia
needs to undergo through the SIPOC process. It will help them to understand
who would be the suppliers i.e. whether they will manufacture it or outsource.
It will help them to understand what the necessary resources are in order to
introduce Nokia SIM cards. The output will give them the idea what are the
different SIM cards they going to introduce in the market. Customers will give
them the idea who their target markets are and according provides service
plans. And finally the process deals with customer service and the necessary
strategies to be undertaken in order to gain market share.
CONCLUSION AND RECOMMENDATIONS
In order to diversify its business in to mobile network market, Nokia needs to
make use of its leading mobile phones manufacturer image. As Nokia has
build loyalty among its mobile phone users, it can use this for attracting
customers towards its SIM cards and thereby gain market share. Also with its
world class R & D department, it can offer many services to its customers
which will help them to differentiate in their service offering from its
competitors. For instance, video calling, free roaming, outgoing call restriction,
etc. By focusing more on rural market which is untap to a certain extent, Nokia
can satisfy its customers in rural areas which most of the existing players are
not successful. Also by offering customize service plans to its customers such
as offering SmS package, unlimited internet package, Free Hello tune, and so
on with minimum price. Nokia can also make tie-ups with existing players
such as Airtel, Vodafone, Aircel in order to gain larger market share. It can
also offer better deals to customers who are buying Nokia handsets on its SIM
cards which will increase its sales as well as customer base. This will help
them to develop loyalty among its customers. In order to diversify in to SIM
cards segment, Nokia needs to use mass marketing by implementing various
promotion strategies such as Advertisements, Hoardings, Sponsoring events,
canopies outside colleges and so on. Nokia also needs to plan its distribution
strategy in order to reach to maximum people. They can also use their
‘Connecting People’ tagline in its SIM card, thereby giving additional meaning
to it.
Thus, to diversify in to SIM card market is a better option for Nokia to increase
its market share and revenue. Also this will help them to build larger customer
base which will ultimately result in one of the leading brands in the
telecommunications industry.
Nokia Marketing Strategy and Nokia Launches 2013 and 2014
Nokia Phone Marketing Plan and Strategy of Nokia Phone world wide
strategy.