Guidelines

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).

Market in India (Contd)

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.

Market in India (Contd.)

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.

Levels of Market Segmentation

Nokia engages in the following levels of marketing: Segment Marketing Nokia offers designs, features and functionality that caters 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 N96, E71

Psychographic Segmentation (Lifestyle)

Live Customers - Looking for design and style, followers of trends and

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

Demographic Segmentation (Income)

Nokia has managed to stay ahead of its competitors by targeting consumers at the Bottom of Pyramid (BOP) along with other segments. High Income Group Caters to the upper segment of the society with high purchasing power. e.g. Nokia 8800Sapphire, N96, E71 etc Medium Income Group Caters to that segment which gives more importance to value for money e.g. N72,N73,Nokia 6300,Nokia 5300 (Xpress Music) Low Income Group Caters to the consumers in BOP segment Nokia 1100, Nokia 2100,Nokia 3310,Nokia 3315, Nokia 2300

Nokia-Target market selection

Selective specialization Nokia has selected a number of segments and has come out with products for each of them thereby ensuring its presence in the complete market.
M1 M2 M3 P1

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.

Nokias Pricing Strategy

Nokia uses penetration pricing when it launches its

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.

Dealing with Competition

Stress on Quality and Brand. Believe in providing excellent after sales customer support. Provides great functionality with the extra value of

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.

Dealing with Competition (Contd.)

India recently ranked as second largest mobile market. Nokia was the only one who recognized this Indian

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.

Dealing with Competition (Contd.)

Availability is word for distribution and care system at

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

SWOT Analysis (Contd)

Weaknesses
High Import Tariff. Aesthetics of Sony Ericsson and Motorola much better. Not able to achieve Point of Parity (PoP) superiority as

compared to Sony Ericsson phones (Cybershot camera, W-series MP3 player)

Opportunities
A huge rural market just waiting to be tapped. Probable launch of 3G in India

SWOT Analysis (Contd)

Threats
Launch of Apples iPhone Threat from Chinese made mobile phones (lower end

segment). Probable launch of VOIP handsets 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.

Future Plans (Contd.)

TRAI has recently authorized the use of VoIP in India.
VoIP will decrease mobile tariffs to as less as 10 to 40p

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.