Marketing Management I

Product Category: Smart Phones

MBA FT (2010 – 2012) Section B

Group: 4
Devashish Gantayat - 101216
Dhaval Patel - 101217
Fenil Shah - 101218
Foram Joshi - 101219
Gagandeep Singh – 101220
Smartphones are as name suggest “Smart” mobiles with a robust operating
system whose functionality can be extended by addition of software and which
provide developers with comprehensive API’s and flexibility to build software.

Smartphones generally have good features such as wireless connectivity,

office documents editor, push/pull e-mail facility, good multimedia, touch
screen and/or QWERTY keyboard for easy input.

There are many aspects that people consider before purchasing a smartphone
such as:

Design:-
Size and weight, along with screen size and resolution, make a difference in the
display and handling of a smartphone.

Multimedia:-
The best business cell phones have at least a 2 megapixel camera with zoom
features and the ability to play and record audio and video. Smartphones act as
life management devices and include organizational features like calendars and
task lists. Most sync with home computers allowing for document viewing and
editing.

Connectivity:-

Nowadays access to emails on move is need for executives. Youngsters want to

be on social networking sites. This requires internet connectivity. Smartphones
are equipped with various wireless connectivity options such as Wi-Fi, 3G,
GPRS, EDGE, etc.

Display and input:-

All latest smartphones have either QWERTY keyboard or a touchscreen as

convenient input method. The screen quality of smartphones also matters a lot.
New technologies are introduces, such as AMOLED, WXGA tft lcd, and
phones are marketed on basis.

Additional Features:-

Smartphones are marked by advances technologies used in them. Techno-savvy

customers often consider processing speed, RAM, type of operating system,
GPS and geo-tagging, accelerometer etc.
Market Leader:
In market, Nokia leads the market with market share of 42%. The net
revenue of Nokia from smartphones is about Rs. 2440 crores. Famous models of
Nokia communicator, N900, N96, N72, E72, E71, E63, etc. By introducing
push mail facility, Nokia has entered into BlackBerry’s market. Nokia
smartphones are shipped with Symbian OS and newly developed Maemo
(Linux) OS.

Strategy

Nokia distinguishes its phone with a brand like N-Series, E-Series and have
different strategies for each series. Strategies of its famous series is given below

N-Series:

Nokia targeted younger generations who wanted to possess mobiles with latest
technologies such as 5MP Camera, a decent music quality, GPRS etc.

E-Series:

These mobile were launched for people who wanted mobile computing on the
go, especially business people. These phones are enables with spread sheet,
presentation softwares. These are also equipped with good connectivity options
like GPRS, EDGE, 3G, etc.

THE 4P’S OF THE MARKETING MIX:

Product:

The product is the centre of the marketing mix and the other three P's are based
around it. Nokia comes up with innovative phones almost every six months. The
new phones that Nokia launches have some new feature or price difference, thus
appealing to the consumer. Sometimes, Nokia launches special and limited
editions of its mobile phones, on special occasions such as the Olympics. In
short they offer phones of great variety with various designs and high quality.

Price:-

Price is a key factor in the selling of a product, and is usually the one that is
open to the most change based on different pricing strategies, for example,
competitor based, penetration or skimming. Since its entry into Indian mobile
market in 1995, Nokia built a strong brand image with focused marketing and
distribution network. Nokia has come up with the perfect prices for each and
every consumer segment in the market. A lower middle-class person can go for
a Nokia 1200 costing around Rs. 1200 while an executive can opt for N-96
costing around Rs. 33,000.

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, Nokia mobile phones are very easy
to access nowadays, they are sold in supermarkets, Nokia Priority, Nokia Care
and specialized outlets (eg. The Mobile Store).

Promotion:
This involves providing information to the customer over a variety of media
platforms, using radio, television and print advertising as well as using other
promotional tools such as "money off deals" and "free giveaways". The
advertisements that Nokia comes up with are very successful in targeting the
customers in a consumer market. The advertisements are made in such a way
that it appeals to the psychology of the consumer. They also have various sale
promotion schemes like offering discounts on special occasions and giving free
gifts along with a purchase of a mobile phone.

Market Challenger:
Second major player in Indian market is RIM BlackBerry. The market
share of Blackberry is about 17% and revenue is about Rs. 986 crores. The main
target market of Blackberry has been corporate executives. The features such as
push mail, anywhere connectivity created much appeal in corporate customers.
But now it has started targeting younger generation by introducing Facebook,
Tweeter connectivity, good multimedia playback etc. The Blackberry phones
comes with custom developed RIM Blackberry OS. Famous phones from RIM
are BlackBerry Bold, Storm, Curve, Pearl and Torch.

Stratergy:

BlackBerry first made headway in the marketplace concentrating on e-

mail. BlackBerry initially targeted the business executives by providing any
time mail access using push/pull mail and high security features using
BlackBerry PIN which cannot be changed and are locked to each handset
 device. But recently BlackBerry has launched phones with lower prices and
high multimedia features to target the mass market and compete in the
smartphones segment.

Third major player is Samsung with market share of 15% and Rs. 870
crores. It specifically has targeted younger generation. The design and features
are made to appeal college students. Samsung has got major boost in market
share due to its Corby & Omnia series of phones. Samsung manufactures
phones with various OS, Windows Mobile and Android. Now they are
developing their own Bada OS.

Market Follower:
Sony Erricson was late to enter the smartphone market. It has entered
with its model Xperia which involves all the features that the existing high end
smartphones have. It has a market share of 9% and revenues of Rs 522 crores. I
Sony Ericson use Symbian OS, Windows Mobile and have also launched the
latest model with android OS. Famous models of Sony are

Strategy:

Sony Ericson targets customers who require rich multimedia experience.

They market their phones on bases high resolution cameras, good audio quality,
and crystal clear screen.

Market Niche:
IPhone has created a niche for itself in the smartphone market. Backed up with
its strong brand value and an image of innovating continuously it targets the
premium market segment with its highly priced models. It has a market share of
around 2% with revenues of Rs 116 crores. Its operating system iOS has been
the trendsetter in the smartphone market.

Strategy:

Apple iPhone used its already famous counterpart iPod to enter the
market. It marketed itself as an iPod with phone facility. It then changed its
marketing strategy and now they market it as great smartphone with lots of
features and ease of use. With every new release, Apple adds latest features and
technologies to iPhone. Apple doesn’t increase its product range.
 Apple gets its competitive advantage due to AppStore service. Apple
provides lots of applications to customers through AppStore. The developers
developing the software gets 70% of revenue earned by selling software and
30% is kept by Apple. This has also generated lot of revenue for Apple.

HTC has also created a niche by launching its new series of smartphones with
the Android operating system. These mobiles are specifically targeted to people
with technical orientation or developers who are interested in trying the
applications in Android market or creating and trying new applications. It has a
market share of 7% and revenue of Rs 406 crores. HTC also has a series of
mobiles with the Windows mobile OS, Android and BREW. Famous models are
Hero, HD2, Nexus One, Wildfire, P3400, Aria, Passion, Wing, Tattoo, etc.

Strategy:

HTC has been in developing PDA’s and smartphones for quite long time.
But it earlier provide the phones to other companies which in turn marketed in
their names, like O2, iMate, T-Mobile, NTT DOCOMO, Virgin, Dell, Acer, HP
etc. But after acquiring Dopod, it started selling smartphones using Dopods
channels with its own brand name. Now HTC manufactures high end phones in
wide price range. It has now started releasing many new models and winding its
product range. HTC has created an image of high end phones with latest
features and it specially targets younger generation and techno-savvy customers.
Recently it has captured major market share by releasing wide range of android
based phones.

Upcoming trends in Smartphone market:

 With these fast processors, such as QUALCOMM Snapdragon, NVidia
Tegra, smartphones will finally run full-blown apps.

 A Chinese company In Technology Ltd. Has developed a smartphone

which runs on Windows XP called xpPhone. What we can say a complete
PC replacement.

 Phones with build-in projectors (Samsung GT-i8520) to project the screen

on wall are made to compensate for small size of screen.

 With introduction of new and faster connectivity standards such as

WiMAX, the data transfer
Exhibit 1: Market share of Smartphone vendors in India

Exhibit 2
Worldwide Mobile Device Sales to End Users in 2Q10 (Thousands of Units)

2Q10 2Q09

Company Units 2Q10 Market Share (%) Units 2Q09 Market Share (%)
Nokia 111,473.8 34.2 105,413.4 36.8
Samsung 65,328.2 20.1 55,430.1 19.3
LG 29,366.7 9.0 30,497.0 10.7
Research In Motion 11,228.8 3.4 7,678.9 2.7
Sony Ericsson 11,008.5 3.4 13,574.3 4.7
Motorola 9,109.4 2.8 15,947.8 5.6
Apple 8,743.0 2.7 5,434.7 1.9
HTC 5,908.8 1.8 2,471.0 0.9
ZTE 5,545.8 1.7 3,697.9 1.3
G'Five 5,208.6 1.6 NA NA
Others 62,635.2 19.30 45,977.2 16.1
Total 325,556.8 100.0 286,122.3 100.0

Source: Gartner (August 2010)