Marketing Report for Nokia in Usa

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Omar Raad Albraich M00338326

TITLE: MARKETING REPORT FOR NOKIA IN USA

FROM: OMAR RAAD ALBRAICH

TO: THE HEAD OF MARKETING AND PLANNING

DATE: 15 / 04 / 2012

INTRODUCTION:

µNokia¶ is and the largest producer of communication devices and electronic gadgets

in the world. Nokia is headquartered at Helsinki in Finland. They have operations

spread over in almost 150 countries. The company operates in four different

divisions namely: Nokia Mobile Phones, Nokia networks, Nokia Ventures

Organizations and Nokia Research Centre. Their prime vision is a world where

everyone is connected. It is one of the most loved and fastest growing brand in the

world.

The following marketing report tries to explore the mobile phone business of Nokia

within the USA market.

METHODOLOGY:

The report is discussed mainly over two different sections. The first section tries to

study and understand the competitors in the market, the macro and micro

environment analysis along with the analysis of customers. The second section of

the marketing report suggests marketing objectives and strategies that Nokia can

practise to develop a better market section. This section also identifies the

competitive advantages that Nokia can use as a firm and their targeting and

positioning in the competitive market.

COMPETETOR ANALYSIS:

In USA, Nokia do not directly sell mobile phones to their consumers. Instead, they

enrol themselves with cellular service providers and reach consumer through these

cellular service providers. This in itself acts as a negotiating di sadvantage for Nokia.

PERFORMANCE




The main competitors of Nokia with regard to mobile phone in the US Market are:

Apple, Blackberry (RIM), Android, and Windows mobiles. Nokia entered the USA

market in 1998. The USA market is highly competitive with Apple b eing the market

leader owning 29.7% of the market share. Blackberry closely follows Apple with

27.4% market share. The new entrant Android based phones occupy 22.7 % of the

market. Windows mobiles follow Android phones with 14% share. Nokia is ranked

only fifth(with 3.4% market share) in this competitive market.

The players in the market can be divided into two strategic groups based on the

complexity and openness of the software platforms used in mobile phones.

Group A:

This group comprises of the three major players whose platform is open to additions

and development. The firms that fall into these categories are Apple, Android and

Blackberry.

Group B:

The second group comprises of firms that introduce communication devices with

significant inbuilt features are not supported. This includes symbian phones like

Nokia, Google mobile phones having Windows and palm Operating systems.

OBJECTIVES AND STRATERGIES:

The objectives followed by the companies in strategic group A are attracting the ever

dynamic youth and advanced thinking individuals by means of offering

communication on a platform that is open to add-ons. Apart from the inbuilt features,

they try to attract dynamic consumers by offering add-on services to the mobile

phone by means of online stores . Apple has developed i-store for this purpose.

Android reaches their consumers through Android market and RIM uses Blackberry

App-world for this purpose.

The players in strategic group B, uses their specific inbuilt and physical features as a

mode of attracting target consumers that include a proportionate mix of youth,

executives, business professionals and the elderly. This includes companies like

Nokia, Google nexus and HTC. They try to attract potential consumers with phones




those stylish in look, encompasses of numerous inbuilt features and altogether

provide a better user friendly experience compared to firms in strategic group A.

IMAGE:

The firms in group A are looked upon by consumers as a latest, sophisticated,expensive and advanced mobiles phones with latest features and applications.

Whereas, the firms in strategic group B that include Nokia: are perceived by

consumers as an affordable, user- friendly and value to money product.

CUSTOMER ANALYSIS:

SEGMENTS:

There can be three basic segments that can be indentified in this market wherein

Nokia operates. The first and the largest segment includes, the youth between the

age groups of 16 to 25. This is followed by the middle aged consumers within the

age groups of 25-45 that includes working executives and business professionals.

This is followed by the elderly that falls into the age group of 45+.

MOTIVATIONS:

The motivations for each segment differ according to their purpose and need.

Though the core functionality is voice and text communication, there are lot of

augmented features that a consumer considers before opting a device.

The consumers in the youth segment purchase a mobile phone for their

entertainment needs like music, video, gaming and extensive communication. Ap art

from these features they also prefer devices with stylish looks. Nokia has tailor made

devices like Nokia 5730 express music, 5630 express music, 5800 xpress music,

Nokia N-gage for the consumers in this particular segment.

The business and working executives use mobile phones mainly for communication,

especially online communication. These consumers are motivated to purchase a

mobile phone mainly for online and telephonic communication, devices that has the

ability to save and review business documents and files (.ppt files) format.

Understanding this need of consumers Nokia had launched the E-series mobile

handsets that include models like E7, E61, E71, E52, E62 etc.




The elderly people mainly are motivated to buy mobile pho ne for communication and

navigation purposes. People in this age group are mainly non -working retired

individuals who enjoys their leisure time. They prefer user friendly communication

devices that helps them navigate as well apart from helping in communic ation.

Understanding this need Nokia has developed devices exclusively for navigation

purposes like 6710 Navigator, 6110 navigator, 6110 navigator.

KEY SUCESS FACTORS :

The key success factors of the Market leaders Apple is the cool, trendy, latest

technology incorporated smart phones that they produce. Their ability to innovate

with research is the prime reason behind their success.

Blackberry worked its way into the top mobile phones list by means of developing

solutions to meet the instant communication needs of consumers(especially youth)

by means of developing Blackberry Messenger in association with Telecom

providers.

Android phones like HTC, Goole Nexus, Samsung operates with the advantage of

open ended platform which they posses. This makes the device mobile more than

just a communication device. It prevents the product from entering into the decline

stage of the PLC.

NOKIA¶S KEY SUCCESS FACTORS:

Nokia is a firm that has huge economies of scale because of their strong bond they

have with suppliers and with the well integrated supply chain network. This helps

them to gain cost advantage and help them produce reliable phones at a lower cost

and reach them to consumers. The strong distribution retail network they have is

also a key success factor.

However, Nokia must develop technologically advanced phones, create a solution to

the growing instant communication needs of consumers and develop an open ended

software like Android with the support of an online applications.

UNMET NEEDS:




There are unmet needs experienced by mobile phone users. Entertainment is as

important to consumers as communication. Though there do exsist mobile phones

that offer platform for watching movies, and listening to songs , there exists no such

device in which aired television channels can be watched. Hence, a company that

develops such device that can fulfil this unmet entertainment need of consumers will

gain a competitive edge over others.

ENVIRONMENT ANALYSIS:

Political:

Political factors like the legislations regarding minimum wages , type of government

and market regulations, trade agreements/ tariffs are important factors and plays a

vital role in the decision making process of the mobile phone industry. Most

important of this is the minimum wages law which becomes a decisive factor for

mobile handset providers to decide whether to set up plants and research units

within USA or to outsource the same.

Economic:

Like any other industry the economic market conditions also assert an impact on the

mobile phone industry. This is because, the economic condition of the country is

connected to the economic condition of consumers. The recession that struck USA

in 2008 was a major factor for the declines of sales in this industry mainly due to the

increased level of unemployment, low spending power etc.

Social:

Social factors do have an important role to the firms operating in the telecom

industry. The factors like the rate of family formation, the growth rate of the

population, the age wise distribution of population as well as the regional shift in the

population will impact and affect the industry a nd the players within the industry.

Hence time to time marketing plans, strategies must be developed after well studying

the population distribution figures and census as well.

Technological:




Technology is the most important of the environmental factors fo r a firm operation in

the communication industry. Technology is ever changing , and adapting to this

change brings in solidarity and integrity for speed, fast and efficient means of

communications. According to the change of technology the firms must have

financial and people resources that can effectively work together and produce

communication devices that provides ease of communication with efficiency.

Legal:

To operate in this market, all communications firms must vitally follow the legal

regulations of the telecom industry. The telecom companies must also follow the

legalities of other laws like employment laws, laws protecting consumer rights etc.

Environmental:

It is also necessary for consumers to work without creating harm to the environment.

This includes back collection and safe disposal of used mobile phones and batteries.

Apart from this, they also contribute to the environment by associating themselves

with events that promote environment friendliness.

INTERNAL ANALYSIS:

The internal analysis of the firm is done by analyzing the strength, weakness and

opportunities of the firm.

STRENGTH:

Extremely strong Brand Equity and Brand Name

Extremely strong distribution network

Strong research team

Proved to be affordable and reliable

WEAKNESS:

Lack of open platform software

Lack of constant communication

Lack of online application purchasable stores




Lack of service centres at all places

OPPURTUNITIES:

Presence in a rapidly growing telecommunications industry market

Efficient staff and infrastructure

Ability of the firm to innovate - that promises future prospects

THREATS:

Increasing competition

Price wars with competitors

Entry of mobile phones ± that has open platform software

MARKETING OBJECTIVES:

Certain marketing objectives must be devised keeping in line with the firm¶s

objective that will ultimately lead to achieving the firm¶s objective as a whole.

The major objectives of the company are to achieve in the upcoming year would be: achieve aggressive sales across youth & business segments,

develop and promote a new phone with an open platform like android,

In order to achieve Nokia USA¶s aim of achieving aggressive sales in all

segments. The firms marketing objective for the will be:

Rise the sales in all segments by 3% by the end of 2011

The second objective of Nokia USA would be: to develop and promote a new

phone with an open platform like android. The marketing objective for the same

would be:

To generate awareness for the product by 3% before end of 2011.




To cover all regions of USA (especially the northern states). The marketing objective

for this business objective can be: To increase retail outlets by 3% before end of

2011

TARGETING AND POSITIONING:

Nokia can develop new strategies to focus consumers based on their level of use as

heavy users, medium users and light users. This will help Nokia in developing and

categorizing their product according to the nature of usage. The market can be

broadly looked at in three segments like below:

Heavy users: will be the youth segments (between 18 to 25) who are the highest

users of mobile phones and who prefer to stay connected mostly. This consumer

segment prefers trendy phone with style and elegance.

The brand positioning must be made in such a way to the consumers that they feel

that the products of Nokia are reliable, suitable for their kind of use. The brand must

also stand out as an icon of the youth that stands for studying and serving the

communication needs of the youth.

Medium users: will mainly be business users between ages 26 to 40 who use

telephone as a medium to keep connected mainly for business purposes. These will

include the working class of individuals who are not much price conscious butparticular about business supporting features and applications that the particular

product offers.

The positioning of the product amongst this segment must be as a brand that

integrates technology with convenience and brings forth solutions to all the business

oriented communication needs.

Light users: The people who fall in the age group above 40 years of age. These are

people who are light users and who use phone as a basic medium of just staying

connected when necessity occurs.

To these people, the brand must be positioned as a trust worth, reliable, value for

money brand. The name, reputation and image that Nokia has achieved around the




world as a leading producer of mobile phones can be used as the basis of the

positioning goal.

GROWTH STRATERGIES:

To grow in this Market Nokia can make use of Ansoff Matrix. Ansoff matrix suggests

different growth strategies of which market penetration and product develop ment can

be used by Nokia to improve performance within this market.

Nokia can undertake product development by developing new product s for the

existing market and by introducing new products for the existing consumers in the

existing market. This can be done by means merging up with Google and develop a

new phone that can function using an open platform like Android. This will enable

incorporation of latest applications and will prevent a particular product from entering

into the decline stage on the lif e cycle of a product.

Nokia must also encourage their Research and development team and start

developing business phones with dual SIM card facility and with inbuilt wave

projection technique. The wave projection technique will enable business people to

project their slides and presentations on the go. Dual SIM card facility is also a vital

facility as many of the consumers in this segment are working people who wish tokeep their business and personal contacts separately.

Market penetration can be done by means of extensive promotional campaigns and

PR campaigns. To begin with, Nokia must well negotiate deals with cellular providers

and make an attempt to reach end consumers at a competitive price way better than

what the competitors can offer. Discount schemes must also be set up in association

with retailers for various models that are found to be slow moving in the market.

In order to attract the youth, Nokia must position in the minds of these consumers asa sign of youth icon. This can be done to a gre at extend by developing trendy,

compact, stylish mobile phones with loaded features and applications.

For the business segments in association with cellular providers, discounted rates

must be offered to corporate consumers. PR campaigns must also be given




importance in projecting the specific features that Nokia business phones have in

comparison to the competitors products.

The brand positioning in the consumers mind should be a unique, compact yet

convenient phone creator of advanced business phones that ideally encompasses of

all the basic business applications that a businessman would ideally need.

In the light users segment, a product must be developed that has big easy to scroll

screen that does not impact hard on eyes. This is because the consumers in this

segment are mainly old people.

SELECTING COMPETETIVE ADVANTAGE:

In order to establish a prominent position in the highly competitive market, Nokia

must choose an option of sustainable advantage. Nokia can primarily use the porters

µcost advantage¶ to develop a competitive sustainable advantage to overcome the

extensive competition in the current market. This is mainly because Nokia has a

strong bond with the suppliers because of which Nokia has been able to develop low

cost mobile phones in other parts of the world like India and China . This has enabled

Nokia to significantly increase their market share in these countries and even

become market leader.

Price skimming can be used for newly launched mobile phones, especially theintroduction and growth period of a particular series of mobile phone. However,

penetration pricing can be used for models that enter the maturity period. In the

decline stage of the product discounted prices must be offered to the product as to

achieve maximum sale out off the existing model and to create space for the new

incoming model in the market.

MARKETING MIX PROGRAMME:

FOR MARKETING OBJECTIVE 1:

Product: Nokia n-gage, Music express series

Price: Should be nominal priced like between $217 and $326

Place: Through tie ups with cellular operators like At&T and Orange and authorized

retail agents




Promotion: Must be done on youth magazines, celebrity endorsements, social

networking sites. Bill boards can also be used along with dynamic Tv advertisements


Product: The further improved versions E-series

Price: Between $ 400 To $ 680

Place: Through retailers and fleet sales in coordination with Telecom providers

Promotion: Personal selling to corporate organizations, advertisements on business

magazines, bill boards and PR campaigns


Product: N series , navigator versions

Price: $ 270 To $ 490

Place: Through retail agents and joint association w ith cellular providers

Promotion: Advertisements in newspapers, fly-leafs, PR campaigns and TV ads

CONCLUSION:

To summarize, the USA market is a highly potential market for an experienced

Market player like Nokia. But, the market is consists of consumers who are more

technologically advanced and are more tech-savvy. Hence, is the success of Apple,

Blackberry who well incorporates technological findings into their products.

Therefore, Nokia must strengthen itself in progressing with technology

instantaneously to overthrow competition and acquire a better market position.

Sufficient people and financial inputs must be put into researching, developing and

marketing of these new products. Only then, can Nokia improve and sustain a good

market position in a market like that of USA.

RECCOMENDATATIONS:




Consumers preferring communication over features:

It is seen that consumers especially the youth gives more importance to

communication over features. The success of Blackberry by the introduction of

Blackberry Messenger is a vital sign of this changing trend amongst the consumers.

Consumers, especially the youth are evolving into the concept of staying connected

24/7 than just when necessary to communicate a message across to peers. So,

Nokia must put serious efforts into developing messenger software in coordination

with cellular providers and efficiently market it in this market. Without doubt, it would

enable significant improvement in market position.

Promoting online communities:

An online community must be developed by Nokia , wherein all the existing Nokia

users can share their views , opinions, benefits and problems that they face with

regard to using a Nokia product. This can also be used as a channel through which

the company can keep in touch with the consumers on a regular basis.

Developing online application stores:

Online application store like android store for android, i-store for Apple must be

developed. Free and paid applications and programs must be made available to

consumers via these online stores. These stores will help certain model of mobilephones from entering the decline stage as applications c an be developed to keep it

updated.

APPENDIX:



Omar Raad Albraic

M00338326




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