B2B Group Term Project - Group5 - 07-10-10

8/7/2019 B2B Group Term Project - Group5 - 07-10-10

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Institute of Management Technology, Dubai Page | 1 of 21

Group Term Project

On

NOKIA

Submitted to:

Dr. Mohan Lal Agarwal

Submitted by: (Group 5)

Pranay Sachdev (Smba 09049)

Siddharth Verma (Smba 09069)

Vaibhav Khurana (Smba 09077)

Institute of Management Technology, Dubai




ACKNOWLEDEMENT

We are grateful to our Marketing Professor at IMT Dubai, Our Project

Mentor and Guide, Dr. Mohan Lal Agarwal for his continuous

encouragement and support throughout the course of the project. We

are thankful to him for trusting our capabilities to handle the creative

work and for giving his valuable inputs to improve it even further. It

was a pleasure and a true learning experience working under hisguidance and support.

Group 5

Pranay Sachdev (SMBA09049)

Siddharth Verma (SMBA09069)

Vaibhav Khurana (SMBA09077)




Executive Summary

The primary objective of this study is to analyze the B to B marketing study of

Nokia in the Middle East. Specifically, the study sheds lights on the size,

structure and competition in the market and the factors that are most likely to

influence growth of the market in the coming years.

The research covers analysis¶s to Nokia¶s competitors in market and also

reasons leading to downfall of its market share. Since Year 2007 Nokia

witnessed a tremendous downfall in its share and it was only till recent that it

was able to launch N8. However it still leads global market but in comparison to

market in UAE it has shown considerable downfall.

N8 is the new product of Nokia that runs on Symbian^3 Operating system with

unbelievable and exceptional features. For past 3 years Apples I phone had

captured the market with its techno and unique features but with N8 into play,

Nokia hopes to revive to its top position.

The study also enunciates Nokia¶s basic Marketing principle to overcome its

challenge and strategy that it has inculcated so as come out of its downfall. For

this purpose SWOT/PEST Analysis in relation to Nokia market in UAE isperformed. A complete analysis of the product life cy cle for a product is hereby

performed and list of resellers is also annexed.

Taking other reasons into account with which Nokia can tap possible market

share in UAE particularly could be the recent ban imposed on blackberry

handsets by UAE government. Possible other reasons could be that Nokia has

recently sued Apple for Patent Infringement due to which Apples Market share

has tumbled down.




Table of Contents

S.N

o. C

ontents Page1. Introduction to Nokia 5

2. Nokia History 5

3. Competition in the Market 6

4. Market Challenge 7

5. Response Strategy 7

6. Marketing Principles- Nokia 8

7. PEST 9

8. S.W.O.T 10

9. Marketing Research 11

10. Sources of Marketing Information 12

11. B2B Market Segmentation 13

12. The Marketing Mix 14

13. The stages of marketing: The Product Life Cycle 15

14. Application of Internet to B2B marketing by B2B

Marketer 17

15. Useful Information 18

16. References 20

17. Annexure 21




Introduction toNokia:

Nokia is a communications based company, which focuses on mobile telephone

technology. When mobile phones first became available on the market, the

models were very basic with the best technology being SMS messaging (send

written ³text messages´ from one phone to another). Then the next advance intechnology was being able to put different faces on your phone (different style

covers for the front and back of your mobile device) and after that the

technological advances have come thick and fast, with advances such as:

y MMS

y WAP (Internet)

y Polyphonic ringtones

y Predictive SMS

y Camera recorders

Nokia History:

Nokia is known today as the largest manufacturer of mobile phones, having

about 40% of the share in the second quarter of 2008. This company is even the

reason why Finland is a prosperous country in which it is accounted for about

30% of the Nation¶s market capitalization. But Nokia had a really humble

beginning it all started in 1865.

In 1895, Fredrik Idestam established a wood-pulp mill, which is now known as

the Nokia Corporation. It was first based in south western Finland town called

Tampere but was later relocated to Nokia town so that the company can use the

Nokiavirta river. This river is where the company¶s Nokia, originated.

In the beginning of the 20th

century, Finnish Rubber works began establishing

its factories. This company acquired the Nokia wood mills and also acquired a

company producing telegraph and telephone cables, the Finish cable works . The

merging of these three companies in 1967 led to the creation of the Nokia

corporation.

Nokia started producing military as well as commercial mobile radio

communications technology in the 1960¶s. It was in 1964 when the company

started to create VHF-radio. The two companies started to develop mobile

phones for the NMT network standard. In 1982, they introduced their first car

phone called the Mobira Senator, which weighted 9.8kg.




Then Nokia introduced one of the world¶s first handheld phones in 1987 and

this was called Mobira Cityman 900. During those days, the Cityman is one of

the most light-weight phones having only about 800g. But this tag price was

approx 4,500 Euros. Although that was very expensive, Cityman was still

considered a success. After that many advancement in technology goes on andnow Nokia is still on the success path.

The company has finally elected a new CEO to replace OPK, Olli -Pekka

Kallasvuo. 43-year-old Stephen Elop¶s bona fides are in order: As President of

Microsoft¶s Business Division (since January 2008) he was in charge of the

Microsoft Office money machine and was part of the company¶s ³Leadership

Team´

Competition in theMarket

With all this technology available in the communications market it is obvious

that Nokia will have lots of competition, they include:

� Apple I-Phone-

It was founded in April 1, 1976 by Steve Jobs, Steve Wozniak and

Ronald Wayne. It has been on the top charts for its new product I phone.

� Blackberry-

It is a device developed and designed by Canadian company Research InMotion since 1996. Recent release is Blackberry curve.

� Sony Ericsson-

It was founded in October 1, 2001 with headquarters in London, U.K.

� Samsung-

Has head quarters in South Korea with products in market like Mobiles,

MP3 Players, Laptops etc..

� Motorola:

Motorola, Inc American Based multinational telecommunication

company based in Schaumburg, Illinois. It is a manufacturer of wireless

telephone handsets




� Siemens:

In 2005 the Taiwanese company BenQ acquired the financially bleeding

mobile phone subsidiary from Siemens and gained the exclusive right to

use Siemens trademark for 5 years.

With all of these competitors in the market Nokia must keep ahead of the game

by running successful marketing strategies, to do this Nokia must focus on the

principles of marketing. At the moment Nokia are the world¶s best selling

Phone Company.

Market Challenge:

Nokia once a mobile market leader has been losing market sha re while

Apple, Google and others re-define the smart phone which are giving

tough competition to Nokia. Companies like Samsung, Motorola are providing phones having same

feature at much cheaper prices.

The handset giant is particularly vulnerable in the h igh-end smart phone.

With Nokia failing to upgrade mobile processors, companies like Apple,

Google have taken the lead.

Nokia needs to gain traction in the U.A.E market as well as globally by

encouraging its own high-end smart phone sales.

Software issues: Updating of software platform is a struggle. Nokia has

been using outdated software which is affecting not just global market but

also UAE market.

R esponse Strategy:

In order to re gain its market share which dropped like dead stone after

year 2007 when Apple¶s I phone captured entire market with its latest

technology. Nokia¶s response to this effect was very slow and the year

2010 only that were they able to launch high end smart phone when I

phone had already damaged their reputation.

Multimedia Usage: Until year 2010 Nokia was unable to enter the market

of smart phones. With N8 into play, Nokia has already started to advertise

and promote it with huge bang. To this effect the response so far has also

been positive.




Integrate Offline and Online Advertising: Nokia has started to create

awareness for its brand by publishing advertisement on to different web

sites.

Local Social Networks: Nokia in order to promote and create awareness

among customers of its new product has started a pop up advertisement.This method is generally used in social or interactive web sites or online

social networks.

Contests and Discounts: It has already started to promote its old models

in discounted rates so that customers as well as resellers demand shall

increase.

Marketing Principles thatNokia follows:

Customer Satisfaction:

Nokia keeps its customers on top and gives top priority to them. The thinking of

Nokia is that if the customer is happy, the company will automatically climb the

ladder of success.

Customer Perception:

The Company believes that if the customers are happy which will be measured

by customer satisfaction, the perception will be automatically good.

Customer needs and expectations:

Nokia understands the needs of its customers and makes products according to

them, eg. N8 against the Apple¶s I Phone.

Generating income profit:

Nokia also aims at generating profits so that its stakeholders/shareholders are all

happy.

Making satisfactory progress:

As we can see that Nokia is been in the market since a very long time and has

retained its position despite many competitors it is able to firmly hold its top

position until 2007 when its shares started to tickle down. The continuous

success is because of constant revision of its strategies & ideas.




Aware of the Environment:

Nokia is a very Eco friendly Company. They use recycled paper for their

packaging and protect the env ironment however they can.

PEST:

Political factors:

Nokia always takes care & intensely considers fair means of practices as per thepolitical factors. With stringent rules and regulation of UAE government Nokiatrade has seen slight downfall.

Environmental Social and Ethical factors:

Many companies may view profit as more important than ethical practice and

this can lead them to making illegal decisions and this has been a big

contribution to many companies going out of business or losing all their market

share to eco-friendly companies. Nokia is a company which complies with the

environmental social and ethical factors around itself.

Technological:

In the communications market this is probably the most important external

factor in affecting a companies development of their marketing strategy as they

must always keep up to date with every change within the market if they are to

be successful and hold on to their market share and hopefully gain more.

Nokia's current marketing strategy by launching N8 to counter Companies like

Apple and Blackberry is one its move.




S.W.O.T:

Strengths:

Still maintains the highest Market share in the telecom industry.

Goodwill of Nokia in the Middle East.

Weaknesses :

The costs (labour and material) are on the rising trend.

Lack of Technological expertise.

Leadership issue.




Opportunity (external factor):

This is the area in Nokia can make profit, or gain market share, by 2 ways:

1. Technological advancement.

2.

More and more mobile phone users.3. With recent ban on Blackberry by UAE government Nokia has

chances to capture market again.

4. With Nokia suing Apple for Patent Infringement which has caused

Apple¶s share to decline, Nokia has an upper edge to tap market.

Threat (external factor):

Major threat to Nokia is from its competitors who have been introducing latest

handsets and upgraded software¶s and technologies. Apples iphone recently

introduced iphone 4 to which Nokia introduced N8. But since Apple¶s I phonein 2007 market share of Nokia has fallen tremendously which is one of the

biggest concerns of the company all around the globe.

Marketing R esearch:

Rightful success behind every business is based on how any business reacts to

customer demands and how they are able to fulfil these demands by providing

what they want and when they want. Our analysis quantifies secondary datacollected by us. Market research also involves the collection, collation, and

analysis of these data relating to the consumption and market ing of relevant

goods and services. The market for mobile phones is humongous and the

current market gap which is saturated in case of Nokia products need to find a

new market segment or launch new products.

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

"Our business objective is to strengthen our position as a leading

communications systems and products provider. Our strategic intent, as

the trusted brand, is to create personalised communication technology that

enables people to shape their own mobile world.

Nokia is currently creating innovative technology to allow people to

access Internet applications, devices and services instantly,

irrespective of time or place. Achieving interoperability of network




environments, terminals and mobile services is a key part of companies intent.

Nokia need to capitalise on leadership role by continuing to meet the

target and enter segments of the communications market that

will experience rapid growth. With appointment of new CEO it shall be bit

more difficult task when he has many objectives to cover especially rapidlyfalling Nokia¶s market share. Focus should be on targeting segment as well as

launching new innovative products so as to compete with competitors like

apple, blackberry.

Nokia has established itself as one of the world¶s leading player¶s in wireless

communication and has significantly influenced the way in which voice and

other services can been transferred to a wireless, mobile environment.

As demand for smart phones have been increasing Nokia¶s plan to lead and

capture market share shall only be possible by inventing and pooling new andinnovative technology far better than its competitors. In this process Nokia shall

be able to offer customers unprecedented choice, speed and value. Nokia has a

time and again contributed to the development of new

technologies, products and systems for mobile communications. Recent

examples include: the launch of N8 with symbian^3 and symbian^4 operating

system.

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

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

In order to classify the wants and needs of the consuming population, following

are the attributes which we think Nokia must ponder upon and gather

information:

1. Consumer Behaviour

2. Buying patterns and sales trends

3. Consumer preferences

4. Activities of competitors in the market

Sources of Marketing Information:

The information that we collected through market research were of two forms,

qualitative or quantitative data.



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1. Qualitati ata refers t data presented in numer i al form, usuall

f i ures.

2. Quantitati e data is t e information concerning t e moti es and altitudes

of consumers.

The answer to f irst par t is explained graphicall here. It states that Nok ia

Corporation market share has been witnessing a steep fall since year 2007, the

time when apple¶s I phone was launched.

T two mai sources of market research i formation are primary

research and secondary research:

1. Pr imary research: where the company gathers information about the

markets themsel es.

2. Secondary research: where researchers/us use information that has been

discovered by other companies or via other mediums.

However our information is entirely based upon Secondary research.

B2B Market Segmentation:

In order to plan Nok ia¶s product, we must target areas where maximum prof it

could be generated. There are cer tain var iables that can affect people buying

habits, behaviour and other aspects keeping in view of the following segments:

� Age � Gender � R eligion � Lifestyle

� Taste � Taste � Fashion

On the basis of these segmentation the Nok ia has in past launched products

suiting the needs and demand that these segments might have. As the main aim

of market research was to develop an idea of market oppor tunities and to track




sales in order to identify those products, which are likely to experience a rise i n

sales and to look at those in which the sales are likely to fall.

The Marketing Mix:

The marketing mix refers to the combination of elements within a company¶smarketing strategy, these are designed to give the customer what they want and

in the long term are designed to maximise profits.

The marketing mix is based around the idea of the 4P¶s:

Product:

The product i.e. Nokia Cell phones is in the centre of the marketing mix and the

other 3P¶s are based on it. Consumers purchase goods and services for a variety

of individual reasons and a company must be aware of all of these when selling

a product. In short, there research should not stagnate with having older version

of software or technologies but by creating new advancement in technology.

Time and again launching of new products as per the demand of customers and

in order to have competitive edge over its competitors it should always try to

stay one step ahead in order to tap market share.

Price:

It¶s basically a key fact in the selling of a product, and is usually the one that is

open to the most change based on different pricing strategies, for ex: competitor based, penetration or skimming. Nokia must be flexible to promote discounts or

any incentive plans on older as well as new devices so that cus tomer retention

stays high.

Place:

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

very successful it must be easy to access, mobile phones are very easy to access

now a days, they are sold in supermarkets, specialise outle t and all major

department stores. Nokia is brand well known by every possible man on earthand this being a key factor it has established various outlets and should

regularly update these stores with its new devices or products.




Promotion:

This involves information to the customer over a variety of media platforms,

using radio, television and print advertising as well as using other promotional

tools such as ³money off deals´ and ³free give ways´. This is a part of

marketing mix that Nokia has failed is that promotional schemes offered byNokia is very low. Even in UAE where electronics gadgets are suppose to be

sold off cheap there is no difference in the price.

List Of Nokia R esellers In Dubai: (See Annexure 1)

The stages of marketing: The Product Life Cycle

1. Market and Product research

y Nokia spends around $50-60 million every year on its technical

needs and Research.

2. Product launch

y Testing ± Nokia product is the name with trust and it focuses on

best of best quality. It maintains its standards so as to retain

customer loyalty, product leadership and operational excellence.

y Pricing - Nokia uses a pricing strategy that best suits the product.

With Nokia 1100 it tried to penetrate market which it was very

successful. With Products like N-95 N-series and E-series Nokia

was very successful in skimming market share.

y Branding - Nokia builds its brand with high-end multimedia

handsets for upscale buyers and low-priced phones for emerging

countries. Nokia follows Umbrella branding ³N Series´ & ³E

Series´. There Logo shows their brand personality. It focuses on

building customer, relationship and trust and building friendship

and trust is the heart Nokia brand.

y Packaging - Packaging is important because it protects products

as they make their way from factory to customers. It hasAttractive, Good & Secure Packing. During 2007, 15,000 ton

packaging material has been saved by using smaller packaging.

Nokia have reduced the amount of printed material inside the box,

In 2007 Nokia began to increase the level of recycled content .




3. Product promotion

y Advertising - Through TV, Sign boards, Bill boards, Radio, Newspaper,

Broachers, Posters, Dummies and display stands.

y Merchandising

y Publicity and P.R.- Nokia has strong PR. They keep on doing some or the

other new events, programmes and publicity, so as to keep up with the

brilliant image of the company and also to enhance the brand equity.

Nokia does not perform Direct Sales activities on its official website

www.nokia.com but uses DEMO style of Direct Marketing. Nokia does

not use Direct Mail or Telemarketing styles of Direct Marketing. In

recent times for the promotion of its new product Nokia has just sent out

an invitation for a launch event for Nokia N8 for next Week in Dubai.

y Sales promotion

Nokia has hired aegis group as its new media planning group and has

approximately spend around $500 million for promotion and $10 million in last

two years.

y Sales and distribution: From the Manufacturing plant of Nokia located in

Finland, China/India etc., the products are sold and distributed to

different distributors in the middle east, eg: Jacky¶s, jumbo, Nokia

Showrooms (8th showrooms-recent one at Mirdif Mall), Malls depending

on the demand.

y Local, national or international sales: The sales as per the graph for the

operating system Symbian which is specifically used by Nokia is approx

25,387 with a market share of 41.2 % in the second quarter of 2010.




4. Monitoring and analysis the sales:

y Meeting customer satisfaction?

y Does the product need modifying or replacing?

y Is a profit being made?

y Is the promotion and distribution policy effective?

Application of Internet to B B marketing by B B Marketer:

The impact of internet on business is increasing worldwide. Business-to-

business transactions account for over 80 percent of all transactions conducted

over the internet. They are many nations in terms of using the internet in

business-to-business (B2B) settings.

While practitioners are realizing this potential for using the internet to build

profitable, long-term relationships with their trading partners. Essentially, the

relationship quality between trading partners and their business performance is

enhanced through the use of the internet, with the internet affecting technical

bonds more than social bonds.

Among various strategies and policies that Nokia follows one of it is that it does

not sell its products online or through internet marketing. With the current

economic recession many companies are trying to find cost effective

alternatives of buying Nokia cell phone and its accessories. In order to fulfill

these demands the business marketers use websites other than Nokia¶s

professional website. These web sites generally contain details of

manufacturers/suppliers/buyers which are far more effective and efficient means

to purchase Nokia¶s products and suppliers across the UAE.

In the last five years, Nokia internet marketing through B2B has increased

dramatically as a result of the rapid adoption of the internet in marketing

practice through portal and web sites other than the professional Nokia web site.

Internet is one of the most important marketing tools because it has the potential

to facilitate relationships in B2B contexts. Business-to-business (B2B) internet

marketing of the mobile phones like Nokia includes the use of all three forms of

e-commerce (internet, intranet, and extranet) for purchasing goods and services,

buying information and consulting services, and submitting requests for

proposals and receiving proposals.




The B2B internet based technologies of Nokia provide effective and efficient

ways in which corporate buyers can gather information rapidly about available

products and services, evaluate and negotiate with suppliers, implement order

fulfillment over communication links and access post -sales services.

Useful Information:

Nokia N8:

Nokia is in process to launch its latest hand gadget sometime next week inDubai. The question that poses each geek is that whether it could overshadow

apple¶s I Phone and Blackberry and regain its honor in the market or would bejust another mobile in its long list. The word around is people are anxiouslyawaiting for it as nokia embarks in the segment of higher-end smart phones.Nokia has managed to pack a lot into a sleek anodized aluminum case thatcomes in several colors, including silver white, dark gray, orange, blue andgreen. Central to the N8 is a 3.5-inch 16:9 capacitive touch screen (640 x 360pixels) showing 16.7 million colors. There¶s 16GB of internal memory,expandable with an additional 32GB using MicroSD card.

With a 12-megapixel sensor and Carl Zeiss optics, the N8 certainly has enough

hardware to impress. Whether the photo quality is there as well remains to beseen. HD video recording at 720p, 25 fps with H.264, MPEG-4 should meanhigh quality video as well. There¶s also a HDMI connection so you can watchphotos and video on a compatible TV.

One interesting fact about N8 is the latest version of the Symbian mobileoperating system (Symbian^3). Nokia says there are 250 new features in




Symbian^3 including real multitasking, multiple personalized home screens,turbo charged graphics, multi touch and intell igent networking.

Nokia Sues Apple

Nokia Oyj, the world¶s biggest maker of mobile phones, filed a patent -

infringement lawsuit against Apple Inc. in its latest salvo over the iPhone and

iPad. The lawsuit, the fifth patent complaint between the two companies in the

past year over smart phone technology, broadens the fight to include Apple¶s

iPad touch-screen computer tablet. Nokia¶s filing of lawsuit in federal court at

Madison, Wisconsin, helped push Apple shares down 4.2 percent in New York

trading, their steepest drop since Jan. 22

The legal battle began in October, when Espoo, Finland - based Nokia fileda lawsuit accusing Apple of infringing 10 patents. It demanded royalties on the

more than 51 million iPhones sold since Apple Chief Executive Officer Steve

Jobs, 55, introduced the device in 2007.

The five patents in the newest complaint relate to enhanced speech and data

transmission, and antenna configurations that improve performance and save

space, Nokia said in a statement. The patents aren¶t the same ones at issue in

cases in a federal court in Delaware, and before the U.S. International Trade

Commission.




R eferences:

Books:

Kotler Keller, ³Marketing Management´:

2009, Pearson Prentice Hall, 13 th Edition, New Jersey

ISBN -13-978-0-13-135797-6.

Al Ries and Laura Ries, ³The Fall of Advertising and the Rise of PR´

2004, Harper Business, 1st Edition, United states of America

ISBN - 0-06-008199-6.

http://www.scientificamerican.com/article.cfm?id=digitally -augmented-

reality. http://moconews.net/article/419-mobile-content-bits-admob-family-guy-

app-nokias-ad-spend-ringback-tones/

http://www.eyeofdubai.com/v1/news/newsdetail -41246.htm

www.nokia.com

http://web2.dubaichamber.ae/pdf/reports/Electronics-market-monitor.pdf

http://www.ameinfo.com/44069.html

http://www.scientificamerican.com/article.cfm?id=digitally -augmented-

reality

http://www.nokia.com/NOKIA_COM_ 1/Corporate_Responsibility/Sideb

ars_new_concept/Nokia_Suppliers_and_the_Environment/env_guide.pdf

http://ec.europa.eu/environment/ipp/pdf/nokia_st_II_final_report.pdf

http://www.apple.com/iphone/

http://www.brandingstrategyinsider.com/2010/04/nokia -brand-needs-

firm-direction.html

http://www.docstoc.com/docs/ 12163706/Nokia -Marketing-Mix

http://www.123helpme.com/view.asp?id=120850

http://www.ec21.com/product-details/Unlocked-Nokia-N97-N93-N8--

4773122.html




Annexure: 1

Nokia R esellers:

�

Al Rostamani Group Tel: 04-428-7777� Burj Dubai Square Bldg 2, Dubai, UAE

� Albwardy Investment Tel: 04-351-1333

� Alphamed Group

� Arabian American Technology -- Aramtec Tel: 04-289-5444

� Lifco Group of Companies

� Maritime and Mercantile International LLC Tel: 04-424-500

� Al Aqili Group Tel: 04-324-8000

� Golden Falcon Chemicals, Ingredients & Specialities Tel: 04-227-4433

� Al Kamda General Trading LLC Tel: 04-266-4200

� Alokozay Group of Companies Tel: 04-887-1155

� Ashraf & Partners Tel: 04-294-0500

� Federal Foods Tel: 04-339-0005

� Jaleel Group Tel: 04-333-9191

� Digi-Key Corporation

� Comtel Telecom

B2B Group Term Project - Group5 - 07-10-10

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