Nokia Corporation stylised as NOKIA, is a Finnish multinational communications and information technology company, founded in 1865. Nokia is headquartered in Espoo, Uusimaa, in the greater Helsinki metropolitan area.[1] In 2014, Nokia employed 61,656 people across 120 countries, did business in more than 150 countries and reported annual revenues of around €12.73 billion. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange.[5] It is the world’s 274th-largest company measured by 2013 revenues according to the Fortune Global 500. The company is a component of the Euro Stoxx 50 stock market index.
The company has had various industries in its 150-year history, originally founded as a pulp mill, and currently focuses on large-scale telecommunications infrastructures, and technology development and licensing. Nokia is also a major contributor to the mobile telephony industry, having assisted in development of the GSM and LTE standards, and was, for a period, the largest vendor of mobile phones in the world. Nokia’s dominance also extended into the smartphone industry through its Symbian platform, but was soon overshadowed by competitors. Nokia eventually entered into a pact with Microsoft in 2011 to exclusively use its Windows Phone platform on future smartphones. Its mobile phone business was eventually bought by Microsoft in an overall deal totaling €5.44 billion (US $7.17 billion). Stephen Elop, Nokia’s former CEO, and several other executives joined the new Microsoft Mobile subsidiary of Microsoft as part of the deal, which was completed on April 25, 2014.
Since the sale of its mobile phone business, Nokia began to focus more extensively on its telecommunications infrastructure business, marked by the divestiture of its Here Maps division, its foray in virtual reality, and the acquisitions of French telecommunications company Alcatel-Lucent and digital health maker Withings in 2016.
Market In INDIA
Initially tariff rates were extremely high in India. Later on, even though the rates were slashed considerably, mobiles were still considered to be a luxury.
The biggest breakthrough for mobile phones in India was when incoming calls became free after the launch of Airtel (GSM segment) and the CDMA segment (RIM).
When Nokia entered India, it concentrated on the high end segment because of the tariff constraints in India. Only the affluent could afford mobile phones.
Increase in purchasing power due to increase in income and standard of living thanks to outsourcing, globalization and the number of educated and skilled people in India presented a good opportunity for Nokia and others to expand.
Gradually, mobile phones started becoming necessities. The mid and low-income segments also became targets for mobile phone companies.
In fact, many in India have made a direct transition that is people who never owned a landline, went straight to mobile phones.
Therefore, we saw slow growth in the initial few years and a phenomenal growth in the past few years.
Nokia chose to aim the youth market focusing on students in the range 13-21 as their market research showed that youths were receiving large amounts of pocket money and most have no real commitments to spend it on.
A good portion of the youth segment also started earning well thanks to the BPO and call centre explosion in India resulting in disposable income and need for a higher standard of living. Now, Nokia is trying to tap the potential of the lower end and rural markets as well.
SEGMENTATION TARGETING POSITION AND MARKETING MIX OF NOKIA
Segmentation
Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them.
Criteria For Segmentation
An ideal market segment meets all of the following criteria:
• It must be large enough to earn profit.
• It is possible to reach potential customers via the organization’s
promotion and distribution channel.
• It responds consistently to a given market stimulus.
• It can be reached by market intervention in a cost-effective manner.
• It is useful in deciding on the marketing mix.Levels of market segmentation
Nokia engages in the following levels of market segment:
Segment Marketing
Nokia offers designs, features and functionality that cater to the demands of the market segment. E.g. Nokia Ngage (gamers)
Niche Marketing
Nokia also has products for customer groups seeking a distinctive mix of benefits and are ready to pay a premium price for it. E.g. Nokia Lumia 925, Lumia 920.
Demographic Segmentation
High Income Group
Caters to the upper segment of the society with high purchasing power .e.g. Nokia Asha501, Lumia925, Lumia920, Lumia625, Lumia720, etc.
Medium Income Group
Caters to the segments which give more importance to the value for money.
Example of phone for this segment are Nokia Asha 206, Asha 205, etc.
Low Income Group
Caters to this segment which have very low income and use mobile phones
only for calling purpose. Example of offering for this segment are Nokia 106, Nokia 111, Nokia 112, Nokia 103, Nokia 113, Nokia 100, Nokia 101 etc.
Psychographic Segmentation
Lifestyle
Achievers– Looking for design and style, followers of trends and fashion and have active lifestyle– Nokia Lumia1020.
Strivers– Combination of ease of use and elegant looks. Want seamlessly connected and in best possible way Nokia 6110 Navigator.
Survivors- Smart business people wanting smartest tools for balancing work and life.Nokia Nokia 111, Nokia 112, Nokia 103, Nokia 113, Nokia 100, Nokia 101 etc.
Explore Customer- Want cutting edge technology for their stylish life-styles -Nokia Lumia 520 with 8 GB chip with multimedia devices, that snap, record, browse and share contents all via internet. There exists another segment of consumers who rank price and functionality of the phone above the aesthetics and enhanced features. For these segments we have products like Ngage (gamers), Xpress music (music lovers), etc and Asha 305, Asha 210 etc.
Behavioral Segmentation
Occasions- Nokia launches new phones on special occasion like Diwali,
Christmas and many more regional festivals and special occasion.
Benefits- Nokia launches various phones for benefit seekers who look for quality and better service but within reasonable price. Like phone with good camera, memory and display. So Nokia offers various Asha series phones for this category.
Market Targeting
After segmentation the firm evaluates various segments and decide how many
and which segment to serve.
Evaluating Market Segments
In evaluating different market segments firm must look at three factors:
1) Segment size and growth
2) Segment structural attractiveness
3) Company’s objective and resources
Nokia Target Market Selection
Selective Specialization
Nokia has selected a number of segmentsand has come out with products for eachof them thereby ensuring its presence inthe complete market.
M1 M2 M3
P1 P = Product
P2 M = Market
P3
Nokia’s Pricing Strategy
Penetration Pricing
- Used to gain instant market share in a new market.
2. Well know companies like Nokia do it with new products that carry new
technologies totake more market sharefrom competitors.
Competitor – BasedPricing
- Used when there is a lot of competition in the market.
2. When a company is looking to take another company’smarket share by
offering similar products at a lower price.
Nokia Marketing Strategies
As a big company Nokia is able afford more promoting andadvertising that smaller, less successful companies.
Mass marketing by sponsoring events that will be viewed by large amounts of people in their chosen market segment.
Effective use of print media : Advertisements for businessphones found in Economic Times. High end phoneadvertisements found in magazines such as Lifestyle.
Effective use of television : Advertisements that Indians canidentify with. Using Shahrukh Khan as Brand Ambassador.
Differentiated Marketing
Nokia uses differentiated marketing targeting strategy because they target several market segments and design separate products for each.
Nokia tries to manufacture products for every “PURSE, PURPOSE and PERSONALITY”.
Nokia Microsoft Partnership
The Nokia-Microsoft partnership brings together two global businesses with highly complementary sets of assets and competencies. But what will it actually mean for Nokia smartphone products?
First and foremost, Nokia is adopting Windows Phone as its primary smartphone platform. Working with Microsoft, we’ll help to drive and define the future of the platform by leveraging our expertise in hardware optimization, software customization, and language support.
Nokia and Microsoft are also combining services assets to drive innovation. Nokia Maps, for example, will soon be at the heart of key Microsoft assets such as Bing and AdCenter, and Nokia’s application and content store will be integrated into Microsoft Marketplace. Similarly, Microsoft will provide developer tools, making it easier for application developers to leverage Nokia’s global scale.
Differentiation and Positioning
Beyond deciding which segments of the market it will target, the company must decide on a value proposition- on how it will create differentiated value for targeted segments and what positions it wants to occupy in those segments. A product’s position is the way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products. “Products are created in the factory, brands are created in the mind,” says a positing expert.
Nokia is clearly using Differentiation strategy, which is a combination of
differentiation competitive advantage and broad target scope. Differentiation in themarketing mix for the Lumia 920 occurs in the Product and Price components of themarketing mix. Lumia 820 is also differentiated, but only in the product component ofthe marketing mix. However the price of the 820 is lower and mid-ranged for themarket, it is not differentiated.
The smartphones are differentiated from its rivals in the Product component of themarketing mix with their physical and non-physical characteristics. The physicalcharacteristics of the 920 and 820 are the design of the product as well as the multiplecolors that are available to the customers. The colors offer customization for thedevices and differentiate the products from rivals such as Samsung and Apple. Thetwo companies often offer their smartphones in only two colors.
The devices are differentiated in a non-physical way through the company’s
partnership with Microsoft. Nokia is first to manufacture a smartphone running
Windows software, and at present it is offering more Windows phones than any of itsrivals. The Lumia1020 is also differentiated by its innovative technologies such as itsrevolutionary camera. Nokia 820 and 920 both offer wireless charging, which is anew and innovative offering for the Indian market.
Positioning Map
In planning their differentiation and positioning strategies, marketers often prepare perceptual positioning maps, which show consumer perceptions of their brands versus competing products on important buying dimensions.
| Value for Price | Business
|
| Performance | Family Reliable |
Positioning statement
A statement that summarizes company or brand positioning – it takes this form: To (target segment and need) our (brand) is (concept) that (point-of-difference).
Nokia’s Positioning statement is “CONNECTING PEOPLE”
Marketing mix
In order to understand which strategy Nokia has used to achieve its objectives ofregaining lost ground in the smartphone market, we will look at the marketing mix ofthe company. As marketing strategy shapes the marketing mix for the products, themarketing mix will point to the strategic choice of the company. The marketing mix isa synonym for 4ps, which is constructed of the four most important components ofevery product’s strategy – Product, Price, Promotion and Place. These componentshold the opportunities for the company to differentiate.
Product
Nokia’s products vary a lot because the company has a number of series of
Smartphone such as Nokia Lumia, Nokia Asha, as well as feature phone series.
Product design also varies, the company has touch screen products, classic buttonphones, as well as slide sets. Nokia’s products have some great features that varyfrom product to product. Nokia is known for great quality of its devices, and oftenoffers technologically advanced cameras and great maps for its smartphones.
Price
The prices of the smartphone series vary between Rs 5000 and Rs39000. There is high price variability of the products, so that the prices meet every social class needs.
Promotion
Nokia makes use of advertising on television, newspapers, radio and billboards. Thereis no information on any current or near past promotional campaigns.
Place
Nokia is getting its products to the market through distributors. It mainly sells its smartphones and feature phones trough Mobile operators and retailers,
which is common for the industry. The company does not own shops in most of the part of country. According to the marketing mix analysis for Nokia, the company mainly focuses onproduct component of the marketing mix. Nokia offers great variety of product at adifferent price levels. Given the variability in products and series, at this point it ishard to understand the strategic choices of the company. It is even impossible toassess the decisions regarding the new series Nokia Lumia.
Customer Perceived Value
Customer Perceived value is getting something as a return after paying cost for a product or service. In simple words perceived value is the classification of expected quality for the price paid for a product.
The CPV of Nokia can be described under three headers:
Reliability
- Never fails
- Battery life
- Robust
Value for Money
- Affordable
- Features
- Premium Resale Value
Brand
- Utility first
- Easy to use
- Great Designs in all segments
Conclusion
Nokia’s mission is to regain its leadership position in the smartphone market. Thecompany sees greatest potential for achieving its objective in the partnership withMicrosoft. According to the environment analysis the most serious problem for thecompany is the threat from existing rivals.
Nokia has built some interesting products in the Lumia series, with very impressivetechnologies and beautiful designs. However the market success of these products hasnot been so great and Nokia did not achieve its goal of becoming a market leader inIndia.Nokia has introduced its flagship device at a high price with very innovativetechnology and has position it in the high-end costly Smartphone market. The product is introduced by implementing differentiation strategy. According to the analysis the reason for this is wrong implementation of marketing strategy and specifically problems with the positioning of the products. This strategy implementation is correct according to the analysis, as the product is introduced with aggressive marketing mix, targeting the mass market. Lumia 925 has seen great interest in the Smartphone market in India.
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