Assignment On Customer Driven Marketing Strategy Of
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Assignment On Customer Driven Marketing Strategy Of
Principles of Marketing (MKT 101) Summer 2010
Submitted To Kashfia Ahmed Senior Lecturer Department of Business Administration East West University
Submitted by Md.Mehedi Hasan Arman Khan Md.Nazmul Hasan Bhuyan Amit Saha Benzir Ahmed
2009-3-10-076 2009-3-10-034 2009-3-10-022 2009-3-10-024 2009-3-10-013
Date of Submission: July 15, 2010
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LETTER OF TRANSMITTAL December 08, 2009 Kashfia Ahmed Senior Lecturer Department of Business Administration East West University
Subject: Submission of Assignment. Dear Sir: We are very pleased to submit this assignment on “Warid” as you have authorized us to in this semester. We are honored to prepare this assignment under your guidance since it gave us the opportunity to know the current Management Objectives of “Warid” and analyze its business performance nad competitive advantage. We tried our level best to accumulate the information for you as comprehensive as possible. We will be obliged to provide further clarification on this report whenever necessary. Sincerely Yours, Md. Mehedi Hasan Arman Khan Md. Nazmul Hasan Bhuyan Amit Saha Benzir Ahmed
[2009-3-10-076] [2009-3-10-034] [2009-3-10-022] [2009-3-10-024] [2009-3-10-013]
________________ ________________ ________________ ________________ ________________
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ACKNOWLEDGEMENT We would like to express our gratitude and indebtedness to our honorable faculty, Ms. Kashfia Ahmed, Senior Lecturer, Department of Business Administration, East West University (EWU). With her inexhaustible guidance, valuable advice, continuous inspiration, constructive criticism and generosity she helped us to carry out this report successfully. We would also like to express our gratitude to the website that helped us to gather all the necessary information. Finally, we would like to thank to all group members that directly or indirectly helped us to provide and accumulate all the necessary information for the accomplishment of this assignment.
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Table of Content Seria l
Topic Name
Page Number
1
Executive Summery
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2
Introduction
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3
About The company -Nokia
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4.
Nokia’s Application of Marketing Concept
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5.
Market Segmentation for Nokia 5.1 The Segmentation of Nokia conducted on the basis of Consumer Markets: 5.2 The Segmentation of Nokia conducted on the basis of Price:
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Market Targeting of Nokia:
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6.
6.1. Evaluation the market segments 6.2. Selecting Target market Segments 7.
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7.1. Nokia Positioning 7.2. Nokia Brand Personality 7.3. Nokia Positioning – Product 7.4. Nokia Positioning – Price 7.5. Nokia Positioning – Place 7.6. Nokia Positioning – Promotions 7.7. Nokia Positioning Maps 7.8. Developing Positioning Statement 7.9. Overall Positioning Strategy of Nokia 7.10. Differentiation policy of Nokia 7.11. Differentiation criteria of Nokia
15 15 15 15 16 16 17 18 18 19 20 20
8.
Conclusion
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9.
Bibliography
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Positioning and Differentiation of Nokia
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1. EXECUTIVE SUMMARY Nokia is one of the world’s largest cell phone companies who follow a particular customer driven marketing strategy, which can be considered as a model for other company. Nokia segmented the market of world according to their economic condition and then try to targeting as much as they can. Suppose, Nokia itself launch varieties models of mobiles at varieties prices and positioning itself as more for more, the same for less and less for much less. They also try to bring their product differentiation, service differentiation provide new classic models, features and long lasting batteries. We hopefully say that, this particular customer driven marketing strategy should be widely followed to achieve the unified whole.
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2. Introduction The company we have chosen to analyze in our assignment is the mobile phone giant Nokia. This assignment tells us briefly what Nokia actually is, its Customer driven marketing strategy, how they create value for target customer view on the size and sales of the company and also the Various Market segmentation Strategies, target market strategies and differentiation and positioning their products to desired market with customer satisfaction. Since January 2004, Nokia Group has consisted of four different business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. “In addition, there are two horizontal groups that support the mobile device business groups: Customer and Market Operations and Technology Platforms.” In the year 2004 Nokia’s net sales for mobile phones was 18507 million euro, which went down 12% from 2003. Nokia’s market areas were Europe/Africa/Middle East (55% of net sales), Asian Pacific and China (25%) and Americas (20%). Nokia’s market share in Europe was 45.8% in 2003, in 2004 it was 34.8% and in the third quarter of 2005 it was 36%. The average number of personnel for 2004 was 53511. At the end of 2004, Nokia employed 55505 people worldwide. In 2004, Nokia′s personnel increased by a total of 4146 employees. Nokia’s turnover for the third quarter of 2005 was 8403 million euro from which mobile phones brought in 62%, multimedia 17%, Enterprise solutions 2% and Networks 9%. “The year 2004 was demanding for Nokia. In response, the company set five top priorities in the areas of customer relations, product offering, R&D efficiency, demand- supply management and the company’s ability to offer end-to-end solutions. Nokia is making good progress in these areas, and is now better positioned to meet future challenges.
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3. About the Company NokiaPeople!
Connecting
Nokia Corporation is one of the world's largest telecommunications equipment manufacturers. With headquarters in Keilaniemi of Espoo, Finland, this Finnish telecommunications company is best known today for its leading range of mobile phones. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers.
for every major market and protocol, including GSM, CDMA, and WCDMA.
Figure 1: Nokia Headquarter
Nokia provides mobile communication equipment Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of Nokia rapids. Finnish Rubber Works established its factories in the beginning of 20th century nearby and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works acquired Nokia wood mills as well as Finnish Cable Works, a producer of telephone and telegraph cables. All three companies were merged as Nokia Corporation in 1967. The name Nokia originated from the river which flowed through the town of the same name (Nokia). In the 1970s Nokia became more involved in the telecommunications industry by developing the Nokia DX
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200, a digital switch for telephone exchanges. In the 1980s, Nokia offered a series of personal computers called MikroMikko. However, these operations were sold to International Computers, Ltd. (ICL), which was later merged with Fujitsu-Siemens AG. Nokia also began developing mobile phones for the NMT network. In 2004, Nokia resorted to similar streamlining practices with layoffs and organizational restructuring, although on a significantly smaller scale. Recently, Nokia joined other mobile phone manufacturers to embrace Taiwanese Original Device Manufacturers.Nokia signed a contract with BenQ, a Taiwanese Original Device Manufacturer, to develop three high- end mobile phones, which are scheduled to retail by the end of 2005. 4. Nokia’s Application of Marketing Concept Nokia knows the needs that will satisfy its customers. Part of the marketing strategy of the company is giving solutions to its consumers on its demand regarding the mobile services they need not just in home but also in their business and to the other aspect of their lives (Nokia Corporation). Currently, the Nokia had released it new innovation of the series of mobile phones which are called the N-series. This is to fulfill its mission of becoming the ultimate manufacturer of converged mobile devices which offers music players with cameras and high speed internet access that can be use in the business services. According, the Tapio Hedman, the VicePresident of the multimedia marketing, that the advantage of these digital channels are not only for the purpose of communication but also as the establishment of the N series particularly the N95 to be the major brand of its own right. In order to accelerate the purchasing cycle as well as to divert the versatility of the mobile phones, the company decided to have something different in their products as part of the marketing strategy of the company. This N series product will definitely be something new and something different compare to the past mobile phone units. This had resulted to be the sixth biggest brand in the world; this is according to the 2006 Interbrand survey. The company also explores the more high tech gadgets as the mp3, the camera, the video graphs and the multimedia. But, the company doesn’t stop there and it has
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still the planned of moving forward and meet the expectations of not just the company but also its consumers
5. Market Segmentation for Nokia Our assignment deals with customer driven marketing strategy done in leading mobile phone company Nokia. This part mainly focuses on various market segmentation done by Nokia Co. Ltd. in the market. Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses. Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. Companies often favor this method of marketing to the one-size-fits-all mass marketing approach,
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because it allows them to target specific groups that might not be reached by mass marketing programs. The market can be divided into segments by using four "segmentation basis": Psychographic, behaviorist, geographic, and demographic basis. The basic criteria for segmenting a market is are customer needs. To find the needs of the customers in the market it is important to undergo market research. Psychographic and behaviorist bases are used to determine preferences and demand for a product and advertising content, while geographic and demographic criteria are used to determine product design and regional focus.
Nokia, arguably the biggest player in the world, has divided the market into four segments: Hi-fliers: The biggest segment as far as Nokia is concerned consists of 'Hi-Fliers', corporate executives who use a mobile phone to increase productivity at work. Aged between 25 to 45, the segment looks for data transmission and other business-related features. In most cases, the company sponsors the handset, hence price is not a major consideration. Trendsetters: In any technology adoption cycle, the first segment to adopt an emerging technology is dubbed as 'the early adopters'. For Nokia, these early adopters are 'Trendsetters' who are most receptive to advanced models. This was the segment at which WAP-enabled models were aimed. Social contact: The third segment for Nokia is the upwardly mobile, socially-conscious segment that uses a mobile to stay in touch. Today's youth and affluent housewives constitute two major chunks of the segment. Assured: The fourth and last segment as defined by Nokia comprises of CEOs, high-profile celebrities, industrialists and other high "net worth" individuals. The fact that the segment cannot do without a mobile phone makes it the 'assured' segment.
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5.1 The Segmentation of Nokia conducted on the basis of Consumer Markets: Geographic
World region – Asia, China Country – Bangladesh Cities – Reach out maximum places Demographic
Age – All age group Gender – Male, Female Income – All income groups Occupation – Every sector Religion – Irrespective of religion Psychographic
Social class – All class of people Lifestyles – Urban, rural, and even far villages Behavioral
Benefits – Quality Loyalty status – Strong
5.2 The Segmentation of Nokia conducted on the basis of Price: The price ranges are as follows:
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Range 1: (1000tk – 5000tk) Workers and laborers:
• • •
•
The nokia phones falling in this range are mostly used by the manual Workers because they cannot afford a high price mobile phone. Some students also use cell phone from this range as they have the fear of snatch of mobile phone. Mobile phones falling in this category are simple phones who only meet the purpose of messaging and calling. These phones do not have additional features such as camera, blue tooth or infra red. The only feature available in this phone is FM radio, which is most preferred laborers, security and watch men
Range2: (5000tk – 9000tk) middle manager
•
• • • •
•
• •
The main users of this segment are middle managers because they have limited and average salary and cannot afford to spend it on unnecessary expenses. They do not keep mobile for show off purpose. The core feature of this segment is Audio Video Player, FM Radio, Camera, EDGE, GPRS and Expandable Memory. This segment offers up to maximum 3 hours of talk time. The need to remain in connection with internet, this segment offers EDGE connectivity so they can faster access information, including emails or news clips With the VGA camera, users can capture special moments with images and video clips or connect to their colleagues using push to talk technology. Affordable, business tool for any occasion.
Range 3: (9000tk – 15000tk) university students:
• •
The cell phones falling in this range are mostly used and popular in university or college students. These cells have a stylish look and have all the essential features such 13
•
• •
as Audio Video Player, FM Radio, Bluetooth, Camera, EDGE, GPRS and Expandable Memory. They are popular among this group because they have high resolution mega pixel camera, they like to click photos of family and friends and they want to save their memories. They have high memory, so they can download songs videos and share it with their friends. They are stylish phones usually used to show off their personality and attitudes
Range 4: (15000tk – 21000tk) music lovers/ high memory
• • •
•
This segment contains cell phones for music lovers. These mobile phones are specifically optimized for entertainment, music and games. These Music phones offer dedicated music or gaming keys, expanded memory, large LCD screen and extended battery performance to provide quick and easy access to entertainment content. These phones offer up to 18 hours of music playback, memory for up to 3,000 songs on an optional 4GB microSD card and dedicated music keys
Range 5 (21000tk – 30000tk) Communicator/ high and young business people
• • • • • •
Young and energetic business men fall into this category of age 30 – 40. These people are young and adapt new changes quickly. They are busy most of the time so they want quick solutions for their problems They want easy access to everything. They like challenging and new things. The cell phones falling in this category are business phones including communicators and high memory storage phones. These phones enable to connect the business people to one another. 14
They have a lot of storage space and connect to GPRS anywhere. They can take their office work with them and can even download heavy files. Range 6: (30000tk - above) Higher Class Executive
•
It is both a mobile phone and media player rolled into one. Similar as the N95 and G600, the candy bar N82 is packed with lots of advanced function and features such as HSDPA, Bluetooth 2.0 with A2DP, Wi- Fi, integrated GPS, FM radio, microSD and TVout.
6. Market Targeting of Nokia: Through the consistent releasing if the new units of the mobile phones with different services and difference feature, the company has its target market that expected to support the kind of products and services. The company is very optimistic that their new line of products will going to support by the target market as the sports enthusiast persons for the sports services that the phone is offering. To the specified fashion fanatic for the latest trend and for the updated fashion design suitable for every their daily lives. The music driven consumers segment is also the company top target market due to the music service that the new products have offering. Including in the said music services are the radio, the mp3, the XpressMusic, and the music player. In market targeting we have two jobs: During market targeting Nokia consider two types targeting job 1. Evaluation the market segments 2. Selecting Target market segment 6.1. Evaluation the market segments: In evaluation Nokia follow 3 criteria. Such as-
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Segments Size and growth of Nokia: Nokia divide their segments on basis of the size of segments. For each segments they introduce different types of product. They divide the market according to the financial condition. For that they are able to sell their product to middle and lower class people. Structural Attractiveness of Market Segments: Nokia looks at the attractiveness of each segment and launch the desirable products. For instance they had launched NOKIA 1100 for lower class people and N70 for middle class people. Company Objectives and Resources: Nokia balance their supply on the basis of their company’s target and available resources.
6.2. Selecting Target market Segments After doing all evaluation Nokia decide to choose differentiated marketing policy. They launch different products for each segment. For example, NOKIA1100-Lower middle class, 5300-Higher middle class, N-95-High class executives.
7. Positioning and differentiations of Nokia: 7.1. Nokia Positioning When Nokia positions its brand in the crowded mobile phone marketplace, its message must clearly bring together the technology and human side of its offer in a powerful way. The specific message that is conveyed to consumers in every
advertisement and market communication (though not necessarily in these words) is "Only Nokia Human Technology enables you to get more out of life"
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Figure-3: Nokia Logo
In many cases, this is represented by the tag line, "We call this human technology". This gives consumers a sense of trust and consideration by the company, as though to say that Nokia understand what they want in life, and how it can help. And it knows that technology is really only an enabler so that you-the customer-can enjoy a better life. Nokia thus uses a combination of aspiration, benefit-based, emotional features, and competition-driven positioning strategies. It owns the "human" dimension of mobile communications, leaving its competitors wondering what to own (or how to position themselves), having taken the best position for itself. 7.2. Nokia Brand Personality Nokia has detailed many personality characteristics for its brand, but employees do not have to remember every characteristic. They do, however, have to remember the overall impression of the list of attributes, as you would when thinking about someone you have met. As the focus is on customer relationships, the Nokia personality is like a trusted friend. Building friendship and trust is at the heart of the Nokia brand. And the human dimension created by the brand personality carries over into the positioning strategy for the brand. 7.3. Nokia Positioning - Product The product of the Nokia goes to the high end quality controls to give its client high tech and quality worth of a product. Including in the top-end devices of the company is the new release number of unit which is considered safe and has the quality of the materials as well as the design and together its features. Mobile phones accessories as the headset, the memory card and its features as the camera and video were some of the clients want in their mobile phones. To be able to keep abreast to the faster world, it is much important to determine the updated phones so that the
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company will also be up to date and cannot overcome by its competitors.
Nokia Product Design Nokia is a great brand because it knows that the essence of the brand needs to be reflected in everything the company does, especially those that impact the consumer. Product design is clearly critical to the success of the brand, but how does Nokia manage to inject personality into product design? The answer is that it gives a great deal of thought to how the user of its phones will experience the brand, and how it can make that experience reflect its brand character. The large display screen, for example, is the "face" of the phone. Nokia designers describe it as the
"eye into the soul of the product".
Figure-3: Nokia various product
7.4. Nokia Positioning - Price In cooperation of the local mobile operators, the company offers a solution which was designed for the low cost of the ownership and the providing affordable mobile phones. In this manner, though the products offers a wide range of high tech features, the company maintains its prices in order for the consumers can afford the said products. These strategic prices that the company is offering will benefit not only the consumers but also the company itself due to the affordable prices in their service that their company is offering. In this regard, the company will accommodate and can enhance to its consumers a good quality the products with an affordable prices.
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7.5. Nokia Positioning - Place Through the plan of diversifying its products and its services, the company offers its business in the United States, Venezuela, in India, Brazil, Indonesia and to the other parts of the world which focus on the establishments of the of the luxury mobile phones, as well as the communication products. In this manner, the products and the service of the company will be well-known all throughout the world. Furthermore, upon diversification the company will expect to come up for the ample income return. In this manner, the company also merged and shared its products to the other service provider company as the awing to have a strong team building for the promotions and for the continuous providing high quality services to its consumers. Then, these companies will provide a technology as well as the services that will allow the brands and the products to execute, to plan, to create, measures, and to optimize the mobile advertisements worldwide. Regarding this team-up, the products will go to be a high end by providing its consumers a media sharing solution as well as the organizations of the shared photos.
7.6. Nokia Positioning - Promotions There are many promotions that Nokia is doing in order for them to have a market. Advertisements are the first thing that the company had done. These advertisements can be through the television, to the newspapers, to the radio, to the prints and to the others as the posters. Some of the advertisements are the worldwide promotions in order for the consumer to know and the latest trends in the field of the mobile phones. Promotions are also the strategy of Nokia in order to enhance the consumers. Distribution of these products also to the other part of the world will help for the promotions and to the knowledge of the consumers in the other part of the world. Providing the quality services and the high technology products is the bet for the promotions because the consumers will determine the quality of the products the special and unique features they will have in the said products.
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The demand of the consumers had pushed Nokia in pursuing its plan to serve its consumers for the services they want and they need. Since communication is the ultimate way of transaction whether formal or in the business sector or the informal one as the family and the friendly communication. Regarding this, it will obviously determined that the mobile is part of every people for whatever reason that is the Nokia is always and never stop in giving quality services and updating its products for the benefit of the its consumers.
7.7. Nokia Positioning Maps: In planning their products differentiation and strategies nokia of a prepare perceptual positioning maps which show consumer perception to their particular model verses other models.
Service Better
Less
High Apple iphone N900
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Price Sony Ericson W995
Nokia 1100 Low Figure-04: Nokia positioning Map The figure shows us that Nokia produce 1100 for lower income people and N70 for middle class people and N900 for higher class people.
7.8. Developing Positioning Statement of Nokia To- Several classes people OurIs- Connect people That- high featured, durable and economic prices
Positioning Statement: Nokia- Connecting People! 7.9. Overall Positioning Strategy of Nokia: Nokia follows three types of positioning strategy such as more for more, the same for less and less for much less.
Price More
The same
Less
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More
Benefits
The same
More for more
More for the same
More for Less The same for less Less for much less
Less
More for more
Nokia offers high performance handsets for much higher price such as Nokia E series , N series. Same for Less In contrast to their competitors nokia offers same features service for less price. Such as Nokia produces 5300 handsets for much less price while their competitors like Sony Ericson , Samsung offer same features for less price. Less for much less price Considering lower income people, Nokia produces handsets with less features for much less prices. Nokia 1100, 1200, 1208 produces to provide least features but high quality at much less price.
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7.10. Differentiation policy of NOKIA Product differentiation of Nokia: Nokia launches different types of models. They have enormous number of mobile. Especially they have targeted all classes of people abd launches different models which is totally absent in other mobile companies. Their products have shaped that easy to hold, soft key, expressing personality, life styles and mode of user. Service differentiation: Nokia is reputed for their long lasting battery. They also have larger number of dealer around the world. Recently they started to operate service center in every district named “NOKIA CARE CENTER”. By those outlets they provide customers with great service. These types of differ them from others. Channel Differentiation: Nokia maintain a huge number of outlet and distributor. This is one of the strategy by which they occupy strongest place in south asian country People differentiation: Nokia’s employees have reputation for their well behavior and skilled performance. They provide service the whole world with high reputation for several years. Image differentiation: Nokia have particular logo, music, state like “CONCENTRATE PEOPLE”. All these things work as image of Nokia and promote their market.
7.11. Criteria for Differentiation of Nokia Important: Nokia Offer the Consumer to Connect the over Communicating Network. Distinctive: Nokia offer the difference from other company the size, shape, model etc. Superior: The difference is superior that’s way that Nokia mobile using process is very easy and comfortable.
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Communicable: Nokia’s Differentiation is communicable and visible all over the world because it is top mobile selling company of the world. Preemptive: Competitors cannot easily copy the difference because Nokia has serial number, IMEI number and Code number. Affordable: Buyers are not paying the differentiation cost of Nokia mobile. Nokia charge suitable price of each mobile. Profitable: Nokia have many difference to attract buyers and finally Nokia try to earn profit.
8. Conclusion From the above assignment we have come to this conclusion that Nokia has implemented various segmentation strategies for its products on a large scale & becoming no.1 leader in the world of mobile phones. Nokia segments its market according to various variables. The main segmentation is done on the basis of price. As per our opinion Nokia had introduced various schemes to attract people & gain more goodwill into market. I would like to conclude that Nokia had been launching various new products & strategies throughout the year but still it is the no.1 brand leader in mobile phones. Many people around the globe are purchasing Nokia phones, as they are very cheap, good & efficient to operate. Nokia have used better & efficient market segmentation strategies to market its products according to various segments of customers in the market. Nokia as such has used all modern & good techniques to tackle problems of customers in market. Customer care & feedback is also given more importance. Better, efficient & advanced techniques are used to increase the sales of product. Also Nokia is largest manufacturer of mobile phones in India & also the no.1 leader in it. Various segmentation strategies and positioning and differentiating strategies are being enrolled into the market to increase the sales of the products. New models & their strategies are being well utilized to enhance the product.
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9. Bibliography 1. www.nokia.com 2. En.wikipedia.org 3. www.scribd.com 4. Principles of marketing –Philip Kotler and Gary Armstrong, 13th Edition
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