Nokia's Marketing Strategy- Analysis and Recommondations
in-depth description of a segmentation analysis, targeting and positioning strategies. In the second part of the report the reader will achieve understanding on Nokia’s chances to maintain their brand relevance to their target group. This is followed by recommendations on how to improve the current marketing situation and an overview of Nokia’s alternative strategic approach along with the resources and capabilities they require for increasing their market share, profitability and value creation. The main conclusions made in this report are to highlight the main range of products and the constantly altering product names, which is done to make products appeal more familiar to consumers. The second scenario suggests going a different way by inventing a control panel for household appliances. The research for the analysis comprises of a qualitative approach based on industry experts, internal documentation such as Nokia’s financial statements, market reports and public announcements relevant to the marketing strategy.
Table of Contents
1. SITUATION ANALYSIS - CURRENT STRATEGIES
2. PESTLE- ANALYSIS
3. SWOT- ANALYSIS
4. SEGMENTATION, TARGETING AND POSITIONING
5. DIFFERENTIAL ADVANTAGE/ COMPETITIVE EDGE .
7. RECOMMENDED MARKETING STRATEGIES
1. PESTLE ANALYSE
2. CONSUMER GROUPS NOKIA
3. CUSTOMER TARGETING - THREE STRATEGIES
4. SEGMENTATION ANALYSIS-NOKIA LUMIA & NOKIA E SERIES
5. NOKIA LUMIA 900- SAMSUNG GALAXY
6. IMPLEMENTATION SCHEDULE
7. MARKETING MIX – CONTROL PANEL
I I . I L L U S T R A T I O N I N D E X
FIGURE 1: SWOT- ANALYSIS NOKIA
FIGURE 2: THE THREE- STEP STP (HOLLENSEN 2010)
FIGURE 3: FOUR SEGMENTATION CATEGORYS OF NOKIA
According to the technology research provider Gartner, there were “only” 1,75 billion mobile phones sold in 2012, which is 1,7 % less on the year (elektroniknet.de 2013). Smartphones have been, and will be the absolute top-sellers, they have become our everyday companions. Nokia used to be the number one mobile phone supplier in terms of sales and marketing innovation for decades, before they failed to join the major shift to the most profitable and fastest growing mobile phone segment: smartphones. This is exactly the market, Nokia is planning to take over. However, even with the launch of the latest Windows Phone 8, Nokia has not been able to turn around their worldwide market-share losses suffered over the recent years.
So why have they missed their shot? Nokia have always stood for-coolness, user - friendliness and broad technological diversity. After all, when you think of the Windows Phone, you think of Nokia. And thanks to good marketing and reliability, the company is still holding 18% (SPIEGEL Online 2013) of the German market share.
I . C U R R E N T S I T U A T I O N
1. Situation Analysis - Current Strategies
It was not long ago that one of the most popular and widely spread technology brands ever unveiled its “revitalised” marketing strategy launching the “first real Windows Phone” (Marketingweek.co.uk 2011). With its slogan: “The Amazing Everyday,” and “Live Adventure Everywhere” Nokia is trying to reclaim its position. The campaign will put its shirt on social media and digital advertising rather than on above-the-line campaigns. (Marketingweek.co.uk 2011)
Over the last 18 months, Nokia has outlined new strategies in order to provide consumers with innovative products. This has been very significant for Nokia as they need to defend their market position in the mobile phone industry. The industry had shifted from a battle of devices to a war of operating systems, said Stephan Elop, CEO of Nokia (Nokia 2012). They had to switch from the mere sales of products to the sales of services. This is why they started the cooperation with Microsoft and created the Windows Phone, to provide a new alternative for users. The shared vision with Microsoft led to new applications and services that they were sure people would use in their everyday lives. They changed the way they operate to make the company a more agile competitor. The new marketing strategy is very emotional and much more personal . The “Amazing Everyday”-campaign
was to “ open people’s eyes and minds to t he amazing all around them, to feel more positive about their day, a bout life, and their i nteractions with the world. A nd Nokia was to give the device an integral role in how people discover, create and sh are the a mazing everyday.” (Inferno 2013)
As Nokia is accessing the world of social media, they poured the lion share of their marketing budget into the digital world. In this respect, they were trying to reach new audiences on the German market and differentiate themselves from competition. Mr Elop emphasised that the marketing expenditures for launching the Lumia 920 and 820 were three times higher than for any other Nokia launch in history (The Times 2011).
„Traditional press ads are to be avoided ”, said the head of brand campaigns, as they were “ not dynamic enough to do the phone justice ” (Marketingweek.co.uk 2011). All the more, communications marketing will focus on the practical uses of the phone rather than technical specifications (…) for the Lumia (Marketingweek.co.uk 2011).
Nokia is attempting to become the leading supplier for global services among devices, which run on Windows. The license agreements with Amazon and Groupon are further strategically demanded services. The collaboration with consumers is crucial to Nokia as their products are highly consumer-oriented. Clients are supposed to do the co-design and thus help Nokia to cause astonishment among the broad client base. The company is trying
to come across more youthful, vivid, and energetic (Marketingweek.co.uk 2012).
There was a great marketing campaign in which Nokia Germany gave away free wireless charging stations (WParea.de 2013) against the invoice via Facebook for each Lumia sold. Nokia kept pushing advertising for Lumia in a national cash-back campaign. All owners of a Nokia Lumia 820 or 920 were given a 50 € voucher for renowned department stores. (Windows-smartphones.de 2012) For a Nokia N8 campaign, the Nokia Store offered free apps for download. Clients are enticed with so-called “Premium Apps” such as “Angry Birds”. (Teltarif.de 2011)
They have renewed their strategy, worked on partnerships, have come up with new undisputable products, have opted for one core target group and invested heavily in communication campaigns.
2. PESTLE- Analysis
The PESTLE analysis offers a wide-ranging list of details, which might help a company to figure out the potential success or failure of certain strategies and products (Johnson and Scholes et al. 2013, p. 80). It comprises of the macro-environment of political, economic, social and technological factors and will draw information about opportunities and threats which are then referred to in the SWOT- Analysis (Kotler and Armstrong et al. 2011, p.
147) The two most important factors for Nokia are analysed as follows, as it is vital to focus on core operations and make decisions, respectively. The complete PESTLE analysis can be seen in appendix 1.
What is most significant to Nokia is to keep up with the technological advances for its smartphones. They do not only need to keep up with their rivals, Apple and Samsung, but they have to be better. Only one valuable service, which is new, innovative and lifts them above competition would be enough to recapture their leading market position. In order to do this, Nokia needs something outstanding based on enhanced hardware and software. A collaboration with network operators to offer value-added services could be a source of sustainable differentiation. Nokia will have to invest even more than they already do in R&D to create the efficient technologies required, connected with an attractive design to
build on their success.
Lifestyle change (Social)
The success in mobile phone manufacturing in Germany is of tremendous significance and is eventually reliant on the final consumer. Consumers are nowadays expecting added value, which is adapted to everyday-life conditions, such as the new evaluation of the time factor. However, the development here does pose more and more threats to Nokia as it needs further effort to adapt to entire cultures individually to satisfy the customer.
3. SWOT- Analysis
According to Hollensen (2010) ,evaluating the key strengths and weaknesses of Nokia’s existing marketing strategy, the SWOT- Analysis will help identify more suitable ways for the company to follow and highlight areas which could make a marketing process more effective. It encompasses both the internal and external environment (Hollensen 2010, p.
illustration not visible in this excerpt
Figure1:SWOT- Analysis Nokia
The strengths of Nokia are not only its marvellous brand reputation and broad appeal; Nokia is also increasingly entered into discussion due to its successful merchandising and marketing strategy with the Windows Phone Lumia. The position is due to Nokia’s large sales and distribution network, its user friendliness, the new simple but attractive designs and Nokia’s reliability. A less traditional marketing approach also seems to strengthen the
brand image and helps the company to hit the zeitgeist. Unique functions such as the free Nokia Music +, MS Office to go and a high-speed LTE-connection bring their smartphones great advantages. Thanks to the utmost innovative wireless recharging technology, the Nokia Lumia can be recharged without using a cable. Moreover, Nokia is strengthening its role among mobile phone suppliers with its efforts for environmental protection and sustainability. Due to these strengths Nokia has a strong customer relationship with loyal customers.
Although Nokia does have some major strengths, there are still some major weaknesses, which are to be dealt with. With only 4.4 m items sold in the fourth quarter, the launch of the Lumia was not as successful as it should have been (The New York Times 2013). The fast paced markets often cause products to quickly fall from favour, which is why the communication within the existing marketing strategy – the interaction with customers - must be engaged and has to stand out from competition. Less stylish phones ranging in the low-priced segment are another potential weakness which can endanger the future of
Nokia. In terms of distribution, there has to be mentioned that Nokia has a weak high-street presence, having no flagship stores.
With four unique functions in the Nokia Lumia and their affinity for sustainability they could be miles and miles ahead of their competitors, but lacking presence and viral marketing within the company communication are avoiding it.
The potential market is growing as children are becoming more and more interested in smartphones at ever-younger ages and elderly people are trying to keep up with the increasingly fast pace of technology. While the elder consumer group, aged 50+, finds itself in a more and more financially stable condition, the chances that they start
purchasing smartphones, which they in fact are more confident with due to their familiarity with Microsoft, rise. The existing brand reputation can be used to build on marketing strategies and create a strong bond to millions and millions of people using Microsoft on their computer.
The greatest opportunity, however, is to reduce cost and time, i.e. to raise efficiency of their product research while still improving the technology. Entirely new possibilities would open up, if they were to engage in the tablet PC market. After all, the new marketing strategy has already opened new and more innovative ways for the brand to do so. With Microsoft as an ally, Nokia and Microsoft benefit from each other, as both
companies have a great loyal consumer base.
Nokia has to face the ever-worsening price wars with competitors due to the strong price pressure from the Asian market with its better distribution channels. Another threat might be the launch of a new, innovative product from rivals that Nokia has only little chance to keep up with, as they are still trying to catch up with the latest innovations.
Due to lacking high-street presence, there is hardly a person customers can refer to when they need help or have questions. Along with an increasingly demanded after-sales service this might have a strong impact on crisis-stricken Nokia. The huge range of products, which should actually be positive in terms of variety, might carry the risk of consumers ending up confused.