Marketing Orientation of Nokia Corporation - Essay Example

1.0 Introduction

According to Kohli and Jaworski (1990), marketing orientation denotes the efforts by the entire organisation to generate market intelligence geared at meeting the current and future needs of the target customers. It also involves the dissemination of the generated market intelligence across departments for effective and efficient response to the changes in the marketplace. However, while organisations tend to claim their strategy is focused on market orientation, this is not often the case. For instance, Nokia has more than often taken a “non-market oriented missteps”, which in turn, has resulted in the firm’s recent drop in popularity in the marketplace. In essence, this managerial report focuses on the situation at Nokia Networks and Technology by critically examining the related literature on how a focus on marketing orientation can help the company achieve its strategic goals on a long term basis.

2.0 Nokia

Nokia Corporation, regarded as the world’s leading mobile phone manufacturer, serves millions of customers in more than 100 countries across the globe. Further, the company is divided into four business groups that include Networks, Multimedia, Mobile Phones and Enterprise Solutions. The company also boast of about 15 manufacturing facilities spread across nine countries, and also maintains its R&D facilities in 12 countries (Reference for Business, 2016). By 2015, the company had over 55,000 employees and realised net sales of about 12.5 billion euros that translated to operating profits approximated at 1.7 billion euros (Nokia, 2015).

3.0 Related literature on marketing orientation in achieving strategic goals

As noted by Morgan, Vorhies and Mason (2009), there are different types of orientations that companies can embrace in the marketplace, and they include, for example, production, product and selling orientation. The production orientation holds that consumers have a preference for products that are generally available and cheap. As such, managers embracing this concept tend to focus on achieving high production efficiency, reduced cost of production and mass distribution (Lafferty & Hult, 2001).Overall, the decision of managers focusing on the production orientation is informed by the belief that consumers are generally interested in the availability of products that they can purchase at low prices (Morgan & Strong, 2003).

Conversely, the product concept refers to an orientation that considers consumers to prefer products that stress quality, performance and innovativeness. As such, the managers who focus their attention on this concept are more inclined to advocate for superior products and making improvements over time. Such managers also observe that consumers tend to admire quality products. However, an overemphasis on quality sometimes contributes to managers focusing on product orientation to overlook the market needs (Zott & Amit, 2008). With regard to the selling concept, the focus by the managers involves ensuring that a given company undertakes an aggressive selling and promotion endeavour. This concept notes that consumers tend to exhibit buying inertia or resistance, and as such, should be coaxed into buying (Noble, Sinha & Kumar, 2002). A significant number of companies with a large quantity of products tend to embrace the selling concept, and the objective is often to sell what is available, rather than make what resonates with the needs and wants of the customers in the marketplace (Noble et al., 2002). However, marketing concept, on its part, denotes a business philosophy that appears to challenge both production, product and selling orientations. The marketing concept holds that the key to achieving a firm’s strategic goals involves being more effective compared to the competition, particularly when it comes to creating, delivering and communicating, for instance, customer value to the targeted customers. In essence, marketing concept focuses on four main pillars that include: customer needs, target market and integrated marketing and profitability (Avlontitis & Gounaris, 1997).

3.1 Critical analysis of marketing orientation

As noted by Kohli and Jaworski (1990), marketing orientation encompasses three key components that include intelligence gathering, dissemination of such intelligence, and responsiveness to the needs and wants of the target market. As such, a focus on marketing orientation compared to other forms of orientation play a role in ensuring that a given firm can achieve superior performance. Additional advantage of marketing orientation is that it contributes to superior value especially for the customers, and in turn, encourages exceptional performance from the firms embracing the concept (Ramayah, Samat & Lo, 2011). Further, as noted by Levitt (1960), marketing orientation is suitable for business management and administration because it can help to improve firm performance. In addition, firms can also make use of marketing orientation to gain a competitive edge in the marketplace as suggested by Lukas and Ferrell (2000).

With regard to the cultural definition of the marketing concept, Narver and Slater (1990) observe that a given company’s ability to realise exceptional performance largely depends on being able to establish a sustainable competitive edge by a focus, for instance, on superior value for the targeted customers. Similarly, in order to achieve such a goal, Narver and Slater (1990) reiterate the need for an organisational culture that is mainly focused on creating superior value for the target customers. Organisational culture in this sense denotes the values and beliefs embraced, for instance, by the people in a given firm. As such, creating and maintaining a culture that can encourage a particular behaviour necessary for achieving and sustaining competitive advantage provides a given company with an avenue to realise its strategic goals. On another note, and as identified by Narver and Slater (1990), marketing orientation is associated with some behavioural components such as customer and competitor orientation, and inter-functional coordination. Through customer orientation, for instance, a company can engage in activities that ensures it gains a better understanding when it comes to creating value for the target customers (Parasuraman, Berry & Zeithaml, 1998). Conversely, through competitor orientation, a company can engage in activities that enhances its knowledge regarding the strengths and weaknesses of the competition in the marketplace. As a result, a firm embracing competitor orientation is able to remain relevant in the marketplace because of the strategy of using competitor information to adapt to the changing trends in the marketplace (Jaworski, 1993).

As a behaviour component of marketing orientation, inter-functional coordination plays a role in ensuring that firms embracing marketing orientation are in a position to coordinate activities and resources for purposes of creating superior value for the targeted customers. In essence, these three behavioural components as emphasised in marketing orientation play a role in ensuring that a given company realise continuous success in terms of creating superior value for potential customers and gaining a competitive advantage in the marketplace respectively (Lafferty & Hult, 2001). Overall, compared to other concepts that businesses use to realise their strategic goals, marketing orientation is suitable for a number of reasons. For instance, the marketing concept ensures that firms focus on prioritizing customer needs. As a result, the existing and potential customers are able to experience more satisfaction with products that meet their needs and wants. In turn, a company that focus on marketing orientation is in better position to attract repeat purchases and also build its brand reputation in the marketplace. Further, a continuous focus on the customers through marketing orientation tend to encourage firms to make adjustments on a continuous basis in order to meet the changing trends in the marketplace (Mitchell, Wooliscroft & Higham, 2010).

Through embracing the marketing concept, firms are in a position to align all functions with the strategic goal of meeting the intended needs of the existing and potential customers. Further, marketing orientation plays a role in ensuring that firms have a better understanding of what is needed in the marketplace thus placing them in a more suitable position to improve sales and profits. Similarly, a consistent understanding and delivering what is needed in the marketplace by the existing and potential customers contributes to long-term profitability (Pulendran, Speed & Li, 2003). However, some of the subtle shortfalls associated with marketing orientation include high costs of investment in marketing research, a focus on continuous training to meet the changing trends in the marketplace and constant modification of products also require an ongoing investment, for instance, on new equipment and product iterations (Narver, Slater & MacLachlan, 2004). Overall, the benefits attributed to market orientation for firms in the marketplace exceeds the limitations (Pulendran et al., 2003).

4.0 Why marketing orientation is suitable for the Nokia case

Nokia is hardly a technological laggard, and this is evident in its recognition among the firms that first came up with the idea of smartphone in the mid-90s. During the same period, the company also came up with a prototype of a touch screen and internet-enabled phone. Further, the firm also spent a significant amount of money on research and development. However, Nokia failed to translate its R&D capabilities into products that resonated needs and wants of customers in the marketplace (Surowiecki, 2013).

The advent of mobile phone was specifically intended for calling purposes, and to fill the communication gap that was created by the lack of fixed telephone. Initially, it never occurred to the producers of the gadgets and users alike that mobile phones could be used for other functions. Subsequently, with the continued progress in technological advancement, the idea of smartphone came up. Initially, a significant number of mobile phone users focused on the shelf life of the mobile devices. However, as more people across the globe continued join the middle income earning bracket, they increasingly became less concerned with the shelf life of the mobile gadgets. Instead, their attention shifted on how they can derive more entertainment from the mobile phone devices (Jia& Yin, 2015).

However, despite the changes in customers’ taste and preferences, Nokia still maintained a focus on product orientation, and as such, the company continued to strengthen the inherent properties of their mobile phones in the market without the consideration of the changing taste and preferences of the target customer. On this note, a focus on market orientation would have ensured that Nokia understands the changing needs of the existing and potential customers in the marketplace and to try and create value for the target customers (Jia& Yin, 2015).

4.0 Nokia’s marketing myopia

Levitt (1960) identifies marketing myopia as a common problem that affects most industries, thus leading to their laggardness. For instance, such a problem as evident with the case of Nokia can be attributed to an overemphasis on product orientation. Consequently, a focus on product orientation has contributed to a situation where the company tends to overlook the customers’ needs. Customers’ needs change from time to time, and in order for a company such as Nokia to avoid suffering from myopia it needs to embrace marketing orientation as is the case with competitors such as Apple Inc. (Wright, Jayawardhena& Dennis, 2008).

5.0 Recommendation

While competitors such as Apple and Samsung focused on market orientation in terms of changing their products in tandem with the changing needs of consumers in the marketplace, Nokia stressed its attention on product orientation thus overlooking the market needs (Jia & Yin, 2015). On this note, in order for Nokia to realise success, the following measures are a necessity.

• As a Company in a competitive marketplace, Nokia needs to understand its value proposition. In this regard, the Company need to convince its existing and potential customers of the benefits that they can derive from using Nokia’s products and services compared to competitors. However, such a statement can only yield fruits if the Company focuses on understanding the changing needs of the target customers (Narver et al., 2004).
• Achieving success in today’s competitive marketplace that is influenced by greater technological advancement require a focus on a continuous innovation process. Apple and Samsung have gained competitive advantage in the marketplace due to an emphasis on a constant innovation process that ensures they build a differentiation strategy in the marketplace. In essence, value proposition in the mobile phone sector relates to how a companies can add value to their products and services to ensure such products and services appeal to the existing and potential customers. As such, developing a strong value proposition would ensure Nokia attract more customers to its products in the marketplace (Narver et al., 2004).
• A focus on product orientation has contributed to Nokia overlooking the market needs in today’s competitive and constantly changing mobile phones market. On this note, embracing marketing orientation would ensure that Nokia adapts fast to the changing needs of customers and, subsequently, remain relevant in an increasingly competitive mobile phones market (Narver et al., 2004).

6.0 Conclusion

In a competitive mobile phones market, an understanding of the changing needs of the existing and potential customers is necessary to ensure a firm such Nokia remain relevant in the marketplace. Compared to a focus on product orientation, that has been largely associated with Nokia, shifting to marketing orientation would ensure that the company gains a competitive edge by gaining intelligence in the marketplace, disseminating such intelligence across departments and ensuring prompt response using the information gathered from the marketplace to ensure products from the company resonates with the needs of customers. In turn, the firm will be in a position to improve sales and profits as a result of attracting more customers and establishing its reputation in the marketplace.