Motorola introduced the first mobile phone in Hong Kong in the 1980’s Motorola emphasizes on the transformation of device formerly known as the cell phone into a universal remote control for life by adding more functions and innovations in the mobile phone. Motorola won the Asian Innovations Award by the technology of the product A668 with a “finger writing board” on the mobile phone, also,with the integration of the technology of iTunes® by cooperation with Marc®, Motorola launched the product ROKR E1. Motorola aims to be the leader in multi-mode, multi-band communications products and technologies.
Samsung provide a wide range of products for customers to choose from, including the 3G mobile phone, the MegaPixel Camera Phone, the Camera Phone and the Color Display Phone. No matter from the prime mobile phone of the latest 3 G mobile phone, Samsung provides choices for customers to deliver the desirable benefits and solutions for different customers.
Sony Ericsson has the mission to be the most attractive and innovative brand of mobile phone in the world. To achieve this goal Sony Ericsson integrated design into every step of the process – intelligent features, user-friendly applications, innovative materials and attractive visual appearance. Design is the essential differentiator when comparing mobile communications products. The attractive good looking appearance and the sophisticated integration of technology has contributed to the success of Sony Ericsson, some products like W800i and W550i, with the functions of mobile phone and Walkman®, has gained market share in this competitive market.
Methodology
- Product attributes used in questionnaires
In order to find out the most important product features that will influence our target customers’ purchase decision, we have conducted 5 focus groups, each with 6 target customers. At last, we concluded 14 product attributes that are important in affecting their purchase decision. The product attributes consist of product-related and non-product related attributes. Produce-related attributes include design, appearance, ease of use, functional performance, durability, multi-function, advanced features and number of models to choose from. Non-product related attributes include after sales services, price, resale value, level of advertisement, accessibility and reputation.
A questionnaire is then designed according to the above product attributes that customers consider as important when choosing a mobile phone.
- Sampling Procedure & Size
As our target customers are university students, we use convenient sampling as the sampling method and distribute the questionnaires among CUHK students. The sample size consists of 60 CUHK students, which include 29 female and 31 male.
Research Findings
Based on the Attitude toward the Object Model, the positioning statement which guides the marketing mix strategy was generated by
- Factor Analysis: identifying factors affecting customers’ attitude toward the brand;
- Compare Means: evaluating the current market performance of self and competitors based on the identified factors;
- Multiple Regression: revealing the weight of each factor and confirming the significance of the identified factors in attributing the attitude
- Simple Regression: confirming the significance of the attitude towards the brand in attributing the buying intention.
Results of the above are as follows:
Fig. 1 Factor Loading Table
From the factor loading table (Fig. 1) generated from factor analysis, the 14 attributes were categorized into 2 factors. The identified Factor 1 is “product quality” (multi-functions, stylish design, professional look, excellent functional performance, advanced features, user friendly and durable); Factor 2 is “marketing activities” (purchased everywhere, widely advertised, reputable phone, many models, reasonable pricing, good after-sales services and high resale value).
Fig. 2 Mean of FS1 and FS2 for Each Brand
Fig. 2 shows the mean of FS1 and FS2 for each brand. They were used as coordinates to plot a perceptual map (Fig. 3). The perceptual map shows the relative positions of the 5 mobile phone brands in respondents’ mind.
From the map, Nokia is on the most top right hand corner. It is the winner in terms of both factors, which are marketing activities and product quality. However, the differing range of the five brands on product quality is not as large as that on marketing activities. It implies that Nokia is doing much better on marketing activities than the other brands, but not differing much from the others on product quality although it is the winner.
The differences of the five brands were supported by the ANOVA Table (Fig. 4). For both factors, that significant figures smaller than 0.05 means that the factor scores means of the mobile phone brands are significantly different. There is at least one brand winning when considering each of the two factors.
Fig. 3 Perceptual Map
Fig. 4 ANOVA Table from Compare Means
Fig. 5 and Fig. 6 are outputs from multiple regression. Fig. 5 reveals that the two factors accounts for 59.3% of behaviors’ attitude towards the brands, which is shown by the R-square and enough product attributes were included in this study.
Fig. 5 Model Summary from Multiple Regression
Fig. 6 Output from Multiple Regression
In Fig. 6, the two significance figures are 0. Therefore, the chance that beta is different from zero by chance is 0 and all betas, i.e. all factors are significant. Factor 1, product quality, accounts for around 60.3% of respondents’ attitude towards the brands, which is higher than factor 2, marketing activities, 47.9%. Product quality is more important than marketing activities in determining customers’ attitude towards the brands.
Attitude = Beta 1 * Factor Score 1 + Beta 2 * Factor Score 2
y1 = 0.603 FS1 + 0.479 FS2, R2=0.59
Fig. 7 Ideal Line on the Perceptual Map
From the betas, the angel of the ideal line on the perceptual map could be calculated, which is 50.16˚.
The ideal line (Fig. 7) gives hints to marketers on how to allocate their resources more efficiently. To be efficient, mobile phone marketers should place more emphasis on product quality than on marketing activities.
Fig. 8 Model Summary from Simple Regression
From R-square of Fig. 8, 54.8% of respondents’ intention to buy the brand can be predicted by their attitudes towards the brand. Therefore, brand building is important.
From factor loading table (Fig. 1), the four most important attributes are multi-functions, which brings customers the benefit of convenience and efficiency; stylish design, which emphasizes their taste and personal characteristics; can be purchased everywhere means easily accessible by them and widely advertised gives them peace-of-mind and recognized reliability.
Accordingly, the positioning statement is:
“To college students aged 18-25, Nokia is a brand of mobile phones that provides easily accessed efficiency and recognized personal characteristics because of its multi-function, stylish design, extensive distribution and advertising.”
The recommended marketing mix strategy was based on the above statement.
Marketing Mix Strategies
The Objective of Nokia is to make sure their mobile phones provide the most desirable benefits that customer want or at least as god as their major competitors. Since Nokia is the market leader in the industries, Nokia has to maintain its leading position by knowing what customer want. If it does has not fulfill requirement and remain terrible in finding customers’ benefits, it should ensure that it did similarly to its major competitors. Otherwise, Nokia will lost its leading position.
According to our research (Fig 9), the core benefits that customer want are multi-functions, stylish design, and professional look. They ranked the top 3 at the Factor Scores 1 attributes. It shows that customer concerns these 3 factors before making their purchase and they influence the purchase decision. Therefore, Nokia should try to be the best in these factors or at least as good as their competitors to maintain its leading position.
Fig. 9 Factor Loading Table
From the perceptual map (Fig10) allows us to know about Nokia and its major competitors, Sony Ericsson, Motorola, Samsung and LG, in the customers’ mind. Through inspection and comparison, Nokia can maintain or modify its future product strategy to keep or improve its leading position at the product quality factors (FS 1).
From the map, Sony Ericsson and Nokia perform similarly in the attributes of product quality. It shows that the only different about Nokia and Sony Ericsson is at the market activities factors. By comparing Nokia with others remaining major competitors, it shows that all the five brands have a narrow spread in teams of product quality. Customers treat these brands more or less the same in terms of product quality and there is only a small different between all the brands. As we have found that the major three benefits in the product quality factors (FS1) are multi-functions, stylish design and professional look. Nokia should put in resources to differential itself from its competitors. Otherwise, these competitors may catch up with the leading position of Nokia in the product quality. Nokia has to put more efforts in improving its product quality in these three major areas, which has to be fulfills customers’ expectation and wants.
Fig 10 Perceptual Map
- Product strategy alternatives
Nokia has to manage its existing product. It has a great variety of product and each model has different design and functions. Each model may fit in expectation of certain groups of people and these people support Nokia to make profits and future developments.
As technology and needs of customer change overtime, Nokia has to keep an eye of the market and modify its existing product to fit in the need of the customer. For example, when the technology of camera was introduced, Nokia had modified some of its model and provide the camera function to adapt to the needs and trend. In this sense, Nokia will maintain competitive advantages over its competitive and protect its market share.
Nokia is the market leader of the mobile phone industries and customers always want new models focused on the three core benefits. As the trend and customer switch their preference on functions, stylish and professional look from time to time. Nokia has to develop and launch new products according to the preference.
- Suggested Product strategy
The three core benefits that customers want are multi-functions, stylish design and professional look. Therefore, Nokia has to put resources on these aspects in order to improve its image on the product quality and distinct itself from its competitors.
At the moment Nokia has provide customers with technologies like 3G, Bluetooth, dual camera, GPRS, music player, WiFi, but not all functions are the what the customers want. Different target customer may have different requirement over the functions. Some of them may only need the basic ones, while some of them may want to follow the trend and desire for the most advanced technologies.
For the stylish design and professional look, different people have different definition and taste on these terms. It also depends on the current trend. It is very difficult to tell what is really stylish and which mobile phones have professional looks.
Hence, Nokia has to adapt suitable strategies on its existing and new products. In the aspect of developing and launching new projects, Nokia has to carry out target market research and find out what the most important attributes in customers’ mind. It has to know the judging criterion of the customer on each benefits and integrate these benefits into the new product to ensure the success and competitive advantages of the brand.
For the existing product, they can carry out sales analysis and perform appropriate actions on the product. For example, they can carry out extension for the popular and profitable models, contraction for the less profit ones, and repositioning for the products that are have wrong and inappropriate target markets. Meanwhile, they can also study the popular models and get information about customers’ preference and acceptance of the various functions, stylish and professional design.
Mobile Phone industry is an oligopoly market in a mature stage of 2G mobile phone with a status quo pricing. Reducing the price not only can’t help to promote Nokia’s phone, but would only lead to price war. Also, from the factor-loading table, we can see that the attribute of reasonable price is not the most important factor to affect customers’ purchase decision. As a result, we suggest Nokia to keep its existing pricing strategy.
Fig 11 Factor Loading Table
From the factor-loading table (Fig 12), we can see that our target customers perceive the factor of ‘widely advertised’ to be an important one. This is reasonable since there are always new models available and customers can only get the most updated product information through different advertising methods. From the perceptual map, it shows clearly that Nokia is already a market leading player in terms of Factor 2- Marketing Activities. In customers’ mind, Nokia has already heavily promoted for its mobile phone. Though, we can get important insights for the promotion strategy.
Fig 12 Factor Loading Table Fig13. Perceptual Map
- Objectives of the promotion strategy
There are three objectives of the communication strategy. The first two objectives are to inform and persuade customers when there are new models available. The communication programs should provide information on Nokia’s products quality in terms of its functions as well as its design in order to improve customers’ awareness and knowledge on new launched mobile phones.
The final objective is to send messages to customers which enhance Nokia’s brand image. The communication strategy should remind customers and maintain its top position in their evoked set.
The media message of communication strategy should focus on Nokia’s phone quality that could provide customers with multi- functions, which are perceived to be most important in mind of target customers. Apart from this, Nokia should also highlight its stylish and professional design in the media message as a selling point. Nokia should combine both rational and emotional appeals. The rational appeal such as feature appeal can present customers with a number of important product features and functions that will lead to favorable attitudes while emotional appeal can direct customers to a social- based feelings such as being stylish and professional by having Nokia’s mobile phone.
As Nokia is already on an ideal position in terms of marketing activities, it should keep the original media vehicles such as TV ad, printed media and public relations activities so as to maintain its position.
Being perceived as the leader in marketing activities, Nokia should keep the existing level of advertisement in both TV channels and printed media, but modify its existing ad by emphasizing its multi- functions and stylish, professional design. This can use the resources more efficiently and effectively.
Nokia should make good use of public relations activities by sponsorship. As our target customers are university students, Nokia should sponsoring some university’s activities such as orientation camps and danso performance. This can help maintaining Nokia’s brand image and keeping its leading position in their evoked set.
Lastly, Nokia can also promote the functions and features of new models through some interactive outdoor campaigns which are designed to take the message direct to the customer. The campaign can locate in shopping malls and high streets and targets university students on the move. The outdoor campaigns should give demonstrations of the phone's functions and features – such as the MP3 player, games and camera, allowing potential customers to try the functions of the mobile phones. This can drive them straight into retailers after first sampling the functions by interacting with the outdoor campaigns.
From the factor-loading table (Fig 14), we can see that our target customers perceive availability as the most important factor when purchasing mobile phones. As a result, the objective for Nokia’s distribution strategy is to make sure Nokia’s mobile phones are highly accessible by customers in terms of time and place.
In order to achieve the objective, we suggest Nokia to adopt intensive distribution that is selling Nokia’s mobile phones in as many retail outlets as possible.
Yet before we decide to choose which retail outlets to be our major channel members, we first have to determine customer preferences. To better understand our target customers, we have asked them the frequency (out of 7 scales rating, 1=Never, 7=Every time) of buying mobile phones from some retail outlets.
From the statistics table (Fig 13), we can see that most people usually buy mobile phones from Service Providers (e.g. Smartone, 3), followed by electric stores (e.g. Fortress, Broadway) and specialized store (e.g. Wilson).
Since they are all existing retailers adopted by Nokia, we suggest it to maintain its existing extensive distribution strategy and sell its mobile phones in the above 3 main types of retail outlet. As most people will buy their mobile phone from services
Fig.14 Factor Loading Table Fig 15. Statistics
Appendix 1-Questionnaire
Part 1
Please circle the close answer:
Part 2
Please rank the importance of the following elements when you choose a mobile phone:
Part 3
In this section, please state your agreement or disagreement with the following statements about yourself:
Part 4
1. Have you tried any of the following brands of mobile phone? Please tick:
___ Nokia
___ LG
___ Motorola
___ Samsung
___ Sony Ericsson
2. Where do you usually buy mobile phone? Please tick:
___ Electric chain store (e.g. Fortress, Broadway)
___ Service provider (e.g. Smartone, 3)
___ Specialized store (e.g. Wilson)
___ Others, please specify :( )
3. Which kinds of media do you usually expose to? Please tick and specify:
___ TV, please specify :( )
___ Radio, please specify :( )
___ Newspapers, please specify :( )
___ Magazines, please specify :( )
___ others, please specify :( )
Part 5
Following information is for statistical purpose only. All information will be treated as COMPLETELY CONFIDENTAIL.
Sex:
□Female □Male
Age:
□ 20 or below
□ 21-25
□ 26-30
□ 31-35
□ 36-40
□41-45
□46-50
□ over 50
Education:
□ Primary or below
□ Secondary
□ University or above
Occupation:
□ Blue collar
□ White collar
□ Professional
□ Retired
□ Housewife
□ Student
□ Others, please specify:( )
Monthly household income:
□ Up to $10000 per month
□ $10000-$20000 per month
□ $20001-$30000 per month
□ $30001-$40000 per month
□ $40001-$50000 per month
□ Over $50000 per month
Appendix 2-SPSS Output
Communalities
Extraction Method: Principal Component Analysis.
Total Variance Explained
Extraction Method: Principal Component Analysis.
Component Matrix(a)
Extraction Method: Principal Component Analysis.
a 2 components extracted.
Rotated Component Matrix(a)
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 3 iterations.
Component Transformation Matrix
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
Case Processing Summary
Report
ANOVA Table
Measures of Association
Variables Entered/Removed(b)
a All requested variables entered.
b Dependent Variable: attitude
Model Summary
a Predictors: (Constant), REGR factor score 2 for analysis 1 , REGR factor score 1 for analysis 1
ANOVA(b)
a Predictors: (Constant), REGR factor score 2 for analysis 1 , REGR factor score 1 for analysis 1
b Dependent Variable: attitude
Coefficients(a)
a Dependent Variable: attitude
Variables Entered/Removed(b)
a All requested variables entered.
b Dependent Variable: intention
Model Summary
a Predictors: (Constant), attitude
ANOVA(b)
a Predictors: (Constant), attitude
b Dependent Variable: intention
Coefficients(a)
a Dependent Variable: intention