To determine the marketing mix for a product is essential to any company. They are the main variables through which a firm carries out its marketing strategies. These variables are more commonly known as the 4 P’s. They are…
- Product
- Place
- Price
- Promotion
Here, I will look into detail the marketing mix for Nokia.
Product
The product is the most important aspect of the marketing mix. The reason for this is that without a product, a company will be like a vehicle without wheels. It is only after determining the product that the company can think about the three other aspects of the marketing mix. A company’s product also reflects upon the image of the firm and thus is essential to ensure the quality of the product. Whether a product will be successful or not can be measured by looking at its product life cycle. Here, one can observe and predict how long it will take for the product to make an impact on the market and how long it will be in demand in the market.
The primary products of the Nokia Corporation are its wide range of mobile phones. Nokia’s mobile phones are known in the market for their slick and unique appearance, their innovative services, and their user-friendly applications. Till date, Nokia has launched 33 different models of cellular phones, each one featuring something new, and there are more in prospect. Some phones, however, are aimed at some socio-economic groups rather than others. As an example, the model# 3330, with a wide variety of games (figure 1.0), is aimed for the younger customers , i.e. teenagers (socio-economic group E) whereas, the Nokia 9210 Communicator, which includes features such as word processor and a spreadsheet, are more intended for the Socio-economic group A, i.e. professional workers.
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The advantage Nokia holds of offering so many different types of phones to their customers is that they act as a risk bearer. In any case, where a newly launched product takes a battering in the market, the company has the other alternatives and the revenue gained from them to go back to.
In my questionnaire, I asked the people what aspect mattered to them the most when purchasing a mobile phone. The results are displayed in the pie chart below.
Since the sample inquired paid most attention to the appearance and the features, Nokia holds a competitive advantage over its rivals such as Motorola and Ericsonn. Nokia’s phones, offering both a unique appearance with attractive features at approximately the same price range as the other companies, Nokia is likely to gain far better revenue than its competitors in the market.
To grab a more significant share of the market, Nokia has launched a series of innovations in the market that will give the term ‘communication technology’ a completely new meaning. The Nokia 5510 (figure 1.2), as Nokia says, ‘doesn’t even look like a phone- because it is whole lot more than a phone. It provides features such as Digital Music player/recorder, FM radio and added games, just to name a few. Other phones such as the Nokia 5210 has features such as a built in thermometer and a timer. The range of its products helps Nokia maintain its competitive advantage over its closest rivals. In the product life cycle, I will put Nokia in the ‘Growth’ section. This is because the company is having higher sales value than competitors; profits growing and sales falling; retailers more willing to accept product and there are competitors who will be entering the market with ‘copycat products’ and company is trying to establish consumer loyalty- all characteristics of a company in the ‘growth’ period.
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Nokia is a market orientated firm and thus, is constantly driven by the needs of the consumers. Due to the fact that internet is becoming wireless, Nokia is fast involving in the business and is coming up with technology such as the Nokia 9210 Communicator to further meet the needs of its consumers and stay competitive in the market.
The Boston Consulting group Box, also known as the ‘Boston Matrix’, analyses a products stand in the market based on two dimensions: relative market share, and the market growth rate. The matrix is divided into four categories:
- Star: Stars are high growth businesses, which are comparatively strong, considering its competitions. They eventually become cash cows as growth eventually slows and assuming they keep their relative market share.
- Cash Cows: Cash Cows are low growth businesses which have a relatively high share of the market. They are in little need of investment as they are established forms. However, they need to continue generating strong cash flows to stay in the position.
- Question Marks: These are firms who have a low market share but have a high growth prospect. This means that although they may have the potential, they need significant investment for them to become competitive against other firms.
- Dogs: These are the companies which have low share of the market as well as a low prospect of growth.
A chart of the Boston Matrix is shown below.
Nokia falls into the category of Stars. This is because in the growing world of wireless communications, the prospect of growth is enormous as the sky is the limit for growth. And due to the fact that Nokia holds a relatively high market share compared to its competitors, it will be classified as a Star.
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Place
Identifying the ideal place, where to sell and promote your product, is crucial to any business. In order for a product to be successful, the place where it is sold should be convenient to its customers and the company should ensure that the place is going to be feasible for the company resulting in significant turnovers. For Nokia, Hong Kong holds a lot of promise. This is because the Asian Pacific countries represent the most powerful economic region in the world, with a staggering gross domestic figure of $14 trillion. Since the growth period started since the 1960’s, the region saw its collective global output percentage increase by six times- 4 % to 25 %.
Thus, doing business in this region is ideal for the company as the people have the purchasing power and the wireless communication market is rather big in the SAR. More than 90% of the population in Hong Kong have mobile phones, as it is very rare to see someone without one. Hong Kong is known as the ‘shopper’s paradise’ and is known for its electronics market. Every electronics shop, dispersed in abundance all over Hong Kong, displays the wide variety of Nokia phones on offer to the consumers. In addition, there are 4 Nokia Retail Outlets for exclusive consumer care. This, once again, brings Nokia to the doorstep of each customer.
When I interviewed Mr Anthony Yip, one of the sales staff from the ‘Nokia Professional Centre’ located in Causeway Bay, he said, “As a company, we want to see a Nokia phone in every user’s hand. This is why we are setting up ‘Professional Centres’ around Hong Kong…so that the people learn more about our products and us.”
The ‘Nokia Professional Centres’ currently have four branches, spanning four key locations around Hong Kong Island as well as Kowloon and the New Territories to gain a better access to their customers.
Nokia’s channel of distribution is very effective and cost efficient. Raw materials needed to assemble the phone are transported to the factory in Hong Kong from Europe. These materials are put together in the assembly line and are converted into finished goods. The phones are then cut down from bulk and are sold to the retailers in small quantities. This method is very effective as it saves the cost of shipping finished phones from Europe. Selling the phones in small quantities means that the retailers will not have to store and thus will save the storing costs.
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Promotion
Promotion plays an enormous role when launching a new product or re-launching an old one, as it acts as a medium between the customer and the product. A promotion of a product includes aspects such as advertising, endorsement, branding as well public relations. Promotion increases consumer awareness and thus persuades them to buy it.
Nokia has done an extensive job in promoting its products to the local population. Nokia is marketing its products using Marketing Segmentation. This means that it is aiming certain type of product at a certain age or socio economic group. For example, the Nokia 3310 is featured in an MTV show means that the product is targeted towards the teenagers where as the more professional looking Nokia 8850 is advertised in business magazines and news channels such as CNN and CNBC. Ads could also be seen on local trams and buses. Advertising is needed for image enhancement of a product and is also necessary to create a price inelasticity of the product. This is because as brand becomes more famous, products gain customer loyalty and thus the product becomes price inelastic. Nokia’s branding can be considered as very successful as the consumers are willing to pay a reasonably high amount of money because they recognise Nokia and are aware of its quality.
As stated before, Nokia produces products other than mobile phones such as digital music players. Therefore, it offers an opportunity for mass marketing; using standardised promotional materials for all its products. This is very cost efficient as it eliminates further costs of advertising.
The company’s strap- line, ‘Connecting People’, is very effective. Nokia uses the word ‘people’ which is very general and refers to a mass of people, rather than a particular group. In my survey, when asked about which phone they owned, the answer was almost unanimous. It is shown in the chart below.
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Price
Price of a given product can determine the socio economic group it will be sold to as well as how successful a product will be in the market.
Competitive advantage can be achieved by adjusting the relationship between product and price. If customers want anything that isn’t mass produced, i.e. something that is unique, they will be willing to pay a higher price. This is effective in the case of Nokia as it provides its customers with unique products such as the 9210 Communicator, thus, the consumers will be willing to pay more.
Not all phones, however, are aimed at the socio economic group A. Phones that are targeted at the teenagers are reasonably priced from HK$ 650 - $ 900. This is a staggering improvement from 1995, when phone costs were very high. That was, however, due to the cost of shipping the phones from Europe. Since the establishment of the Nokia factory in Hong Kong, prices have gone down as more and more people are now able to afford the phones.
As stated before, the extensive advertising of Nokia has made its product inelastic. There fore a slight hike of process will not affect the demand as the customers know that they are getting their moneys worth. When inquired about how much they would like to pay for a Nokia phone, the result came as follows in the chart below.
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S.W.O.T Analysis
A S.W.O.T. analysis is carried out to observe the current strengths and weaknesses in a firm and to identify the future opportunities and threats. Such analysis is useful when a company is creating awareness of all the possible factors in a marketing strategy. It has its disadvantages, however, as it does not reveal how the factors interact. Here is a SWOT analysis of Nokia.
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Conclusion & Recommendation
To wrap everything, Nokia is a successful wireless giant aided by its strong marketing strategy. Its innovative products, appropriate placement, top notch promotion and suitable pricing has allowed it to hold the better share of the mobile communications market. In a world that is fast becoming reliant on technology, Nokia, with the help of its state of the arc technology, will create a new revolution in the industry.
Locally, the telecommunication market is a thriving one and offers endless opportunities to the company. However, continuous market research and development needs to be done to keep Nokia where it is today.
To eliminate any possible threats, Nokia can continue to develop new products and acquire a patent which will eliminate any chances of ‘me-too’ products from other companies. Acquisitions are also an option as a merge will make Nokia stronger as well as help remove competition. Organic growth can also help them guide towards more turnovers over a period of time. Nokia is, clearly, the hot choice of the mobile customers at present. By the looks of it, it is only a matter of time before its competitors are hunted down to extinction, at least in the field of mobile phones.
