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Nokia as a Company Turnover Nokia in India Market in India Segmentation Products (Signature Products, Milestone Products) Target Customers Pricing Strategies Branding SWOT PEST Positioning
Nokia as a Company
Nokia was established in 1865 as a wood pulp mill by Knut
Fredrik Idestam. The company was later relocated to the town of Nokia by the Nokianvirta river, which had better resources for hydropower production. Finnish Rubber Works acquired Nokia Wood Mills as well as Finnish Cable Works. These three companies were merged to form Nokia Corporation in 1967. The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in the 1960s. In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment.
Nokia in India
Nokia entered the Indian market in 1994.
The first ever GSM call in India was made on a Nokia
2110 mobile phone on its own network in 1995. The tariffs levied on importing mobile phones were as high as 27%, usage charges were at Rs.16 per minute and, at these high rates, consumers did not take to mobile phones. Nokia also had to face tough competition from other powerful global players like Motorola, Sony, Siemens and Ericsson.
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).
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.
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.
fashion and have active lifestyle - Nokia 8800Sapphire Connect Customers - Combination of ease of use and elegant looks .Want seamlessly connected and in best possible way Nokia 6110 Navigator Achieve Customers - Smart business people wanting smartest tools for balancing work and life .E90 models use of e-mail, calendar ,contacts , web browsing Explore Customers - Want cutting edge technology for their stylish life-styles - Nokia N-95 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 1100,2100,2300, etc
P2
P3
P= Product M= Market
Pricing Strategy
Penetration Pricing
1. 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 to take more market share from competitors. Competitor - based Pricing 1. Used when there is a lot of competition in the market. 2. When a company is looking to take another companys market share by offering similar products at a lower price.
products. 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. Once the products have gained a foothold and popularity in the market Nokia starts using competitive based pricing. This way they lower their profits on each product and increase the number of people who buy the products thereby still making a considerable profit.
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 Brand Nokia is associated with features such as durability, quality and assurance of good after sales services and support.
Marketing Strategies
As a big company Nokia is able afford more promoting and
advertising 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 business phones found in Economic Times. High end phone advertisements found in magazines such as Lifestyle. Effective use of television : Advertisements that Indians can identify with. Using Shahrukh Khan as Brand Ambassador.
Marketing Strategies
Blue Ocean Thinking
Innovative products launched in India First phone with camera, Nokia 7650, first phone with radio Nokia 6510 Red Ocean Thinking Engage in head to head competition with competitors. Pro-active launch of N96 to counter the launch of Apple iPhone
Products
Products
Products
Competition
The fact that Nokia operates a very aggressive
marketing strategy has elevated them above the competition. Also, consumers are fooled into believing that branded products are "better" than un-branded products or products produced by lesser-known brands such as One Tel/Sagem/Fly and other lesserknown phone producers in the market. That is the reason why Nokia faces most competition from Branded Competitors like Sony Ericsson, Motorola and Samsung.
Major Competitors
Sony Ericsson
In mid-income group and high-income group N-series faced a lot of competition from the Sony Ericsson Wseries. Motorola In youth segment (MotoRazr, MotoYuva) MotoRazr appealed to the youth segment on account of its looks and MotoYuva on account of its features and low price. Samsung In mid-Income group segment. E-840, E-251 provided a tough competition to nokia phones in the 5000-9000 price segment.
customer support. Possession of the Nokia brand creates a sense of pride in its owner. Nokia care centers Crisis Management Nokia did an excellent job in maintaining its goodwill during the battery overheating crisis.
potential and decided to invest extensively in India way before its competitors. India has a voice in the design, marketing, sales and promotion of Nokia products. Nokia opened a design studio in Bangalore to explore new design for mobile phones targeted at Indian markets. This is a satellite studio which will collaborate with local designers to get a better understanding of the cultural nuances relevant to mobile phone design.
Nokia. 700 priority dealers and 11,000 authorized dealers and many more in every nook and corner of country. Conversion of mobile into FMCG category. Till 2003 , bulk of mobile sales was thru grey market only.
SWOT Analysis
Strengths 70% Market share in India Goodwill in India Well known in rural segment as well. Good battery life. Detachable panel. Only changing the panel for a fraction of the cost gives the phone a look of as good as new. Good reach as far as service centers are concerned. Have mobile phones for all segments
Opportunities
A huge rural market just waiting to be tapped. Probable launch of 3G in India
Point of Difference
Excellent customer services.
Edge in mobile software. Has set a benchmark in introduction of features like
robust design, longer battery life, facility of hindi SMS, torch in mobiles, etc.
Future Plans
As on June 2008 mobile penetration is about 28% -289
million. This means that 900 million of Indias population is yet to be connected. According to statistics 11400 connections are sold per hour in India ie about 8 million per month. Hugely untapped rural market. Strategy - entering in to partnerships ,building an ecosystem with other players as agri-input providers and operators to tap vast rural market. e.g. : Collaborating with ITCs e-Choupal to use their distribution system to their advantage.
per minute for STD calls and free local calls. VoIP handsets may be floated in India for as less as Rs. 800 (Chinese make) to Rs. 15000 for high end models by leading players such as CISCO. Low tariff rates and low cost handsets may result in huge drift towards VoIP from GSM and CDMA, Therefore, Nokia should think about positioning itself in the VoIP handset segment as well.