Executive Summary
Nokia is one of the leading brands in the whole world, and its main industry is the information and communication sector. Currently, it has engaged in sales in over 150 countries with about 130,000 employees in the countries where it has established its base. The company has managed to gain annual revenues of approximately 50.7 billion, generated by its main mobile technologies namely GSM and CDMA. The communication industry is growing very fast and the competition is rising among mobile phone providers. To cope with this competition, Nokia has managed to stay at the top of the game by introducing new features and functionalities at a regular basis on mobile phones. The strong brand has remained a trusted name by customers across the globe and all its customers are very loyal to its products. A successful marketing plan should have a detailed situational analysis, clear goals and objectives, target market and segmentation, marketing mix strategy, evaluation and control, implementation/ action plan and future recommendations. This plan should ensure that Nokia remains a top player in the industry, now and in the future.
Nokia is a multinational company that specializes in the production of communication and information technology gadgets, and it has its headquarters in Finland, with many more branches across the globe. Nokia mobile phones are the principal technological devices that the company has managed to deal with across the globe. Statistics show that between the year 1998 and the year 2012, Nokia remained at the top of the largest phones’ vendor in the whole world, and it was positioned at the second position among the phones that achieved the highest unit sales, coming second after Samsung (Masalin 2003). Nokia’s ability to capture people’s minds by the use of its concept of ‘Nokia- Connecting People’ has been one of the main reasons it has continued to be a top player in the industry. Over the years, Nokia has strategically managed to move along with technological advancements, enhancing its products with functionalities such as WAP, polyphonic ringtones, predictive messaging, camera phones and video recorders and other smart technologies (Zaleski & Abbott 2001). Nokia also benefits from the investments it has made in the research department so as to study the market and come up with new strategies as needed.
Internal analysis and SWOT analysis
Nokia’s current interim financial report for the year 2012 was release on 18th October, the year 2012 and the mobile phone business showed a positive response in terms of sales and earnings (Marx 2012). As compared to the previous year, the year 2012 has realized strong sales in the mobile phones business. The sales volume for mobile phones has increased quarter on-quarter to 77,000,000 units, with the Asha smart phone showing the highest increase in sales as compared to other phones (Zaleski & Abbott 2001). However, Nokia sales in North America decreased, and the company observed that the reason for this decrease was that the increased competition that mobile phones faced in that region. Fortunately, in Europe, the net sales for Nokia phones have gone up. In the year 2009, Nokia had a market share of 38% in the second quarter of the year and it has maintained the title of the largest manufacturer of mobile phones ever since the year 2008. In the year 2008, out of the total market volume of 520 million units, Nokia phones scooped a net sale of 210 million units (Marx 2012).
Promotional strategies
According to Atsmon, Kloss, Smit, & Matson (2012), market research has been one of the core activities of any company, considering that it enables companies to understand what and how customers want to access various products. It ensures that the consumer behavior is assessed, buying and selling trends are established, and competition within the industry is examined (Pieters & Wedel 2008). Nokia uses a marketing mix that places it at a better position as compared to its close competitors. For example, Nokia largely uses advertising as the main communication strategy and its adverts always use one concept that states ‘Nokia- Connecting people’. Nokia advertising is uniformly done across the globe, and the main mass media approaches used are televisions, magazines, newspapers, billboards and radios. Also, Nokia uses public relations to sponsor various public relations events, thus reaching the press in an advantageous manner.
Distribution channel
Distribution channels are critical elements in the marketing of a company’s products since the success of each channel reflects in the product availability to the consumer (Pieters & Wedel 2008). Finland’s manufacturing plant is the main Nokia manufacturing plant for the mobile phones. From the main plant, the mobile phones are routed to the main depot of the company. The regional distributers access their orders from the depot and with the help of the established re-distribution suppliers; they provide the supplies to all retailers. Just like in Finland, distribution channels in other regions such as India and China usually follow the same channels like the headquarters. To ensure smooth distribution, the distribution structure consists of regional general managers, regional sales managers, area sales managers and the field sales forces.
SWOT Analysis, (Nokia Corporation SWOT Analysis, 2012)
The SWOT analysis consists of an evaluation of a company’s strengths, weaknesses, opportunities and threats that form the company’s internal and external factors. Nokia, as a large corporation has several internal and external factors that affect it as follows.
Strengths
A large market share in the mobile phone industry that enables it to compete well with others in the market.
Technologically advanced research and design department that evaluates the market needs of the industry.
Nokia ranks fifth globally in terms of brand value.
Even through crises, the management of Nokia has showed enormous ability to get through all obstacles.
Weaknesses
The company pays high costs for the supply chain.
Prices of the mobile phones are higher than those of China phones.
Opportunities
The mobile phone industry continues to grow, extending from the former urban-areas-only to the rural areas too.
The demand of phones in developing countries is largely growing.
The company created a 50-50 collaboration venture with the Germany’s Siemens.
People, especially the young people are in need of stylishly designed mobile phones.
Threats
China mobile phones are coming up with more sophisticated designs and fashions and customers might incline towards the new stylish phones.
Most sellers do not just concentrate with Nokia phones; rather they sell phones from different manufacturers.
Competition is rising due to the emergence of smart phones.
Goals and objectives in one year’s time
1. To penetrate the rural areas market and achieve a 10% increase in sales both urban and rural areas.
2. To use the strong brand name to beat other mobile phone giants in the industry and remain the world’s largest vendor in the cell phone sector.
3. Allocate financial resources to online marketing, display stands, poster dummies, and sales promotion as new marketing communication strategies in order to realize a 30% increase in unit sales.
Target Market and Segmentation
Market segmentation refers to the process by which companies divide a market into smaller portions that are quite similar in order to understand the best marketing communication mix that should be applied to each of the segments (Quinn & Dibb 2010). The main objective of market segmentation is to identify each market segment and focus on it so as to realize more and ultimate sales. Nokia should carry out this activity based on geographical segmentation, demographic segmentation, psychographic segmentation and benefit segmentation.
Geographic segmentation
The company should achieve this by focusing on the Asian market that has a high potential of achieving the ultimate sales. The country of choice should be India whereby the marketing should be done in all the cities and the surrounding areas so as to reach a maximum number of places. This means that the company should use a regional approach to enable it to penetrate the local areas and create loyalty among them. This means that flagship stores should be created all over this region, and customers should be given a wide range of innovations. A regional approach is vital in ensuring that the company meets the needs of a particular geographical region.
Demographic Segmentation
Demographic segmentation covers the diversity of people’s perspectives such as the age, gender, income, occupation, religion (Quinn & Dibb 2010). Nokia phones come in different types that can appeal to different age groups. In this case, Nokia should come up with different models of cell phones (both smart phones and mobile phones) that can be used across all ages in the target market. In order to penetrate through the different genders, Nokia should be built with two distinctive colors, namely pink and blue. This is because the pink color is usually associated with the female gender while the blue color is associated with the male gender. In order to cover different income groups, Nokia should come up with both sophisticated phones and simple phones. The simple phones should consist of the basic features of a mobile phone such as messaging service, call service and memory just enough to carry out the normal functions of the phone. This phone should be aimed at meeting the needs of those people who are low-income earners. This is because such people are usually interested in the basic functions of the phone. Sophisticated phones should be targeted at the higher income earners who are interested in smart phone functionalities such as internet, camera and wireless connectivity. People in occupations related with information and technology are more interested in hi- tech gadgets and Nokia should devise smart phone gadgets that may interest this demographic group.
Psychographic segmentation
According to Quinn & Dibb, (2010), psychographic segmentation refers to diverse perspectives brought about by differences in social classes and lifestyles. Social classes consist of low class, medium class and the high class depending on how the group is perceived in the society. Lifestyle covers the kind of life people live in a region such as urban life, rural life and village life. Currently, most Nokia products are aimed at the medium and high classes of people who are working or those in corporate sectors. However, in order to reach the lower class members, it would be vital for the company to increase the production of some of its earlier phones such as Nokia 1200 that can serve the purpose of the low class members at a less expensive price. The same case should go for the members of urban and rural areas because they possess diverse needs when it comes to mobile phones. More smart phones such as the Nokia N79 (a sophisticated sports phone that can monitor someone’s heartbeat while in the field) should be accessible to the high class members and in the major urban centres.
Benefit segmentation
Benefits segmentation refers to the aspect of marketing where segmentation is done based on the benefits and loyalty status of the brand (Quinn & Dibb 2010). Nokia can enhance the type and variety of the benefits that people can attain by purchasing the phone. For example, they should consider an enhanced battery life for the phones and the creation of more user-friendly applications and phone designs. By attaining such benefits, customers should be able to realize value for their money and they should become loyal and repeat customers in the long run.
Marketing Mix Strategy
For a budget of $250,000, the company can carry out a marketing mix as stated below. This amount will cover the National campaigns that will be involved.
Product
The company should increase the variety of Nokia mobile phones that it offers, including the smart phones. Every other big phone company is trying to come up with new models for mobile phones and therefore, Nokia should increase the number of N Series phones.. The quality of phones should be maintained because Nokia has managed to keep up the brand personality and its market share is already high. The changes on the product should be done on its design because there is room for improvement. For instance, more color varieties would create interest across demographic market segments. Other designs that can penetrate the market segments are the flip and slide designs with different sophisticated camera and video options. Such features should be enhanced to curb the current competition. This enhancement of the product should take about 40% percentage of the national campaign budget.
Price
Pricing is a very crucial component of the marketing strategies that a company uses, and it can be done through three methods namely penetration, skimming and cost-based pricing (Constantinides 2006). Therefore, pricing must be done in a way that the company should still be in a position to attract and keep customers, and at the same time the company must realize profits and high revenue. The best strategy to use is to create a price set cost-based pricing, thus creating a wide range of buying points for potential customers. This means that the company needs to consider its cost of production and the mark-up profit it expects from the sales. This way, it can ensure that it realizes enough profits that should maintain continuous re-investment.
Promotion
The best promotional mix should be a combination of strategies that can be used to increase the sales and revenues (Constantinides 2006). It is crucial to note that Nokia phones have reached the maturity stage of the product life cycle and therefore the promotional mix must be chosen wisely (Marx 2012). The first strategy would be advertising using online adverts, display stands and poster dummies that the company has not used in the past. Sales promotion should also be used through various incentives offered to customers. For example, the N-series phones should be sold with an offer tagged to them such as offering original blue tooth, T-shirts, phone wallets for free, and this should be given to every person who purchases them. Another promotional strategy that can increase brand recognition is the use of road shows because according (Walden 2010); they can successfully capture people’s attention in both urban and rural areas. Promotions should take up about 30% of the total budget, that is, advertising and sales promotions.
Place
Marketing strategies should be created with a great consideration of the place of distribution very clear in the mind (Constantinides 2006). For instance, the Nokia products should be available at various shops, exhibitions and galleries in urban and rural areas of the target markets. There are certain phone dealers that are already established in various regions across the world, and these dealers should be used to create collaborations between Nokia and their dealership shops, supermarkets or warehouses. This should ensure that the product is available to the consumers whenever they are needed without any high costs of transportation. Retailers to be used should include all established retail shops and suppliers who deal with such products in various regions across the globe. Inclusion of new retailers and other shop outlets should be allocated approximately 20% of the total budget.
Evaluation and Control
Results of the implemented marketing plan should be evaluated and controlled in a regular manner so as to establish its success. Customer needs should continuously be researched on so as to understand the customer trends in the market. This may be done through sales tracking (Richardson 2007), so as to examine the Nokia phones that are more likely to increase in sales and check on those that are more likely to drop. The area sales managers should be responsible for sales tracking so that they can devise new strategies as required. Evaluation of profits and total revenues collected should be conducted in quarterly basis in order to control sales in all the market segments. The finance department in the company should be responsible in the tracking and controlling the profits in all business units. Research should take up about 5% of the allocated budget while the remaining 5% of the budget should be kept aside for any miscellaneous expenses that will arise.
Implementation/Action Plan (Gantt chart)
N-Series phone launch
New colored covers
Dealership shop distribution
Supermarket distribution
Online advertising
Sales Promotions
Road shows
The production and launch of more smart phones (N-Series) should be done in February and March, and this should be done together with the new designs of colored phone covers (pink and blue). The engineering and design departments are responsible of ensuring the success of these two projects within the two months. Dealership and supermarkets distribution channels should be in place by the time the new phones and designs are through and they should start in April, with supermarkets being used as a channel for the next eight months. Online advertising should start early so that by the time the new phones and designs are launched, people should have the basic clues regarding the Nokia phones. Sales promotions are meant to be used with the new phones as soon as they are launched and the promotions should take five months. External resources should be required to carry out road shows, and due to the costs involved, the shows should run for only one month. Distributions, advertisings, promotions and road shows should be headed by the sales and finance departments.
Conclusion
Nokia has been one of the leading brands worldwide, and for it to carry out a marketing plan, it needs to carry out a thorough market research. Nokia is surrounded by various internal and external factors that act advantageously and disadvantageously for the company. The marketing goals and objectives aimed at increasing the sales are based on marketing, communication and sales. The target markets should be segmented through geographical segments, demographic segments, psychological segments and behavioural segments. The marketing mix strategies used are all related to the product, place, price and promotional strategies. The results should be tracked and controlled throughout the implementation of the marketing plan. The plan is meant to be implemented through a one year span.
Future recommendation
A manufacturing plant should be set up in the African region in the future so as to capture the emerging and developing markets in the region. This would ensure that the price of each Nokia phone is low and affordable to the developing countries in the African continent.
References
Atsmon, Y, Kloss, M, Smit, S, & Matson, E 2012, ‘Parsing the growth advantage of emerging- market companies’, Mckinsey Quarterly, vol. 1, no. 3, pp. 10-4.
Constantinides, E E 2006, ‘The marketing mix revisited: Towards the 21st Century marketing’, Journal of Marketing Management, vol. 22, no. 3/4, pp. 407-38.
Masalin, L 2003, ‘Nokia leads change through continuous learning’, Academy of Management Learning & Education, vol. 2 no. 1, pp. 68-72
Marx, P 2012, ‘The Nokia store’, New Yorker, vol. 82, no. 43, pp. 30.
Nokia Corporation SWOT Analysis 2012, ‘Nokia Corporation SWOT analysis’, pp. 1-10.
Pieters, R, & Wedel, M 2008, ‘Visual marketing: From attention to action. Lawrence Erlbaum Associates.
Quinn, L, & Dibb, S 2010, ‘Evaluating market-segmentation research priorities: Targeting re-emancipation,’ Journal of Marketing Management, vol. 26, no. 13/14, pp. 1239-55.
Richardson, J 2007, ‘Tracking sales,’ Publishers Weekly, vol. 244, no. 9, p. 36.
Walden, K 2010, ‘Advertising business, advertising culture,’ Canadian Review of American Studies, vol. 29, no. 2, p. 127.
Zaleski, J, & Abbott, C 2001, ‘The Nokia revolution (book review)’, Publishers Weekly, vol. 248, no. 21, p. 90.
