The digital products technology is popular all around the world. It did a tremendous change in every around the world; basically the mobile phones because now at the moment time cell phones are the first top priority in conditions of telecommunication. Within the cellular phone manufacturers China must be one of the primary and growing markets. As we realize about this, a head in mobile telecommunications market, Nokia has its scientific business strategy that contributes to success, and pays off a great attention to the marketplace of China. Based on the Chinese mobile phone market, this newspaper analyzes Nokia's business strategy to show reason of Nokia's success.
The business strategy includes the proper objective, the competitive strategy and marketing combine. The strategic idea of Nokia is to use the demand-side strategy. Nokia subdivides the whole market into several objective markets in line with the studies about the partialities of different individuals. And different kinds of cell phones are put into the market aimed at bringing in different consumer communities. The competitive strategy of Nokia is to increase the innovative capacity to gain the competitive advantages. Strong technological innovation capacity makes Nokia stand in the most in front position of mobile industry on a regular basis, and characterized this brand by a particular vitality. As well as the marketing mixture of Nokia is to use the integrated marketing strategy including product, price, campaign and place. It prices the construction of any brand, the orientation of its products and pays a great deal of focus on technology improvement. It does increase the sales through sensitive advertisement, display to the stars and large-scale entertainment. And also choose the FD program as its major sales channel to improve its sales.
Nokia is famous around the globe as a successful mobile phone maker. It helps to keep being the first choice in the mobile telecommunications relies on its plentiful experience, technology innovation and scientific online marketing strategy. The idea of the company is "technology connecting people", which has been rooted in people's mind deeply. The business emphasizes the awareness of mankind either in the decision of marketing strategy or in the management of the corporation.
In 1985, Nokia set up its first branch company in Beijing, meaning Nokia has entered the Chinese market. And now the employee of Nokia in China has increased way beyond 6000. Nokia insists on the blend of produce and research in China. They have create two research centers in China and paid a great focus on the co-operation with other local company. Nokia also calls for parts in several open public services and has gained great reputation in China.
The first part provides brief description of the Nokia in China. The next part shows the marketing target of Nokia, and the third one discusses the Target Market Strategy of the company. Following that is the Competitive Strategy of Nokia, and lastly marketing combination is the which include product strategy, price strategy, and promotional strategy and place strategy. At last is the final outcome about Nokia's total business strategy.
As Nokia is aware of that everyone in the world needs communication, it insists on aiding people satisfy this need by providing consumers with very real human technology- technology that is intuitive, a happiness to utilize and beautiful. While in the Chinese market, the marketing objectives of Nokia is to have the first place in neuro-scientific mobile communications and be the international business welcomed by federal, operator and consumer most of all. Besides these, Nokia in China is set to become the best employer that has the capacity to appeal to and keep fantastic talents.
Because of such market aim for, the strategy of Nokia relies on growing, changing, and building the Nokia business to ensure its future success.
a. The marketplace segmentation
The subdivision of the market is vital for an organization to make decision. It is required as a simple skill for a corporation to understand the mobile phone market and its structure, so as to the market decision. (Earl Peter, 1996))
Nokia collect data and process it in order to get results which may reflect the age, gender, region, education, income, lifestyle and the partiality of the consumers in China. Then it subdivides consumers according to the research results and decides the prospective market effectively. (John C, Mowen, Miner, 2004) Based on the development of communication and the intensive market research, Nokia has subdivided the mobile phone market into four different kinds: the research and technology pursuer, the time controller, the personal communicator and the image chaser. From such consistently increasing market segmentation, the products of Nokia have been increasingly more mature, and also have attracted the interest of nearly all customers. (Reid, David A, Richard E, 2004)
b. The target market strategy of Nokia
According to the right subdivision of the Chinese cellular phone market, Nokia has delineated its different market strategies emphasized on different market requirements. Through its abundant product line, strong investigative potential and reasonable commercial network, with the suitable marketing strategy, Nokia designs numerous kinds of products to meet up with the need of each marketplace.
In the marketplace of personal communicator, the objective-oriented consumers pay more attention to the quality, price and convenience of a phone somewhat than any additional features. Because of this features, the merchandise from Nokia, which is expected to meet the consumers, is simple, sensible, and abandons a lot of phone's additional features to bring about lower prices on a large cut-off. Due to having less additional features, to increase the service life is very feasible. And the 1 series and the 3 series Nokia cell phones like 1100, 3100, 3108 and 3120 have shown this.
In the market that pursues science and technology, the consumers wish that their cell phones could be helpful to raise the efficiency of the task and study. For this reason, Nokia develop new technology applications on cell phones as possible as it can. Along with the N group of Nokia phones are the typical representatives to match this market. They have turn into a kind of electric product with a higher price. In customers' view, it is advantageous to by such a mobile phone at a price due to program of new technology and better efficiency. With a higher price, this market offers Nokia with nice profits as well as a high-technology image of Nokia.
While in the market of image chaser, the clients prefer to value the exterior image of a cellular phone. Therefore the products should capture the popular factor, including products appearance, propagate spokesman that popularizes, etc. Plus the orientation of the Nokia adoring series is expressing the individual identity and grade of the users appropriately. The Nokia 7260, Nokia 7280 and Nokia 7360 are reps of these cell phones that have satisfied the demand of fashion, level and lifestyle.
And on the market pursuing management of time, the merchandise of Nokia are trying their best to improve their work efficiency. So that the users could have enough rest time out with their heavy workload. So for the supervisors who usually need to make decision and highlight on efficiency, the 6 series of Nokia mobile phones like 6600, 6670 and 6681 will be the correct choices.
a. Ideas of competitive strategy
There are five kinds of basic competitive strength within an industry. They determine the potentiality for revenue of the industry. The potentiality here is measured in the long-term investment, rather than every industry has the same potentiality. The ultimate profit potentiality changes fundamentally with the change of the joint competitive durability. (He Zi-Lin, Lim Kwanghui, Won Pho-Kam, 2006)
The consequence comes out from the interaction of the competitive durability is to form three types of basic competitive strategies. Those strategies are: overall cost authority strategy, differentiation strategy and concentration strategy. (Michael porter, 1997)
The first strategy methods to make the greatest efforts to lower item prices through reducing costs, then to maintain competitive advantage. It's important to increase the control of cost because the earnings of the low-cost company could be more than the average level. Within the competitive market, this is vital for an organization to overpower its opponents, for taking the initiative and also to be a success. (Hooley Graham J, John Saunders, 1993)
The second strategy is to provide a unique service or product that is more practical, more fashionable or handsome. If the differentiation strategy may be accomplished, it could help the company acquire the remarkable income in this field. Because it can set up a defensive position to cope with the five competitive pushes, and keep maintaining the competitive edge based on the customer brand devotion. (Hooley Graham J, John Saunders, 1993)
Finally, the key strategy is to give attention to a specific customer foundation or a certain regional market. This involves an organization to provide goods or services more efficaciously to a slim strategic goal, and then exceed their opponents in a wider scale. This strategy gets the potential to get profit over the common level. (Ketels Christian H, 2006)
b. The competitive strategy of Nokia in China
The Chinese market of mobile phone is large and attractive for each mobile phone manufacturer. And so it is no doubt that your competition in Chinese cellular phone market is intense. Despite the fact that Nokia is within a leading position in global mobile marketing communications industry, it always sustains a high degree of vigilance. Motorola must be its major rival either in China or other areas. Anycall Corporation originates from Korea also needs to seize this profitable market. In the meantime, more and more local cellular phone manufacturers appear and find support from some consumers. Nokia could never slacken itself.
The basic competitive strategy of Nokia is the differentiation strategy, which requires earning the competitive advantages through improving its innovative capacity continuously. Strong technological innovation potential makes Nokia stand in the most ahead position of mobile industry all the time, and characterized this brand by a special vitality. How exactly to meet needs of natural market? This is the biggest challenge that your Hi-Tech company faces mutually. (Oster Sharon M, 1994)
Nokia compensates a great focus on technology improvements, and has invested a whole lot in growing new technologies to keep its leadership. Right up until now, Nokia has 54 researches & develop centers all around the globe. These centers work hard to analyze the global market and continue providing new theory, new demands to the company. This ensures its advanced technology and leading position. In China, Nokia has 2 R&D centers that happen to be situated in Beijing and Hangzhou independently. So the researches in China develop fast and gained great reputation. Relied on these assets Nokia has enough resources to do researches, and could always maintain ahead of others.
The individuation is the marrow of the Nokia mobile phones. Around the steadily ripe market of cellular phone, the dazzling and excellent design is even more important than the technology. Nokia is far-sighted that calls for the initial to ascertain an independent apartment which can be specialized to look at design. The task of this apartment is to provide mobile phones with diversification and individual character. Within the last 10 years, the factor that Nokia's regularly modified product design has become a unique competitive advantages. Under the advice of the beliefs called "technology hooking up people", Nokia hasn't only won the best position in cellular phone market, it also fit the customers' needs accurately.
Nokia also makes great work to innovate upon technology, produce new cell phones frequently, create good cooperative relationship with local companies and perform humanized management. All of these are crucial for Nokia to hold its competitive edge and leading position.
The combination marketing program, which is one of the major ideas in modern marketing, means a set of controllable, tactical marketing tools that the company blends to produce the products or services to meet the demands in the target market. It contains everything that a company has capacity to de to affect the demands for its product. There are four kinds of tools that are well known, they are product, price, place, and campaign. (Peter Doyle, 2006)
a. Product Strategy
There are many selections for an organization to make its product strategy. Among them, the merchandise orientation strategy, the brand strategy and the merchandise development strategy are the most three important choices. (Safon Vicente, 2007)
After subdividing, confirming the mark market, how to type in and get that market becomes the essential problem for Nokia. That is an issue about its products orientation. The marketplace studies of Nokia shows that the consumers can make decisions completely relative to their own personal preferences, the product brand, the power of the overall economy, consumer assurance and other personal characteristics, when supplied with the cellular phone products with the same quality and effort. With this so-called buyers' market, the online marketing strategy should be related to the characteristics of the different utilization community to earn the competition. Nokia did well in this area. Analysts in Nokia analyze different personalities, split consumer communities and decide the type of mobile phones should be provided to a specific consumer community. So the Nokia mobile phones have won a lot of supporters about the world. It is without doubt that the Nokia mobile phones will be considered to begin with whenever a person decides to buy a mobile phone because of its high capability, special design and good reputation. (Sadler Philip, 2003)
A brand is a name, term, sign, sign, or design, or a combination of the, that recognizes the maker or vendor of something or service. Consumers view a brandname as an important part of a product, and branding can add value to something. And product design is obviously affect the success of the brand. Nokia continues being proficient at molding the good brand image by injecting individuality into product design. It includes considered a whole lot about how the customers will choose the brand, and how it can make that experience reveal the brand identity. For example, Nokia designers assume that the screen of an mobile is the "eye into the soul of the product". The condition of mobile phones is curvy and easy to carry. The tender key touch pads also add to the feeling of friendliness, expressing the brand personality. All in short, the design of a mobile phone is vital and important to the development of Nokia.
At the year of 2006, Nokia has acquired several design awards because of the four successful types of mobile phones. Nokia 8800, Nokia N70, Nokia 7370 and the N series are the awarded phones. All of them has gained glorification and been welcomed by consumers because the day these were put into the marketplace. Here shows that Nokia has paid a great focus on the fit the consumers' needs and acquired encouraging repayments.
b. Price strategy
The price of a product reflects that the business enterprise should fulfill the various sorts of demand and get revenue to ensure its standard index object. The pricing aims are the assistance for an venture to make price decision, which means the reason or the standard that the business consciously wants to attain while setting a price for its product.
The prices decision means that the business enterprise enterprise set a reasonable price because of its product scientifically such that it could achieve the goal. And the major method for Nokia to make its pricing decision is the Brand Life Cycle Model which means to set different prices predicated on different life circuit of the product. That means to create a higher price for services, medium price for second-line products and good deal for third-line products. The brand new products are the substitutes for the initial first-line products. Once there's an alteration or development, whether it is technical, functional or perhaps on the product packaging and even it is the slightest one, the purchase price can jumped to a fresh level.
The technologies applied to cell phones are innovated fast due to short life routine of the cellular phone. When the marketplace is not saturated, the competition is not intensifying, and the transparency of the product technology is not very high, the organization could access to excess income most easily. After the new entrants and the transparency of bettering technology increase, it only can get a simple profit. So it is essential for a fresh product to truly have a high price, which could make the venture earn excess gains. When others commence to provide the similar products, it is essential to provide substitutes with improvements and decrease the price of the initial ones. It is not only ensure the sales of the new products, also lengthen the life time of the old ones. So long as the businesses innovates, troubles itself, surpass itself, it will be in a position to keep command when compete with other manufacturers.
Meanwhile, the price should be made on the basis of sufficient market researches on consumers. No real matter what a sophisticated technology a product has, it is prosperous only the consumers love and buy it. Take Nokia 88 series and 89 series as an example, these phones were made for those costumers who have strong purchase abilities and treat the mobile phone as a symbol of their position. So this kind of cell phones usually has a high price and a long life routine, and seldom reduces their price because their users do not change their cell phones too often.
c. Advertising of Nokia
Promotion refers to the use of effective ways to catch the attention of consumers' attentions and acquire their comprehensions to comprehend and pay attention to their products also to energize consumer desire to get and promote the realization of the final purchase.
The promotional technique for Nokia to increase the sales is the integrated promotional strategy. It really is a series of activities inform the consumer the life and characteristics of the enterprises, brands and products, which could arouse the marketplace demands, create and keep maintaining the image of your company.
The promotional activities of Nokia are always based on this issue like fashion, convenience and function etc. Especially in the past two years, it pays increasingly more attention to appeal to consumers and create consumer group through the utilization of emotional elements.
"Technology Connecting People" is the recognized brand concept of Nokia, which has been rooted in consumers' brain through some common campaign methods like Tv set advertisements, magazine adverts. But now, it adopts some new ways to publicize its products. Nokia usually contracts with film distributors to make its phones come in the film. This is actually an advertisements in another type of form. People could see Nokia mobile phones in the TV or film just like "Friends", "Love of Scenery" and "An Empire" etc. And Nokia requires the lead to make use of the celebrity impact and presents the celebrity using its own products. It also retains programs accord with its products to publicize the brand, notion and the culture of Nokia.
d. Marketing Route Strategy of Nokia
The marketing channel strategy is a set of inter-reliant channels through which the products could be spread from manufacturers to the consumers. This is of products here's not limited to the tangible ones. The marketing route strategy can be an important element of the complete marketing system, which takes on a significant part in minimizing the price and enhancing the competitive power of the enterprise. Combined with the market development, the habits of the marketing channel strategy are diversified. The vertical marketing system, horizontal marketing system and cross types marketing system are three common varieties. (Arch W, 1975)
Nokia choose its local business agent predicated on 5C principle. In other words, Nokia will decide whom to choose according to their capital, credibility, channel, assistance and management. Once the decision is manufactured, the agent must adhere to the deal, and sale the telephone in his own area. Any office should source perfect base place for the sell. In the meantime, focus on the multilevel marketing and try to take the intensive marketing strategy in every domains.
In 2005, Nokia decided to go with new channel style called FD, which includes ability to improve the provincial agent into money platform, save a great deal of intermediate links and make the channel flat. Through this method, most of Nokia monopoly stores can find the ability of direct supply, which will help Nokia reduce the decision time, ensure the profit of its terminal cooperators and its good post-sale service.
In summary, the success of Nokia is inseparable with the methodical business strategy. The business strategy is an over-all concept. It offers two indispensable elements called competitive strategy and marketing strategies as well as the idea of the business enterprise strategy. The strategic concept of Nokia is to consider the demand-side strategy. Nokia subdivides the complete market into several objective markets based on the researches about the partialities of different individuals. And then different kinds of mobile phones are put in to the market aimed at getting different consumer organizations. The competitive strategy of Nokia is to enhance the innovative capacity to earn the competitive benefits. Strong technological innovation potential makes Nokia stand in the most ahead position of mobile industry on a regular basis, and characterized this brand by a particular vitality. And the marketing mix of Nokia is by using the integrated marketing strategy including product, price, campaign and place. It prices the construction of an brand, the orientation of its products and gives a great deal of attention to technology improvement. It increases the sales through hypersensitive advertisement, demonstration to the stars and large-scale entertainment. And also choose the FD system as its major sales route to boost its deal.