Nokia Marketing Plan

Nokia Corporation

The Nokia Story Nokia was set up in 1865 by a mining engineer named Fredrik Idestam at the Tammerkoski Rapids in South-Western Finland. The company started as a wood pulp mill, and in 1960, the company started a mobile phone manufacturing business. In 1998, Nokia produced 100 million mobile phones and became the world’s largest phone makers. Now, Nokia is a leading multinational company engaged in producing mobile communication products, and is the world’s third largest mobile phone manufacturer. At the last count, the Nokia Group has employed approximately 139,000 people around the world. (Nokia Corporation, 2012) In February 2011, Nokia entered into a strategic alliance with Microsoft to launch Windows Phone. Since 2008, Nokia’s shares have in succession delisted from the stock market of London, Frankfurt, Paris and Stockholm. On June 15, 2012, due to lack of funds, Nokia sold their assets on a large scale. As a result, the stock continuously slumped, and the market value shrunk massively; it fell back to the 1980’s levels. On June 15, 2012, Nokia announced to lay off 10,000 employees in a worldwide range and shut down many global mobile phone factories, in order to restructure the senior management team. And until now, the only two regions of Nokia’s mobile phone manufacturing plants are Mainland China and South Korea. (baidu.com, 2012)
Central Problem of Nokia
The failure of the software development and loss of competitiveness
As of the early 2000s, Nokia’s home-made software, Symbian, Meego, and Maemo, were announced as failures. This is the central problem for this company. Without its own unique software system, the phone producer has lost its competitive edge in the marketplace. Faced with the decision of revamping one of their old software systems (timely and expensive) or partnering with Microsoft or Android, Nokia chose to form a partnership and adopt a software platform. Now, a strategic partner of Microsoft, Nokia cooperated to launch Windows Phone. Because of the loss of competitiveness due to the lack of having a private software system, Nokia suffered the following pitfalls:
1. Market share dwindling
Since 1996, Nokia had occupied the top of the global market share for 15 consecutive years, but in the second quarter of 2012, Nokia fell down landing third in sales worldwide. Apple and Samsung have taken Nokia’s place. Apple sold 20.3 million iPhone and Samsung sold 19 million smart phones, leaving Nokia with only 16.7 million mobile phones for that year.
2. Stock slump
Accompanied by a series of bad news, Nokia’s stock plunged 19 percent, to ＄6.70, which was already selling at a 13-year low.
3. Persistent takeover talk
In the last four years, Nokia has shed 75 percent of its market value, leading to widespread speculation that it might be a takeover target. One of the rumors was Microsoft buying the company for 19 billion.
Environmental Scan
At any point in time, whether a company is rising or falling, there are microenvironment factors that influence a firm. Particularly in this case, there are significant environmental issues that impacted Nokia’s performance.
Demographic factors: Demographically Nokia targets to meet the needs of different market segments. By targeting the youth and young adult segments Nokia can try to revive its brand name and promote its new fun, bold, and youthful image. There is a growing population of young people and young adults in African and Asian markets. However, when dealing with the younger generations of the world, Nokia has to be careful. Today’s youth are highly educated and aware of most products in the marketplace, and therefore are knowledgeable of the wide variety of products they could purchase. This knowledge base is a potential threat to Nokia because consumers could simply purchase other telecommunication options available in the market place.
Environmental/Socio-cultural factors: The socio-cultural view of “going green” has altered the public’s view of communication methods. As environmental issues such as climate change become more prominent in the public eye, it is increasingly important for Nokia to incorporate the conservation of resources and protection of the environment into their organizational processes. Over the past few decades, Nokia has embraced this environmental shift and has shown that it is a company that is committed to sustainability in the world. The company’s sustainability initiatives and technological developments show the commitment of the organization towards a better environment. The company encourages the development of phones that are energy efficient to help in environmental conservation. Nokia has shown participation in environmental management campaigns. By encouraging the use of alternative sources of energy Nokia seems to be advocating for a better environment for the sake of all humanity. Nokia is proud to be a green company. This shows consumers that they are environmentally aware of their impact.
Political factors: Throughout the company’s long history, Nokia has had to deal with a variety of political and legal issues. As an international firm, Nokia is affected by the political environment in which it does business. For instance, political stability in Finland and African markets are favorable for Nokia to thrive. Not only does Nokia have to be aware of the political state of a country, it also has to abide by the legal environment. Nokia has been successful in complying with all the legal processes for operating business in all the markets. On a different note, patent issues have affected Nokia. In particular, Asian competitors that have tried to steal technology and copy Nokia’s technology innovations are threatening Nokia’s competitive advantage and compromising their hard work. All in all, these political and legal factors affect Nokia 's bottom line.
Economic factors: The Finland economy does not seem to be conducive for Nokia. This can be viewed in terms of the tax regimes that have really stifled the efforts to bring back Nokia back on track. Market giants such as Apple and Google have also contributed to the bad environmental times that have impacted on Nokia. These giants have been pushing Nokia left and right and they have led to the current predicaments that threaten the success of this phone company. Consumer behavior has also affected the economic environment of Nokia. This is in view of the fact that the spending of consumers has changed over time. During today’s recession people have less disposable income so they are buying less phones/accessories. This has resulted in change in priorities of customers hence the revenue collection form the company.
Technological Factors: As with all telecommunication companies, Nokia has to continually monitor the advances in technology in order to stay competitive. Technology is growing at a very high rate with other companies developing new applications and software to meet consumer needs. Technology innovations can be implemented in all facets of the organization from online shopping and services to logistics management. With the market being so competitive, Nokia has to demonstrate that it is capable of developing new technological tools. While developing strategic partnerships can help the company grow, it should not rely on other players in the industry to develop new technologies for them.

SWOT Analysis
Strengths: Nokia has many internal strengths including: (1) human capital – Nokia has highly qualified personnel on its staff such as CEO, Stephen Elop, and its numerous engineers; (2) loyal and dedicated workforce; (3) strong international sales of basic phones, especially in emerging markets; (4) strategic partnership with Microsoft; (5) engineering capability to create new "disruptive" technology; and (6) Nokia is the largest distributor of mobile phones in the industry.
Weaknesses: This case highlights many internal weaknesses of Nokia including: (1) lack of innovation; (2) lack of an internal software platform to work off of (instead Nokia decided to work with Microsoft); (3) complacency with their existing technology; (4) mismanagement; (5) lack of employee accountability; (6) continued loss of market share; and (7) stock value plunge.
Opportunities: After reading this case it is apparent that Nokia has some opportunities expanding their business internationally. Currently, international locations with a growing consumer base have a need for basic mobile phones. As the standard of living increases in developing countries throughout the world there will be more demand for the basic cell phones that Nokia currently produces. Also, the current legal problems between Google and Apple open a door for Nokia to strengthen its position in the market.
Threats: Nokia’s most obvious threat is its competition. Not only are competitors creating lower cost products they are introducing new advanced features/technology into the marketplace in which Nokia has to compete with. Another threat is innovation poaching from competitors. These external threats have the potential to be detrimental to Nokia if the company does not prepare to defend itself from them.
Nokia Strategies By understanding the macoenvironment factors and the company’s strengths, weaknesses, opportunities, and threats Nokia’s marketing team is able to generate strategies to try to keep the company competitive. To minimize the risks of a marketing strategy, the strategy should build off of the firm’s competitive strengths. As mentioned above, Nokia has a number of competitive strengths that have historically contributed significantly to its sales and profitability. These include its scale, its differentiating brand, its world-class manufacturing and logistics system, its operation of the industry’s largest distribution network and its strong relationships with its mobile operator and distributor customers (Nokia Corporation, 2012). Highlighted below are some possible marketing strategies, along with their strengths and weaknesses that Nokia could implement to regain its industry leader status. The first set of possible marketing strategies that Nokia could implement revolve around product pricing. One price strategy would be to increase the price range of their product offering. Nokia’s marketing team would have to do this strategically with different consumer markets in mind. A broader price range between products could entice customers to buy a product. For instance, Nokia could create a specific marketing campaign to target emerging markets in which they offer lower priced basic phones. The next price strategy Nokia could implement is price-bundling. By applying a mixed bundling strategy, Nokia could offer its products both individually and in bundles. A strength of this strategy is that it induces consumers to buy more products because if they buy the products in a bundle they would pay less than if they bought the items separately (Kotler & Keller, 2012). Weaknesses of this strategy include: (1) Nokia has to be very conscious about what prices they set for the products individually: if the price difference is not that great between the bundle and the products individually, the consumer might not see the benefit of buying the bundle; and (2) Knowledgeable customers might be less likely to need or want bundled products. Overall, a price strategy would help attract consumers to buy Nokia products due to the economic value to the consumer. The second set of strategies involves the promotion of Nokia’s products and services. In the last few years Nokia has started to rejuvenate their brand by implementing a bold, fun, and youthful marketing campaign. Nokia could push this campaign further by showcasing Nokia products and Nokia experiences that make their phones stand out amongst the competition. In retrospect, Nokia’s promotional strategy should have evolved in parallel with changes in the telecommunications market, however this wasn’t the case. Hence, Nokia has some catching up to do. According to Nokia the mobile communications, music, media and information technology are converging in to one industry (Nokia Corporation, 2008). Therefore, Nokia should showcase that their products and services accommodate this convergence. Nokia should produce advertisements that relate to the customer and demonstrate how a Nokia product can make their life easier. Also, Nokia should provide the phone carriers/operators with more attractive phone displays for their stores and perhaps provide the store’s sales team with product training / sales materials to help push the bold, fun, and youthful strategy to the end consumer. To make the most impact, this strategy should be implemented in markets where Nokia doesn’t have a strong market share. The third strategy focuses on Nokia’s product place/distribution. As mentioned earlier, Nokia could transition its geographical focus to emerging markets. The strengths to this strategy are that the standard of living in emerging markets is growing which has resulted in an increase in demand for personal mobile phones and this strategy is supported by historical net sales growth in emerging Chinese, Indian, Russian, and Brazilian markets (Nokia Corporation, 2012). These factors minimize the risk of pursuing this emerging market consumer strategy. However, this strategy’s weakness is that by focusing on producing low cost basic phones, Nokia is diverting resources away from research and development of advanced smart phone technology. By allocating resources to existing technology, Nokia reduces its chances to create the new disruptive technology. Furthermore, in an effort to reach more consumers, Nokia should try to partner with as many service providers such as Verizon, Sprint, T Mobil, Boost, and ect, to get their products in front of the consumers. The more stores Nokia phones can displayed in, the more consumer awareness there will be. Weaknesses of this strategy include it being difficult to get these relationships and if a Nokia phone is displayed side by side its competition, consumers might be easily swayed to buy a different product. The fourth set of strategies focuses on Nokia’s product. One strategy would be to discontinue failing or non-value adding technologies from Nokia’s portfolio. This strategy would give Nokia the ability to reallocate the funds used to develop and maintain these technologies to be used in R&D for new products/services. However, a major weakness to this strategy is that some customers using Nokia’s older models may become angry that the product is being discontinued. To minimize the negative response to this strategy, Nokia will have to find a way to service older generation products to appease customers. Another strategy would be to invest heavily in R&D in order to create the next disruptive technology. This strategy would produce a high reward if successful. By creating a disruptive technology, Nokia would become a market leader. According to Kotler and Keller, “a market leader has the largest market share and usually leads in price changes, new-product introductions, distribution coverage, and promotional intensity” (p. 299). However, there are large risks associated with this strategy as well. For instance, when creating new products there is a good chance that the new technology will be a failure and not adopted by consumers. Also, this strategy is very expensive. The last product strategy would be to focus on developing existing products to enhance the consumer 's experience. Nokia should focus on making their phone features and applications more user friendly, easy to navigate, enhance their athletics, and expand their information capabilities. The strengths of this strategy are that it isn’t very risky and it would enhance the firm’s relationship with existing customers. The downside to this strategy is that other than pleasing existing customers, it doesn’t directly attract new customers. Therefore, Nokia would have to weigh the benefits of this strategy. Perhaps this strategy should be a continuous strategy for the firm to pursue. While all of the strategies above would help Nokia, the most advantageous strategy to pursue would be to focus on its products. A product development strategy has three main components: (1) Idea generation, (2) Product Design, and (3) Detail Engineering. Idea generation refers to continuous research and development efforts in hopes to create new innovative technologies to implement into Nokia’s existing products or to create the next disruptive technology that will change the way society uses telecommunication technology. Product design refers to bettering the aesthetics of Nokia’s products. This includes improving product functionality and appearance. Lastly, detail engineering refers to strengthening Nokia’s software platforms including its development, operation, and maintenance. This is critical for the company to have its own operating platform to stand on that is reliable and efficient. While Nokia’s partnership with Microsoft is a great opportunity to collaborate on a product, it should not be Nokia’s ultimate software platform. Nokia must be able to support itself as a mobile phone producer with its own unique software in order to differentiate itself amongst its competition. All in all Nokia needs to continue to develop its products to ensure that it stays competitive with its rivals such as Apple and Samsung. Also, by continuously integrating consumer needs and wants into its products and services Nokia will strengthen its relationship with its customers. It is imperative in the media industry that a company is constantly aware of new innovations and is looking at ways on how to integrate them into its products and services. It will not be easy for Nokia to implement these strategies in a short amount of time, but working on this strategy and taking full advantage of the differentiators, Nokia will have success.

Works Cited

Bhasin, H. SWOT Nokia. 11 Feb. 2011. Web. 16 Jul. 2012 .

Burrows, Peter. Stephen Elop 's Nokia Adventure Market share dwindling, stock cratering, persistent takeover talk. How the CEO is trying to lead Nokia past its epic fail. June 2011.

Charlie. A brief history of Nokia World. 25 Aug. 2009. Web. 16 jul.2012 < http://conversations.nokia.com/2009/08/25/a-brief-history-of-nokia-world/>. David, Fred. Strategic Management. 4th Ed. New York: Macmillan Publishing Company, 1993.

Jones, Bernie. Neighborhood Planning: A Guide for Citizens and Planners. Chicago and Washington, D.C.: Planners Press, American Planning Association, 1990.

Kotler, P., & Keller, K. (2012). Marketing Management. Upper Saddle River: Prentice Hall.

Nokia Corporation. (2012). Form 20-f 2011. Washingtion, D.C.: United States Securities and Exchange Commission.

Sadauskas, Andrew. Former Nokia executive blasts CEO Stephen Elop in 29,000 word angry letter: "The worst CEO Ever". Smart Company. July 2012. Web. 13 July 2012.

Cited: Bhasin, H. SWOT Nokia. 11 Feb. 2011. Web. 16 Jul. 2012 . Burrows, Peter. Stephen Elop 's Nokia Adventure Market share dwindling, stock cratering, persistent takeover talk. How the CEO is trying to lead Nokia past its epic fail. June 2011. Charlie. A brief history of Nokia World. 25 Aug. 2009. Web. 16 jul.2012 < http://conversations.nokia.com/2009/08/25/a-brief-history-of-nokia-world/>. David, Fred. Strategic Management. 4th Ed. New York: Macmillan Publishing Company, 1993. Jones, Bernie. Neighborhood Planning: A Guide for Citizens and Planners. Chicago and Washington, D.C.: Planners Press, American Planning Association, 1990. Kotler, P., & Keller, K. (2012). Marketing Management. Upper Saddle River: Prentice Hall. Nokia Corporation. (2012). Form 20-f 2011. Washingtion, D.C.: United States Securities and Exchange Commission. Sadauskas, Andrew. Former Nokia executive blasts CEO Stephen Elop in 29,000 word angry letter: "The worst CEO Ever". Smart Company. July 2012. Web. 13 July 2012.