Nokia - marketing Plan

8/9/2019 Nokia - marketing Plan

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Index

Executive Summary 03

History of NOKIA 04Company Profile07

Introduction08

Vision of NOKIA09

Mission Statement of NOKIA 09Current Market Situation 10Objectives of NOKIA 11Marketing

12Market Segmentation 14

Niche Marketing15Target Market 16Positioning Strategy 16Marketing Mix 17Product

17Product Mix Strategies

19Price

20Price determination factors 21Distribution

22Promotion

23SWOT Analysis

24Bibliography 25


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Executive Summary:NOKIA is the Global leader in the mobile phone sector. NOKIA wasfounded in 1864 in Finland. The first business of NOKIA was papermaking and selling. Then it switched to rubber works and then to themost important sector of its life which was telecommunication sector.Today NOKIA is leading all over the world with a reputable andrecognized image in the mind of people.The key elements of NOKIAs vision are reduced mobility, growth andquality, therefore, NOKIA majorly focuses on these three elementswhich serve to be Global leader. Their mission statement is:"NOKIA, together with its employees, will make a meaningfulcontribution to the community in each individual country it operatesin."There are approximately six to seven competitors of NOKIA in themarket of Pakistan. The major objectives of NOKIA include, marketingobjectives, advertising objectives, financial objectives and societalobjectives. And each and every step is aimed to obtain theseobjectives.We focus in this research report mainly on its marketing that all thetopics of marketing with reference to NOKIA but our major focus is onthe marketing mix of NOKIA which consists of four elements.These elements of marketing mix are Product, Price, Place andPromotion.We have also described the segmentation and target marketing ofNOKIA. This report consists of promotional strategies of NOKIA topromote its products. There is a SWOT analysis of the firm at the end,which shows a brief review of the strengths, weaknesses,opportunities, and threats to the firm in the market from itscompetitors.In short it is a comprehensive research report on the marketing mix ofNOKIA which describes in detail all the strategies adopted by NOKIA tobe a Global leader.

History of NokiaPaper was the beginning:NOKIA was founded in 1864 (1865) near theNOKIA river in Finland. There were a lot offorests, rivers and lakes: it was Finland's nationalpride, such conditions allowed paper industry torise. A Finnish engineer Fredrik Idestam becameone of the businessmen in this industry.


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Unfortunately, he didn't have enough experience in this business so heacquired technology from Germans.Idestam visited one paper manufacturing plant in Germany. Idestamsaw everything he needed. Idestam came back to Finland, he createdhis own paper manufacturing plant.

When his son-in-law Gustaf Fogelholm (who became NOKIA's presidentin 1895) decided to start the power generation business, FredrikIdestam was the main opponent of this idea. But Gustaf won againsthis father-in-law and established the first power plant in 1903 andsecond in 1913.

Old logo of NOKIA

Rubber works:At the end on 19th and at the beginning of 20th centuries, FinnishRubber Works (FRW) was the leader of Finland's rubber products. Oneday FRW's bosses decided to move the plant outside of Helsinki. Theydecided to build a new plant near the same NOKIA River, near NOKIA

plant. So, FRW started buying cheap energy from NOKIA.At the beginning of the 20's, NOKIA started to look for shareholders.NOKIA neighbor, FRW, became the largest shareholder. During the IstWorld War NOKIA paper business decreased a lot. But FRW's rubberbusiness increased. So, NOKIA partner became stronger and acquiredits shares: NOKIA became a part of a big corporation. In 1922 FinnishCable Works joined them. It is interesting, but paper, rubber and cableswere sold under the same NOKIA brand.But the bosses of three companies were against merger of companies.The merge was made only in 1967. An alliance, which was calledNOKIA Group, stayed in the same business: paper, rubber and cables.

The last one and the most perspective business sector was consumerelectronics.Electro sparks:NOKIA relationships with Russia are quite interesting. After the II WorldWar, Germany's ally Finland was forced to pay reparations to the USSRtill 1952. Reparations included electro cables, which were produced byFinnish Cable Works. Company had to make twice the cables than itwas able. But it has done this task just because of patriotism and


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enthusiasm. After paying all reparations, the USSR became the mainpartner of NOKIA Group.In the middle of the 60's NOKIA was exporting about 20% of itsproduction to the USSR. Despite positive opinions about NOKIA partner,the president Bjorn Westerlund had a bad feeling all the time: "If one

day the Kremlin says "No", we will loose all our business", heexplained. But nobody wanted to hear these pessimistic forecasts.In 1977 Kari Kairamo became NOKIAs president. Kairamohad gained experience by working in the USA, and unlikehis predecessors who leaned towards Soviet Union, he wasstrongly western-oriented. He wanted to handle things "offthe record" through unofficial meetings, and consideredpersonal relationships particularly important. Compared tohis predecessors, Kairamo was also keener on appearing in

public. During Kairamo's era, the emphasis was on electronics andpower generation.

In 1986, Kairamo restructured the corporate governance byestablishing a new internal Board of Directors, in which he becameChairman.Consumer electronics became NOKIA main business in 1987. Kairamostrived to make the company more international and turn its gaze onEurope. Under Kairamo's leadership, NOKIA made a few large-scaleacquisitions (televisions and computers), which were not without risks,however, as it turned out.Kari Kairamo was a charismatic and emphatic leader who liked tomingle with people. His enormous energy was, however, tragicallyexhausted in 1988 when NOKIA was heading to financial doldrums due

to loss-making and businesses that were just too diverse.

Today's leader :

In 1981, by Kairamo's leading, NOKIA created NMT mobile phonestandard, which became very popular in Northern Europe andRussia. In 1987 NOKIA launched its first NMT phone, MobiraCityman.The next step was to create GSM networks. In 1989 NOKIA

delivered the first GSM network to Finnish company Radiolinja. In1991 the first GSM call was made by Finland's president. In 1992NOKIA introduced First GSM phone:

NOKIA 1011.In 2006, Olli-Pekka Kallasvuo becomes Nokias President and CEO; Jorma

Ollila becomes Chairman of Nokias board. We don't think that it isnecessary to talk a lot about NOKIA phones: they are the most popularphones in almost all countries. Only in the US NOKIA takes the second


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place, after Motorola. But this isn't a problem, because today NOKIAtakes about 36% of global mobile phone market.NOKIA doesn't make only mobile phones: all its handsets are equippedwith a range of accessories. NOKIA was the first that offered suchdesign element as exchangeable covers: only then other makers

added this feature to their handsets.So NOKIA is the true leader of today's mobile communications and itsmarket share continues to rise. We can't forecast that this rise won'tstop in the future, but now it looks that NOKIA should gain an evenbigger market share. Unfortunately, nobody knows whether this willhappen or not.

Introduction

NOKIA is the Global Leader in the production of latest cell phones.

NOKIA is the most successful brand of the world which is leading its

competitors due to providing the best customer value. The NOKIA

phones are recognized in the world due to their distinctive features

which are not found in the competitors phones.

In Pakistan, NOKIA is distributing its cell phones to all of the social

classes. It does demographical segmentation to cater all the customers

according to their age, gender, income, occupation, education, raceand generation. They also use psychographic segmentation to better

understand the needs and psychology of their customers. Like it

provides different phones to different social classes. In Pakistan, NOKIA

distributes its cell phones to its customers through the authorized

dealers like Chimera, Mobile Zone and United Mobiles etc. NOKIA cell

phones are also available at every electronics market and at each

electronics shop because of the fastest growing demands of the NOKIA

mobile/cell phones.

NOKIA is leading because it analyzes its customers real needs in a

better way, and provides them the advanced cell phones which also

fulfill their unstated needs. NOKIA also fulfills the latent needs of the


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customers, which cant be fulfilled by NOKIAs current cell phones or by

its competitors cell phones.

In this research report, our major focus is on the 4Ps of marketing mix

of NOKIA. We enforce on NOKIA cell phones Product, Price, Place and

the promotion of their products.

VISION:

NOKIA sees mobile technology as an enabler that can help create amore sustainable world. Combined with latest technology betterproduct design, tighter control of production processes, greater reuse

of materials, and proper recycling, mobile communications can help toreduce the use of scarce natural resources and energy.Key elements of NOKIA business vision are - mobility, growth, andquality.

Reduced MobilityMobile technology and digital services can often replace theneed for travel or transport, and this in turn reduces thegreenhouse effect caused by the burning of fossil fuels.Mobile technology can make various transactions easier andenable greater economic and social activity and industrialgrowth.

Efficient use of Natural ResourcesWe strive to handle the short life of mobile phones and therelated increase in consumption by operating in a sustainableand responsible manner.We take part in a wide range of cooperative initiatives and globalorganizations to share knowledge and shape effectiveenvironmental policies.

At the same time, we strive to reduce material and energyconsumption in our own activities.

QualityReduction of waste is an environmental goal closely linked with quality- quality of design, sourcing, assembly, and end-of-life practices.

Mission Statement 2007:

Our Mission is a world where everyone can be connected


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Everyone has a need to communicate and share. Nokia helps people to fulfill this needand we help people feel close to what matters to them. We focus on providingconsumers with very human technology technology that is intuitive, a joy to use, andbeautiful.

We are living in an era where connectivity is becoming truly ubiquitous. The

communications industry continues to change and the internet is at the center of thistransformation. Today, the internet is Nokia's quest.

Nokia's strategy relies on growing, transforming, and building the Nokia business toensure its future success.

Current Market Situation:

According to an approximate figure, there are more than seven

international brands available in the Pakistani market. They are also

available in almost all cities of the Pakistan. The current market of

Pakistan is a fast growing market because there has been a great

advancement in the education field and in the fastest growing

telecommunication sector. Growth in education, business and mobility

is creating strong need for communication. The local market is

dividing the customers into different segments depending upon their

income levels, social classes and life styles.

The major competitors of NOKIA are :

Objectives of NokiaMarketing Objectives :NOKIA wants to differentiate itself from its competitors in a positivemanner. NOKIA wants create a good perception in the minds ofcustomers about its products. NOKIA main objective is to achieve a
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prominent position in the market. NOKIA wants to map its name in theminds of customer on the behalf of technological improvements,additional features, quality of product and related services.Advertising Objectives :NOKIA main advertising objective is to create the awareness about the

product and differentiated features. Further to convey a message tocustomers that how we are giving the value to customers as comparedto competitors. NOKIA wants to establish a positive attitude ofcoustomers towards their products through advertising. NOKIA wantsto persuade their target customers to try their products and buy moreof it. NOKIA wants to create good image, personality and uniqueposition for their product in the market through heavy and effectiveadvertisements.Financial Objectives :To earn an annual rate of return of 20% on total investment over thenext 3 years after paying the tax. As being a leading business concern,

maximization of profits is aimed as well as to sustain growth in earningin real terms.Societal Objectives :NOKIA is making it possible for the people to be more closer andpreserve the memorable moments of their life in the cameras of theircell phones as claimed in the slogan Connecting People. NOKIA givesthe people opportunity to enjoy sweet preserved memories any time.NOKIA also gives the opportunity to be seen as savvy customers. Itsan ethically responsible company and a respected corporate citizencontinuing to play due rolls in the social and environmental sectors.Company is striving for excellence through commitment, integrity,

honesty, and team work.

Marketing

Need :Due to changed scenarios of business, society and work activities,need of communication in Pakistan are growing rapidly. People requiredifferent ways to fulfill their communication needs.Want :To fulfill their communication needs people in Pakistan need cell

phones. Why they want cell phones not other devices? The reason isthat, their communication need is shaped by culture. Use of cellphones has become our social need and it has also become the part ofour personality. So we can say that our need is backed by our culture.Demand:Backed by buying power wants become our demands. So people inPakistan now demand different types of cell phones, according to


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technological facilities, additional features, and better quality andespecially according to prices.People having low income demand economic cell phones with greaterdurability. So NOKIA is providing them cell phones according to theirdemand like NOKIA 1100, NOKIA 1110, NOKIA 1112,NOKIA 1600 etc.

People with medium income demand cell phones with some otheradditional features like high graphics, good sound quality & some otherutilities. So NOKIA is providing them cell phones according to theirdemand like NOKIA 3110, NOKIA 6300, NOKIA 6610, NOKIA 7610 etc.People having high income, demand best quality cell phones with allnew features and high resolution cameras. So NOKIA is providing themcell phones according to their needs like NOKIA N Series (N73, N95etc.)Marketing & Market Orientation:Focus on satisfying customer needs and wants. NOKIA identified whatcustomer wants and tailor all the activities of the company to satisfy

those needs as efficiently as possible by proceeding advanced cellphones.Quality:NOKIA always focus on high quality to provide high customersatisfaction and to compete with other brands. NOKIA hasinternationally accredited research and development system, whichmakes a valuable addition to companys products in Pakistan. It has areputation of having lot of emphasis on quality.And the only reason that why people always prefer NOKIA over othercell phones is its best quality and durability. Competitors are providingcell phones with latest features but those are not durable and their

quality decreases over time.Environment monitoring:NOKIA, every time has introduced some innovations, which alwaysgained a lot of encouragement and response from the consumers. Ithas the history of making innovations at the right time. Its fact thatmost of technologies in the cell phones, first introduced NOKIA,especially credit goes to NOKIA for introducing Blackberry. Suchinnovations are only possible because of effective environmentalmonitoring. For such a great success, R & D department of NOKIAmake always unbeatable efforts.Demographics:

People who like to have high quality, stylish and good looking cellphones always prefer NOKIA. Because they are willing to buy the newinternational lifestyle at a reasonable price.Technology:Latest technology is used the in production of cell phones. R&D hasmade it a Star in Pakistani telecommunication sector.Financial resources:


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Financially NOKIA is highly stable and utilizes best human resources toenhance the efficiency of company. NOKIA has a huge and significantbudget every year for Advertisement, R & D, and especially for theimplementation of new ideas and innovations. NOKIA is investing a lotfor R&D purposes.

Human resources:NOKIA top-level management is highly qualified, competent andexperienced thats utilizing best human resources to enhance theefficiency of company and to work for the goodwill of the company.

Brand value/image:NOKIA is the leading company all over the world. It has created itspositive image by providing better customer satisfaction and maintainhigh quality. NOKIA is providing unique offerings and customer valueby the distinctive and inimitable features of its cell phones.

Consumer brings decision process :

Information:Advertising of NOKIA cell phones through electronic media and privatemedia is basic source of information.

Individual/intra personal Psychological factors:NOKIA is a leading company in Pakistan and all over the world so that ithas good perception in eyes of its consumers. NOKIA innovative cellphones and its attractive colorful phones has made impossible to

consumer to ignore it. Individuals are now willing to pay more to buynot only a cell phone but a totally new life style

Attractive professional consulting:The efforts and appreciation, which NOKIA has got from professionalsrelating to cell phone industry, is adding to buyer confidence to buyNOKIA cell phone. NOKIA runs effective campaigning to introduce itshigh quality products to relating professionals. This strategy has notmade only first choice for all professionals but it has resulted intogreater placing in front of consumers.

Market Segmentation:

Market segmentation is customer oriented and consistent withmarketing concepts. In segmenting our focus is to identify the wants of


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customer within a sub market and then decide if it is practical todevelop a marketing mix to satisfy those wants.


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Similarly NOKIA also introduces a marketing mix in form of its cellphones to satisfy the wants of those customers who share a similar setof needs and wants. Therefore NOKIA attractive cell phones changecustomers of split loyals and shifting loyals into hard-core loyals.NOKIA introduced a range of cell phones * to satisfy the wants of those

customers who are in need of long lasting good looking phones ataffordable prices.

Demographic segmentation :NOKIA makes the demographic segmentation on the bases ofAgeGenderIncomeEducationOccupation &Generation.

Youngs from 15 to 24 who study in schools, colleges & universitiesneed cell phones remain in contact with their families and teachers.Professionals, jobholders and businessmen with age 25 and aboveneed cell hones to accomplish their job related tasks.According to gender population is divided into two groups Males &Females. First men were in great need for cell phones but now becausethe number of Female students has increased rapidly and more womenare working outside so that they also need cell phones according totheir needs.Income wise Pakistanis are divided into three groups for the use of cellphones. People with low income, medium income and with high

income. People having low income demand economic cell phones withgreater durability. People with medium income demand cell phoneswith some other additional features like high graphics, good soundquality & some other utilities. People having high income, demand bestquality cell phones with all new features and high resolution cameras.Geographic Segmentation:Geographically, NOKIA divides the customers by two factsCity or Metro sizeDensityAlmost all people in all the cities and in all Urban, Suburban and Ruralareas need cell phones according to their income, education and

lifestyle.People in the Urban areas with high incomes need high tech luxuryphones.

Psychographic Segmentation:For this type of market segmentation NOKIA considerSocial ClassesLifestyle &


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PersonalityPeople belonging to lower class demand economic cell phones withgreat durability. People belonging to middle class demand cell phoneswith some other additional features like high graphics, good soundquality & some other utilities because they have better resources.

People belonging to upper class dont bother about price so theydemand luxury cell phones, with best quality, all new features and highresolution cameras.Simple people like simple sets because they just need to make andlisten phone calls.People with stylish lifestyle need stylish and smart cell phones.

Behavioral Segmentation:NOKIA divide its buyers into different groups on the basis of

Readiness StageLoyalty StatusUser Rates &BenefitsReadiness means awareness and being informed. So consumers whoare aware of the new technology and the benefits of this technologyare ready to buy superior cell phones like NOKIA.People, who are brand loyal they always prefer good brand names.People, who are heavy user of cell phones they always prefer durablecell phones.People, who bother about benefits from product, always demand high quality, convenient

and economic cell phones with high speed. Who want to capture their memorablemoments they look for cell phones with cameras.


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Target Market:NOKIA covers the whole market but with differentiated cell phones fordifferent market segments. So we can say that NOKIA approachesDifferentiated marketing to serve all the segments according to

their needs in different segments. As we have mentioned above thatNOKIA divides the market into different segments on the bases of theirincome levels, education, profession and social status.Therefore NOKIA has selected the whole portion of market as theirtarget market that it serves with differentiated cell phones. NOKIAhave a wide variety of cell phones and other relevant accessoriespricing from low to high. So they are catering almostAll income groupsNOKIA customers arePeople from Urban & Rural areasPeople belonging to Lower, Middle & Upper Class

New GenerationStudentsProfessionalsBusinessmenHouseholdsQuality Conscious Customers.

Positioning Strategy:

NOKIA has positioned itself as a Global Leader in comparison to itscompetitors.In Pakistan NOKIA has mapped itself in the minds of the customers asprovidingNew Technology basedWith new featuresHigh quality &Durable cell phones at reasonable prices.In Pakistan, NOKIA is perceived to some extent more expansive thanother competing brands. But other brands due to their low quality andlow durability are unable to compete. Therefore NOKIA isunderstandably positioned as first choice of customers and it justifiesits prices through quality and value that it gives to its customers.NOKIA image has strengthened much more due to advanced cellphones.The name, brand image and product quality also make it easy forNOKIA to position itself in the minds of the customers in the best way.


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Marketing Mix:NOKIAs marketing objectives are based on the following marketingmix strategies:

Product

Price

Place Promotion.Product:

Product :NOKIA is providing Cell Phones in different technologies, styles, colors,shapes, prices with additional features, high quality and durability. Itscore benefits is to provide communication facility as mentioned in itslogoConnecting People as well as some other entertainment features likeinternal cameras for capturing precious moments, music & videoplayer etc.Nokia is providing cell phones with all accessories likeExtra BatteriesExtra CasingsHands FreeData Cable &Software CD

Features

NOKIA has added many features in its cell phones likePerformanceStyleGood displayMore functional keysHigh resolution cameras like N73 with 3.2 Mega Pixel CameraWOW music qualityLight weightGood & soft keypads according to phone sizesUMTS supportsBluetooth

InfraredGPRS

DesignDesigns of cell phones are very attractive these represent the actualpurpose and functionality of these cell phones. Designs are accordingto the requirements of the customers likeStylishAttractive


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Light weight &Slim.

Quality:

Quality is at the heart of Nokias brand promise. They want theircustomers to know that Nokia is the best quality company in theindustry.Their goal is to have the industrys best products and services, mostloyal customers and most efficient operational mode.According to Nokia

We believe that quality is about meeting and exceeding customerexpectations. At Nokia, we view quality holistically and as an integralpart of business management. The quality of products andcustomer experiences depends on the quality of processes, which

in turn is tied to the quality of management .

Nokias key quality targets are:

For Nokia to be number one in customer and consumer loyalty

For Nokia to be number one in product leadership

For Nokia to be number one in operational excellence

The quality and reliability of their products and services are among the

most important factors driving customer satisfaction and loyalty.Designing good quality products begins with understanding customerrequirements and creating the best user experience. The whole chain,from suppliers through to R&D, operations, sales and distribution tocustomers, impacts the end-result everybody in the chain has a roleto play in achieving quality.Their products and customer experiences are the results of oureveryday processes. Process management means finding the simplestway of operating, in order to create customer value in a lean manner.Quality in management is vital for leveraging innovations globally andimproving productivity in general. Their approach to this is platform

thinking, process management and combining fact-based managementwith values-based leadership. They have developed a key frameworkfor improvement at Nokia, which we call the 'Self-RegulatingManagement System'. It's about management practices that allow usto run our business in a consistent, effective and fact-based manner.


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Product Classification:

Consumer Product:A product, which is used by ultimate consumer, is a consumer product.

Warid connections are consumer product

Shopping Product:Its a Shopping type of consumer product because cell phones are notpurchased very frequently thats why people always make comparisonwhile purchasing cell phones among different brands. Consumercompares Nokia cell phones with those of competitors on followingaspects:QualityPriceStyle

Warranty &Brand reputation.Nokia and the resellers both advertise the Nokia cell phones.

Product Line:Cell phones are only product that NOKIA offers with all its accessories.

It serves its offerings in the telecommunication sector. Nokia is usingboth the line stretching and line filling techniques to enhance itsproduct lines.Nokia is adding high quality cell phones with distinctive features athigh prices and at the same time its providing different varieties in cell

phones with improved versions within existing price ranges.So we can say that Nokia is making line extensions on the bases ofstyles, features, colors and price etc.

Product Item:Product item is a specific version of a product that can be designatedas a distinct offer among an organizations product.NOKIA cell phones also categorized different product items having

similar physical and distinctive features. NOKIA objective is to induceup- selling; therefore NOKIA introduced cell phones ofN-SERIESwith the premium quality of cell phone camera lens. NOKIA introduced

L-AMOUR Collection of cell phones and the most distinctivefeature of this series is that they are the most stylish phones in themarket which sharply attract the customers. NOKIA also introducedN-GAGE phones to fulfill the need of video gamers to play qualitygames on the NOKIA N-GAGE cell phones. The key features ofN-GAGE cell phones are:

Network Multiplayer Game-play


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Unique Global Identity

Rankings and Tournaments

Chat & Message Boards

Friends List

Player Profile Pages

Exclusive Downloads News Alert System.

Product Mix Strategies:

Product Mix Width:Number of product lines an organization offer. NOKIA only deals in cellphones therefore it has only one product line that consists of cellphones.

Product line depth:Number of product items in a product line. NOKIA has introduced a lotof different cell phones in the market within the product items likeN-SERIESL-AMOUR CollectionN-GAGE cell phones and many other models.

Product Life Cycle (PLC):In its product life cycle in Pakistan Nokia is at the stage ofMaturitybecause it has penetrated very well and now it is enjoying higher sales &profits. Nokia is enjoying higher profits because ofIncreased rate of sales

Wider distributionStable pricesHigh qualityGreater reliability &Adding advances features.

Branding Strategies of NOKIA:

Brand Name:Today, we know and use the worlds most famous brand nameNOKIA in uniform letters. It may appear in different sizes and colors

but the basic shape of the five lettered name is instantly recognizable.Its easy to say, recognize and remember. NOKIA has positioned itsbrand name strongly in the minds of the customers on the bases ofdifferent attributes, benefits and values that it provide to itscustomers. Thats why the brand name NOKIA has become asymbol of quality and trust for people. Whenever people look forreliable cell phones they always call NOKIA.


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Packaging:Nokia is packaging its cell phones in more sophisticated way. Its packagingprovide greater safety of cell phones while transportation and displaying inthe stores. All the parts are covered separately in plastic sheets in the box.

The size and shape of boxes is very attractive with its brand logo NOKIAand slogan Connecting People. Graphics on the box conveying its message,make the packaging more attractive & worth able.

Labeling:NOKIA has descriptive label on its every cell phone box showing productspecification and distinctive features in that cell phone model.

Brand equity:NOKIA is a global leader and its brand name NOKIA is highly valued. Peopleare well aware of NOKIA just because of value that it gives to its customers

and differentiate its brand name from those of its competitors. Thats why theNOKIA customers are very loyal to its brand name and this loyalty creates aprofitable customer relationship for the company.

Branding for market saturation:Under a uniform global accepted, recognized and well known brand NOKIA isestablishing different values and images in the minds of its customers andgrabbing the market share of its competitors.

Price:

Pricing Strategies of NOKIA:

NOKIA is a leading company in cell phone industry, which is setting areasonable price for quality. It has created good image in the minds ofcustomers. The company is setting a brand image by providing cell phones atreasonable prices with best quality that justifies its prices. Nokia phones areeasily accessible by people with average incomes because it has segmentedthe market according to their income levels. Nokia provides cell phones atdifferent level of prices with different features so that everybody could enjoyNokia according to his income level.

Price determination factors:There are certain factors involved in the price determination of NOKIA cellphones. These factors are as follows:

Production cost

Design cost

Nature of the market and demand

Advertising cost.

Value Based Pricing:


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Nokia charges the prices based on the buyers perception or we can saythat Nokia charges prices according to market demand.Value Pricing Strategy:Nokia is providing best quality cell phones with latest technology andfeatures at fair prices as compared to its competitors.

Affordable:Although NOKIA has set high quality standards and charge premium price tothe customers but it is still affordable because it cater customers of allincome levels.

Initial price:Setting the initial prices so that total revenue is as large as possible relativeto total cost. NOKIA is following the policy of maximization of profits bycharging initially maximum price but affordable price for the customers thenit lower down its prices after some time

Market share:NOKIA cell phones sales as a percentage of total sales for that industry aremore than any competitors sales and NOKIAs sales are more significant

relative to others.

NOKIA Faces Very Low Price Elasticity of Demand:The demand of NOKIA cell phones is less elastic because people are brandloyal of Nokia further NOKIA prices are stable. Many of the customers arebrand conscious and NOKIA establishes its cell phones prices keeping in mindall the income levels of its customers. Therefore NOKIA offers a completerange of cell phones from low to high prices. And still NOKIA makes lot ofprice changes to accommodate its customers.

Non-Price Competition:NOKIA is trying to shift their demand curve to the right by means of productdifferentiation. N-series and other elements of marketing mix.

Some Other Pricing Strategies:

Market Share

NOKIA

SAMSUNG

Sony Ericsson

MOTOROLA

SIEMENS

LG


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NOKIA Company competes on price or non price elements of marketing mix.One price strategy is followed by NOKIA as same price is charged for allsimilar customers who buy same product items. It means Nokia dont use theconcept of Dynamic Prices.

Market entry strategies For New Nokia Cell Phones:When NOKIA introduced N-series cell phones. They must have decided

whether to adopt a skimming or penetration pricing strategy.

Skimming pricing:Nokia when introduces any cell phone in N-series or other high quality cellphones with additional features and high resolution cameras it charges highprices because it wants to skim the maximum revenues. The prices for such atype of cell phones are high in relation to the target markets expected pricerange. Only most interested people could pay for N-series cell phones. After

skimming maximum revenues Nokia comes to market penetration.

Differential advantage:There are a lot ofPoints of Difference between NOKIA cell phones andthose of competitors. Thats why prices of Nokia cell phones are not much affected bythe competitors.

Distribution:Dealers:

NOKIA involves dealers and retailers to move product from

producer to consumer. The dealers consist of AuthorizedDealers and other retailers. The authorized dealers of NOKIA inPakistan are :

Mobile Zone

Chimera

United Mobile Phones.

The NOKIA has an indirect channel of distribution i.e.Producer -----------wholesaler ---------retailer---------consumers

Conventional Marketing Channel:

NOKIA uses conventional marketing channel which comprises anindependent producer, wholesaler(s) and retailer(s). NOKIA usesthis channel to improve operating efficiency and marketingeffectiveness.Vertical marketing system of NOKIA involves traditional indirectcode i.e.,


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Producer--------------traditional-------------consumer

Intensive distribution:

In intensive distribution, a producer sells its product throughevery available outlet in the market where a consumer couldeasily reach. So the strategy of NOKIA is also intensivedistribution with all outlets through specific dealers andintermediaries.

Gross Margin to Motivate Dealers & Retailers:

NOKIA cell phones net price is lower than retail price so that ithas high gross Margin for the retailers. It gives specific

importance to its retailers and dealers as it now smooth theprogress of selling NOKIA cell phones by those intermediariesgiving gross margin and advertising by NOKIA and itsintermediaries.Other Intermediaries:

Transportation firms are other channel intermediaries whoperform their functions in the distribution of NOKIA cell phones tothe authorized dealers and retailers.Inventory Control:

NOKIA follows the inventory control system. It satisfies the orderfulfillment expectations of customer through managing inventory

properly. NOKIA determines the inventory size by balancing costsand desired level of customer service.

Promotion:Advertising:

Impersonal, one-way mass communication about a product ororganization that is paid for by an identified marketer.NOKIA uses the following advertising media to promote its sale

TelevisionNewspapers

MagazinesBillboard &Internetwww.nokia.com is the most comprehensive collection of allNOKIA cell phones. It presents different sections includingproduct information, NOKIA club etc.Allocation of Budget For Advertisement:


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Nokia allocates heavy budget every year for advertisement through TV

channels, Newspapers, Magazines & Billboards.Use of Pull Strategy For Promotion:NOKIA uses Pull Strategy which involves NOKIA using advertising andpromotion to persuade customers to ask intermediaries/dealers for the

NOKIA cell phones. This strategy is more appropriate because NOKIA isthe well known leading brand.Competitive Advertising:

This is a kind of selective demand advertising. It puts one brandagainst the rest of the market. NOKIA is competing for marketshare with several other brands products. NOKIA by usingcompetitive advertising emphasizes on the special features anddifferential advantages of its cell phones, from the cell phones ofother brands.Indirect-action Advertising:It is a part of product advertising. It stimulates demand over a longerperiod of time. Indirect-Action Advertising is also designed by theNOKIA to stimulate demand of cell phones over a longer period of time.This is intended to inform and remind consumers about the existenceof NOKIA and to point out its benefits.Co Branding With Mobilink & Warid:Nokia has been doing co-marketing with Mobilink & Warid to promoteits cell phones. First it started with Mobilink that people who will buyJazz connection they will get Nokia 3310 on discount price ascompared to the market price. Then It offered Nokia1100 on discountprice with Warid connection. These were co efforts to promote Jazz,Warid & Nokia. In both the cases the Nokia and the communicationservice providing companies were advertising as well as promoting toeach other.

SWORT Analysis:(Strengths, Weaknesses, Opportunities, Threats):

Strengths:

NOKIA has an excellent Brand Name

NOKIA has positioned itself in the minds of customers

very well as compared to the competitors Nokia introduces every coming technology in the

market before the competitors.

NOKIA has captured the whole market according to thesegments.

The cell phones are available in all Price Ranges.

NOKIA provides all the features that people demand.


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NOKIA provides best Quality & Reliability. The cell phones are available in all those retail points

where target customers can easily reach.

Collective efforts of NOKIA, its dealers & retailers

promote it in the best way.

NOKIA packing is very safe and attractive for thecustomers.

R & D department of NOKIA is very strong. Thatprovides latest research and development in order towalk step by step with the market and market changes.

Weaknesses:

To some extent the prices of NOKIA cell phones arerelatively higher than those of its competitors.

Nokia dont provide some additional features that itscompetitors provide regarding multimedia purpose.

Opportunities:

It has the more opportunity to promote its cell phonesvery well than its competitors due to the best brandimage factors.

Nokia can add all the features that its competitorsprovide regarding multimedia purposes.

Nokia can also focus on remote areas; they have anopportunity to advertise their product properly in therural areas.

Increasing population is a bright opportunity for Nokiato capture this opportunity in future.

Pakistani Govt. is now focusing more on telecom sectorand also communication needs are increasing day by

day so Nokia should focus on this perspective.Threats:

There are a large number of international competitorsfor NOKIA.

Customers may purchase other brands due to the highprices of NOKIA.


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Some companies are providing cell phones in themarket; those are just the copy of NOKIA cell phoneswith same logo, but with low quality and low prices thatmay affect the brand image of NOKIA.

Bibliography:We took help form the book, and from the students which already havestudied this courseAll the data available in this report is either collected from web sites,books or self-made; and from lectures given by our beloved teachermadam SHELLA SOHAIB.

Nokia - marketing Plan

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Transcript of Nokia - marketing Plan