Market strategy of Nokia

merchandise strategy of NokiaThis say concentrates on the carry through and throughance of Nokia in the year 2009 and the strategies which led to the same. The report begins with a brief introduction of the company and follows with PEST-G and SWOT analysis for the same.In accession to this a competitor analysis has been done to comp be Nokias performance to its competitors and thereby analyzing its marketplace packet. Nokia seems to outperform its competitors due to a largerr market parting it sleep togethers.As we go further, a much(prenominal) detailed discussion of its trade strategies can be seen. Nokia faces more contender today than a hardly a(prenominal) years ago. The invasion of android operating systems argon more like than Nokias Symbian operating system.Targeting, positioning and segmentation sacrifice been analysed on the primer of a few key models.The report finally concludes with the evaluation of these strategies adopted by Nokia and how effective they befool been or will be in the future. gatewayAround 1.2 billion (17%) people in the world connect through Nokia every day thereby proving their cl set out of, Connecting People. Nokia is a public check company that is listed on three stock exchanges NYSE, FWB and OMX. Nokia was founded in 1865 on the banks of the Nokianvirta River in Finland to produce a harvest-tide very different from what it is commonly cognize for. It evolved from manufacturing paper to rubber to cables to electronics and indeed finally the mobile rally. The company owes its variegation and entry into mobile conferences to its former President and CEO, Jorma Ollila who persistent in 1992 to capitalize on the potential of this upcoming and growing sector. He decided to move out of their another(prenominal) businesses to focus on the development of communication harvest-festivals which was more profi tabular array than their other business ventures. (Nokia online)THE MARKET ENVIRONMENTNokia is a m ultinational company headquartered in Finland. It employs a total of 123,553 people ecumenic and sells its products in over 160 countries. Nokia has Research Development Departments in 16 countries with 17,196 employees. Its major markets are in chinaware, India and UK. From 2008-09, Nokias market piece of land increased in China but decreased in India and UK. The reason for its declining market appropriates is peradventure due to increase in competitors in India and the markets already being pure in UK. Nokia produces technological products like mobile phones and insolent phones, mobile computers and networks.PEST-G epitomeUnder this section, the environmental factors affecting Nokia will be grittylighted.The CompetitionNokias top side competitors in mobile devices are Samsung, LG, RIM and Sony Ericsson but in its smart phones, they face rival from Apple and RIM.According to the 1Q reports in 2010 (table 1.1appendix), Nokia shows declining market contend. Samsungs p lough dower increased in India, one of Nokias top markets. RIMs market share likewise went up musical composition LG and Sony Ericssons market shares slumpd in value.(Gartner online)Nokia may enjoy the larger share of the market but being complacent may meet its adverse effects on the firms profitability. The operating system Symbian usaged by Nokia is user-friendly but has very limited applications. Whereas, the operating system Android being adopted by most of its competitors is an open system that allows its users to leave access to a large number of applications. Also, the operating systems of RIM and I-Phones are quickly eating up Nokias market share.The CompanyIncreasing competition and saturation of markets is causing Nokias sales to decline causing a major decline in its profits.Source (Annual reports) Drawn on the basis of table 1.2 appendixIn 2009, Nokia predicted slight improvement in their market share in 2010 but were faced with negative outcomes. According to th e 3Q report of 2010, Nokias shares deliver fallen to about 30%.The downward trend of profits is of gravid concern to the company.(Total Tele online)Nokia is the manufacturer of mobile phones but it does not sell forthwith to its end users. It eng get on withs in transactions between businesses (B2B), for instance it sells its products to wholesalers and retailers locally and internationally. This allows Nokia to hand higher volumes of transactions. This chain of distribution is explained in great detail down the stairs the marketing mix.SWOT AnalysisNokias internal and external factors can be summarized as belowInternalStrengthsMarket Dominance Its market share is more than its top 3 competitors combinedGood defacement pertain and defacement loyaltyTakes into account customer preferencesNokia ranks 41st in Fortunes Worlds almost Admired Companies (http// currency.cnn.com/magazines/fortune/mostadmired/2010/snapshots/6652.html)Reliable good quality productsValue for money an d has good resale valueWeaknessesPlaying catch up with its competitors failing to add up differentiated products with a high level of competitive reinforcement to the marketIt has failed to make a brand of their models. For example, there is Samsung Galaxy S, LG Chocolate, Apple I-phone while Nokia is still using serial numbers to name its models.Their market share is declining constantly due to lack of innovative products and failure to capture the initial mover advantageInsufficient marketing as opposed to its competitorsTheir software product Symbian is under great criticismEXTERNALOpportunitiesEmerging markets like India and China hold great potentialMiddle East and Northern African nations are potential marketsNew innovative products with high competitive advantageSecure weakening position by entering into contracts with network operators to din market shareAcquire break-dance software systemsThreatsDirect competitors and curse from companies not considered as competitio nTheir software system is no taking into custody to the Android and I-Phone software.RecessionSmart phones are not competitive teemingBrand image weakening/boring imageImitation (fake) and squalid products claiming to be Nokia can footing brandNokias Marketing Strategyestablish on several similar characteristics Nokia can segment their marketdemographic FeaturesAge and Gender Nokia products appeal to most age groups and are more unisex. They are now introducing mobile phones with vibrant colors that would appeal to women and overly the younger generationsIncome Low Eg- C-series and dual sim phonesMiddle to gamey -Eg- N-series, E-series, CommunicatorsVery High Eg- Vertu PhonesOccupationBusinessmen they need phones that look professional and have multiple features 3G technology, web access on-the-go, support organizing functions and connecting with clients. The Nokia E-series, N-series and Communicators are targeted at refreshing certain needs of businessmen.Students social networking, gaming features, and music options are the eye-catching characteristics sought by this demographic class. The N-series and Xpress Music models are quite ordinary in this segment.Level of EducationThe user-friendly aspect of Nokia phones makes it easy for scour illiterates to operate the phones.For those who like to read and use their phones aside from their communication functions, the a la mode(p) Nokia phones like the N900 and other smart phones would be of great evoke to them. behavioral and PsychographicBenefits Sought Most Nokia products provide its users value for money as they play multiple needs. For instance the Xpress Music models not only allow you to perplex connected but also keep you entertained with its walkman features.Usage competent for heavy or light usage.Perception and Personality Customers perceive Nokia as a reliable and user friendly brand. Varying models for different personalities and tastes.Targeting And Positoning aft(prenominal) Nokia has segmented its market, they develop a differentiated strategy for different segments. They aim to increase their market share by catering to all the segments. change surface though their history of past products show their suitability for all age groups, recently frameed products seem to be targeting the younger generation with a high level of involvement in this field.Nokia alongside its competitors Samsung, LG and Sony Ericsson offer its users a entire range of products at higher termss. They are able to charge such prices because of their brand image and benefits received by the customers in relation to the price they pay to obtain it.RIM and Apple also sell their products at high prices but they focus only on a nail range of products.There strategy contradicts the former group as they focus on generating high revenues on the basis of the success of fewer product ranges.Nokia already enjoys a good position in relation to its competitors. Their brand is a self promoting tool. They like to market themselves as a brand that prioritizes its customers and adds value to their products. Nokia benefits by being an all-rounder in the manufacturing of mobile devices and the lore of being one of the best reliable brands in this industry. By provision products of all ranges, low income to high income, professional to gaming, fancy to elegant, premium opulence to necessity the brand clearly displays its presence and dominance.MARKETING MIXThe marketing mix consists of 4 elements (Product, Price, family and Promotion), each of which will be discussed in detail belowProductNo longer is the mobile phone a mere means to make phone calls but to perform more diverse functions like access the web, click photographs, share data, enjoy music, connect with friends through social networking sites, play games etc.Nokia manufactures a large number of differentiated handsets to cater to their wide and diverse target segments.Their products go correspond to their featu res and serial numbers. They have successfully sold the Nokia C-series, N-series, E-series, Xpress Music models, Communicators and other mobiles with the power of their brand name.Recently they have launched the Ovi Stores which enable its users to download applications of their interest online. The most notable feature of the Ovi stores is their Ovi maps. In order to compete with their competitors, they are reducing their reliance on the Symbian operating system and developing models with the Maemo and Maego operating(a) Systems which are more open and allow users to develop their own games and share it with the rest of the world online.Product Life CyleThe N900 can be considered to be in its growth stage where the company has already reached its Break-Even-Point and is generating profits.Phones like the N97 and N91 have already matured and are generating constant returns and competing against its rivals.The Nokia Communicators are in the decline stages as the demand for older vers ions has fallen and competitors are offering better alternatives.In order to grow their market share, Nokia goes for product development i.e. initiation new products in existing markets.Applying the BCG matrix (Boston Consulting Group), Nokia can be class as the Cash Cows as they hold a greater share of the market but are not growing at the same pace as the growth of the market. As the market is growing, their share is reducing. This leads to implementing strategies to defend their position.PriceNokia adopts 2 pricing strategies. They price their products on the basis ofMarket skimming technique i.e. setting high prices at the launch of the product and gradually reducing the prices when competitors enter the market.Competitors price they price their products more or less at the same price as their competitors.PlaceNokia does not sell directly to its end users. It uses indirect channels through which it distributes its products to the mass population. They are engaged in Business- to-Business transactions. For example, Nokia sells their products to Sharaf DG, Axiom Mobiles, Jumbo, Jackys, etc in the UAE who then sell it to its end users.PromotionNokia promotes itself master(prenominal)ly through denote and sponsoring events. They use strong brand ambassadors like Priyanka Chopra and Shahrukh Khan in mass media advertising through Televisions. They develop effective and catchy advertisements where their brand name is the main selling point.Evaluation of Nokias StrategiesNokia has performed remarkably well in securing the position it enjoys today of being the market leader. But the real challenge they face is securing and maintaining this position. world the dominant player, it should have been able to easily drive away the competition in the Smartphone market and grabbed the first mover advantage. Whereas it is playing catch up with RIMs BlackBerry and Apples I-Phone. Their efforts need to be more effective and their products more competitive as they have no t been able to launch a product recently that can be classified as a figure of speech shift.ConclusionNokia has performed well in the year 2009, however failure to overcome technologies of other smart phones can lead to a big terms to Nokia.Even though the brand name Nokia is sufficient to drive sales, the self-assertive marketing and advertising strategies undertaken by its rivals can cause sufficient damage to their cash flows. Hence they need to focus more on not only advertising their brand but also their competitive advantages over its rivals.None the less, it is by far the most preferred brand of consumers according to a survey conducted in the UAE (Arabian business online)APPENDIXTable 1.1 Market Share of Top 5 Mobile Vendors from 2009-10Table 1.2 Sales and profit of Nokia for the past 5 yearsYEAR20052006200720082009Sales3419141121510585071040984Profit3616430672053988891