GuidelinesNokia as a CompanyTurnoverNokia in IndiaMarket in IndiaSegmentationProducts (Signature Products, Milestone

Products)Target CustomersPricing StrategiesBrandingSWOTPESTPositioning

Nokia as a CompanyNokia 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 IndiaNokia 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 IndiaInitially 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 SegmentationNokia engages in the following levels of marketing: Segment MarketingNokia offers designs, features and functionality that caters to the demands of the market segment. E.g. Nokia Ngage (gamers) Niche MarketingNokia 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

M1 M2 M3

P1

P2

P3

P= Product M= Market

Selective specializationNokia has selected a number of segments and has come out with products for each of them thereby ensuring its presence in the complete market.

Pricing StrategyPenetration 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

company’s market share by offering similar products at a lower price.

Nokia’s Pricing StrategyNokia 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.

BrandingNokia 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 StrategiesAs 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 StrategiesBlue Ocean Thinking Innovative products launched in India First phone with camera, Nokia 7650, first

phone with radio Nokia 6510Red 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 lesser-known phone producers in the market.

That is the reason why Nokia faces most competition from Branded Competitors like Sony Ericsson, Motorola and Samsung.

Major CompetitorsSony Ericsson In mid-income group and high-income group N-series faced a lot of competition from the Sony

Ericsson W-series. 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 CompetitionStress 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 centersCrisis 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 Strengths70% Market share in IndiaGoodwill in IndiaWell 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)WeaknessesHigh 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)

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

SWOT Analysis (Contd)ThreatsLaunch of Apple’s iPhoneThreat from Chinese made mobile phones

(lower end segment).Probable launch of VOIP handsets in India.

Point of DifferenceExcellent 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 PlansAs on June 2008 – mobile penetration is about

28% -289 million.This means that 900 million of India’s 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 ITC’s 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.