Guidelines

Nokia as a Company
Turnover
Nokia in India
Market in India
Segmentation
Products (Signature Products, Milestone Products)
Target Customers
Pricing Strategies
Branding
SWOT
PEST
Positioning
Nokia as a Company
Nokia 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 India
Nokia 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 India
Initially 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 Segmentation
Nokia engages in the following levels of marketing:
 Segment Marketing
Nokia offers designs, features and functionality that
caters to the demands of the market segment. E.g. Nokia
Ngage (gamers)
 Niche Marketing
Nokia 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
Selective specialization
Nokia has selected a number of segments M1 M2 M3
P1
and has come out with products for each
of them thereby ensuring its presence in
P2
the complete market.
P3

P= Product M= Market
Pricing Strategy
Penetration 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 Strategy
Nokia 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.
Branding
Nokia 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 Strategies
As 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 Strategies
Blue Ocean Thinking
Innovative products launched in India
First phone with camera, Nokia 7650, first phone with
radio Nokia 6510
Red 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 Competitors
Sony 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 Competition
Stress 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 centers
Crisis 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
Strengths
70% Market share in India
Goodwill in India
Well 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)
Weaknesses
High 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)

Opportunities
A huge rural market just waiting to be tapped.
Probable launch of 3G in India
SWOT Analysis (Contd)
Threats
Launch of Apple’s iPhone
Threat from Chinese made mobile phones (lower end
segment).
Probable launch of VOIP handsets in India.
Point of Difference
Excellent 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 Plans
As 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.