PROJECT
ON
“Digital Media Marketing
Nokia Channel of Distribution”
BACHELOR’S OF BUSINESS ADMINISTRATION
SESSION 2009-12
UNDER SUPERVISION OF SUBMITTED BY
Mrs. SUREKHA THAKUR A. Vani Madhavi
Faculty BBA IInd Year (IIIrd sem)
AGBS (HYDERABAD) Roll. No. 16
1
A
PROJECT
ONDigital Media Marketing
“NOKIA CHANNELS OF DISTRIBUTIONS”
SUBMITED TO AMITY GLOBAL BUSINESS SCHOOL
HYDERABAD
BACHELOR’S OF BUSINESS ADMINISTRATION
SESSION 2009-2012
Submitted To: Submitted By:
Mr. SUREKHA THAKUR A. Vani Madhavi
Faculty Guide Roll. No. 16
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ACKNOWLEDGEMENT
I express my thanks to Mrs. SUREKHA THAKUR (faculty Guide) for granting
me the permission to work on the brand Nokia. Who guided and helped me in
all possible ways they could, at every stage of the project.
I would like to express my thanks to my company guide to Mr. Shishir
Priyadarshi (HCL-ASM) and Mr. Abhishek Jain (Nokia-ASM) who helped me in
my S.I.P. as well as to completion of this report.
I would also like to thank all the team members of Nokia who provided all the
relevant information and their kind support, on the basis of which this report
has been prepared.
A. Vani Madhavi
BBA 2009 – 2012
STUDENT DECLARATION
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I A. Vani Madhavi student of BBA at AGBS(HYDERABAD) of hereby declare
that the Project work entitled “NOKIA-CHANNELS OF DISTRIBUTIONS" is
compiled and submitted under the guidance of Mr. SUREKHA THAKUR
(faculty guide), and company’s official website (Company guide), is my
original work.
Whatever information furnished in this project report is true to the best of my
knowledge.
SUBMITTED BY:
A. Vani Madhavi
BBA (2009 – 2012)
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PREFACE
As a student of management in Business administration, it is very
important to understand the practical way of doing work in an
organization. The project report provides student the opportunity to
study the organization and try to correlate the theoretical and practical
aspects of working in a real business environment.
A distribution system is a key external resource for any company
or firm. Normally it takes years to build, and it is not easily change. The
choice before an organization to have, indirect or joint distribution
depends upon the degree of control; flexibility depends upon the
degree of control, flexibility, cost and financial requirements.
For example, indirect distribution, there is less of control but is
more economical. In this sort of distribution lesser funds are tied up
and there is low fixed variable cost of managing the channel. On the
other hand in personal selling, there is better control but is more
expensive.
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Today most of the TELECOM companies including Nokia used
intensive distribution, which consists of manufacture placing the goods
or services in as many outlets as possible. Generally for the product it
requires great deal of location convenience. Management generally
needs to search for distribution economics in inventory control,
warehouse location and transportation modes. Distribution play the
vital for the success of any product in the market, out of 4 p’s of
marketing mix one is place which clearly indicate that consumers and
customers needs, wants and demand.
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Table of content
Topic Page No.
1. Introduction……………………………………………………….…………………………11
2. Device Business …………………………………………………………………………12
2.1 Service Business ……………………………………………………………….13
2.2 Infrastructure Business……………….……………………………………….12
3. R & D Centers…….………………………………………………………………………..14
4. Industry Overview……………………………………………………………………….14
5. Some Firsts for Nokia In India………………………………………………………..17
6. Some Achievements for Nokia…………………………………………………………18
7. Total Market size………………………………………………………………………….…19
7.1 Handset Market share…………………………………………………………….197.2 The Stat of the world wide mobile phone market …………………….217.3 World wide mobile terminal sales to end users………………….……22
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7.4 World wide smart phones sales…………………………………..………….237.5 Nokia still top dog in smart phone market……………………………....24
8. Networking equipment………………………………………………………….28
9. First mobile phones……………….……………………………………………..29
10. Involvement in GSM……………….……………………………………….…….31
11. Milestones and releases………………………………………………………..33
12. Devices………………………………….…………………………………………….36
13. Services……………………………….……………………………………………...37
14. Solutions…………………………………………………………………………….38
15. Markets………………………………………………………………………………38
16. Subsidiaries……………………….……………………………………………….39
17. Online Services…………………………………………………………………..40
17.1 mobi and mobile web………………………………………………………….40
17.2 OVI……………………………………………………………………………………41
17.3 My Nokia………………………………………………………………………… .42
17.4 Comes with Music……………………………………………………………..42
17.5 Nokia Messaging……………………………………………………………….43
18. Controversy…………………………………………………………………......44
19. Nokia Interactive advertising…………………………………………….46
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20. Nokia Corporation………………………………………………………………..49
21. Channel Support and coordination to sales strategies ………….52
22. Intensive distribution…………………………………………………………53
22.1 Extensive distribution………………………………………………………..53
22.2 Selective distribution…………………………………………………………53
22.3 Exclusive distribution……………………………………………………..…53
23. Vertical Integration……………………………………………………….….54
24. Market strategy for Nokia………………………………………………….55
25. Nokia Succeed in the Indian Mobile Market……………………….56
26. The Power of focus…………………………………………………………….58
27. The distribution Age…………………………………………………………..59
28. Investment in manufacturing…………………………………………….62
29. Building the Brand……………………………………………………………..64
30. Product for India………………………………………………………………..67
31. An Expanding Market………………………………………………………..70
32. Work performed by marketing channels…………………………....71
33. Distribution Channel flows………………………………………………..73
33.1 Physical flow………………………………………………………………………73
33.2 Title flow…………………………………………………………………………….73
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34. Channel level…………………………………………………………………..74
34.1 One level channel…………………………………………………………….74
34.2 Two level channel……………………………………………………………74
34.3 Three level channel…………………………………………………………74
35. Research Methodology……………………………………………………75
36. Research process……………………………………………………………76
37. Method of data collection………………………………………………..84
38. Collection of data through questionnaire………………………….91
39. Questionnaire……………………………………………………………………...93
40. Conclusion………………………………………………………………….….95
41. Limitations………………………………………………………………………97
42. Suggestion………………………………………………………………….98
43. Biblography……………………………………………………………………101
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INTRODUCTION
Nokia has played a pioneering role in the growth of cellular technology in
India, starting with the first-ever cellular call a decade ago, made on a Nokia
mobile phone over a Nokia-deployed network.
Nokia started its India operations in 1995, and presently operates out of
offices in New Delhi, Mumbai, Kolkata,Jaipur,Lucknow,Chennai, Bangalore,
Hyderabad, Pune and Ahmedabad. The Indian operations comprise of the
handsets business; R&D facilities in Bangalore, Hyderabad and Mumbai; a
manufacturing plant in Chennai and a Design Studio in Bangalore.
Over the years, the company has grown manifold with its manpower strength
increasing from 450 people in the year 2004 to over 15000 employees in
March 2008 (including Nokia Siemens Networks). Today, India holds the
distinction of being the second largest market for the company globally.
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Devices business
Nokia has established itself as the market and brand leader in the mobile
devices market in India. The company has built a diverse product portfolio to
meet the needs of different consumer segments and therefore offers devices
across five categories ie. Entry, Live, Connect, Explore and Achieve. These
include products that cater to first time subscribers to advanced business
devices and high performance multimedia devices for imaging, music and
gaming.
Nokia has been working closely with operators in India to increase the
geographical coverage and lower the total cost of ownership for consumers.
Today, Nokia has one of the largest distribution network with presence across
1,30,000 outlets. In addition, the company also has Nokia Priority Dealers
across the country and Nokia ‘Concept stores’ in Bangalore, Delhi, Jaipur,
Hyderabad, Chandigarh, Ludhiana, Chennai, Indore and Mumbai to provide
customers a complete mobile experience.
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Services business
With the global launch of Ovi, the company's Internet services brand name,
Nokia is renewing itself to be at the forefront of the convergence of internet
and mobility. From being a product centric company, Nokia is now focusing to
become solutions centric. The strategic shift is built on Nokia’s bid to retain
consumers and empower Nokia device owners to realise the full potential of
the Internet. Nokia will build a suite of Internet based services like Nokia
Maps, the Nokia Music Store and Nokia N-Gage around its Ovi brand.
Infrastructure business
Nokia Siemens Networks is a leading global enabler of communications
services. The company provides a complete, well-balanced product portfolio
of mobile and fixed network infrastructure solutions and addresses the
growing demand for services with 20,000 service professionals worldwide. Its
operations in India include Sales & Marketing, Research & Development,
Manufacturing and Global Networks Solutions Centre. Headquartered in
Gurgaon, Nokia Siemens Networks has 47 offices and presence in over 170
locations across the country.
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R & D centers
Nokia has three Research & Development centers in India, based in
Hyderabad, Bangalore and Mumbai. These R&D hubs are staffed by engineers
who are working on next-generation packet-switched mobile technologies
and communications solutions to enhance corporate productivity.
The Center in Bangalore, the biggest R&D site in the country comprises S60
Software Organization, Common Technologies, Next Generation now called
Maemo Software, Productization and Software & Services.
INDUSTRY OVERVIEW
Nokia Corporation is a Finnish multinational communications corporation
that is headquartered in Keilaniemi, Espoo, a city neighboring Finland's
capital Helsinki.Nokia is engaged in the manufacturing of mobile devices and
in converging Internet and communications industries, with over 123,000
employees in 120 countries, sales in more than 150 countries and global
annual revenue of EUR 41 billion and operating profit of €1.2 billion as of
2009 It is the world's largest manufacturer of mobile telephones: its global
device market share was about 39% in Q4 2009, up from 37% in Q4 2008 and
38% in Q3 2009, and its converged device market share was about 40% in Q4, 14
up from 35% in Q3 2009. Nokia produces mobile devices for every major
market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS).
Nokia offers Internet services such as applications, games, music, maps, media
and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens
Networks produces telecommunications network equipment, solutions and
services Nokia is also engaged in providing free digital map information and
navigation services through its wholly-owned subsidiary Navteq.
Nokia has sites for research and development, manufacture and sales in many
countries throughout the world. As of December 2009, Nokia had R&D
presence in 16 countries and employed 37,020 people in research and
development, representing approximately 30% of the group's total workforce.
The Nokia Research Center, founded in 1986, is Nokia's industrial research
unit consisting of about 500 researchers, engineers and scientists. It has sites
in seven countries: Finland, China, India, Kenya, Switzerland, the United
Kingdom and the United States. Besides its research centers, in 2001 Nokia
founded (and owns) INdT – Nokia Institute of Technology, a R&D institute
located in Brazil. Nokia operates a total of 15 manufacturing facilities located
at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan and
Suzhou, China; Farnborough, England; Komárom, Hungary; Chennai, India;
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Reynosa, Mexico; Jucu, Romania and Masan, South Korea Nokia's Design
Department remains in Salo, Finland.
Nokia is a public limited liability company listed on the Helsinki, Frankfurt,
and New York stock exchanges. Nokia plays a very large role in the economy
of Finland; it is by far the largest Finnish company, accounting for about a
third of the market capitalization of the Helsinki Stock Exchange (OMX
Helsinki) as of 2007, a unique situation for an industrialized country. It is an
important employer in Finland and several small companies have grown into
large ones as its partners and subcontractors. Nokia increased Finland's GDP
by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finnish GDP
was 3.5% and accounted for almost a quarter of Finland's exports in 2003.
In recent years, Finns have consistently ranked Nokia as one of the best
Finnish brands. In 2008, it was the 27th most respected brand among Finns,
down from sixth place in 2007.] The Nokia brand, valued at $34.9 billion, is
listed as the fifth most valuable global brand in the Interbrand/BusinessWeek
Best Global Brands list of 2009 (first non-US company). It is the number one
brand in Asia (as of 2007) and Europe (as of 2009), the 41st most admirable
company worldwide in Fortune's World's Most Admired Companies list of
2010 (third in Network and Other Communications Equipment, seventh non-
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US company), and the world's 85th largest company as measured by revenue
in Fortune Global 500 list of 2009, up from 88th the previous year. As of 2009,
AMR Research ranks Nokia's global supply chain number six in the world.
Some firsts for Nokia in India
1995 – First mobile phone call made in India on a Nokia phone on a Nokia network
1998 - Saare Jahaan Se Acchha, first Indian ringtone in a Nokia 5110
2000 - First phone with Hindi menu (Nokia 3210)
2002 - First Camera phone (Nokia 7650)
2003 - First Made for India phone, Nokia 1100
2004 - Saral Mobile Sandesh, Hindi SMS on a wide range of Nokia phones
2004 - First Wi-fi Phone- Nokia Communicator (N9500)
2005 – Local UI in additional local language
2006 – Nokia manufacturing plant in Chennai
2007 – First vernacular news portal
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Some Achievements for Nokia
Ranked No 1 Most Trusted Brand Survey by Brand Equity, 2008
Ranked the No 1. MNC in India by Businessworld, India’s leading
business weekly, 2006
Ranked as the No. 1 telecommunications equipment vendor in the
country by Voice & Data for five consecutive years –2008, 2007,
2006,2005 and 2004
Ranked as the 9th most powerful brand by Millward Brown’s BrandZ
2008
Ranked world’s 4th most valuable brand by Interbrand, 2007
Ranked Asia’s most trusted brand by the Media-Synovate, 2006
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Handset Market Share
Nokia: 59.5%
Sony: 8.1%
Samsung: 7%
Motorola: 5.9%
Nokia said on Friday the cellphone market totaled 1.26 billion phones
last year, above its earlier forecast of 1.14 billion, and reduced its share
of sales to 34 percent from an earlier forecast of 38 percent.
Research group Gartner said the grey market -- mostly in China, India
and Latin America -- totaled 145 million phones last year.
Nokia said new measurement tools enable it to better estimate the
number of handsets being sold by some new players.
"These include vendors of legitimate, as well as unlicensed and
counterfeit, products with manufacturing facilities primarily centered
around certain locations in Asia and other emerging markets," Nokia
said.
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Nokia repeated it expected the overall 2010 phone market to grow 10
percent while its market share would be unchanged at 34 percent.
The comments boosted Nokia shares, which trimmed an earlier high of
10.91 euros to settle at 10.80, up 2 percent, by 1539 GMT.
"This is a good thing for Nokia because it is really showing that they
want to measure the real market and grey market has been a big driver
in 2009," said Gartner analyst Carolina Milanesi.
"It is an opportunity for them to go after and try and actually win over
users in that segment as well," he said.
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The State Of The Worldwide Mobile Phone Market, 2009
Gartner just released a report highlighting the state of the mobile phone
worldwide market for 2009. In terms of units sold, Nokia leads,
unsurprisingly, given its history. In the smartphone market share segment,
Nokia, through its Symbian operating system, leads again, again
unsurprisingly. What is again unsurprising is the fact that Nokia lost market
share both in terms of the units shipped, as well as smartphone market share.
In terms of units shipped, Nokia lost 2.2%, and 5.5% in terms of its
smartphone market share.
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Worldwide Mobile Terminal Sales to End Users in 2009 (Thousands of
Units)
Company 2009 Sales
2009
Market
Share (%)2008 Sales
2008
Market
Share (%)
Nokia 440,881.6 36.4 472,314.9 38.6
Samsung 235,772.0 19.5 199,324.3 16.3
LG 122,055.3 10.1 102,789.1 8.4
Motorola 58,475.2 4.8 106,522.4 8.7
Sony Ericsson54,873.4 4.5 93,106.1 7.6
Others 299,179.2 24.7 248,196.1 20.3
Total 1,211,236.6 100.0 1,222,252.9 100.0
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Worldwide Smartphone Sales to End Users by Operating System
in 2009 (Thousands of Units)
Company 2009 Units
2009
Market
Share (%)2008 Units
2008
Market
Share (%)
Symbian 80,878.6 46.9 72,933.5 52.4
Research In Motion 34,346.6 19.9 23,149.0 16.6
iPhone OS 24,889.8 14.4 11,417.5 8.2
Microsoft Windows Mobile15,027.6 8.7 16,498.1 11.8
Linux 8,126.5 4.7 10,622.4 7.6
Android 6,798.4 3.9 640.5 0.5
WebOS 1,193.2 0.7 NA NA
Other Oss 1,112.4 0.6 4,026.9 2.9
Total 172,373.1 100.0 139,287.9 100.0
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Nokia Still Top Dog In Smartphone Market, But Is Bleeding
Share
Gartner, a global market research firm, reported the smartphone market
segment results recently for the whole of 2008. As expected, Nokia shipped
the most units, with around 61 million units (that’s not a lot is it, judging by
the fact that a high percentage of the world’s population now own cellphones,
but this is the smartphone market we’re talking about, so the market is much
smaller). This translates to around 44% market share, more than twice the
share of its closest competitor, Research in Motion – “RIM” (makers of the
Blackberry) with around 17%. However, Nokia’s market share has been
declining of late, as in 2007, its market share was around 49% and has been in
steady decline recently. Bad news for Nokia indeed, but not especially
surprising, given that its competitors have introduced a slew of new products
and new competitors have been slowly building their own momentum.
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In particular, Apple and RIM recorded impressive year-on-year growth, which
mainly came at Nokia’s expense. Gartner reports that Nokia higher end N-
series smartphones are facing increasingly stiff competition from RIM’s
Blackberries as well as Apple’s iPhone. When Palm’s Pre is finally unleashed, I
think it’s safe to say that Nokia’s market share is going to decline even further.
It’s probably in Nokia’s best interests to get the latest N series phones out the
door as quickly as possible. Perhaps its flagship E series phones need to be
25
refreshed as well. The other challenge comes in the form of the very gloomy
outlook for the global economy – so it looks like Nokia is facing a double
whammy of increasingly serious competition and a tough operating
environment (although, to be fair, its competitors are facing this as well). The
surprising item in the market share list was the inclusion of Samsung – from a
share of 1.8% the previous year, it jumped to 4.2% last year, due to the
success of its Omnia handset. If that’s what they can do with only one handset,
imagine what can happen if Samsung put their minds to it and releases more
smart handsets. More headache for Nokia, especially seeing that Samsung is
going to position its OmniaHD product directly against the Nokia N97. If
Samsung manages to make this happen quickly, and a reasonable price point, I
foresee Nokia’s mindshare in the eyes of consumers quickly evaporate. Come
on Sammy – get it out the door quickly, and show us what the OmniaHD can
do, and if it can do it better than Nokia’s own N97!
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The Nokia House, Nokia's head office located by the Gulf of Finland in
Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the
workplace of more than 1,000 Nokia employees.[23]
27
Fredrik
Idestam,
founder of
Nokia.
Statesman Leo
Mechelin, co-
founder of
Nokia.
Networking equipment
In the 1970s, Nokia became more involved in the telecommunications
industry by developing the Nokia DX 200, a digital switch for telephone
exchanges. In 1982, a DX 200 switch became the world's first microprocessor
controlled telephone exchange and the first fully digital exchange to be taken
into service in Europe. The DX 200 became the workhorse of the network
equipment division. Its modular and flexible architecture enabled it to be
developed into various switching products. In 1984, development of a version
of the exchange for the Nordic Mobile Telephony network was started.
For a while in the 1970s, Nokia's network equipment production was
separated into Telefenno, a company jointly owned by the parent corporation
and by a company owned by the Finnish state. In 1987, the state sold its
shares to Nokia and in 1992 the name was changed to Nokia
Telecommunications.
In the 1970s and 1980s, Nokia developed the Sanomalaitejärjestelmä
("Message device system"), a digital, portable and encrypted text-based
communications device for the Finnish Defence Forces. The current main unit
used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).
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First mobile phones
The Mobira Cityman 150, Nokia's NMT-900 mobile phone from 1989 (left),
compared to the Nokia 1100 from 2003. The Mobira Cityman line was
launched in 1987.
The technologies that preceded modern cellular mobile telephony systems
were the various "0G" pre-cellular mobile radio telephony standards. Nokia
had been producing commercial and some military mobile radio
communications technology since the 1960s, although this part of the
company was sold some time before the later company rationalization. Since
1964, Nokia had developed VHF radio simultaneously with Salora Oy. In 1966,
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Nokia and Salora started developing the ARP standard (which stands for
Autoradiopuhelin, or car radio phone in English), a car-based mobile radio
telephony system and the first commercially operated public mobile phone
network in Finland. It went online in 1971 and offered 100% coverage in
1978.
In 1979, the merger of Nokia and Salora resulted in the establishment of
Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic
Mobile Telephony) network standard, the first-generation, first fully-
automatic cellular phone system that went online in 1981. In 1982, Mobira
introduced its first car phone, the Mobira Senator for NMT-450 networks.
Nokia bought Salora Oy in 1984 and now owning 100% of the company,
changed the company's telecommunications branch name to Nokia-Mobira
Oy. The Mobira Talkman, launched in 1984, was one of the world's first
transportable phones. In 1987, Nokia introduced one of the world's first
handheld phones, the Mobira Cityman 900 for NMT-900 networks (which,
compared to NMT-450, offered a better signal, yet a shorter roam). While the
Mobira Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman just
under 5 kg (11 lb), the Mobira Cityman weighed only 800 g (28 oz) with the
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battery and had a price tag of 24,000 Finnish marks (approximately €4,560).
Despite the high price, the first phones were almost snatched from the sales
assistants’ hands. Initially, the mobile phone was a "yuppie" product and a
status symbol.
Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader
Mikhail Gorbachev was pictured using a Mobira Cityman to make a call from
Helsinki to his communications minister in Moscow. This led to the phone's
nickname of the "Gorba".
In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone
unit, along with two other employees from the unit, started a notable mobile
phone company of their own, Benefon Oy (since renamed to GeoSentric). One
year later, Nokia-Mobira Oy became Nokia Mobile Phones.
Involvement in GSM
Nokia was one of the key developers of GSM (Global System for Mobile
Communications), the second-generation mobile technology which could
carry data as well as voice traffic. NMT (Nordic Mobile Telephony), the
world's first mobile telephony standard that enabled international roaming,
31
provided valuable experience for Nokia for its close participation in
developing GSM, which was adopted in 1987 as the new European standard
for digital mobile technology.
Nokia delivered its first GSM network to the Finnish operator Radiolinja in
1989. The world's first commercial GSM call was made on July 1, 1991 in
Helsinki, Finland over a Nokia-supplied network, by then Prime Minister of
Finland Harri Holkeri, using a prototype Nokia GSM phone. In 1992, the first
GSM phone, the Nokia 1011, was launched The model number refers to its
launch date, 10 November. The Nokia 1011 did not yet employ Nokia's
characteristic ringtone, the Nokia tune. It was introduced as a ringtone in
1994 with the Nokia 2100 series.
GSM's high-quality voice calls, easy international roaming and support for
new services like text messaging (SMS) laid the foundations for a worldwide
boom in mobile phone use. GSM came to dominate the world of mobile
telephony in the 1990s, in mid-2008 accounting for about three billion mobile
telephone subscribers in the world, with more than 700 mobile operators
across 218 countries and territories. New connections are added at the rate of
15 per second, or 1.3 million per day.
32
Milestones and releases
Reduction in size of Nokia mobile phones.
Evolution of the Nokia Communicator. Models 9000, 9110, 9210 and 9500
shown.
Nokia opened its Komárom, Hungary mobile phone factory on May 5, 2000.
33
In March 2007, Nokia signed a memorandum with Cluj County Council,
Romania to open a new plant near the city in Jucu commune. Moving the
production from the Bochum, Germany factory to a low wage country created
an uproar in Germany.
In May 2007, Nokia announced that its Nokia 1100 handset, launched in 2003,
with over 200 million units shipped, was the best-selling mobile phone of all
time and the world's top-selling consumer electronics product.
In November 2007, Nokia announced and released the Nokia N82, its first
(and currently, only) Nseries phone with Xenon flash.
At the Nokia World conference in December 2007, Nokia announced their
"Comes With Music" program: Nokia device buyers are to receive a year of
complimentary access to music downloads. The service became commercially
available in the second half of 2008.
In April 2008, Nokia began finding new ways to connect people, asking the
"audience" to use their creativity and their mobile devices to become Nokia’s
production company – to take part in filming, acting, editing and producing a
collaborative film. Nokia Productions was the first ever mobile filmmaking
project directed by Spike Lee. This was a collaborative experience that existed 34
across borders and perspectives, working off a common script. The film
premiered in October 2008.
In 2008, Nokia released the Nokia E71 which was marketed to directly
compete with the other BlackBerry devices offering a full keyboard and
cheaper prices.
Nokia announced in August 2009 that they will be selling a high-end
Windows-based mini laptop called the Nokia Booklet 3G.
On September 2, 2009, Nokia launched two new music and social networking
phones, the X6 and X3. The Nokia X6 features 32GB of on-board memory with
a 3.2" finger touch interface and comes with a music playback time of 35
hours. The Nokia X3 is a first series 40 Ovi Store-enabled device. The X3 is a
music device that comes with stereo speakers, built-in FM radio, and a 3.2
megapixel camera.
On September 10, 2009, Nokia unveiled a new handset 7705 Twist, a phone
with a sports square shape that swivels open to reveal a full QWERTY keypad.
[77] The new mobile, which will be available exclusively through Verizon
Wireless, features a 3 megapixel camera, web browsing, voice commands and
weighs around 3.44 ounces.35
Devices
The Nokia N900, a Maemo 5 Linux based mobile Internet device and
touchscreen smartphone from Nokia's Nseries portfolio.
The Devices division is responsible for developing and managing Nokia's
mobile device portfolio, including the sourcing of components, headed by Kai
Öistämö. The division consists of the previous mainline Mobile Phones
division with the separate subdivisions Multimedia (Nseries devices) and
Enterprise Solutions (Eseries devices) as well as formerly centralized core
devices R&D – called Technology Platforms.
This division provides the general public with mobile voice and data products
across a wide range of mobile devices, including high-volume, consumer
36
oriented mobile phones and devices, and more expensive multimedia and
enterprise-class devices. The devices are based on GSM/EDGE, 3G/W-CDMA
and CDMA cellular technologies. Nokia's Nseries Multimedia Computers
extensively uses Symbian OS.
In the first quarter of 2006 Nokia sold over 15 million MP3 capable mobile
phones, which means that Nokia is not only the world's leading supplier of
mobile phones and digital cameras (as most of Nokia's mobile telephones
feature digital cameras, it is also believed that Nokia has recently overtaken
Kodak in camera production making it the largest in the world), Nokia is now
also the leading supplier of digital audio players (MP3 players), outpacing
sales of devices such as the iPod from Apple. At the end of the year 2007,
Nokia managed to sell almost 440 million mobile phones which accounted for
40% of all global mobile phones sales.
Services
The Services division operates in five areas of consumer Internet services:
music, maps, media, messaging and games. The division consists of the
previous enterprise and consumer driver services businesses previously
hosted in Multimedia and Enterprise Solutions divisions, as well as a number
37
of new acquisitions (Loudeye, Gate5, Enpocket, Intellisync, Avvenu and OZ
Communications), headed by Niklas Savander.
The group works with companies outside the telecommunications industry to
make advances in the technology and bring new applications and possibilities
in areas such as online services, optics, music synchronization and streaming
media.
Solutions
Solutions is responsible for Nokia's offering of solutions, where the mobile
device, personalized services and content are integrated into a package for the
consumer. The unit is led by Alberto Torres.
Markets
The Markets division, the successor organization to Nokia's Customer and
Market Operations division, is responsible for the management of the supply
chains, sales channels, brand and marketing functions of the company, headed
by Anssi Vanjoki.
38
Subsidiaries
The Nokia 5800 XpressMusic, a touchscreen smartphone and portable
entertainment device which emphasizes music and multimedia playback.
Nokia has several subsidiaries, of which the two most significant as of 2009
are Nokia Siemens Networks and Navteq. Other notable subsidiaries include,
but are not limited to Vertu, a British-based manufacturer and retailer of
luxury mobile phones; Qt Software, a Norwegian-based software company,
and OZ Communications, a consumer e-mail and instant messaging provider.
39
Until 2008 Nokia was the major shareholder in Symbian Limited, a software
development and licensing company that produced Symbian OS, a
smartphone operating system used by Nokia and other manufacturers. In
2008 Nokia acquired Symbian Ltd and, along with a number of other
companies, created the Symbian Foundation to distribute the Symbian
platform royalty free and as open source.
.
Online services
mobi and the Mobile Web
Nokia was the first proponent of a Top Level Domain (TLD) specifically for the
Mobile Web and, as a result, was instrumental in the launch of the .mobi
domain name extension in September 2006 as an official backer. Since then,
Nokia has launched the largest mobile portal, Nokia.mobi, which receives over
100 million visits a month. It followed that with the launch of a mobile Ad
Service to cater to the growing demand for mobile advertisement.
40
Ovi
Nokia Ovi logo.
Ovi, announced on August 29, 2007, is the name for Nokia's "umbrella
concept" Internet services. Centered on Ovi.com, it is marketed as a "personal
dashboard" where users can share photos with friends, download music,
maps and games directly to their phones and access third-party services like
Yahoo's Flickr photo site. It has some significance in that Nokia is moving
deeper into the world of Internet services, where head-on competition with
Microsoft, Google and Apple is inevitable. The services offered through Ovi
include the Ovi Store (Nokia's application store), the Nokia Music Store, Nokia
Maps, Ovi Mail, the N-Gage mobile gaming platform available for several S60
smartphones, Ovi Share, Ovi Files, and Contacts and Calendar. The Ovi Store,
the Ovi application store was launched in May 2009. Prior to opening the Ovi
Store, Nokia integrated its software Download! store, the stripped-down
MOSH repository and the widget service WidSets into it.
41
My Nokia
Nokia offers a free personalised service to its subscribers called My Nokia
(located at my.nokia.com). Registered My Nokia users can avail free services
as follows:
Tips & tricks alerts through web, e-mail and also mobile text message.
My Nokia Backup: A free online backup service for mobile contacts,
calendar logs and also various other files. This service needs GPRS
connection.
Numerous ringtones, wallpapers, screensavers, games and other things
can be downloaded free of cost.
Comes With Music
On December 4, 2007, Nokia unveiled their plans for the "Nokia Comes With
Music" initiative, a program that would partner with Universal Music Group
International, Sony BMG, Warner Music Group, and EMI as well as hundreds of
Independent labels and music aggregators to bundle 12, 18, or 24 months
worth of unlimited free music downloads with the purchase of a Nokia Comes
With Music edition phone. Following the termination of the year of free
42
downloads, tracks can be kept without having to renew the subscription.
Downloads are both PC and mobile-based.
Nokia Messaging
On August 13, 2008, Nokia launched a beta release of "Nokia Email service", a
new push e-mail service, since graduated as part of Nokia Messaging.[135]
Nokia Messaging operates as a centralised, hosted service that acts as a proxy
between the Nokia Messaging client and the user's e-mail server. It does not
allow for a direct connection between the phone and the e-mail server, and is
therefore required to send e-mail credentials to Nokia's servers. IMAP is used
as the protocol to transfer emails between the client and the server.
Controversy
43
NSN's provision of intercept capability to Iran
A cartoon about Nokia's provision of intercept capability to Iran and people
who were arrested in Iran by IRI regime using intercept capabilities
In 2008, Nokia Siemens Networks, a joint venture between Nokia and Siemens
AG, reportedly provided Iran's monopoly telecom company with technology
that allowed it to intercept the Internet communications of its citizens to an
unprecedented degree. The technology reportedly allowed it to use deep
packet inspection to read and even change the content of everything from "e-
mails and Internet phone calls to images and messages on social-networking
sites such as Facebook and Twitter". The technology "enables authorities to
not only block communication but to monitor it to gather information about
individuals, as well as alter it for disinformation purposes," expert insiders
44
told The Wall Street Journal. During the post-election protests in Iran in June
2009, Iran's Internet access was reported to have slowed to less than a tenth
of its normal speeds, and experts suspected this was due to the use of the
interception technology.
The joint venture company, Nokia Siemens Networks, asserted in a press
release that it provided Iran only with a 'lawful intercept capability' "solely for
monitoring of local voice calls". "Nokia Siemens Networks has not provided
any deep packet inspection, web censorship or Internet filtering capability to
Iran," it said.
In July 2009, Nokia began to experience a boycott of their products and
services in Iran. The boycott was led by consumers sympathetic to the post-
election protest movement and targeted at those companies deemed to be
collaborating with the Islamic regime. Demand for handsets fell and users
began shunning SMS messaging.
Nokia Interactive Advertising
45
Nokia mobile phones by series
Nokia 1000 series1011 · 1100/1101 · 1110/1110i · 1112 · 1200 · 1208 ·
1600 · 1610 · 1650
Nokia 2000 series2110i · 2115i · 2310 · 2600 · 2600 classic · 2610 ·
2630 · 2650 · 2651 · 2700 classic · 2730 classic · 2760
Nokia 3000 series
3100/3100b/3105 · 3110 · 3110 classic · 3120 · 3120
classic · 3155 · 3200/3200b/3205 · 3210 · 3220 · 3230 ·
3250 · 3310 · 3315 · 3330 · 3410 · 3500 classic ·
3510/3590/3595 · Nokia 3530 · 3510i ·
3600/3620/3650/3660 · 3600 slide · 3720 classic
Nokia 4000 seriesSeries skipped as a sign of politeness from Nokia
towards Asian customers. See tetraphobia.
46
Nokia 5000 series
5070 · 5100 · 5110 · 5130 Xpress Music · 5200 · 5210 ·
5220 Xpress Music · 5230/5235 · 5300 · 5310 Xpress
Music · 5320 · 5330 Mobile TV Edition · 5500 Sport ·
5510 · 5530 · 5610 · 5630 · 5700 · 5730 · 5800
Nokia 6000 series
6010 · 6020/6021 · 6030 · 6070 · 6085 · 6100 · 6101 ·
6103 · 6110/6120 · 6110 Navigator · 6111 ·
6120/6121/6124 classic · 6131/6133 · 6136 · 6151 ·
6170 · 6210 · 6210 Navigator · 6220 classic · 6230 ·
6233/6234 · 6255i · 6260 Slide · 6260 · 6265 · 6270 ·
6275i · 6280/6288 · 6290 · 6300 · 6300i · 6301 · 6303
classic · 6310i · 6315i · 6500 classic · 6500 slide · 6555 ·
6600 · 6600 fold · 6600 slide · 6610/6610i · 6620 ·
6630 · 6650 · 6650 fold · 6670 · 6680 · 6681/6682 ·
6700 classic · 6710 Navigator · 6720 classic · 6730 ·
6800 · 6810 · 6820 · 6822
47
Nokia 7000 series
7110 · 7160 · 7210 · 7250 · 7280 · 7360 · 7380 · 7390 ·
7500 Prism · 7600 · 7610 · 7650 · 7700 · 7710 · 7900
Prism
Nokia 8000 series8110 · 8210 · 8250 · 8310 · 8600 Luna · 8800 · 8850 ·
8910
Nokia
Communicator
9000/9110/9110i · 9210/9290 · 9210i · 9300/9300i ·
9500
Nokia Cseries C3 · C5 · C6
Nokia EseriesE5 · E50 · E51 · E52 · E55 · E60 · E61/E61i · E62 · E63 ·
E65 · E66 · E70 · E71 · E72 · E75 · E90 Communicator
48
Nokia Nseries
N70 · N71 · N72 · N73 · N75 · N76 · N78 · N79 · N80
(Internet Edition) · N81 (N81 8GB) · N82 · N85 · N86
8MP · N90 · N91 (N91 8GB) · N92 · N93 · N93i · N95 ·
N95 8GB · N96 · N97 · N8
Nokia Xseries X3 · X6
Internet Tablet 770 · N800 · N810 (WiMAX Edition) · N900
N-Gage Classic · QD · QD Silver Edition
Nokia Corporation
49
Industry
Telecommunications
Internet
Computer software
Founded
Tampere, Finland (1865)
incorporated in Nokia
(1871)
Founder(s) Fredrik Idestam
Headquarters Espoo, Finland
Area served Worldwide
Key people
Jorma Ollila (Chairman)
Olli-Pekka Kallasvuo
(President & CEO)
Timo Ihamuotila (CFO)
Mary T. McDowell (CDO)
Products Mobile phones
Smartphones
50
Mobile computers
Networks
(See products listing)
ServicesServices and Software
Online services
Revenue ▼ €40.99 billion (2009)[1]
Operating
income▼ €1.197 billion (2009)[1]
Net income ▼ €891 million (2009)[1]
Total assets ▼ €35.74 billion (2009)[1]
Total equity ▼ €14.75 billion (2009)[1]
Employees 123,171 (2009)[1]
Divisions Devices
Services
Solutions
51
Markets
Subsidiaries
Nokia Siemens Networks
Navteq
Symbian
Vertu
Qt Development
Frameworks
Website Nokia.com
Channel support and coordination to sales strategies :
This is an import consideration for the formula of sales strategy. If indirect
distribution is adopted it is imperative that sales organization indicated dealer
cooperation programmes. Support is to be given for maintenance of adequate
stocks, local promotions in the form of P. O. P. (Point of Purchase) displays and
for local advertising. Feed back from the dealer is an important area of support
52
and can’t be ignored. In the dealer management programmes, for the success of
channel support an d coordination.
Adequate incentives for a dealer are must.
Proper feedback and communication is important.
Measures have been taken to promote dealer loyalty
The degree of coverage and support you want from the channel depends
on how intensively or extensively you want to distribute your products.
INTENSIVE DISTRIBUTION
In this the distribution is made to all the outlets, which are many in number and
spread in big area. Maximum exposure to the product is given.
EXTENSIVE DISTRIBUTION
It is the distribution in which we will cover a great area but do not concentrate on
all customers in the area.
53
SELECTIVE DISTRIBUTION
Here goods are distributed to selects outlets. These may be specially stores or
prominent stores in one area. The distribution is done through more than one
outlet but less than all e. g. designer shirts, cosmetics, T. V. electrical equipments.
EXCLUSIVE DISTRIBUTION
This is done exclusively be one dealer who provides after sales service like
in automobiles. This is done for the cultivation of an exclusive image.
VERTICAL INTEGRATION
It is a process of requirement membership rights at various levels of
distribution channel. It is costly affair for absolute channel control. Business has
been maintained between desire for market control, coordination and
distribution costs and specialization. A balance should be maintained between
channel control and the cost incurred in it.
54
Marketing Strategy for Nokia
For this project I have been instructed to come up with a marketing strategy for
an existing company/product I have chosen to do Nokia communications,
particularly the mobile phone sector of Nokia's business. To do this properly I will
need to:
* Appropriately identify, collect and use primary and secondary data that is
55
relevant to the marketing strategy of Nokia.
* Produce a clear analysis of the external influences affecting the development of
a marketing strategy.
* Complete a realistic rationale for the development of a coherent marketing mix
for Nokia communications.
* Show a full understanding of a marketing strategy for Nokia with a clear
understanding of marketing principles.
* Produce a full, well-balanced marketing strategy that reflects appropriate use of
marketing models and tools.
How Did Nokia Succeed in the Indian Mobile Market, While Its
Rivals Got Hung Up?
By most accounts, India is among the world's fastest-growing
markets for mobile phones. The country has some 170 million
subscribers and adds 6 million to 7 million more each month.
(China, in contrast, adds 5 million subscribers, and the U.S. 2
56
million subscribers a month.) Recognizing this potential, several
global telecom giants jumped into the fray when the Indian
government first opened up the country's telecom market to
private enterprise in 1994. Among them, one company -- Finland-
based Nokia -- forged ahead of rivals and today commands a 58%
market share for mobile phones (also called "handsets"). In
specific segments, such as GSM telephony, Nokia's market share
in India is as high as 70%. (GSM, which stands for Global System
for Mobile, is the world's most popular standard for mobile
communications.)
How did Nokia take the lead in the Indian mobile phone market,
ahead of companies such as Ericsson, Motorola, LG and Samsung?
According to company executives and industry experts, Nokia's
strategy combined focusing on the mobile phone market,
establishing crucial distribution partnerships, making early
investments in manufacturing and brand-building, and developing
innovative product features -- such as mobile phones that could
double as flashlights. Ravi Bapna, professor of information
systems at the Indian School of Business in Hyderabad, says, "As
57
far as Nokia's India strategy is concerned, the numbers speak for
themselves. The company is a key cog in India's wireless value
chain, and it has used India as its emerging market lab."
The Power of Focus
D. Shivakumar, Nokia India's vice president and country manager,
believes that focus played a key role in the company's growth in
India. "If you look at the [mobile phone] landscape in 1995,
anybody could have succeeded if they had done the same things
as Nokia did," he says. "But all the other companies had
something else to focus on, some other business. Nokia was
completely focused on mobile phones; others had consumer
electronics, home appliances, etc." Nokia's focus was not just on
handsets, of course. The mobile infrastructure business -- then
58
part of Nokia India -- was equally important. But, as of April 1,
2007, Nokia's joint venture with Siemens for mobile infrastructure
has become an independent entity. Thus, Nokia India has become
even more sharply focused.
Being ahead of the curve was another component of Nokia's
strategy. "We invested before everybody else -- in the brand, in
people, in distribution," says Shivakumar. Adds Pankaj
Mahendroo, president of the Indian Cellular Association: "Nokia
invested in each vertical of the handset ecosystem --
manufacturing, distribution and design R&D."
Nokia has invested more than $1 billion in India so far, and
company headquarters at Helsinki has repeatedly said that more
funds will be made available if required. The Indian company had
revenues of more than $3.5 billion in 2006, which means there is
also money to be reinvested. (The company does not disclose its
profit numbers.)
The Distribution Edge
59
Investment in people is difficult to judge; every company claims
to have the best talent in the business. But when it comes to
distribution, Nokia's lead is clear. Today, India has some 95,000
outlets that sell mobile phones. "In 50,000 of them -- and that's a
conservative estimate -- only one brand is available, Nokia," says
Shivakumar.
Nokia started distributing its phones through a partnership with
HCL (formerly Hindustan Computers Ltd.), which had already built
an extensive network for its own products. Recently, Nokia has
decided to supplement that with its own distribution efforts. "Both
companies realized that there was a tremendous growth
opportunity and it was best that we utilized the resources of both
organizations in an optimum manner," says Nokia India director of
sales Sunil Dutt. "We decided that we would address some
markets jointly, and that we would individually address some of
the other markets."
While Dutt does not spell out how the two partners will divide the
markets, some clues exist in the way demand is shaping up. In
the cities where the market is maturing, buyers are looking at 60
more sophisticated mobile phones, such as Nokia's E-series
phones (which serve business users) and the N-series (which have
multimedia features). In rural India -- which constitutes 70% of
the population -- affordability is an issue. So there is a different
range for this constituency.
The price points sometimes dictate the type of outlet. "As the
[telecom] operator footprint expands into different markets, all
kinds of retail outlets get into selling mobile phones and airtime
connections," says Dutt. "People who have been selling consumer
electronics, STD booth owners and even cloth merchants get into
this business." A stationery store stocks mobiles in a corner; a
mom-and-pop grocery store moves beyond rice and lentils. "Then
there are people with existing businesses who decide to set up a
separate shop only for mobile phones," he continues. "And why
do they feel the need to set up a different outlet? In this business,
customer engagement … requires a completely different
approach. Even the retail outlets realize this and [have started]
separating the two businesses."
61
Dutt notes that in the mature urban markets, "such as the metros
and Tier I towns where mobility has been around for a few years,
customer expectations are more evolved, and are continuously
evolving. Our task here is to provide our people with relevant
competency and skills sets." Nokia has begun to set up concept
stores -- seven so far -- in Indian cities. "At our concept stores, we
have tried to bring to life all the experiences that we offer at
Nokia experiential zones across the world," he adds.
Investment in Manufacturing
The other big investment area that has set Nokia apart from other
telecom firms is manufacturing facilities and R&D. Nokia has
several R&D centers and labs in India. More importantly, it
established a $150 million handset manufacturing facility in
Chennai in 2005. The total production at this unit has crossed 25
million handsets. "Some 30% of our production is being exported
to neighboring countries," says Sachin Saxena, Nokia India
director of operations in charge of the factory.
62
Other companies, such as Motorola, LG and Samsung, have also
lined up similar investments or are in the process of setting up
manufacturing units, but Nokia has had a clear head start. Also,
the Chennai factory is devoted to handsets, whereas other
companies are planning to make a whole range of consumer
electronics products. "Domestic manufacturing has worked to
Nokia's advantage," says Ravinder Zutshi, deputy managing
director, Samsung India Electronics. "Samsung India is looking at
making its Chennai facility a global hub for its consumer
electronics products."
Industry analysts note that Nokia's strategy is potentially risky.
When the going is good -- as it is now -- the company can do well.
But Samsung's approach is more flexible, these analysts note. If
demand for mobile phones were to slump, Samsung could switch
its manufacturing lines to other products. In contrast, Nokia
India's focus on mobile phones mirrors the priorities of its parent
company. Nokia traditionally was in a whole range of businesses
-- from toilet paper to power. But in 1993, CEO Jorma Ollila
63
decided to sell off everything else and concentrate on mobile
telephony.
Building the Brand
Another crucial aspect of Nokia's investment strategy focused on
building its brand. Here, the company ran into a problem. The
Nokia range available in India extends from Rs 1,499 ($37) at the
lower end to Rs 45,000 ($1,125) at the high end. Marketing theory
says a brand cannot be all things to all people. This is the reason
that Hindustan Unilever, with quality built around its brand,
refused to match Nirma, which came out with a cheap detergent.
This is also why Eveready, the battery manufacturer, refused to
lower prices when faced with a Chinese challenger in the dry cell
market.
64
But Nokia has a problem promoting other brands under its
corporate umbrella. "Unlike the FMCG (fast-moving consumer
goods) market -- where the product lifecycle is at least 10 and
sometimes 50-100 years -- models have a lifespan of 15-24
months here," says Devinder Kishore, Nokia India's director of
marketing. With such a lifecycle, promoting various models would
mean watching money go down the drain in a couple of years.
Instead, Nokia is promoting platforms -- music, for instance. With
this approach, one model can replace another while the branding
remains the same, or is extended slightly with the E series and N
series. "Nokia has done well to focus on the 'mother' brand rather
than on 'another' brand," says Jagdeep Kapoor, chairman and
managing director of Samsika Marketing Consultants. Kapoor,
who has written several books on brand management, says that
Nokia has understood the Indian market by straddling all
segments: the high, the middle and the low end. "The company
has created a ladder for consumers to climb from the low end to
the middle end to the high end, while being fully assured that
they will be with the mother brand Nokia."
65
Kapoor views the Nokia brand in terms of his proprietary "REAPS"
model, which takes into account five needs -- rational, emotional,
aspirational, physical and spiritual -- of the Indian consumer.
"Nokia as a brand has been able to address all the five needs to
various degrees at various stages," he says. "The rational need of
quality versus price has been met across price segments with
options. The emotional need of being able to keep in touch with
near and dear ones during times of joy and sorrow is being
adequately fulfilled. The aspirational need with the new models
and features and the look-good approach has helped the brand
become a sought-after, must-have brand. The physical need has
been taken care of through size and comfort. And, finally, the
spiritual need has been met through (local) languages and people
--whether they are 18 or 80 -- being able to greet one another via
SMS [text messages] during religious festivals."
ISB's Bapna offers a prescription for Nokia. "Going forward with
the premise that the mobile infrastructure will serve as India's
information infrastructure -- given the lack of substitute physical
and digital infrastructure -- I would encourage Nokia to take a
66
more active role in nurturing content and application-creation
communities that bring a range of services to all layers of the
population," he says. "It's in [Nokia's] own interest to do so."
Products for India
The Nokia story in India has not been about grafting a model that
has worked abroad. In fact some of its models -- the handsets, not
the strategies -- are unique to India. Consider this example: It
would probably be inconceivable to mobile phone users in the
U.S. or Europe that their mobile phones should incorporate a
flashlight, or torch. But in India -- where large numbers of the
rural population do not have electricity, and power cuts are
commonplace even in the cities -- having a torch built into a
mobile phone is a distinct and tangible benefit. The Nokia 1100,
the first made-for-India phone, has been a runaway success.
Manufactured at Chennai, it is also being exported. The 1100
incorporates a torch, an alarm clock and a radio. "Innovation is
67
something which consumers reward in this market," says
Shivakumar.
Similar plans are in the works at Nokia's three India R&D labs,
which employ 700 people. For obvious reasons, most of the
activity is under wraps. Nokia is, however, willing to talk about the
"shared" phone. This is, again, something that mobile phone
users in affluent countries might find puzzling, but the concept is
simple. For reasons of affordability, in rural areas a phone may be
shared by several people. The models being launched to cater to
this need will have separate address books, individual billings and
more. Will it work? People initially doubted the torch phone, too,
but it became a popular product.
Shivakumar offers some reasons to explain why he thinks the
Indian market is different and needs out-of-the-box thinking.
"Fundamental consumer differences exist between India and
other countries," he says. "A cell phone is a huge style icon for
the Indian masses: 62% of Indians buy a cell phone because of its
looks. That is something that is not true anywhere else in the
68
world. It's as huge a style statement as your watch, pen, cufflinks
or bag. Hence, the brand matters quite a lot.
"Second, it is a safety product for women in small towns, because
with a cell phone you are in touch all the time; you're accessible.
Next, it is a huge productivity vehicle. When somebody calls you,
you do not need to take your bike out; you don't need to take
your car out. You make a phone call and it's over.
"It is also a driver of a lot of economic activity. If you go down the
roads of Gurgaon and Delhi, you will find that lots of people have
written their [mobile] phone numbers on the walls -- a plumber,
an artisan, a carpenter, a tailor. I think the whole service sector
has gotten a huge lift, thanks to this. This has killed the visiting
card business…. It is also the ultimate entertainment device. You
have music on it now, in terms of radio and stored music. The day
is not far when you will see movie clips and TV. One of our
products has that, so that's TV on the go."
69
An Expanding Market
The Indian market for mobile phones, in addition to its base of
170 million subscribers, is also one of the most cost-effective in
the world. Call rates in India are among the lowest anywhere --
making a mobile phone call costs two cents in India, compared
with about four cents in China. The market also has tremendous
growth potential. So far, most of the growth has been
penetration-led, which means placing devices in consumers'
hands. The bulk of the growth going forward will be replacement-
led, where consumers come back for more. In India, consumers
tend to change their phones faster than in most other places. And
whenever they change their phone, 60% are willing to pay a
higher price.
Shivakumar offers examples of future services that might be
delivered over cell phones. "The cell phone could be the future
bank -- a full branch of the bank. You don't need 20 people, a
70
security guard or a vault. This is a passbook plus bank rolled into
one. It can be your payment system." Another possible use is
navigation, where cell phones could be used to provide maps of
an area where the user is based. Such services, whenever they
are launched, could help Nokia keep going and growing in India.
Work Performed By Marketing Channels
Today, the markets use to delegate some of the selling jobs, to
intermediaries for the effective distribution of the products at the right time, at
right place and right customers.
Delegation means relinquish some control over how and whom the
products are sold, but producers do again several advantages by using
intermediaries :
Many producers lack the financial resources to carry out direct marketing.
For example, General Motors sells its cars through more than 8,100 dealer
outlets in North America alone. Even General Motors would be hard-
pressed to raise the cash to buy out its dealers.
71
In some cases direct marketing simply is not feasible. The William Wrigley
Jr. Company would not find it practical to establish small retail gum shops
through the world or to sell gum by mail order. It would have to sell gum
along with many other small products and would end up in the drugstore
and grocery store business. Wrigley finds it easier to work through the
extensive network privately owned distribution organizations.
Producers who do establish their channels can often earn a greater return
by increasing their investment in their main business. If a company earns a
20 percent rate of return on manufacturing and only a 10 percent return on
retailing. It does not make sense to undertake its own retailing
Intermediaries normally achieve superior efficiency in making goods
widely available and accessible to target markets. through their contracts,
experience, specialization, and scale of operation, intermediaries usually
offer the firm more than it can achieve on its own.
Intermediaries smooth the flow of goods and services. This procedure is
necessary in order to bridge the discrepancy between the assortment demanded
by the produce a large quantity of a limited variety of goods, whereas consumers
usually desire only a limited quantity of a wide variety of goods.
72
Distribution Channel Flows :
1. PHYSICAL FLOW
2. TITLE FLOW
Channel Levels :
The producer and the final customer are of part of every channel. We will
use the number of inte4rmediary levels to designate the length of a channel. The
above figure illustrates several consumer goods marketing channels of different
lengths. Collectibles through mail order. Shearson-Lehman brokers use the
telephone to prospect for new customers some exercise equipment
manufacturers sell through TV commercial or hour-long “information’s”. Amazon
sells books on line, and Gateway sells computers through its own stores.
73
Suppliers Transporters Manufacture Warehouse
re
Distributers
Dealers Customer
Suppliers Manufacture Distributers
dealers Customers
3. One Level Channel : It contains one selling intermediary, such as a retailer.
4. Two- Level Channel : It contains two selling intermediaries. In consumer
markets, these are typically a wholesaler and a retailer.
5. Three-Level Channel : It contains three intermediaries.
About end users and exercising control becomes more difficult as the number
of channel levels increases.
End users and exercising control becomes more difficult as the number of
channel levels.
74
Research Methodology
Research methods may be understood as all those methods or
techniques that are used for the conduction of research. Research methods
and techniques, thus refer to the methods are researcher use in performing
research operations.
In other words, all those methods, which are used by the researcher
during the course of studying his research problem, are termed as research
methods. Since the object of research, particularly the applied research is to
arrive at the solution for a given problem, the available data and the unknown
aspects of problem have to related to each other make a solution possible.
Research methodology is a way to systematically solve the research
problem. It may be understood as a science of studying how research is done
scientifically. In it we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind them.
It is necessary for the researcher to know not only the search methods or
techniques but also the methodology.
75
Research Process
Research process consists of a number of closely related activities. The various
steps in a research process are as follows:
1. FORMULATING THE RESEARCH PROBLEM ;- The first step in research is
formulating a research, as poorly defined problem. It is most important
stage in applied research, as poorly defined problems will not yield useful
results. It is rightly said that “a problem well defined is half-solved”. Poorly
defined problems cause confusion and do not allow the researcher to
develop a good research design.
2. EXTENSIVE LITERATURE SURVEY ;- Once the problem is formulated, the
next step is to write down a brief summary. For this the researcher should
undertake extensive literature survey connected with the problem. For this
purpose, the abstracting and indexing journals and published and
unpublished bibliographies are the first place to go to.
3. DEVELOPMENT OF WORKING HYPOTHESIS :- Working hypothesis is
attentive assumption made in order to draw out and test its logical or
empirical consequences. As such the manner in which research hypothesis
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are developed is particularly important since they provide the focal point
for research.
Working hypothesis can be developed by using the following approach.
Discussion with colleagues and experts about the problem, its origin and
the objectives in seeking a solution.
Examination of data and records.
Review of similar studies in the area or of the studies on similar problems;
and
Exploratory personal investigation, which involves original field interviews
on a limited scale with interested parties and individuals with a view to
secure insight into the practical aspects of the problems.
4. PREPARING THE RESSEARCH DESIGN :- Research design is the conceptual
structure with in which research should be conducted. A research design
specifies the method and procedures for conducting a particular study. It is of
three types :-
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EXPLORATORY RESEARCH :- An exploratory research focuses on the
discovery of ideas and is generally based on secondary data. It is
preliminary investigation, which does not have a rigid designs.
DESCRIPTIVE RESEARCH :- A descriptive study us undertaken when the
researcher wants to know the characteristics of certain groups such as age
sex, educational level, income occupation, etc.
CASUAL RESEARCH :- A casual research is undertaken when the researcher
is interested in knowing the cause and effect relation between two or more
variables. Such studies are based on reasoning along well-tested lines.
Consideration should be made during the preparation of research design
The means of obtaining the information.
The availability and skills of the researcher and staff (if any)
Explanation of the way in which selected means of obtaining information
will be organized and the reasoning leading to the selection.
The time available for research.
The cost factors relating to research, i.e., the finance available for the
purpose.
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5 Determining Sample Design: All the items under consideration in any field
of inquiry constitute a ‘universe’ or population’. Some important sample
designs which should be consider for the research are:
Deliberate Sampling: Also known as purposive or non-probability sampling
this sampling method involves purposive or deliberate selection of the
particular unit of the universe for constituting a sample which represents
the universe.
Convenience sampling: When Population elements are selected for
inclusion in the sampling based on the case of access, it can be called as
convenience sampling.
JUDGEMENT SAMPLING ; The researcher’s judgment is used for
selecting items, which he considers as representative of the population.
SIMPLE RANDOM SAMPLING ; Also called as “Chance Sampling” or
‘Probability Sampling’ wherfre each and every item in the population has an
equal chance of inclusion in the sample and each one of the possible
samples.
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SYSTEMATIC SAMPLING; Where an element of randomness id introduce
by using random numbers to pick up the unit with which to start, this
process of sampling known as systematic sampling
STRATIFIED SAMPLING; In this method, the population is stratified into a
number of non-overlapping subpopulation or strata and samples items is
based on simple random sampling the entire procedure, first stratification
and the simply random sampling, is known as strategies random sampling.
QUOTA SAMPLING: In stratified sampling the cost of taking random
samples from individual strata is often so expensive that interviewers are
simply given quota to be filled from different strata, the actual selection of
items for sample being left to the interviewer’s judgment. This is called
quota sampling.
CLUSTER SAMPLE : Cluster sampling involves grouping the population and
then selecting groups or the clusters rather than individual element for
inclusion in the sample.
AREA SAMPLING : When the total geographical area of interest is big one,
then area sampling method is taken. We first divide the total area into a
number of smaller non-overlapping areas, then a number of these smaller
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areas are randomly selected and all units in these small areas are included
in the sample.
MULTI-STAGE SAMPLING : This technique is meant fir big inquires
extending to a considerably large geographical area like an entire country.
The first stage is to select large primary sampling units such as states, then
districts, then towns and finally certain families within towns.
SEQUENTIAL SAMPLING : In this the ultimate size of the sample is not fixed
in advance but is determined according to mathematical decisions on the
basis of information yielded as survey progresses. This design is usually
adopted under acceptance sampling plan in the context of statistic quality
control.
6. COLLECTION OF DATA ; The next step is to determine the source of data to
be used. The researcher has to decide whether he has to decide whether
he has to collect primary data or depend exclusively on secondary data.
Sometimes the research study is based on both secondary and primary
data.
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7. EXECUTION OF THE PROJECT : The researches should see that the project
is executed in a systemmatic manner and in time. A careful watch should
be kept for unanticipated factors in order to keep the survey as such
realistic as possible. This means that steps should be taken to ensure that
the survey is under statistical control so that the collected information is in
accordance with the pre-defined standard of accuracy.
8. ANALYSIS OF DATA : The analysis of data requires a number of closely
related operations such as establishment of categories, the application of
these categories to raw date through coding, tabulating and then drawing
statistic inferences.
9. HYPOTHESIS TESTING : In this , the researcher has to test the hypothesis,
various tests, such as Chi-Square test, t-test, f-test, have been developed by
statisticians for the purpose.
10.GENERALIZATION AND INTERPRETATION: When hypothesis is tested and
upheld several times, it may be possible for the researcher to arrive at
generalization, i.e. to build a theory. If the researcher had no hypothesis to
start with, he might seek to explain his finding on the basis of some theory.
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11.PREPARATION OF THE REPORT : For the preparation of the report
following principles should be adopted by the researcher.
There should be objectivity, coherence and clarity in the presentation of
ideas.
Report should be written in a concise and in simple language
Charts and illustrations in the report should be used.
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Methods Of Data Collection
The task of data collection begins after a research problem has been defined and
research design/planed out. The primary data are those , which are collected a
fresh and for the first time, and thus happen to be original in charracter..d The
secondary data. on the other hand, are those which have already been collected
by someone else and which have already been through the statistical process.
Collection Of Primary Data
We collect primary data during the course of doing experiments in an
experimental research but in case we do research of the descriptive type and
perform surveys, whether sample surveys or census survey, then we can obtain
primary data either through observation of through direct communication with
respondents in one form or another or through personal interviews. This in
another words means that there are several method of collecting a primary data
particularly in surveys and descriptive researches important ones are, collecting
primary data, particularly in surveys and descriptive researches. Some important
ones are :-.
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1. Observation Method.
2. Interview Method.
3. Through Questionnaire.
4. Through Schedules.
Observation Methods :
The observation method is the most commonly used method especially in studies
relating to behavioral science. In a way we all observe things around us, but this
sort of observation is not scientific observation. Observation becomes a scientific
tool and the method of data collection for the researcher, when it serves a
formulated research purpose , is systematically planned and recorded and is
subjected to checks and controls on validity and reliability. Under the observation
method, the information is sought y way of investigator’s own direct observation
without asking from the respondent.
The main advantages of this method are :
Subject bias is eliminated, if observation is done accurately.
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The information obtained under this method relates to what is currently
happening : it is not complicated by either the past behavior or future or
attitudes.
This method is independent of respondent’s willingness to respond.
Such is relatively less demanding of active cooperation on the part of
respondents as happens to be the case in the interview or the questionnaire
method. However, observation method has various.
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Limitations :
It is expensive method.
The information provided by this method is limited.
Sometimes unforeseen factors may interfere with the observational
task. If the observer observes by making himself, more or less, a
member of the group experience, the observation is called as the
participant observation.
Emissary without any attempt on his part to experience through participation
what other feels, the observation of this type is often termed as non – participant
observation. There are several merits of the participant type of observation.
The research is enabled to record the natural behavior of the group.
The research can even gather information, which could not easily be
obtained if he observes in a disinterested fashion.
The researcher can even verify the truth of statements made by informants
in the context of a questionnaire or a schedule. But there are also certain
demerits of this type of observation viz.
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The observer may lose the objectivity to the extent he participants
emotionally; the problem of observation control is not solved; and may
narrow-down the research’s range of experience.
Interview Methods :
The interview method of collection data involves presentation of oral-verbal
stimuli and reply in terms of oral-verbal responses. This method can be used
through personal interview and, if possible, through telephone interview.
Personal Interviews : Personal method requires a person known as the
interviewer asking questions generally in a face-to-face contact to the other
person or persons. This soft interview may be in the form of direct personal
investigation or it may be an indirect oral investigation. In the case of direct
personal from the source concerned. He has to be on the spot and has to meet
people from whom data have to be collected.
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The method of collecting information through personal interviews usually
carried out in a structured way. As such we call the interview as structured
interviews.
The chief merits of the interview methods are as follows:
1. More information and that too in greater depth can be obtained.
2. Interviewer by his own skill can overcome the resistance, if any, or the
respondent; the interview method can be made to yield an almost perfect
sample of the general population.
3. There is grater flexible under this method as the opportunity to restructure
questions is always there, especially in case of unstructured interviews.
4. Samples can be controlled more effectively as there arise no difficulty of
the dismissing returns: non-response generally remains very lows.
5. The language of the interview can be adapted to ability or education level
of the person interviewed and as such misinterpretations concerning
questions can be avoided.
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Weakness Of Interview Method :-
1. It is a very expensive method, especially when large and widely spread
geographical sample is taken.
2. There remains the possibility of the bios of interviewer as well as that of
the respondent, there also remains the headache of supervision and
control of interviewers.
3. This method is relatively more time consuming, especially when the sample
is large and re-calls upon the respondent are necessary,. Interviewing at
times also introduce systematic errors.
4. Effective interview presuppose proper report with respondents that would
facilitate free and frank response. This is often very difficult requirement.
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Collection Of Data Through Questionnaire :
This method of data collection is quite popular, particularly in case of big
enquires. It is being adopted by private individuals, research workers, private
and public organizations and even by government. A questionnaire consists of a
number of questions printed or typed in a definite order on a form or set of
form. The questionnaire is mailed to respondents who are expected to read
understand the questions and write down the reply in the space meant for the
purpose in the questionnaire itself. The respondents have to answer the
questions on their own.
The merits are :
There is low cost even when the universe is large and is widely spread
geographically.
It is free from the bias of the interviewer, answers are in respondents.
Respondents have adequate time to give well through out answers.
Large samples can be made use of thus the result can be made more
dependable and reliable.
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Demerits Are :-
It can be used only when respondents are educate and cooperating.
The control over questionnaire may be lost once it is sent.
It is difficult to known to whether willing respondents are truly
representative.
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QUESTIONNAIRE
Name of Retailers :…………………………………..
Address :…………………………………..
Phone Number :…………………………………..
1) Nokia Sales Man is coming to your shop everyday.
a) Yes [ ] b) No [ ]
2) Sales man gives the full information about the product scheme.
a) Yes [ ] b) No [ ]
3) Whose delivery is good ?
a)Nokia [ ] b) Samsung [ ]
c)Lg [ ] d) Other [ ]
4) Which company fulfills the requirements of you ?
a)Nokia [ ] b) Samsung [ ]
c)Lg [ ] d) Other [ ]
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5) Different SIS(Shop in Shop) units available which one would prefer
to use
a) Nokia [ ] b) Samsung [ ]
c) LG [ ] d) Other [ ]
6) Which feature do you think are very satisfactory in Brands.
a. On time Delivery [ ]
b. Communications [ ]
c. Daily visit of S.E [ ]
d. Goods after sales service [ ]
e. Others [ ]
7) Are you satisfied with existing Service?
a) Yes [ ] b) No [ ]
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8) Are you facing any following problem
a)yes [ ] b)No
9) Supply of which product is insufficient
a. Nokia [ ]
b. Samsung [ ]
c. LG [ ]
d. Other [ ]
10) How many times in a month, officials from company come to
your shop to listen your problem
a. One [ ]
b. Two [ ]
c. Sometimes [ ]
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CONCLUSIONS
On the basis of above analysis with reference of tables and charts, I
reached to the conclusion that distribution system is a key external resource
for any company or firm including Nokia
Normally distribution channel takes several year to build and it is not easily
changed. From all the above tables and charts it is clear that distribution or
availability of Nokia is on the top.
I also conclude that the Nokia has to target on that distributors, sub-
distributors and retailers who has closed his selling’s , they have to
find out the problems of switching off and switching to other brands.
So that the customer and consumer remain brand loyal to their
products.
To achieve and to maintain the goodwill of the Nokia and its products,
Nokia has to discover some innovative products which will maintain the brand
loyalty and goodwill of the Nokia with the help of distributors, sub-distributors,
retailers and customers/consumers.
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For raising the sells of Nokia, the distribution channel must be kept tight so
that each and every channel of distribution ( i.e. Distributors, Sub-Distributors,
retailers and customers/consumers ) will be benefited maximum from the Nokia
and its products.
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LIMITATIONS
Generally our outlets use to purchase Nokia mobiles daily, so there is a
possibility that my visiting day is not alternate day.
Sometimes the delivery Van has delayed the stock delivery etc. but outlets
demanding so under this situation are quite difficult to get exact figure of
availability.
Since most of the person of the outlets is not aware of English language so
questions of questionnaire are asked to them and then filled by me. So
there may be a chance of communication gap or biasness.
Most of the outlets are busy to there customers. So there is possibility of
some irrelevant answers. Some retailers were not in the mood to give
response. So some refuse while did not give answer to some questions.
Some retailers give response half-heartedly of error.
Through at most care has been taken for collecting the data yet it is not as
final proof elimination the error of sampling.
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Dealers do not cover all area of the own region.
Fair dealers cover 20 % area of the market and they created problem to the
dealers.
Sales man does not cover the each retailers or shopkeepers. They cover
only daily purchases retailers.
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Suggestions
Dealer’s relationship should be improved. They should be given more
facility and should be provided with novelties.
Company repetitive should give regular visits to the dealers. Annual or half
yearly meeting should be hold by the company of all the dealers where
they can put up their problems.
Publicity should be done heavily so as to make people aware of the
products and painting, hoarding, television and radio are the best media for
advertising.
Dealers network should be properly available to the dealers.
Dealer’s liabilities to cover all area through the area sales man each
retailers or shopkeeper.
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BIBLIOGRAPHY
www.Nokia.com
www.wekipedia.com
www.google.com
BOOKS:
Marketing Management -Study Material
Principles of Marketing-P.Kotler & Armstrong
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