The Introduction of Mobile Phones - Essay Example

Running Header: Marketing Student’s Name: Instructor’s Name: Course Code: Date of Submission: Table of Contents Table of Contents 2 Introduction 3 Competition 4 Marketing principles 4 External environment 6 Political factors 6 Environmental, social and ethical factors 6 Technological factors 7 SWOT Analysis 7 Market segmentation and targeting 8 Recommendation 9 Conclusions 9 References 10 Marketing Introduction As days goes by, mobile phones are turning to be more of a necessity than a luxury as the benefits got from mobile phones have significantly increased. One is that they ease communication as some one can be reached anywhere and anytime by friends, relatives and colleagues. In general, the introduction of mobile phones brought busy lives. Berger (2000) describes that the growth of Nokia phones has been substantial as they have been leading the market with about 70 percent share and it is interesting as there is a further scope of improvement in sales. Nokia largest market is in China followed by India then U.S. This study shows aims at showing the strategies applied by Nokia as a mobile phone company in positioning its products in the market. According to Oehmke (2000) Nokia is a Finland based multinational company founded in 1865 where it started as a pulp, rubber and as a cable manufacturer. It is the world third richest company with its logo ‘connecting people’. Nokia provides services for network operators and in 2008 for example the company recorded revenue of about 50.8 billion Euros which was an increase of about 20 percent from the previous year. The company has employed about 120, 900 employees in 120 countries according to research carried out in June 2009. The share for the global handset market plunged in 2010 as the global sales soared for example in Smartphone’s based on Google’s Android platform. The world wide sales rose by 32 percent in 2010 to 1.6 billion units and the biggest contributor was smart phones whose sales rose by about 72 percent. Sankar (2006) shows Nokia being a communications based company mostly focuses on mobile phone technology. When the mobile phones were introduced into the market, the models were basic with the only technology in messaging. After the SMS messaging there was increased technology where one was able to put different faces on the phone. Later there was the introduction of other technical advanced thick and fast advances which include MMS, WAP and polyphonic ringtones. There was also predictive SMA where the phone finishes off a word when one it texting, there was also the introduction of camera phones and video recorders (Brian, 1998). Competition With this technology available in the communication market, Nokia had to have lots of competition from other companies such as Sony Ericson, Samsung, and Motorola etc. These competitors facilitated Nokia to keep its game up for example by running successful marketing strategies. Nokia therefore introduced new strategies of how to focus on the principles of marketing. Currently Nokia is the world’s best selling Phone Company where it strengthened its position in the market in 2000 through shipments which grew by about 66 percent. The biggest competitor is Motorola which has a market of 17.2 percent after Nokia which is leading by 37.2 percent market share (Sankar, 2006). Marketing principles Businesses have many priorities but in a marketing oriented company such as Nokia, it is important to consider several principles of marketing. One is that the company should consider customer satisfaction which is based on the market research or where the company analyses the market to know whet its customers prefer. The company should find out whether the customers’ expectations are being met by their products and if not then the company should introduce new strategies that pleases their customers. According to John (2009) the other principle necessary in marketing is customer perception. This involves the Company’s image or how customers perceives the company and its products basing on value for money, product quality, fashion or trends and product reliability. The marketing research is carried out to identify directions, discover new business models and web distribution models. These will enable the company to set strategies for the future. However, information got from a marketing research does not guarantee success neither does it make business decisions. Final decisions are made by the marketing managers and therefore are necessary for them to obtain research report showing the courses of action. Market research therefore analyses the marketing needs, the size of the market and the scope of competition. Customer needs and expectations are considered by the company as a way of marketing. This is necessary as it is used to anticipate future trends and can also forecast future sales volumes. This is therefore important to every company that wishes to keep and improves its entire current market share such as Nokia that has many competitors in the market. Nokia also aims at generating income for its shareholders and stakeholders. This marketing principle states that there is need for any organisation to be profitable enough in order to generate income. This income can then be used for growth of the company or to satisfy the stakeholders in the business. Though it is necessary to consider satisfying the customer first it is also necessary to consider several other aspects that benefit the company such as focusing in making satisfactory progress. Nokia markets its product by ensuring that their products are developing along with the market. If one brand is developing well then its income should increase for example the introduction of Nokia Smart phones in the market saw a significant increase in profits for the company as the company focused in producing customers’ preference. Nokia is also keen in its market environment, as it always knows what is happening within other markets and around its competitors. If the market is changing, the company has to introduce technological advances, distribution channels and be up to date as these are important factors that enable a company to survive in the market. External environment Political factors Political factors include the legal constrains for example the introduction of G3 technology constraints that the Nokia company has to take into consideration. Strother (2004) explains the political and legal factors should be handled in the right manner and according to the laws of the country this is because most businesses aim at making significant profits and may mislead their customers about prices of goods, their quality and the availability of the product. Political influence also involves where the legal department ensures that companies operate under high standards of hygiene and safety in both workplace and at other outlet stores. Environmental, social and ethical factors Most company view profits as more valuable than having a strong ethical code. This governs company behaviour and business conduct as some unethical practices are against the law. Other practices are legal but are considered unethical by the public and therefore companies involved in these practices may lose their market share and profits. Tichy (2003) shows examples of unethical practices include testing a cosmetic on animals which has made many consumers boycott certain products. Nokia have managed to maintain its environmental friendly characteristic as it observes the environment and also performs activities that the consumers would not consider as unethical and this is one reason that contributes to the popular brand of mobile phones. Technological factors Tichy (2003) argues that the communication market technology is the most important factor that mobile companies such as Nokia and Motorola have to take into consideration before introducing a product in the market. Technology has to be up to date in order to keep up with the trends and consumers preferences in order for a brand to capture a bigger market share and stay ahead of other competitors. SWOT Analysis Brian (1998) describes that this is a method used by businesses to decide on a marketing scheme since it analyses the strengths, weaknesses, opportunities and threats affecting the company. The strengths of Nokia are that it is considered as the most popular mobile communication company in the industry by generating more sales. Nokia also leads in quality which is the heart of its brand promise. The weaknesses basically show where the product is failing and the problems with Nokia include the current aim at saturated market segment. The Nokia wage costs are ever rising charging higher import costs and high supply chain costs. According to Strother (2004) Nokia Company has many opportunities in the market that enables it to make more profits and this can be achieved through improved technology. The company should also use innovation to reinvent its products and develop them within the market to offer unique products. The fall of phone call charges is an opportunity for Nokia as it can now sell to people who did not have phones due to high charges. The threats in the Nokia market include the 3G licensing in Europe that could hinder the company’s penetration and also the higher import charges. China mobile copy of Nokia sets is another threat and mobile operators such as Orange, Vodafone and O2 are now selling their own brands therefore reduction of market share (Tichy, 2003). Market segmentation and targeting To determine the type of area to market, Nokia analyses where they want to aim their products at for example currently their aim is youths. The global Nokia’s market is at maturity stage of product life cycle and therefore the company should aim at introducing strategies that significantly improve market position. Market segmentation is necessary to use in an industry where there are many kinds of customers for example the automobile industry. According to Steinbock (2001) positioning is where a company product fits in the market and attracting potential customers. The major elements of market positioning include pricing, quality, service, distribution channels and packaging of the products. This is a competitive strategy that enables companies attain core competency in the market. This is determined by how marketers create a good image about their products to the target market. A company may decide to reposition which involves changing the identity of the product relative to other competing products. De-positioning of products may also be used and it involves changing identity of competing products in the market in order to make it look as the identity of own products. Recommendation To effectively position its products into the market, a process should be followed by Nokia which involves defining the market. This is to determine the relevant buyers in the market and ensuring that the products produces satisfy the needs of these buyers. The Company management should also identify the attributes or dimension in which are to be employed in order to achieve a competitive position. Information about the company’s products should be collected from a sample of customers. This will enable the company to know how their products are perceived in the market (John, 2009). Conclusions To effectively implement the above recommendations, the company’s management should ensure that they maintain their company resources which include maintaining a good relationship with the employees. The product resources should also be effectively managed to avoid lower production in some places. Inventory and supply chain has to be effectively managed by the Company, as this will necessary in achieving the Company’s goals. The sources of raw materials should be reliable and relevant according to the conditions in the industry. References Berger, A. (2000). Media and communication research methods: An introduction to qualitative and quantitative approaches. London: Sage publication, 23. Brian, P. (1998). Finding what people want, Experiences with the Web Crawler, Chicago, USA, 17–20. Oehmke, T. (2000). 20th Anniversary of the World's First Commercial Cellular Phone. New York: Cengage Learning Inc. Sankar, S. (2006). Consumer perception of global vs. local brands: The Indian car industry, Nottingham: University of Nottingham. Steinbock, D. (2001). The Nokia revolution: The story of an extraordinary company that transformed an industry, London: Amacom Publishing. Strother, N. (2004). Boom times for India's wireless market. India: SAGE Publications. Tichy, N. (2003). Managing strategic change, technical, political, and cultural dynamics. New York: John Wiley. Read More