1 | P a g e

Assignment Topic

“Critically evaluate the marketing strategy of Nokia”

Marketing Management

Master of Business Administration

Prepared By

Isaac Victor. Neduri

STU 13633

Blake Hall College

Total Words 2,476 (Excl bibliography and contents)

Submission Date: 8th March 2010

1 | P a g e

2 | P a g e

Table of Contents

Abstract...........................................................................................03

Background of Nokia .................................................................... 04

SWOT ............................................................................................ 05

Mission Statement .......................................................................... 05

Corporate Development strategy.......................................................08

McKinsey 7s ................................................................................. 10

Marketing Mix ................................................................................. 11

Suggested strategies for Nokia.......................................................... 13

Bibliography ................................................................................ 14

2 | P a g e

3 | P a g e

“Marketing is not the art of finding clever ways to dispose of what you make. it is the art of creating the genuine customer value”. Philip Kotler

ABSTRACT

Presently Nokia is the world’s largest mobile telephone device manufacture

http://en.wikipedia.org/wiki/Nokia whilst mobile phone devices are increasingly becoming

the necessary commodity. With new entrants in the market and heavy investments are needed

to upgrade. In the midst of these chaos it is remarkable to see how the world’s largest mobile

phone manufacturer able to maintain its competitive edge whilst maintaining its consumer

loyalty and brand image. as part of this assignment we shall analyse and focus on the

marketing strategy of Nokia. Besides analysing of how the factors like globalisation, and E-

business has been incorporated in their market planning

3 | P a g e

4 | P a g e

Background of Nokia:-

Nokia produces mobile devices for every major market segment and protocol, including

GSM, CDMA, and W-CDMA (UMTS).( http://en.wikipedia.org/wiki/Nokia) presently it is

the world’s largest mobile phone manufacturer with market share up to 39% Globally. It is

the most admired brand, ranking 5th position. Initially Nokia started as pulp industry in 1865

then in next 100 years it emerged as a powerful industrial conglomerate. In 1967 it entered

into mobile communications catering niche market i.e., Finnish military, within the next 30

years it has become the world leader in mobile phone market. Nokia is customer oriented

organisation

The Nokia`s marketing is mainly involved in identifying the customer requirements and

cater to needs of the customer accordingly. Nokia is a market driven company it quickly

adopts strategic level marketing where marketing has a key role in defining the long term

objectives and vision of the company. As the company products are technologically driven,

so the user requirements are highly volatile. Nokia has to keep the pace and satisfy the

consumer .There is always a progressive and continuous increase in customer involvement

with technology and communications globally. Increasingly the modes of communication are

broadening. “Nokia’s promise is to connect people in new and better ways.

Nokia’s strategy is to build trusted consumer relationships by offering compelling and valued

consumer solutions that combine beautiful devices with context enriched services”.

[http://www.nokia.com/about-nokia/company/vision-and-strategy accessed on 7.03.09 ]

Strategy: a definition

“A strategy is fundamental pattern of present and planned objectives, resource deployments,

and interactions of an organisation with markets, competitors, and other environmental

factors.” Cited in Orville C. Walker et al, 1992 Marketing strategy: Planning and

Implementation, Pg 8. Richard D. Irwin Inc

4 | P a g e

5 | P a g e

Nokia Strategic Planning Process consists of the steps shown below we examine steps in the

sections below:-

Business mission

SWOT analysis (both internal and external)

Goal Formulation

Strategy Formulation

Implementation

Mission statement: -

“our vision is the world everyone can be connected”.(

http://www.nokia.com/about-nokia/company/vision-and-strategy accessed on 07.03.10) Thus

the scope of Nokia refers to the breadth of its strategic domain i.e., the type of the industry it

is operating in, and scalability of their product lines. It covers almost all the market segments

it competes in, with its mission statement. The mission statement defines the essential nature

of its business and what it is planning to be in future

S.W.OT:-

Strengths:-

Nokia is one of the most popular mobile communications manufacturers. Its greatest

strength is its strong brand image. Its brand equity is rated as top 5th in best global

brands and valued at 34,864$ million.

(http://www.interbrand.com/best_global_brands.aspx accessed on 07.03.10) as

compiled by Inter band-Business Week in 2009 (Inter brand, 2009)

Nokia Offering high product quality well built and durable handsets,

Scalability of products, new product innovations designed to satisfy user preferences.

Strong supply chain network. Nokia has an extensive marketing and distribution

network by offering its products through its own retail outlets and also through

network service providers.

Strong Nokia Siemens tie-up

5 | P a g e

6 | P a g e

Weakness:-

Highly priced as compared to its competitors like Sony Ericson and Motorola

High supply chain cost

Opportunities:-

Nokia has only 6% of total CDMA market share where as their biggest competitor in

CDMA Motorola owns a market share of 33%. Thus Nokia has a opportunity in

Increasing their presence in the CDMA market

Nokia has new market opportunities in many developing countries that are in Africa

and Asia continents. Where mobile phone implementation still has more room to

grow

Increased attention on 3G Market

Threats:-

Nokia facing serious threats of brand piracy China mobile limited made counterfeit

products which are produced in china and distributed throughout the world. This

causes serious damage to the Nokia brand name.

Mobile phone service providers like Vodafone O2, Orange, and 3 networks has

started to market their own branded products making use of their brand fame

Higher import charges.

New Entries into Market line Apple computers and HTC with cutting edge

technology

Goal Formulation:-

After completion of environmental analysis, Nokia has proceeded to develop specific

goals for a planning period. Nokia has introduced products, balancing short term profit

versus long term growth. balancing deep penetration into existing markets with

development of new markets for instance, Nokia has been developing its numbered series

with all the core and conventional requirements of a mobile phone device, besides

developing a new range of products like using internet services on the phone and

simultaneously offering social networking services and SIP phones etc that are to

embedded in one handset to meet customer requirement and satisfaction

6 | P a g e

7 | P a g e

Strategy:-

Nokia new mission was to focus on more attractive market opportunities like 4G technology

where its strengths resources and competencies can provide a sustainable competitive

advantage to generate profitable revenue growth. Nokia is organised into four operating

divisions they are, Nokia Mobile Phones, Nokia Networks, Nokia Ventures Organizations,

and Nokia Research Centre.

“Every business strategy consists of a marketing strategy plus compatible technology strategy

and sourcing strategy” (Philip Kotler, 2001, p.47)

In view of Michael porters condensed three generic marketing strategies, Nokia seems to be

observing differentiation and focus types of strategies together , “In differentiation strategy

the business concentrates on achieving superior performance in an important customer

benefit area”(Philip Kotler, 2001, p.48.) Nokia differentiates itself through leadership in

developing user friendly phones, which are being catered to most of mobile phone market.

“In focus business strategy business focuses on one or more narrow market segments”

”(Philip Kotler, 2001, p.48.). Nokia is excellent in understanding customer requirements and

meeting them accordingly, it also good in focusing on extremely narrow segment and

produces handsets that suits the needs for instance Nokia is the first company to produce

handsets that has user interface in 16 different languages in India. Thus knowing these

Segments intimately and achieving leadership in market

Corporate culture at Nokia:-

• Nokia Way of approach represents the speed and flexibility in decision-making.

• Nokia is Flat-networked organization with a blend of bureaucracy

• Enhanced shareholder value

• The Nokia Values are Customer Satisfaction, Respect, Achievement, and Renewal.

7 | P a g e

8 | P a g e

Corporate development strategy:-

Since some high growth markets are likely to mature over time, and some high profit,

mature business may decline as they get older. With respect to these limitations Nokia has

Nokia has applied two business strategies seeking future business growth. I.e. Expansion

and diversification

Expansion: -

Presently Nokia is extending its business activities into computer tablet manufacturing,

offering new product line to existing customers. “Another way to expand existing

business is to develop product line extension or new product extensions or new product

offerings for existing customers.” (Orville C. Walker et al, 1992, p.49) Thus Nokia

corporate strategy is reflecting its continuous expansion of new series of mobile handsets

offering different services suiting different consumer needs like N-series, E-series, C

series and numbered series etc.

Diversification:-

Diversification through vertical integration “vertical integration is one way for

corporation to diversify their operations.”(Orville C. Walker et al, 1992, p.49). Nokia

was engaged in backward integration by acquiring its suppliers as a part of its corporate

strategic decisions for instance NAVTEQ, “NAVTEQ is a Chicago, Illinois-based

provider of Geographic Information Systems (GIS) data and is a dominant company in

providing the base electronic navigable maps. The company is a wholly-owned subsidiary

of Nokia but operates independently” [http://en.wikipedia.org/wiki/Navteq accessed on

07.03.10]. Integration gave firm access to tighter control over marketing distribution and

servicing of its products

8 | P a g e

9 | P a g e

Portfolio Models– BCG Matrix

These models help to classify and review the current and prospective SBU’s- at present Nokia. One of the best portfolio is Growth- share matrix developed by BCG ( Boston consulting Group) it assesses the products and investing resources in different business units on the corporation`s future earnings and cash flow (Orville C. Walker et al, 1992, p.51)

With regards to the BCG model, The Nokia brand can be placed as a fusion of star and cash cows. Although Nokia has a high market share 39% with some of its products ranges has a very low market growth rate for instance Nokia’s N-gage series, Nokia has to be more creative and should be able to innovate new product lines to attain its position as a star. In the midst of market turmoil due to new potential entrants like Apple I phone and HTC and black berry

Nokia Premium series like Nokia communicator which are aimed to target niche market has been showing a weaker performance, all the entry level mobile phones can be placed as cash cows like 7610, 6600, 3210, 3310 2100 etc..

Nokia’s hot selling N-series would be classified as a star. As it has gained significant market share besides gaining leadership in that target market

Limitations of Growth –Share Matrix:-

Growth share matrix uses only two variables to define the firm’s business

Market Growth rate is an inadequate descriptor of overall industry attractiveness

Relative market share is not enough to depict over all competitive strength

9 | P a g e

10 | P a g e

IMPLEMENTATION:-

McKinsey 7s

“A clear strategy and well thought out supporting programme may be useless if the firm fails to implement them carefully. Indeed strategy is only one of the seven elements” ”(Philip Kotler, 2001, p.48.). Thus Mc Kinsey has added strategy as only one of the element in their 7’s frame work. Thus 7`s frame work implementation is vital for affective business management

Structure

Nokia is a global organization, with its well organised structure Nokia Mobile Phones, Nokia Networks, Nokia Ventures Organizations, and Nokia Research Centre

Strategy

Nokia mission clearly states that it aims to lead the mobile phone manufacturing industry Taking leadership in the mobile phone production. Nokia is the leader in Europe and number one in American and Asian market. However, in recent times Nokia is facing challenge to sustain its position as a leader in mobile phones. Nokia aims to sustain its leadership position with innovative and user friendly design. It has developed innovative services such as predictive texting in mobile phone voice dialling etc

Systems

Nokia is decentralised organisation. Its corporate structure reflects the global nature operations. Nokia mainly benefits in delivering products by understanding the local culture

Style

The act of incorporating new techniques and new ideas and the investment in developing new products is the core success of the organisation.

Skills

Nokia has build-up strong relationship with the top rated universities and place the students into the business and provide them in training and development throughout their career with the company skilled Staff. Besides Nokia offers a Competitive pays and perks including flexible work patterns pension schemes etc

Shared Values

Nokia is customer oriented organisation it has continuous focus on volatile customer requirements as it is technologically driven industry Nokia R&D department is committed to meet the customer demands rightly.

10 | P a g e

11 | P a g e

Implementation of marketing plans

Marketing Mix

“The marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.” (Philip Kotler, 2001, p.9.) Marketing mix signify the generic strategic tools of a marketing plan. These tools are classified into four broad clusters and they are well known as the 4P’s – Product, Price, Place, and Promotion

Product Price Promotion Place

11 | P a g e

Marketing Mix Marketing Mix

Product variety

Quality Design Features Brand name Packaging Sizes Services Warranties Returns

List price Discounts Allowances Payment

period Credit terms

Sales promotion

Advertising Sales force Public

relations Direct

marketing

Channels Coverage Assortments Locations Inventory Transport

Target Market Target Market

12 | P a g e

Price:-

The product group is the heart of the marketing mix and the other 3p’s follow the first one. Nokia is good in producing the phone with added innovative features. It almost upgrades every six months, and Nokia offers high quality well built durable, high-prestige and high performance, besides to these attributes Nokia offers a wide range of products that suits different customer market segmentation

Price:-

The next P that comes in the order is price which also has significance as that of product, Nokia Across its entire range, of mobile phone models Nokia offers a variety of prices to suit different segments. The company uses the Pricing Strategy that best suits its models for instance. The model, Nokia 1100 is the market penetration and Nokia n-95 is the market skimming.

.

Place

Nokia does not sell products on its websites, Traditional retail outlets still make up a large share of Nokia products sold and include Nokia priority shops and individual mobile phone retailer

The supply chain network consists of Nokia – Distributer- Whole seller - Retailer – and final to Customer However Online retailers such as Amazon, phones4u, e-bay offering Goods through their websites

Promotion

Nokia promotes its products in a traditional way using most of the media platforms

12 | P a g e

13 | P a g e

Suggested marketing strategies for Nokia:-

To sustain a leadership position in the industry, Nokia has to employ confrontation strategy

to maintain its leading share position. According to this strategy the primary objective of

Nokia is it should protect against loss of share by meeting or beating a head to head

competitive offering such as i phone, improve its ability to win new customers who might

otherwise be attracted to competitors offering, however in recent times Nokia has come up

with this strategy to beat I-phone market by introducing a cutting edge technology mobile

device called N900.

Managing E commerce and online marketing:-

“Electronic commerce describes a wide variety of electronic platforms” (Philip Kotler, 2001,

p.330)

Internet has enabled companies to decentralize the Global communications possible. Nokia is

marketing its products to the customers that fall under younger, more affluent, and educated

segment. These audiences get information about multiple brands, capable of comparing costs,

prices and features, without relying on the manufacturer or the retailers

Nokia has established an electronic presence in the web in three ways:

Buying space on commercial online service

Selling through another site(like amazon, etc)

Opening its own website/ micro site

Nokia on the other hand operating a online store called OVI store which sells applications for

the enthusiastic customers. Nokia’s business marketing is actually the driving force behind

these micro sites

Use of information in marketing:- The Nokia webpage is appealing , relevant and up to date

to attract repeat vists “ Nokia encourages customers to subscribe them to podcast where by it

can add weekly news or any new product arrivals

13 | P a g e

14 | P a g e

Bibliography

1. Philip, K (2001) A Frame Work For Marketing Management: Prentice and Hall

2. Philip, K(2001) Kotler on Marketing: Free press

3. Orville c. Walker,(1992) Marketing Strategy: Planning and implementation: Irwin Inc

Websites:-

www.wikipedia.org(Accessed 01/03/10).

www.nokia.com (Accessed 01/03/10).

Interbrand (2009). Best Global Brands 2009 Rankings. www.interbrand.com (Accessed

03/03/10)

www.nokiasiemensnetworks.com (Accessed 01/03/10).

Marketing and Corporate Strategy 2010 www.rdi.co.uk (Accessed 03/03/10)

14 | P a g e

15 | P a g e

15 | P a g e