For this project I have been instructed to come up with a marketing strategy for an existing company/product I have chosen to do Nokia communications, particularly the mobile phone sector of Nokia's business.

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Introduction

For this project I have been instructed to come up with a marketing strategy for an existing company/product I have chosen to do Nokia communications, particularly the mobile phone sector of Nokia's business. To do this properly I will need to:

* Appropriately identify, collect and use primary and secondary data that is relevant to the marketing strategy of Nokia.

* Produce a clear analysis of the external influences affecting the development of a marketing strategy.

* Complete a realistic rationale for the development of a coherent marketing mix for Nokia communications.

* Show a full understanding of a marketing strategy for Nokia with a clear understanding of marketing principles.

* Produce a full, well-balanced marketing strategy that reflects appropriate use of marketing models and tools.

Introducing the product

Nokia is a communications based company, which focuses on mobile telephone technology. When mobile phones first became available on the market the models were very basic with the best technology being SMS messaging (sending written "text messages" from one phone to another). Then the next advance in technology was being able to put different faces on your phone (different style covers for the front and back of your mobile device) and after that the technological advances have come thick and fast, with advances such as:

* MMS

* WAP (internet)

* Polyphonic ringtones

* Predictive SMS (where the phone will finish off a word for you if it can guess what you are typing)

* Camera phones and

* Video recorders

Competition in the market

With all this technology available in the communications market it is obvious that Nokia will have lots of competition, they include:

* Sony Ericsson

* Samsung

* Motorola

* Siemens

* Panasonic

* NEG

* Sagem and

* Toplux

With all of these competitors in the market Nokia must keep ahead of the game by running successful marketing strategies, to do this Nokia must focus on the principles of marketing. At the moment Nokia are the world's best selling phone company (see table below which shows market share). Nokia strengthened its lead as the No. 1 vendor in the market during 2000 with shipments growing 66 percent over 1999. Some of the company's success was attributed to a strong second half in 2000 when 59 percent of sales occurred.

. Nokia 37.2% (34.7% 1Q02)

2. Motorola 17.3% (15.5%)

3. Samsung 9.8% (9.6%)

4. Siemens 8.5% (8.8%)

5. Sony-Ericsson 5.2% (6.4%)

Marketing principles

There are many priorities within a business, but in a marketing orientated company like Nokia, many of the following principles will be high on the agenda:

. Customer satisfaction: Market research must be used to find out whether customers' expectations are being met by current products or services.

2. Customer perception: this is based on the images consumers have of the organization and its products, this can be based on; value for money, product quality, fashion and product reliability.

3. Customer needs and expectations: This is anticipating future trends and forecasting for future sales. This is vital to any organization if they wish to keep their entire current market share and develop more.

4. Generating income or profit: This principle clearly states that the need of the organization is to be profitable enough to generate income for growth and to satisfy stakeholders in the business. Although satisfying the customer is a big part of a companies plans they also need to take into account their own needs, such as:

5. Making satisfactory progress: Organizations need to make sure that their product is developing along with the market, if a product is developing well, then income should increase, if not then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know what is happening within their designated market, if it is changing, saturation, technological advances, slowing down or rapidly growing, being up to date on this is essential for companies to survive.

There are also certain external factors that a company should be very aware of, such as P.E.S.T factors (political, environmental, social and technological) and also S.W.O.T (strength, weakness, opportunity and threat). A business must take into account all these constraints when designing and introducing a marketing strategy.

P.E.S.T:

Political factors- Legal constraints (such as the G3 technology constraints that Nokia have to take into consideration) must be taken into account because many businesses aim to make a profit so they may be tempted to mislead their customers about prices, quality of products and the availability of their products. They may also try to cut expenditure by using lesser quality materials in their products (such as weaker materials for Nokia cases and batteries), also some companies may also dispose their waste in ways that damage the environment (pollution) and not ensuring high standards of hygiene and safety in the workplace and outlet stores, all of these are illegal and can leave companies in big legal trouble.

The governmental bodies in the U.K have introduced new laws into the business environment, which ensure that none of these procedures take place; if a company is to be successful they must follow all of these laws.

Environmental social and ethical factors- some businesses view profits are more valuable then a strong ethical code and this can govern behaviour and business conduct. Some un-ethical practices are against the law and companies can not become involved in them (I have mentioned these above) but there are also some practices that aren't illegal by law but are considered highly un-ethical by the consuming public, companies who engage in these practice's can lose a lot of market share if they are found out. An example of this is cosmetic testing on animals, it is legal but some of the consuming public are not happy about it and boycott Certain products because of it, companies must be very careful about how they conduct themselves.

Nokia have managed to be quite environmentally friendly and have not done anything that the consuming public have taken huge offence to, they have been very careful about this and this is one of the reasons they are such a popular brand of mobile phones.

Technological- In the communications market technology is perhaps the most important factor that companies like Nokia have to take into consideration. They have to keep up to date with all the newest technological advances (like camera and motion capture phones) if they are going to capture the biggest market share and stay ahead of their competitors (Sony and Seimens).

S.W.O.T

SWOT analysis is also another way of deciding on a successful marketing scheme, we must look at strength, weakness, opportunity and threat.

Strength (internal factors)- Is looking at the companies current market share and researching how recognised Nokia is amongst consumers in the target market. Nokia is currently one of the most popular Mobile communications companies in the industry, generating over 52,000 sales in 1997, which was a 34% increase from 1996. Nokia's net sales for the October-December period in 1997 came to a total of FIM 15 857 million (FIM 12 669 million in 1996).

Weakness (internal factors)- This is basically looking at where the product is failing or not doing as well as it should in the market. Nokia's problems are that:

. They are currently aiming their products at a saturated market segment.

2. Their wage costs are forever rising.

3. Higher import charges have now been put into place.

4. There are some quite high supply chain costs that Nokia are currently paying.

Opportunity (external factors)- This is the area in which Nokia can make more profit, or gain more market share. There are 2 ways in which Nokia can currently do this:

. Improve the technology that they are using to make their phones and use in their products, for example, camera phones and advanced picture messaging would attract new consumers to purchase phones under the Nokia brand name.

2. Using innovation to re-invent their products, change and develop within the market to offer something none of the competitors have. Also the fact that phone call charges are being forced to fall should prove to be an opportunity for Nokia to sell to the people, who previously may have not purchased a phone because of higher call charges.

Threat (external factors)- This is looking mainly at the competition that are taking away Nokia's current market share and also government legislations (the total costs of 3G licensing in Europe is 110 billion euros) that could hinder Nokia's development as a company.

For an existing product it is often useful to draw up an Ansoff's matrix, in order for Nokia to grow as a business we must look at:

* Market penetration

* Market development

* Product development and

* Diversification

Market penetration- the aim of market penetration is to sell existing products to an existing market, to do this Nokia must do a few things:

. Change the pricing scheme (for example, penetration or competitor based)

2. Introduce discounting

3. Start up a different advertising campaign or consider changing an existing one.

Market development- To complete market development successfully, Nokia must look into the following:

* Researching and selling to a different market (in case of saturation or poor market share)

* Change times that television adverts are aired at and alter the places in which print adverts are being displayed (this can help your products appeal to a whole new market segmentation)

* Lower current prices to help the products appeal to a wider range of consumers.

Product development- This area of the Ansoff's matrix involves keeping up to date with the latest technologies available in your chosen market and using them to appeal to different people (for example, WAP phones are aimed at more professional people while Camera phones are aimed at the youth market)

Diversification- This refers to developing technology that offers consumers something new or different, this is the most common way of companies trying to gain greater market share and increase their profits.

Market research

A businesses success is based on whether they can give the customer what they want and when they want it. Market research involves the collection, collation and analysis of data relating to the consumption and marketing of relevant goods and services.

The purpose of market research is really to find out whether there is a gap in the market for your product or service or whether you can make customers want your product through persuasive adverting. We already know that there is a market for mobile phones but the current market gap has become saturated (or if not saturated, almost saturated) so Nokia need to find a new market segment to aim their products at. In order to classify the wants and needs of the consuming population, companies need to gather information on the following:

* Consumer behaviour- How do customers react to advertising? Whether they are partial to prize give-aways or free gifts? What are their reactions to new and developed products?

* Buying patterns and sales trends- Organizations need to look at how buying trends and patterns are affected by class, gender, religion and region. They also need to understand how buying patterns change over time and what markets are expanding and are worth trying to enter and obviously which markets are contracting and companies shouldn't aim to enter into.

* Consumer preferences- What customers are looking for in a product, for example, style, colour, technology, amount of outlets, customer service and promotional styles.

* Activities of competitors in the market- Nokia need to examine how their rivals are adapting their prices and products to meet the consumers need's, how well the rivals are selling and what marketing strategies they are using.

Market research should supply the company with all the information they require about consumers preferences, whether they buy certain products, what design features are preferable and what kind of retail outfits are most frequently used for purchasing certain products.

Sources of marketing information

The information that companies collect through market research can be in one of two forms, either quantitative or qualitative data.

. Quantitative data refers to data presented in numerical form, usually figures, for example, Nokia's operating profit in the 4th quarter of 1997 was 830 million.

2. Qualitative data is the information concerning the motives and attitudes of consumers; for example, more people buy Nokia phones then Sony phones because Nokia phones are more reliable.

The two main sources of market research information are primary research (where the company has gathered the information about the markets themselves) and secondary research (when researchers use information that has been discovered by other companies).

Methods of collecting primary data:

* Face to face survey

* Open ended interview

* Telephone survey

* Postal surveys

* Consumer panels

* Observations

* Experiments

Methods of collecting secondary data:

Internal sources:

* Existing reports

* Distribution data

* Shopkeepers opinions

* Stock records

* Sales records

* Accounting records

External data:

* Government statistics

* Specialist business organization, for example, Mintel or Neilsons retail audit.

* Consumer databases.

To help decide what market segment to aim at companies can also look at the buying habits of customers. In order to make decisions about the type of products to make, what advertising to use, promotional tactics, pricing and packaging. Nokia will need to know about the following:
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. The types of goods customers buy

2. How much they buy

3. How often they buy

There are also certain variables that can affect peoples buying habits, they include:

. Age

2. Gender

3. Area they live in

4. Religion

5. Lifestyle

6. Taste

7. Fashion and preferences.

Market segmentation

In order to plan their product Nokia must look at what area of the market they want to aim the products at, as the current youth market is more or less saturated Nokia will have ...

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