Marketing Analysis of Nokia: Marketing Plan And situational analysis of Nokia Smart Phones
Q?? Based on the Situation Analysis provided, the purpose of the marketing plan is to develop an environmentally friendly mobile phone for the brand “Nokia”.
A:: Marketing Plan And situational analysis Review of Nokia Smart Phones
Table of Contents:
- Executive Summary ………2
- Introduction and Situational Analysis……..3
- Goals and Objectives of launching environment friendly mobile phones….7
- Target market and segmentation………7
- Marketing Mix………8
- Evaluation and Control……10
- Conclusions and Recommendations……11
- 1. Executive Summary:
The marketing plan is for environmental friendly mobile phones from Nokia. The marketing plan is for twelve month period following the launch. It elaborates on the internal analysis of Nokia and external analysis of the macro-environment.
The marketing mix of the marketing campaign will have four aspects: product (an environment friendly one), place (distribution), pricing and promotions. The positioning of the new product will be that it is a product which is not harmful to the environment unlike its peers.
The distribution will be done indirectly through the intermediaries which include the electronic retailers spread across the globe. The pricing strategy is to charge a premium price for the product because of its positioning as a leader in its category.
The promotion will be done through intense advertising campaigns in the electronic, print and social media. The objective of this advertising will be to create push for the product. It will be complemented by a PR campaign which will create pull for the product by highlighting the environmental friendly features of the product.
The environmental friendly features of the mobile phone include a solar panel for charging the battery from solar energy; the phone will be 100 per cent made from the material recycled from old mobile phones and 85 % of its components will be recyclable.
- 2. Introduction and Situational Analysis:
Nokia is a Finnish mobile phone manufacturer. In terms of sales volume in units Nokia was the second largest manufacturer of mobile phones after Samsung in 2011. Nokia which dominated the global mobile phone market in the early part of the decade of 2000s is now losing out considerably in the lucrative smartphone market.
In the smartphone market Nokia has lost to Apple and Samsung. Nokia was a late entrant in this market. The idea of coming up with environment friendly mobile phones aims at giving the company the first mover headway in a niche segment of the market which is still not being served by competitors.
Nokia started its journey in 1865 as a groundwood pulp mill. Nokia started making mobile phones only in late 1980s. The fact that Nokia has successfully straddled across totally unrelated areas of business is a testimony to the company’s strategic capability to successfully roll out new products and services.
Nokia’s competitive strategy in the past was one which was more incline towards product leadership rather than towards cost or price leadership. In product leadership competitive strategy the company tries to roll out products with strong product differentiation; these products are usually the best in their category.
In cost leadership strategy, the company strives to manufacture products at lowest possible costs. It then sells these products at lower prices than competitors or it may choose to sell products at the same price and generate higher profit margins for itself.
Nokia’s products in the past were often the best in their category and were sold generally at higher prices than competitors. However, in the smartphone segment, Nokia doesn’t have product leadership; its rivals Apple and Samsung enjoy product leadership here.
In order to gain some sort of product leadership in the smartphone category, Nokia has entered into strategic partnership with Microsoft. All Nokia smartphones now use Microsoft’s Windows Phone operating system.
Nokia smartphones compete against Apple’s i-Phones which use Mac operating system and Samsung’s Galaxy phones which use Google’s Android operating system. Nokia had the option to use the Android, but it decided to use Microsoft’s Windows phone operating system in order to create strong product differentiation.
2.1 Internal Analysis of Nokia:
Nokia’s market share in the global mobile phone market in the first quarter of 2012 stood at 22.5 per cent. Its total revenues in 2011 stood at 38.65 billion Euros.
Nokia has positioned itself as manufacturer of best quality and technologically sophisticated mobile phones. The brand name of Nokia has become synonymous with reliability in the mobile phone segment.
Nokia uses extensive advertising through electronic, print and other media for promoting its brand and products. It employs different brand ambassadors in its different national markets; is uses local celebrities as brand ambassadors.
2.2 SWOT Analysis of Nokia:
Strengths: The strengths of Nokia come from its core competency in manufacturing of mobile phones and its strong brand image. The brand Nokia is one of the most recognizable brands in the world. Nokia also enjoys a very strong global distribution network.
Weakness: Nokia’s weakness comes from its inability to match its product innovation rate with those of rivals Apple and Samsung. The research & development at Nokia has lagged behind competitors in the past few years and this explains why Nokia lost its market leader status to rivals.
Opportunities: Nokia has strong presence in emerging markets like India. The emerging markets have still a lot of growth potential. The mobile maker can leverage its presence in these markets for future growth.
Threats: The main threat comes from rivals Apple and Samsung. If Nokia doesn’t catch up with them soon in the smartphone market then it may meet the fate of Blackberry maker Research in Motion (RIM). Nokia can turn into a takeover target then.
2.3 External Analysis:
Industry Analysis
Intensity of competitive rivalry: Competition in the mobile phone industry is intense because of the presence of large number of players. The industry, which was more like an oligopoly in its initial years, has now acquired characteristics of monopolistic competition i.e. large number of players with slightly differentiated products.
Bargaining power of customers: Because of intense competition among manufacturers the bargaining power of customers is high.
Bargaining power of suppliers: Suppliers like those of chips and operating systems have long term strategic alliances with the mobile phone manufacturers. It is more like a symbiotic relationship where both the parties have equal bargaining power.
Barriers to Entry: Barriers to entry are high in the mobile phone industry because of the capital investments required in manufacturing and marketing.
Threat of substitutes: There exist substitutes like internet voice calls. However there is still no perfect substitute which can completely replace mobile phones.
2.4PESTLE Analysis:
Political factors: Nokia is a multinational corporation with presence in more than 120 countries. So it is exposed to political risks in all these countries.
Economic factors: The economic cycles have a significant impact on the revenues and profitability of Nokia.
Social factors: The social factors like attitude to technology and the desire for social connectivity have an important affect on the sale of mobile phones.
Technological factors: Technological infrastructure of the market determines the kind of mobile phones that a manufacturer like Nokia can launch there .For instance, 4G mobile handsets couldn’t be launched till very recently in China because of the lack of 4G technology infrastructure there.
Legal factors: Legal factors like contract laws and laws relating to foreign direct investments affect Nokia’s decision to invest in a country or not.
Environmental factors: Environmental factors are increasingly become important as governments and people around the world look to cut down their carbon footprints. The environmental factors were the major consideration behind the concept of launching an environmental friendly mobile phone.
- 3. Goals and Objectives of launching environment friendly mobile phones
The objective of launching an environment friendly mobile phone is consistent with Nokia’s vision and mission to be a product and technology leader in new segments of the market.
The goals behind this launch are many. The first and foremost goal is to deliver our corporate social responsibility towards the community by developing an environmental friendly product.
The business strategy goal is to gain first mover advantage in the green mobile phone segment, which the company believes will grow exponentially in future. The financial goal is to maximize the value generated for our shareholders.
The marketing goal in the short term is to sell at least 100,000 newly launched environmental friendly mobile phones within one year of the product launch.
- 4. TARGET MARKET AND SEGMENTATION
The target market for the environment friendly mobile phones is that segment of the customers who are environmentally conscious. This segment of the market is very sensitive about the environmental impact of their activities. They will even pay a premium for products whose impact on environment is not harmful. The environment friendly mobile phones will be designed keeping this segment in mind.
Also the promotional campaigns will strive to create consciousness about the impact of mobile phones on the environment in other segments of the markets. The objective of these campaigns will be to penetrate the market beyond the target segment. Nokia is aiming to develop a core competency in manufacturing of green and environmental friendly mobile phones.
Initial research shows that our target segment for the environmental friendly mobile phones constitutes 10 percent of the total global mobile phone market.
For effective segmentation the main requirements are measurability, accessibility, sustainability and actionability. Measurability is in terms of measurability of the variable factors. Accessibility refers to the degree to which the company can access the target market segment. Sustainability concerns whether the marketing efforts directed towards the target segment can be sustained. Actionability refers to the degree to which the marketing strategies can be implemented in the target market.
- 5. Marketing Mix:
Product: The product is an environmental friendly mobile phone. The dimensions of this phone will be 101 * 49 * 18 mm. It will be quite light in weight, weighing approximately 130 grams. It will be manufactured from recycled material from old used Nokia phones. The phone will have a flap and a screen as shown in the diagram of the prototype below.
The phone will be a smartphone with GPRS, 3G and 4G technologies. Its memory will be of 1 GB and it will also have a 5 Mega Pixel camera. The phone will have a small solar panel installed at its top edge. This solar panel will enable the battery of the phone to be recharged from renewable and clean solar energy. Also 85 % components of this phone can be recycled, which will mean a great reduction in e-waste.
The phone will have a two year warranty.
A rough 2 D representation of the prototype of the environmental friendly phone from Nokia
Place: The environmental friendly mobile phone will be distributed indirectly through the various intermediary electronic retailers across the world. The distribution channel will include a central warehouse of Nokia in all the major markets. Mobile phones will be shipped from the manufacturing facilities to the warehouses. From these warehouses these will be distributed to the different electronic retailers and stores. The phones will also be distributed through online stores.
Price: The pricing strategy is to charge a premium price because the product will be a leader in its category. It will be initially priced somewhere around $ 250 per unit.
Promotions: The promotional strategy will rely on advertising through electronic media, print media and social media. The strategy will be a mixture of both push and pull strategies. Push will be created through intense advertising. The pull will be created through intense public relations campaign which will highlight the virtues of using an environmental friendly handset.
The marketing strategy will not rely on product lifecycle. Viral marketing pursued through social media will definitely be part of the marketing campaign.
The four stages of the product lifecycle (PLC) are: introduction, maturity, growth and decline. The environmental friendly mobile from Nokia is definitely in the introduction stage of the PLC
Evaluation and Control:
The evaluation and control will be done by measuring the performance on certain parameters in each of the four quarters of the 12 month period. These parameters are: market share and growth, revenues, number of units sold and profitability. These parameters will be measured at the end of every quarter. The Vice-President (Marketing) in the different national markets will be responsible for measuring these metrics for evaluation and control.
Implementation plan schedule:
| Activity | Preceded by | Number of months | |
| Launching stage (A) |
1 |
||
| Distribution coinciding with launching (B) |
1 |
||
| Rollout of promotional campaign [C] | A,B |
12 |
|
| Evaluation and control | A,B |
12 |
|
The above marketing plan can be implemented within the twelve month period. No additional human resources will be required. However the distribution network needs to be upgraded at some places.
Conclusions and Recommendations
The marketing plan for the twelve month period for the environmental friendly handset looks viable. The marketing plan for the long term period (extending to five years) should be devised based on the success of this short term marketing plan. It is recommended that the marketing plan should be tweaked according to the challenges of the different national markets. The marketing strategy should be standardized as well as customized to meet the unique challenges of the different national markets, since the phone will be launched globally.
Effective implementation can be done only by adopting a flexible approach and through periodic monitoring.
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