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B. 1. Classification and 2. Analysis of 3. Analysis of 4. Analysis of 5. Analysis 6. Analysis 7. Summary of industry 8.

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definition of existing potential new substitute of of opportunities and

Industry industry competitors entrants products suppliers buyers threats

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anagement of Nokia The roots of Nokia go back to the year 1865 with the establishment of a forestry industryenterprise in SouthWestern Finland by mining engineer Fredrick Idestam. While in the year 1898,witnessed the foundation of Finnish Rubber Works Ltd, and in 1912, Finnish Cable Works beganoperations. Gradually, the ownership of this two companies and Nokia began to shift into hands ofjust a few owners. Finally, these three companies were merged to form Nokia Corporation in 1967. [1] Nokia Corporation engages in the manufacture of mobile devices and mobile network equipment,as well as in the provision of related solutions and services worldwide. The company has four mainbusiness functions or segments: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. TheMobile Phones segment provides various mobile voice and data devices. This segment offers mobilephones and devices based on GSM/EDGE, 3G/WCDMA, and CDMA cellular technologies. TheMultimedia segment offers mobile devices and applications with multimedia connectivity over GSM,3G/WCDMA, WLAM etc. 1 Waqas Asif

ID: 36076

Strategic Management of Nokia Role of Strategy: Every company on a small level with very low risk or a multinational company with much more tolose than just money on the line have to have a strategy to make its name in the world with othercompanies in mind. Strategy is as important in an organisation like walking for a human. Behindevery successful organisation there is a strategy. It may be hard for an egg to turn into a bird: it would be a jolly sight harder for it to learn to flywhile remaining an egg. We are like eggs at present. And you cannot go on indefinitely being just anordinary, decent egg. We must be hatched or go bad. The idea from above statement says in strategy you cannot just attempt something that you have toor will do just like that you need to take small and control in sometimes brave steps to achieve whatyou desire and have to be patient because in planned strategy to work time is your biggest friend andsometimes the worst enemy. Sometime it takes years to be where you want your organisation to stand. In a competitive business environment you have to realise the brutal facts of Market environment,Financial and Economic conditions. You need to ask yourself the hard questions before making astrategic plan weather it can be achieved or not and have to make sub small plans those will help you.You have to think of the value added to the organisation after the completion of your strategy. External analysis: 2 Waqas Asif ID: 36076

Strategic Management of Nokia The External Analysis examines opportunities and threats that exist in the environment and I will be discussing the fallowing. 1. P.E.S.T Analysis 2.Porters Five Forces/Market Trends 3.Types of Market 1. P.E.S.T Analysis: PEST identifies the political, economic, social, technological, environmental, and legal factors that of which directly affect a company. In this case Nokia.Political As markets are deregulated, both operators and manufacturers are free to act independently of government intervention. In Countries like India and China where Partial regulations exist, government intervention does take place. Economic With incomes rising, people have more disposable income, which enables consumers to be more selective with their choice of mobile phone, looking to other factors ratherthan fulfilling the most basic of user needs (text messaging and phone calls) and price being such akey factor. Social The rise of the so-called information society has made telecommunications increasingly more important to consumers, both in terms of work and leisure. Users are more aware of mobile phone handset choice and advancements due to increased information availability. 3 Waqas Asif ID: 36076

Strategic Management of Nokia Technological There have been much global advancement in technology such as MMS, Bluetooth, WAP, GSM, GPRS, cameras etc. The Asian markets are more technologically advancedthan their European counterparts, for example in 2002, just 4% of phones had cameras, whereas inAsia 90% did. 2.Porters 5 Force/Market Trends: It uses concepts

developed inIndustrial Organization (IO) economics to derive five forces which determine the competitiveintensity and therefore attractiveness of a market. It consists of fallowing factors. Power of New Entrants:In any market arrival of a new product is not always welcomed. In mobiles world its not different a mobile phone or an online service is launched by Nokia it has as50 percent chance of success. Its like the launch of Nokias N95 Smartphone which was muchappreciated by buyers then the launch of N96 Smartphone. Power of Buyers:Due to recent down fall in the economy, the demand of consumers buying new mobiles has come to a halt. Due to which companies everywhere are thinking of strategies to increase the demand of their products. 4 Waqas Asif ID: 36076

Strategic Management of Nokia Threat of Substitute:There are substitute for everything out in the world. So goes for the mobile, and the services provided by Nokia but the problem lies in consumers switching to thesubstitute. The main reason is that most people dont like to change to something new because theymight find it hard to use or switch over. Power of Suppliers:If the suppliers change the price then company in this case Nokia has a direct impact on the pricing of their products. If there are more suppliers then it is easy to change from one to another if the first one is not able to provide the services a company needs. Competitive Rivalry:Business is good where there are competitors because it gives more chance to improve and go ahead of your rivals. Nokia keep their product catalogs up-to-date and keep looking for better technologies to update its mobile and services. 3.Types of Market : There are different types of markets on which a company makes strategies to fallow and consider before releasing products. Which are discussed as below. Monopoly:Nokia as a mobile manufacturer has dominated mobiles market with its high end N-series Smartphone to its low end mobiles. It was Nokias intentional strategy to keep ahead with the technology to keep customers interested in its products. Duopoly:Its a market state when two companies dominate the market. In this market Nokia is challenging HUAWEI technologies in producing 3G technology dongles because at present time there is no other company in the world expect Huawei producing 3G dongles. Oligopoly:Its a type of market where small numbers of companies in the market collude to take control of the market prices and products. In Nokias case it is colluding with Sony Ericsson andSamsung to make phones which use Nokias mobile operating system (Symbian S60). This eliminatesthe use of Windows mobile operating system and newly introduced Googles operating system Android. Perfect Competition:Its a market where all Companies are on a same level. Nokia as a leading manufacturer still have Samsung, Sony Ericsson, Motorola, and LG give a tough competition with products ranging from every low end user to high end tech loving customer. Internal analysis : 5 Waqas Asif ID: 36076

Strategic Management of Nokia Internal environment analysis is the analysis of factors within the organisation that make give an organisation advantages and disadvantages. Some of them are discussed below. 1.s 2. 3. Core Competencies 1. Resource Audit: Human resources: Its the count of all the skilled or unskilled staff a company hires towork for them. Nokia do hire highly skilled staff due to its nature of technology work and providethem with training to keep them update and create opportunities for program developers who canwork from home to compete in a competition to win prices and even offer them jobs.In this time ofrecession and economy down turn every company is looking to cut cost by making their unwantedstaff redundant. Nokia as a mobile manufacturing giant has taken loses and make 1000 of its staffvoluntary redundancies and are planning to cut even more staff by 600 due to poor profits.[5] We cansee the change in the annual report of the first quarter of 2009 of Nokia. Resource Boston Audit Matrix

[6] Physical resources:These resources of a company can be seen in the form of building, land, equipment and factories all over the world. Nokia in this respect has factories all over the world. 6 Waqas Asif ID: 36076

Marketing For this project I have strategy for an existing communications, particularly business. To do * Appropriately that is * Produce development * Complete marketing * Show clear a a

Strategy

for

Nokia up with a marketing chosen to do Nokia sector of Nokia's will need to: secondary data strategy of Nokia. affecting the strategy. a coherent communications. Nokia with a principles. reflects tools.

been instructed to come company/product I have the mobile phone this properly I and to of a rationale for for of a of use

identify, collect relevant clear of a realistic mix analysis

primary and the marketing external influences marketing

the

the

development Nokia strategy for marketing

of

full understanding understanding a use full,

marketing

* Produce appropriate

well-balanced marketing strategy of marketing models

that and

Introducing -----------------------

the

product

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 (sending written "text messages" from one phone to another). Then the next advance in technology 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: * * * WAP Polyphonic MMS (internet) ringtones

* it * *

Predictive SMS can

(where the guess Camera

phone will what

finish off you phones

word are

for

you if typing) and recorders

Video

Competition ------------------------With all this obvious that * * * * * * * *

in

the

market

technology available Nokia will have Sony

in the communications lots of competition,

market they

it is include: Ericsson Samsung Motorola Siemens Panasonic NEG

Sagem

and Toplux

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 (see table below which shows market share). Nokia strengthened its lead as the No. 1 vendor in the market during 2000 with shipments growing 66 percent over 1999. Some of the company's success was attributed to a strong second half in 2000 when 59 percent of sales occurred. 1. 2. 3. 4. 5. Nokia Motorola Samsung Siemens Sony-Ericsson 37.2% 17.3% 9.8% 8.5% 5.2% (34.7% 1Q02) (15.5%) (9.6%) (8.8%) (6.4%)

Marketing ==================== There are many priorities within a orientated company like Nokia, many be high on 1. Customer satisfaction: Market whether customers' expectations or 2. of for business, of the but in following the

principles

a marketing principles will agenda: find out products services.

research must be are being met

used to by current

Customer perception: this is based on the organization and its products, this money, product quality, fashion

the images consumers have can be based on; value and product reliability. anticipating future vital to any current market more. that to the a own as:

3. Customer needs and trends and forecasting for organization if they wish share and

expectations: This is future sales. This is to keep their entire develop

4. Generating income or profit: This principle clearly states the need of the organization is to be profitable enough generate income for growth and to satisfy stakeholders in business. Although satisfying the customer is a big part of companies plans they also need to take into account their needs, such

5. Making satisfactory progress: Organizations need to make sure that their product is developing along with the market, if a product is developing well, then income should increase, if not then the marketing strategy should be revised. 6. Be aware of the what is happening changing, saturation, rapidly growing, being companies environment: An organization should within their designated market, technological advances, slowing up to date on this is to always if it down essential know is or for survive.

There are also certain external factors that a company should be very aware of, such as P.E.S.T factors (political, environmental, social and technological) and also S.W.O.T (strength, weakness, opportunity and threat). A business must take into account all these constraints when designing and introducing a marketing strategy. P.E.S.T: Political factorsLegal constraints (such as the G3 technology

constraints that Nokia have to take into consideration) must be taken into account because many businesses aim to make a profit so they may be tempted to mislead their customers about prices, quality of products and the availability of their products. They may also try to cut expenditure by using lesser quality materials in their products (such as weaker materials for Nokia cases and batteries), also some companies may also dispose their waste in ways that damage the environment (pollution) and not ensuring high standards of hygiene and safety in the workplace and outlet stores, all of these are illegal and can leave companies in big legal trouble. The governmental bodies in the U.K have introduced new laws into the business environment, which ensure that none of these procedures take place; if a company is to be successful they must follow all of these laws. Environmental social and ethical factorssome businesses view profits are more valuable then a strong ethical code and this can govern behaviour and business conduct. Some un-ethical practices are against the law and companies can not become involved in them (I have mentioned these above) but there are also some practices that aren't illegal by law but are considered highly un-ethical by the consuming public, companies who engage in these practice's can lose a lot of market share if they are found out. An example of this is cosmetic testing on animals, it is legal but some of the consuming public are not happy about it and boycott Certain products because of it, companies must be very careful about how they conduct themselves. Nokia have managed to be quite environmentally friendly and have not done anything that the consuming public have taken huge offence to, they have been very careful about this and this is one of the reasons they are such a popular brand of mobile phones. TechnologicalIn the communications market technology is perhaps the most important factor that companies like Nokia have to take into consideration. They have to keep up to date with all the newest technological advances (like camera and motion capture phones) if they are going to capture the biggest market share and stay ahead of their competitors (Sony and Seimens). S.W.O.T SWOT analysis is also another marketing scheme, we must look threat. Strength (internal factors)Is market share and researching how in the target market. Nokia is way of deciding on at strength, weakness, a successful opportunity and

looking at the recognised Nokia is currently one of

companies current amongst consumers the most popular

Mobile communications companies in the industry, generating over 52,000 sales in 1997, which was a 34% increase from 1996. Nokia's net sales for the October-December period in 1997 came to a total of FIM 15 857 million (FIM 12 669 million in 1996). Weakness product is Nokia's 1. They segment. 2. 3. (internal failing factors)This or not doing problems currently aiming is as basically well as looking it should are at a at in where the the market. that: market

are

their

products

saturated

Their Higher are import some

wage charges quite

costs have high now supply

are been chain costs

forever put that into Nokia

rising. place. are paying. can which this:

4. There currently Opportunity make more Nokia

(external factors)This is the profit, or gain more market share. can currently

area There

in which Nokia are 2 ways in do

1. Improve the technology that they are using to make their phones and use in their products, for example, camera phones and advanced picture messaging would attract new consumers to purchase phones under the Nokia brand name. 2. Using innovation to re-invent their products, change and develop within the market to offer something none of the competitors have. Also the fact that phone call charges are being forced to fall should prove to be an opportunity for Nokia to sell to the people, who previously may have not purchased a phone because of higher call charges. Threat (external factors)This that are taking away Nokia's legislations (the total costs of euros) that could hinder For an existing matrix, in order Product is looking mainly at current market share and 3G licensing in Europe Nokia's development as the competition also government is 110 billion a company.

product it is often useful for Nokia to grow as a Market Market

to draw up an Ansoff's business we must look at: penetration development

development

and

Market products penetrationthe to an existing the pricing aim of market, to scheme

Diversification market penetration is to sell do this Nokia must do a few (for example, penetration or existing things:

1. Change based) 2. 3. Start existing Market must or up

competitor

Introduce a different advertising campaign or consider

discounting changing an one.

developmentTo look and selling poor that print

complete

market into different

development the market market (in

successfully,

Nokia following: saturation share)

Researching

to

case

of

Change places in products

times which appeal

television adverts adverts are being to a whole to help the

are aired at and alter the displayed (this can help your new market segmentation) appeal to a wider range of

Lower current consumers.

prices

products

Product developmentThis area of the Ansoff's matrix involves keeping up to date with the latest technologies available in your chosen market and using them to appeal to different people (for example, WAP phones are aimed at more professional people while Camera phones are aimed at the youth market) DiversificationThis refers consumers something new or companies trying to gain profits. Market A businesses success is based on whether what they want and when they want it. collection, collation and analysis of data and marketing of relevant to different, greater developing this is market technology that offers the most common way of share and increase their

research they can give the customer Market research involves the relating to the consumption goods and services.

The purpose of market research is really to find out whether there is a gap in the market for your product or service or whether you can make customers want your product through persuasive adverting. We already know that there is a market for mobile phones but the current market gap has become saturated (or if not saturated, almost

saturated) so Nokia need to find a new market segment products at. In order to classify the wants and needs of population, companies need to gather information on Consumer behaviourthey are partial to reactions to How do customers prize give-aways or new and react free

to the the

aim their consuming following:

to advertising? Whether gifts? What are their developed products?

Buying patterns and sales trendsOrganizations need to look at how buying trends and patterns are affected by class, gender, religion and region. They also need to understand how buying patterns change over time and what markets are expanding and are worth trying to enter and obviously which markets are contracting and companies shouldn't aim to enter into. Consumer preferencesWhat for example, style, colour, service and customers technology, are looking for in a amount of outlets, promotional product, customer styles.

Activities of competitors in the their rivals are adapting their consumers need's, how well the strategies they Market research should supply they require about consumers products, what design features outfits are most frequently Sources The in information one of that two data for of of companies forms,

marketNokia need to examine how prices and products to meet the rivals are selling and what marketing are using.

the company with all the information preferences, whether they buy certain are preferable and what kind of retail used for purchasing certain products. marketing collect either through market quantitative or presented operating was information research can be qualitative data.

1. Quantitative usually figures, quarter

refers to data example, Nokia's 1997

in numerical form, profit in the 4th 830 million. the motives and Nokia phones then more reliable.

2. Qualitative data is attitudes of consumers; for Sony phones because

the information concerning example, more people buy Nokia phones are

The two main sources of market research information are primary research (where the company has gathered the information about the markets themselves) and secondary research (when researchers use information that has been discovered by other companies). Methods of collecting primary data:

Methods Internal External Specialist retail To help decide at the buying the type of tactics, pricing following: 1. 2. The

Face Open

to ended Telephone Postal Consumer

face

survey interview survey surveys panels Observations Experiments

of

collecting

secondary

data: sources:

Existing Distribution Shopkeepers Stock Sales Accounting

reports data opinions records records records data:

Government business organization, for example, Mintel or

statistics Neilsons audit. databases.

Consumer

what market segment to aim at companies can also look habits of customers. In order to make decisions about products to make, what advertising to use, promotional and packaging. Nokia will need to know about the

types How

of much

goods

customers they

buy buy

3. There habits, 1. 2. 3. 4. 5. 6. 7. Market are

How also certain

often variables that they can

they affect peoples

buy buying include: Age Gender

Area

they

live

in Religion Lifestyle Taste

Fashion

and

preferences. segmentation

In order to plan their product Nokia must look at what area of the market they want to aim the products at, as the current youth market is more or less saturated Nokia will have to research into a new market, I suggest the 55+ market as they will have lots of disposable income and my research shows that most people aged 55+ do not currently own a mobile device and could be persuaded to buy one by certain promotions and a good advertising campaign, also the drop in call prices should attract a lot of people who may have previously been hesitant due the high costs. Below the is a table showing U.K the population in terms in of social grouping of 1999: group Of population class

Socio-economic % A-Upper 2.8% B18.6% C127.5% Lower middle Middle

class

class

C222.1% D17.6% E-Low 11.4% I think group B are the telephone Investigating

Skilled

working

class

Working

class

income

earners

that Nokia should (middle class) event group that is most as my

aim their products at the socio-economic though they aren't the biggest group they likely to spend their money on a mobile questionnaire results showed. consumer trends of market to track likely to sales are fall.

As the main aim of market research is to develop an idea opportunities, an important part of this research must be sales in order to identify those products, which are experience a rise in sales and to look at those in which the likely to

Changes in customer demand, which continue in the same direction for more then 2 years, show a long-term trend or saturation is occurring within the market. This is definitely a bad market for businesses to be in (the mobile phone market is in the first year of a continuing trend) and the company must consider changing their market or product to a market or product that is currently showing a continuing upwards trend.

The -----------------

marketing

mix

The marketing mix refers to the combination of companies marketing strategy, these are designed to what they want and in the long term are designed The marketing mix is based around the idea

elements within a give the customer to maximise profits. of the 4 P's:

Product-The product is the centre of the marketing mix and the other three P's are based around 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 (that is why they conduct market research).

Price-Is a key factor in the selling of a product, and one that is open to the most change based on strategies, for example, competitor based, penetration The three main factors affecting the amount charged for service, are; the cost of production, customer demand

is usually the different pricing or skimming. a product or and competition.

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 nowadays, they are sold in supermarkets, specialised outlets (either by network or brand) and all major department stores. Promotion-This variety of advertising as off involves providing media platforms, well as using deals" information to the customer over a using radio, television and print other promotional tools such as "money and "free giveaways".

The ----------------------1. * * 2. * * * * 3. * * * * 4. Finding Market

stages

of

marketing

and out what Technical Product Test your

product customers

research: want research launch market Pricing Branding Packaging

Product

promotion Advertising Merchandising

Publicity Sales Sales and

and

P.R promotion distribution

* * * * 5. * * * * * * Is Have Does Is Is Type Local,

Managing and national Transportation Monitoring Meeting the product a customer the the promotion and

the amount or of analysing customer need profit service targets distribution of

sales sales international

force outlets sales? goods the sales satisfaction? or replacing? made? satisfactory? been policy met? effective?

modifying being

sales and

If a company gets to section 5 of the marketing cycle and a substantial amount of the goals haven't been met then they will have to consider re-launching the product or taking it out of the market completely and placing it in a different market or changing it to meet the needs of the current market.

Product life ---------------------------------

cycle-

Mobile

phones

Introduction When mobile phones where first introduced they were low quality technology (bad reception, poor reliability and had a short battery life), high priced (around 100 for a basic model) and consumers had to be persuaded to buy mobile telephones, as they were not yet established as a necessity. When products are first released, companies can expect high promotion fee's as the public are probably not yet familiar with the product. Also when mobile phones were first released they were bulky and hard to use, as product design and development are a key figure in success, Nokia had to design phones that were smaller and simpler for consumers to use. As people had paid a lot for earlier, more primitive products they were obviously not going to pay the same high prices for later products so Nokia had to develop phones that could be sold for less

and would production

last

longer,

this

is

where

companies

can

expect

to

pay

high costs.

When Mobile phones were first introduced they were not such a popular item and there weren't as many competing companies in the market. So Nokia and a few other companies (Sony and Panasonic) could charge higher prices then they would in the highly competitive market that they are in today, as there aren't so many companies competing for market share.

Growth In the growth stage of the product life cycle companies can expect advertising and promotional costs to be as high as in the introduction stage as more companies will enter the market and competition for market share will increase. Advertising is a proven way of promoting technological advances within a market (as with the new company 3 promoting their new technology that allows people to watch video's on their handsets) so higher advertising costs can be expected as the technologies available get better and more advanced. The growth stage is also the stage that companies will (hopefully) start to make a profit, based on good market research and a strong sense of branding and a successful marketing scheme. In the growth stage profit isn't the only thing that will start to develop, as there are more companies in the market it is obvious that more technology will be developed and that will drive prices higher, this is how companies start to make profits (because consumers have accepted the product, in Nokia's case, mobile phones, as a necessity they will be more willing to pay higher prices for new phones that emerge in the market).

Maturity When a product enters the maturity stage, advertising and promotional prices should decrease, as consumers are more aware of the product and will research new additions to the market instead of being told what is new (this is because phones have been promoted as fashion items and will be desired by the consumers). At this point in the product life cycle the main producers (Nokia, Siemens, Sony etc) should be clear as they will have the most money to develop and promote their phones while the other, less popular producers of phones (Panasonic, Toplux and NEC) will be struggling to survive and will drop out of the market either here or they will seriously struggle in the next stage, decline.

Decline This is the stage that Mobile phones have entered (Nokia had recorded their first drop in sales earlier this year), and all the remaining companies are trying to re-launch their products by either developing their products or entering new markets. At this point phone sales will be decreasing and promotion and advertising costs will start to rise again as companies fight for the remaining market share and struggle to make a profit. Below [IMAGE] is a graph showing the product life cycle

Sales Time [IMAGE]

Sales ----[IMAGE]

Time ----

With successful re-launching the product the one --------------------------------------------------------------------

life

cycle

should

look

like above.

Branding -------Most forms of promotion are based around the idea of having an image to go with the product. Brand imaging plays a dominant part in an organizations marketing strategy. This is because people make a purchase they aren't just buying a product, they are buying a lifestyle or an image. If branding can make people believe that the

branded product is better then an un-branded product, more people will buy it and they will also be willing to pay higher prices for the "extra quality" and lifestyle they are receiving with the product. Because a lot of rival products are more or less the same (Pepsi and Coke) the main way of making your product stand out is through aggressive branding, This is usually achieved by companies using slogans, logos and distinctive packaging. Types of pricing strategies

Cost

based for a so the product company can they can

pricing and make grow.

This involves calculating the cost of production then adding a mark-up for profit, usually 10% so enough profit to re-invest into the business

Marginal

cost

pricing

This is the addition to total cost resulting from the production of an additional unit of output. If a decision is made to expand by one or more units it will be based on an assumption that the price of each unit will be least sufficient to cover marginal costs, so that the profit earned on all previous units is not lower then it previously was.

Demand

based

pricing

This is usually pricing products based around the customer demand for a product, if the demand is high, the prices will rise. This is usually used when the product is unique, for example, a football match or concert. To use this strategy companies must carry out detailed market research to find out what prices the consumers are willing to pay so they don't over price their product.

Market

skimming

This pricing strategy is also known as price creaming and is usually put into place in markets where the competition is limited. Market skimming pricing involves charging a high price for new products because the customer is new and unique so (hopefully) the consumers will be willing to pay higher prices for them. This is the most common strategy in the mobile phone market, as consumers will pay the higher prices for phones that have the newest technology.

Penetration

pricing

Firms who are trying to establish themselves in a new market and gain instant market share usually use this strategy. It is a high-risk, high cost strategy that is only an available option to the bigger companies (like Nokia) who supply to mass markets. Penetration pricing is based around the idea that a company will set their prices low to encourage customers to buy their products instead of higher priced, more established brands. The organization may also boost sales by lowering prices if demand is price elastic. One problem with this strategy in the mobile communications market (or any other highly competitive markets) is that price wars will often develop with rival companies and this can limit to the amount of profit that can be made, and also generate losses due to under-pricing in an attempt to hold onto market share.

Price

discrimination

This is where companies can charge different prices in different markets, because of the consumers they are aiming at, for example, rail companies charge different prices for peak and off-peak travel cards and fares. This strategy is only available for use when the consumers are unable to undercut higher prices by reselling their products from low priced markets to high priced markets.

Destroyer

pricing

This is a more drastic and aggressive form of penetration pricing, used when a company's objective is to get rid of competition completely by lowering their prices to levels that other companies cannot afford to drop to. The down side to this strategy is that consumers may see the low price as a reflection of the quality of the product and stick to the higher priced products because they offer a product of higher quality.

External factors -------------------------------------------Setting influence a price of with

affecting

pricing

decisions

regards to external

only

production factors,

costs ignores such

the as:

* Market conditionshow much are the customers willing to pay? Can advertising increase product image and price? Is the product aimed at a mass market or a niche market? (a niche market refers to when a company aims a product at a very small, select segment of the

market) * Production costsPrices must if a profit is to be made. (for the short term) and fixed a company cover the The price costs (for will costs spent in production must cover variable costs the long term) otherwise face closing. duties allow will raise businesses the price to charge prices. profits? share? cycle? being

* Taxes and subsidiesVAT and customs of a product. Government subsidies will lower * Or Business objectivesIs is the company mixWhat of promotion the looking business to

looking increase

to its

maximise market

* Marketing What forms sold? * Marketing What Nokias The

stage are

is the product at in the life being used? Where is the product

structureprices

How is current

much

competition the

is

there in competition

the

market? charging? strategy mix

marketing marketing

PriceThe phones that Nokia produce are usually sold at high prices (new phones can be expected to enter the market at around 200+, if they carry the latest technology). The price of the new phones usually decreases after an introductory period, which is usually around 2 months long. Nokia's prices are usually competitor based, in such a way as, they try to keep their prices a bit lower then those of the closest competitors, but not as low as the "smallest" competition as consumers do not mind paying the extra money for the "extra quality" they will receive with a well known brand, such as Nokia. PlaceNokia phones are generally sold at all established mobile phone dealerships such as Carphone Warehouse and The Link, although they are also sold at other retailers such as Dixon's and other electrical suppliers. The products are only sold in the electrical suppliers and stores other then dedicated phone dealerships after the introductory period so the phones can remain limited edition, as this will encourage younger consumers to buy them. PromotionsNokia tend to promote the new technologies and mobile devices they create using one big advertising campaign that focuses on a singular technology instead of each individual handset so they can appeal to a lot of different markets with one campaign. ProductNokia phones tend to include all the latest technology and a

lot of the consumers favourite aspects such as text messaging and games like Snake and Memory. When the phones came out they were big and bulky and quite unattractive but now they are all quite sleek and stylish with phones now getting small enough to fit in the palm of your hand as standard. Most of the phones produced nowadays have accessories that consumers must buy with them (carry cases, hands free kits and in-car chargers) these generate Nokia a lot of profit, as they are very high priced. Nokia's marketing mix has worked very well until recently as the market they are aiming at has become more and more saturated and after looking at all the mobile phone sales figures, it looks as if the phone companies can aim at this same youth market for about another 2 years until they need to change, but they should change sooner so they can start making a bigger profit and get a head start on the competition who will also have to change the market they are aiming at. Nokia's current promotional strategy is working very well as they are able to "talk to" a large number of consumers in different markets rather then the niche markets the old promotional strategies where restricted to. Market segmentation

Market segmentation refers to the different areas of the population that companies can aim their products towards. The market segment that Nokia has chosen to aim is the youth market focusing on students aimed 13-19 as market research has shown that some of the youth market are receiving large amounts of pocket money and most have no real commitments to spend it on and that means they have lots of disposable income and will be able to spend a lot money on new mobile phones. As a big company Nokia are able to do a lot of promoting and advertising that smaller, less successful companies, may not be able to afford, such as television advertising and sponsoring lots of events that will be viewed or heard by large amounts of people in their chosen market segment (events such as music festivals and music awards are a goldmine for companies as they are viewed by millions of people worldwide). Adverts such as television and print adverts will be put into certain areas so that they can attract their chosen market segment, Nokia tend to put a lot of their print adverts in men's magazines such as FHM and Loaded so they can appeal to all of their readers instead of a smaller percentage of the readers they would attract in magazines such as Lifestyle and Good Housekeeping. I think Nokia's way of promoting is very good as they can appeal to mass markets and large amounts of people in their chosen market segmentation with certain advertisement's and with sponsoring large events like the ones I have previously mentioned. Pricing strategy

Nokia's

current

pricing

strategy

is

based

on

main

theories:

1. Penetration pricingalthough this strategy is usually for companies that are trying to gain instant market share in a new market, companies who are already well known in the market still do it with new products that carry new technologies so they can take more market share form their competitors. 2. Competitor based pricingthis is used when there is a lot of competition in the market and a company is looking to take another companies market share by offering the same or similar products for a lower price, this happens a lot in the communications market and this strategy is used by every mobile phone producing company that is still in business. Nokia's pricing strategy has proven very effective, this is down to the fact that they first sell their products for high prices and have very limited sales but make big profits on each sale, they then lower the price of their product and have lots more sales but they make less profit, but they still make a large profit due to the amount of sales, the other reason that they are so successful is that they offer high quality products and they sell them for the same price and sometimes even lower prices then the competition and have now built up the highest market share, they currently have 37.2% of the mobile phone market share and are the biggest selling mobile phone company in the world.

Branding Nokia phones are seen as being of the highest quality and this is reflected in their massive sales figures. The fact that they are seen to be such high quality products is partly down to successful branding, they have a highly recognisable packaging style and the style of their handsets is similar in every line of production with the company name printed just above the screen and just below the earpiece. The fact that Nokia operate such an aggressive marketing strategy has elevated them above the competition as consumers are fooled into believing that branded products are "better" then un-branded products or products produced by lesser-known brands such as One Tel and other lesser-known phone producers in the market. Product Introduction When Nokia promoting and phones were advertising as first introduced they weren't they required a established enough lot to of sell life cycle-Nokia

based on their quality and what they offer to the consumer, so this is where Nokia spent the largest amount of money promoting their products and establishing their brand as a leader in the communications market. Also when mobile phones were first available there were only a few companies as well as Nokia in the market (Sony e.t.c) so they could charge higher prices then they can at the present time in the product life cycle because no companies would dare to enter a price war with such a new product. Growth This stage it, this established to enter customers customers promotional Maturity In this stage the promotional brands, such as Nokia and market share and only have model out and it will sell quality brand and customers Nokia Decline This is the stage that the mobile communications market, including Nokia, have recently entered (Nokia had reported the first drop in sales in the first quarter of 2002), and companies are now promoting, heavily, their new MMS products to the market in an attempt to get out of decline and back into growth, with a new generation of technologically advanced phones that offer motion picture capture, camera technology and the opportunity to watch television on your handset. If a company of analysing page's What I have weaknesses has their entered market 3 found out by analysing decline it strategy, needs which to I look at the have fully and is that S.W.O.T forms evaluated on 4. Nokia's main are: costs do decrease as the more popular Samsung, have gathered the majority of the to show customers that they have a new well, as they have been established as a no-longer need to be persuaded to buy brand technology. of is as the that that the life cycle also has high promotion costs involved in due to the fact that mobile phones are becoming a consumer necessity and lots of other companies decide growing market, although companies do not need to assure they need a mobile phone, Nokia have to assure the they want a Nokia phone and this is where the high costs come from.

S.W.O.T

1. They are currently verging on saturationmodels to a different

promoting their products to a market that is Nokia need to re-launch some of the older market and only promote new products to the

existing 2. Their wag costs are

market already high, and are always

segment. rising-

To solve this they can try and invent or discover machines that can increase productivity so that the number of staff currently employed (The average number of employees in 2002 was 52714 and this was a decrease from 57716 in 2001). 3. High import charges are being set but implemented by the government-

To counter this Nokia will have high start money on I have of the a total 1996's

need to up costs import

up factories in more companies, this will eventually start to save Nokia and export charges. one with from sales.

also discovered that Nokia have established themselves as most popular mobile communications companies in the market of over 52000 sales in 1997 which was a 34% increase

There are many external factors that can affect a marketing from developing; this is where you must use P.E.S.T analysis. outlined P.E.S.T analysis on pages 2 and 3 but have further the effect of these external factors on the development of marketing schemes Political factorsLegal factors, such which has cost companies a total of always around to stop Nokia from further conquering the communications import and export have an affect on more-or-less impossible to avoid unless factories in every country and as

strategy I have analysed Nokia's below:

the G3 technology licensing 110 billion euros so far, are properly developing strategies and market. Also taxes such as Nokia's development and these are a company can afford to run continent in the world.

Environmental, Social and ethical factorsMany companies may view profit as more important then 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 loosing all their market share to eco-friendly companies. Technological factorsIn 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 ad hopefully gain more. Nokia's selling starting current marketing strategy has helped them become the biggest brand in the communications market to date, but now sales are to decrease with the saturation of the current market segment

so Nokia will need to do one of the following; Re-launch their products with an aggressive promotional scheme; Target a different segment of the market that has not been entered so Nokia can instantly gain 100% of the market share (although this is risky as the market might not take to their products and the demand might be low, so sales will also be low and prices will have to be high and this will further stop people from purchasing Nokia's products); Differentiate their products to offer something no other company can offer to the market or simply try and offer a different product altogether, such as landline phones or televisions. Market Nokia's business strategy (statement taken from research 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 are 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 our intent. Nokia need to capitalise on our leadership role by continuing to target and enter segments of the communications market that we believe will experience rapid growth or grow faster then the industry as a whole. By expanding into these segments during the initial stages of their development, Nokia have established themselves as one of the worlds leading player's in wireless communications and significantly influenced the way in which voice and other services have been transferred to a wireless, mobile environment. As demand for wireless access to an increasing range of services accelerates, Nokia are planning to lead the development and commercialisation of the higher capacity networks and systems required to make wireless content more accessible and rewarding to the end user. In the process, we plan to offer our customers unprecedented choice, speed and value. Nokia has a history of contributing to the technologies, products and systems for mobile examples include: the commitment to the open co-development of the new operating system for with symbian; short-range wireless connectivity development of new communications. Recent mobile alliance; the the future terminals with bluetooth; the

development of LANs; and In addition, Nokia have established make mobile Nokia

wireless MMS

LANs for for enabling

enabling mobile

local

mobility multimedia

in fixed messaging.

have continued to be active in IP convergence. They alliances with other service providers in order to access services easier for the end user. in 2002: IAS reported

Nokia's net sales in 2002 decreased by 4% compared with 2001 and totalled EUR 30 016 million (EUR 31 191 million in 2001). Sales in Nokia Mobile Phones were flat at EUR 23 211 million (EUR 23 158 million) and decreased in Nokia Networks by 13% to EUR 6 539 million (EUR 7 534 million). Sales decreased in Nokia Ventures Organization by 22% to EUR 459 million (EUR 585 million). Their operating profit in 2002 increased by 42% and totalled EUR 4 780 million (EUR 3 362 million in 2001). Operating margin was 15.9% (10.8% in 2001). Operating profit in Nokia Mobile Phones increased by 15% to EUR 5 201 million (EUR 4 521 million in 2001). Operating loss in Nokia Networks decreased to EUR 49 million (operating loss of EUR 73 million in 2001). Operating margin in Nokia Mobile Phones was 22.4% (19.5% in 2001), while the operating margin in Nokia Networks was -0.7% (-1.0% in 2001). Nokia Ventures Organization showed an operating loss of EUR 141 million (operating loss of EUR 855 million in 2001). Common Group Expenses totalled EUR 231 million (EUR 231 million in 2001). During 2002, the operating profit was impairments of EUR 182 million and charges related to MobilCom negatively impacted by goodwill net customer financing impairment of EUR 265 million.

Financial income totalled EUR 156 million in 2002 (EUR 125 million in 2001). Profit before tax and minority interests was EUR 4 917 million in 2002 (EUR 3 475 million in 2001). Net profit totalled EUR 3 381 million in 2002 (EUR 2 200 million in 2001). Earnings per share increased to EUR 0.71 (basic) and to EUR 0.71 (diluted) in 2002, compared with EUR 0.47 (basic) and EUR 0.46 (diluted) in 2001. At December (-41% at the to EUR 31, end 432 2002, net-debt-to-equity of 2001). Total capital million (EUR 1 ratio (gearing) was -61% expenditures in 2002 amounted 041 million in 2001).

By the end of 2002, outstanding long-term loans to customers totalled EUR 1 056 million (compared with EUR 1 128 in 2001), while guarantees given on behalf of customers totalled EUR 91 million (EUR 127 million). Nokia also had financing commitments totalling EUR 857 million (EUR 2 955 million) at the end of 2002. Of the total outstanding and committed customer financing of EUR 2 004 million (EUR 4 210 million), EUR 1 573 million (EUR 3 607 million) related to 3G

networks. Global Reach

In 2002, Europe accounted for 54% of Nokia's net sales (49% in 2001), the Americas 22% (25%) and Asia-Pacific 24% (26%). The 10 largest markets were US, UK, China, Germany, Italy, France, UAE, Thailand, Brazil and Poland, together representing 60% of total sales. Research and development

In 2002, Nokia continued to invest in its worldwide research and development network and co-operation. At year-end, Nokia had 19 579 R&D employees, approximately 38% of Nokia's total personnel. Nokia has R&D centres in 14 countries. Investments in R&D increased by 2% (16% in 2001) and totalled EUR 3 052 million (EUR 2 985 million in 2001), representing 10.2% of net sales (9.6% of net sales in 2001).

People The average number of personnel for 2002 was 52 714 (57 716 for 2001). At the end of 2002, Nokia employed 51 748 people worldwide (53 849 at year-end 2001). In 2002, Nokia's personnel decreased by a total of 2 101 employees (decrease of 6 440 in 2001). Employee Value PropositionIn a move to further attract and retain a skilled workforce, this year Nokia developed an employee value proposition framework. The adaptation of this has already started at country levels to reflect and respond to local employee needs and expectations. The four fundamentals of the proposition are (1) the Nokia Way and Values, (2) performance-based rewarding, (3) professional and personal growth, and (4) work-life balance. Nokia Mobile Phones in 2002

Nokia Mobile Phones continued to renew its industry-leading product line-up, launching a record 33 new products during 2002, incorporating colour, imaging, multimedia, mobile games and polyphonic ring tones. Of the total new phones launched, 14 had colour screens and multimedia capability. This attests to the growing share of feature-rich phones offering advanced mobile services in the company's product portfolio. During Nokia 2002. mobile Nokia the year, Nokia launched its first WCDMA mobile phone, the 6650, which began deliveries to operators for testing in October The company also commenced shipments of its first CDMA2000 1X phones in the Americas. These included the Nokia 6370, the 6385, the Nokia 3585, and the Nokia 8280.

In imaging, Nokia began shipping its iconic camera phone, 7650, expanding the scope of the mobile market from voice communications. Feedback from customers and users across the been extremely

the Nokia to visual board has positive.

In the enterprise segment, the company expanded its product offering from the Nokia Communicator 9200 series to include the Nokia 6800 messaging device, with full QWERTY keypad optimised for personal and enterprise mobile e-mail. In entertainment, offering console category. Under publisher, Sega, Nokia N-Gage 60 platform Nokia announced it would bring mobility to gaming by quality games for its new mobile game deck device a collaboration agreement with world leading games the two companies will develop games for the new mobile game deck, which will run on the Nokia Series and the Symbian operating system.

For the full year 2002, Nokia volumes reached a record level of 152 million units, representing faster than market growth of 9%, compared with 2001. Backed by Nokia's ongoing product leadership and user brand preference, Nokia has again increased its market share for the fifth consecutive year reaching about 38% for the full year 2002, bringing the company closer to its target of 40%. During the year, Nokia Mobile Phones took steps to accelerate growth and enhance both agility and scale benefits with the introduction of a new operational structure. From May 1, nine new business units were each made responsible for product and business development within a defined market segment. This allowed Nokia to optimise its activities in these vertically focused areas, while continuing to achieve broad economies of scale from horizontal functions such as application software development and the company's market-leading demand-supply network. Nokia During China, the year, Europe Nokia and Networks in 2002 in Asia, customers.

Networks signed 20 GSM network deals the US, including three new

Mobile Multimedia Messaging Services (MMS) became a reality in 2002, with its rapid implementation into most GSM operator networks. By year-end, Nokia Networks had delivered MMS solutions to well over 40 operators. WCDMA 3G technology implementation moved to pre-commercial and commercial phase towards the end of 2002. Nokia signed 10 new 3G deals in Austria, Belgium, Germany, Ireland, Japan, the UK and Taiwan. In September, Nokia became the first vendor to commence volume deliveries

of

EDGE

hardware access, Nokia for

across Nokia D500 the

all

major

GSM

bands

and

in

all

continents.

In broadband launched the platform

signed nine new contracts in 2002, and next generation multiservice broadband access US and ETSI markets.

The company also further strengthened its GSM/EDGE/WCDMA product family with several new products and solutions. Key launches included a high-availability server platform for use in All-IP mobility networks, and the Nokia LTX, a linear transceiver product family of base station modules that support the definition of Open IP Base Station Architecture. During the year, Nokia took measures to align its operations to better reflect current market capacity and conditions, reducing the number of employees in its delivery and maintenance services as well as in production. Nokia also streamlined its professional mobile radio unit to reflect the slower than expected take-off of this market. Nokia Ventures Organization in 2002

Despite overall flat IT spending and slow growth in the corporate network security market throughout 2002, Nokia Internet Communications maintained the same level of sales and market share in the enterprise firewall/VPN appliance segment as the previous year, as well as significantly improving its operational efficiency. Highlights for the year include the introduction of a record number of new products and solutions that both expand Nokia's network security appliance portfolio and respond to emerging market opportunities. Extending mobility to enterprise workforces, protecting corporate e-mail content and providing firewall/VPN benefits to remote offices were promising growth areas addressed with new product offerings from Nokia. To help foster the creation of new security applications to complement Nokia's own solutions, the Nokia Security Developers Alliance was launched in July. Looking forward to 2003, Nokia Internet Communications remains committed to building a leading position in the corporate network security market and extending mobility to enterprises. For Nokia Home Communications, sales in 2002 clearly declined as the unit began a migration towards emerging horizontal markets with the launch of new types of terminals focused on horizontal terrestrial and satellite markets, providing digital viewers access to a broad range of digital services. Products, such as the Nokia Mediamaster 230 S, introduced Bluetooth-enabled interoperability to the home environment in the second half of the year. Dividend

Nokia's share

Board

of

Directors in

will

propose respect

dividend

of of

EUR

0.28

per 2002.

Net 2002 % 2001 % Change EURm EURm % Nokia 23 77 23 74 Nokia 6 22 7 24 -13 Nokia 459

sales

by

business

group

Jan.

1.-Dec.

31

Mobile

Phones 211

158

Networks 539

534

Ventures

Organization

1 585 2 -22 Inter-business group Nokia 30 100 31 100 -4 Operating Jan. 2002 % 2001 % EURm net EURm net Nokia 5 Mobile sales Phones 201 sales of of profit, 1-Dec. IAS, 31 191

eliminations 193 86 Group 016

22.4 4 19.5 Nokia -49 -0.7 -73 -1.0 Nokia -141 -30.7 -855 -146.2 Common -231 -231 Nokia 4 15.9 3 10.8 Primary [IMAGE] research results 362 Group 780 Group Expenses Ventures Organization Networks 521

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Average Battery 1

Rating

(from

1-10.

being

the

best

and

10

being

the

worst life

Exchangeable 5 WAP 9 MMS 10 The 3 SMS 2 Games 6 Picture 8 Organiser 7 style of the

covers

phone

messaging

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features

Analysis -----------------------

of

my

research

For my primary research I handed out 30 questionnaires but only 20 of them got answered, and above I have compiled all the quantitative data into the Bar and pie charts. When giving out my questionnaire I had to be very selective about who I asked questions to, as I had to make sure that I had a representative sample population so I can make generalisations about the entire consuming population. From my research I have found out that 55% of people do already own a mobile phone, but I also found out that 100% of the student population (aged 11-21) did already own a mobile phone and the majority of the older people in the sample (aged around 40 and 50) didn't own a mobile phone, and I found out that everyone over 65 did not own a mobile phone. My results show that the current youth market has already been capitalised on by the communications companies, and the market has become saturated or is definitely near saturation. This is reflected in the fact that Nokia's sales have decreased by 4% and this has been said by many Wall Street writers to be the tip of the iceberg and they are prophesising that sales will continue to decrease until the marketing strategy is revised. The majority of the people who answered my questionnaire had an income of 30000-40000 and this shows that the current market certainly has enough money to purchase a new phone, the youth market had an average of under 10000, but as they have the most disposable income are more likely to buy new models of mobile phones, but if the majority of the population has a large income they can afford mobile phones but as a lot of them have families and other financial commitments they may be a bit apprehensive about spending a large amount of money on a new mobile phone, so if a phone was launched at this market it should be a available at a lower price then the phones aimed at the youth market. My research also showed that "pay as you go" was the most popular pricing option for the entire population, especially the youth in which 100% of people had chosen this plan, but in the more mature consumers they said that they would probably choose a "pay monthly" system as they would not be bothered with the hassle of "toping up" every time they ran out of call time. Also I found out that some 75% of the youth market will change their payment plan to a "pay monthly" system as the "pay as you go" system had proven to be very expensive,

due to the high call rates to other mobile networks, and because on the "pay monthly" system you can get free text messages (SMS) and free call time, but the amount depended on the network you had a contract with. My primary research backed up my secondary research and showed that Nokia was the biggest selling brand of mobile phones, with 75% of my participants claiming that they owned a Nokia phone, compared to a very small 7% for Nokia's closest rivals, Sony. This has shown me that Nokia are already a very well established brand amongst the consumers and that they do not need to spend any money (or a small amount if entering a new market) on promoting the brand as a whole and should concentrate the majority of their promotional expenditure on singular models or new technologies that are being discovered or being released. My research showed that the most popular places that mobile phones are bought in are Carphone warehouse and The link which accounted for 85% of the sales of mobile phones to the people I questioned. Small dealerships such as selective network outlets and major household appliance stores, like John Lewis or the O2 stores accounted for a very small amount of sales (less then 10%). If a phone is to be successfully distributed it is only logical that it should be released in the main dealerships before the other smaller outlets if it is going to reach its maximum selling potential. According to my research the three most important things that consumers are looking for in a mobile phone are; long battery life, a stylish casing, and good SMS (text messaging) features. If a phone is to be successful in the market environment it must include all of these, but the consumers have to be told that your product has these available, this is what the company should try and promote through advertising and not just the brand name. I have found out that most people do not conduct heavy research, if they do any research at all (only 65% did research into mobile phones), and the most common forms of research are magazines and window-shopping. This means that it is important for a product to stand out to the consumer and look good statistically in a magazine so that it will stand out to the consuming population who research in magazines, and the people who ask floor sales people for advice on which handset to purchase. Price was a difficult variable to analyse as my research has shown that it was a 50-50 split between people who said price was a key factor, and those who didn't really care about the price as long as the phone was offering everything they wanted, although upon further inspection most people would not like to spend over 175 on a handset, but could be persuaded to pay a little more by a strong advertising

campaign or a good all-round free text messages and some free kit or

package, that includes; free accessories, for an in

cheap example, car

call a

rates, hands charger.

I have also found out that the most popular food shops are Sainsbury's and Marks & Spencer, this gives us an idea of where to put promotional fliers and leaflets about up and coming releases into the market, and as people are usually bored while waiting in lines for a till, they will want something to look at and if a flier is conveniently placed near in the lines then that could get more customers interested in a Nokia mobile phone instead of one of their competitors, also people who shop in these 2 main supermarkets tend to be either middle or upper class and will pay extra for "quality" in brand name products. Revised As of Nokia's current sales figures marketing are decreasing increasing and they show no strategy sign again

In the near future, I have come up with a revised marketing strategy that will re-launch Nokia and its products and increase sales to what they have been in the past, and probably higher then they have been since they were first released. My marketing mix

ProductThe phones will continue to be of a high quality, but will not be as technologically advanced as the recent phones that have been released. The phones will be easier to use and carry the less advanced technology with WAP being the most advanced feature available in the new range of phones that will be released, as my market research showed that most of the people aged 40+ were technophobes or wanted mobile technology to be easier to use if they were going to purchase a mobile phone. PriceIf the technology released with the phones is not as advanced, the price does not need to be as high as the prices of the phones in the market at the moment, as less money is being spent on product development and the phones wont cost as much to produce, there is no need to keep the prices so high. I have decided to lower the price due to production costs, and it is also down to the fact that nearly all of the people who I intend to have set as the new target market (the 40+ market) said that phones cost to much and so did call rates, but if phones were a lot cheaper (around 125 per phone on "pay as you go" and free if a contract method of payment is selected). PlaceNokia communications be sold at phones will continue to be sold at the outlets (Carphone warehouse and The link) but will the three main supermarkets; Sainsbury's, Safeways main also and

Tesco as my market research has shown that this where my new target market do the majority of their food shopping at these outlets, it would be an excellent place to sell phones as there is also no competition distributing their products in these locations, and Nokia could have 100% of the shoppers business, and it would also be a way of promoting Nokia for free as people will look at almost anything while waiting in supermarket queues. Promotion-As Nokia would be aiming their new line of mobile phones at a completely new market; there would be high promotion costs involved as there is at the introduction stage of any product life cycle. The best places to put print advertisements would be in supermarkets near the tills so people in the queue can read them and hopefully become interested in buying a Nokia brand mobile phone. Also print adverts should be placed in magazines and newspapers where the target market will see them, my market research showed that the most read magazines by people aged 40+ was Lifestyle, and Vogue for the women, and the most read by men was the observer magazine as not many men admitted to buying a magazine regularly. The most popular newspapers were The Observer and The Guardian on weekends and the Evening standard during the week, so it is obvious that these are the magazines and newspapers that adverts should be placed in as they would be seen more by the new target market. Because we do not want to cancel out any people outside our target market (avoiding a niche market), Nokia should continue to place poster adverts in places that will be viewed by a massive selection of people (such as London's West End and other popular shopping centres). Marketing principles

Any marketing scheme that has been developed must be based around the principles of marketing, and my revised Nokia strategy is no different, below I have analysed how I have followed each marketing principle: * Customer satisfactionBefore developing my strategy I had to found out exactly what the consumers wanted, I found out that they wanted phones that were; high quality (with long battery life, good reception and good SMS features), low priced (priced lower then 150, but could be higher if call charges dropped), and I have offered this in the new line of phones that are being specially developed to meet the needs of the 40+ market (simpler technology). * Customer perceptionI had found out that Nokia was viewed as the highest quality brand name in mobile communications, and it was also the most trusted brand, 8 out of 10 people said that they would look for a Nokia phone that they liked, before they would look at another brand. Nokia's prices were considered a bit

expensive, and this was partly why I have decided to decrease prices of the new range of phones, although people said didn't mind paying the extra money for the quality they think will receive with a branded

the they they item.

* Customer needs and expectationsThis is where you companies need to anticipate future trends and forecast for future sales. In my market mobile phones are not considered a necessity yet so it is hard to anticipate future trends as no company has yet created a foothold in the market and the customers cant say what they would like to see in future products if they do not have any at the moment, so a good thing to do would be to create a feedback group with some prototype phones and see what changes they would like Nokia to make to them. * Generating income or profitThis is the reason why review Nokia's current strategy, the sales were decrease and this was starting to reflect in the profits, and decreases in these will not satisfy stakeholders in I had to starting to income and the main Nokia.

* Making satisfactory progressIf a product is developing with the market then they are fulfilling this marketing principle, Nokia are actually achieving this with their current marketing scheme, but they are spending huge amounts of money on product development and the sales are not currently reflecting well on the decisions to spend that amount of money on product development. * Awareness of the surrounding environmentThis is company must complete market research, from my what the customers want, where they shop, what television, what radio stations/programs they listen average income is and what features people rate technology. There style using are also many external and the decision of which factors strategy the reason ever research I know they watch on to, what the highest in phone

that can affect to use, we can

your marketing evaluate these P.E.S.T:

Political factorsLegal constraints are the hardest external factor to try and avoid making any serious impact on any pricing, or marketing choices made. The only legal constraint that my new strategy "dodges" is the G3 licensing, as the new style of Nokia product doesn't need any of the newest technologies under the G3 frame. Environmental and Social factorsthese affect the way in which done anything that is really the fact that the mobile phones Nokia have never really had any of they operate because they have never anti-environmental, the only problem is let of radiation and has been said to

increase the been highly themselves.

risk of cancer documented and

in mobile phone users, but hasn't affected how Nokia

this have

has not conducted

Technological factorsThis is the most important external factor in the communications as mobile phones are based around technology and new discoveries. The new strategy does have to be careful with technological advances as Nokia do not want to make the new phones to complicated as my market research discovered that this is exactly what the target market does not want, they want phones that are simpler to use. Pricing As Nokia will be strategy, I have mixture of entering a decided to two new market change the theoretical strategy as part of the new market current pricing plan to a pricing approaches:

Market skimming and demand based pricingMarket skimming is where the competition in a market is slim or non-existent and a company can charge what ever price they want because there is no other company to offer a lower one. As Nokia will be entering a new market, we will be able to choose whatever price we want to start selling mobile phones at, and I think they should first be introduced at around 150, as my market research showed that consumers in the new target market would be hesitant to pay any higher, and this is the part that relates to demand based pricing. Market segmentation

The market segment the Nokia was previously aiming at had become saturated, my research showed that 100% of students already owned a mobile phone and where not about too buy another one in the near future. Due to the fact that this youth market is saturated, I analysed the Ansoffs and Boston matrixes, and decided to undertake in market penetration. The new market that I am aiming Nokia's products is the middle aged people, because my research showed that very few middle aged people owned mobile phones and could be persuaded to buy a phone if the product was what they wanted and the price was right, and of those people who said that that didn't want a phone, most of them said they could be persuaded by strong advertising and branding. Evaluation My revised strategy, My target will instantly strategy and market gain has I is one 100% a lot of have advantages listed over Nokia's them previous below: Nokia target

that has never market share,

been entered before, so whereas the current

market

is

saturated

and

competition

for

market

share

is

very

strong. as my are use.

The products that are being released do not need to be technically advanced as the ones in the current market, because market research showed that the 40+ market do not want phones that to complicated and hard to If then would product research and development Nokia can afford to decrease save Nokia a lot no is its

not needed as much anymore employment numbers and this of money every year. competition a company can charge

When entering a new market with whatever prices they want, Nokia's prices can be