Marketing Trends in the Mobile Phone Industry - Case Study Example

Introduction: Andersen and Poulfelt (2014) explain that one of the best business strategies is developing an efficient marketing policy that can help business organizations to achieve growth in their areas of operation. This is because without an effective marketing plan, then the business under consideration will fail to make profits. This is the case of Nokia Corporation which was one of the leading mobile phone companies in the world. Matsuo (2013) explains that Nokia failed to develop efficient marketing strategies, mainly because it did not embark on an effort to collect data regarding its competitors and the needs of its target market. Bowerman, Connell and Orris (2004) explains that to effectively develop a marketing plan, there is a need of the marketers of an organization to collect data that is able to depict the preferences of customers regarding the products of the company. It is this type of information that Nokia used to correct its weaknesses in the marketing strategy, Nokia began collecting data that highlighted the kind of mobile communication gadgets that consumers preferred. This paper gives a detailed analysis of how Nokia used this information to transform its business operations. Nokia and Its Current Market Position: Nokia Corporation is a telecommunications company that was formed in the year 1967, mainly because of a merger of three companies based in Finland. After entering the telecommunications business environment, Nokia was able to quickly develop itself as an innovative company that produced highly technological products, especially mobile handsets. In the 1980s, Nokia was able to develop a long term expansion strategy by acquiring French, Finnish as well as German electronic business organizations. These acquisitions were able to strengthen the position of the company in the field of consumer and telecommunication electronics. Approximately 80% of the revenue earned by the company emanates from its mobile business operations (Matsuo, 2013). This is despite the huge competition, and the current downward trend that is experienced in the mobile telephone market. Millar, Millar and Choi (2010) further explains that Nokia controls about one third of the mobile market all over the world. However, during the later years of 2000, the dominance of Nokia in the mobile phone industry began to diminish. This is because of the introduction of smart phone products from companies such as Apples, Samsung and Google was able to take the company’s market share. For instance, the Android operating system of Google, and the iPhone of Apples proved to be extremely popular amongst consumers, leading to a significant drop in demand of the smart phone products made by Nokia (Matsuo, 2013). For purposes of countering the business operations of these companies, Nokia Matsuo (2013) explains that Nokia embarked on a process of data collection. Nokia was looking for data or information regarding the market trends of mobile communication productions, and the various needs of customers. Bowerman, Connell and Orris (2004) explain that it is possible to obtain data from existing sources, from observational studies, as well as from experimental studies. In a bid to obtain this information, Matsuo (2013) explains that Nokia used the available sources, as well as observational studies to collect data and information regarding the preferences of customers. These methods included internet research, and through the internet, Nokia obtained information from government and websites managed by higher learning institutions. Under observational studies, Nokia was able to observe its financial statements, and compared it to the financial statements of its competitors such as Apples and Samsung. Nokia realized that these companies managed to sale more smart phones, when compared to the normal phones. For instance in 2012, Samsung was able to sale 63 million Smart phones all over the world, while Apples was able to sale 130 million smart phones all over the world (Gartner, 2014). These two companies managed to control over 90% of the world’s smart phone market share. Furthermore, from the data collected from observational research, Nokia was able to denote that the mobile phone sales experienced a 1.7% decline in 2011, and this is because most people favored smart phones (Gartner, 2014). The following are the information obtained through this market research. Current Marketing Trends in the Mobile Phone Industry: Spending on mobile advertisement is on an increase: With the mobile phones playing an important role in the daily lives of people, there is an increase in mobile advertisement by companies operating in the mobile phone industry. For instance in Japan, 80% of the population use the mobile phones to conduct their businesses, such as paying bills, surfing the internet, etc. Mobile phone companies such as Samsung, Siemens and Black Berry have realized this trend, and they have embarked on an aggressive marketing of their products through the use of companies that provide communication services through the mobile phones. Emergence of Smart Phones and their domination of the mobile market: eMarketer, an online marketing firm was able to calculate the smartphone usage of US to be around 60.2 million by the year 2010. This was an increase of 50%, as from the year 2009. Furthermore, Millar, Millar and Choi (2010) explains that by the year 2015, the smartphone usage of people in America will increase by 43%. These marketing trends in smart phones are not only depicted in USA, but also in Europe, and Asia. On this basis, companies such as Apples, Samsung, Alcatel, Research in Motion have invested heavily in research for purposes of developing smart phones that have the capability of satisfying the needs of its target market. An increase in demand for Tablets. In the hope of increasing their market share, mobile phone companies such as Blackberry and Samsung have developed tablets, for the main purpose of competing with iPad. In the view of Mathur and Raj (2013), approximately 24 million tablets were sold in the year 2011, with an 80% decrease of iPads demand and market share. This trend is likely to continue in the coming years and hence mobile companies would have to develop marketing strategies aimed at promoting their smart phones. Social Networking and the Mobile Phones. Social networking is one of the fastest growing habits by citizens of US, Europe, Asia, and Africa. Millar, Millar and Choi (2010) gives estimation that by the year 2015, the use of mobile phones for social networking will grow by about 90%. On this basis, mobile phones have to develop social networking features in their phones, such as face book, twitter, instagram, etc. Matsuo (2013) explains that companies such as Samsung have responded to these needs by developing their mobile handsets, and putting in applications that can facilitate social networking. Use of mobile sites to gain information. Due to the emergence of the internet, consumers are now more concerned in visiting mobile sites for purposes of downloading applications, and getting information concerning their mobile phones. On this basis, there is a need of developing those web pages to contain the necessary information. These web pages must also be fast, as this would ensure that customers are not frustrated while seeking to find information. Changes in the Business Strategies of Nokia: Due to these marketing trends, Nokia decided to enter into a merger with Microsoft in 2013. One of the major aims of the company in entering into a merger with Nokia was to improve its position in the smartphone market that is currently dominated by Samsung and Apples. Microsoft is one of the leading technological giants, and on this basis, Nokia will most definitely take advantage of the research and development capabilities of Microsoft to improve its market share in the mobile industry. After the acquisition/ Merger, Nokia changed its name to Microsoft Mobile. It is important to denote that for purposes of gaining an entry into the smartphone market, Nokia was able to partner with Microsoft to develop Nokia Lumia. This was a series of smart phones that had various applications which made it possible to access the internet and other social media platforms. However, Nokia Lumia was unable to regain the market share that Nokia enjoyed in the 1990s, and early 2000s (Matsuo, 2013). This is because the smart phones from Samsung and Apples were still superior in quality, and hence consumers preferred them, as opposed to Nokia Lumia. This merger by Nokia and a change of name to Microsoft Nokia was therefore a new strategy of building a new brand name, and using the resources of Microsoft for the main purpose of penetrating the smart phone market, and increasing its market share. Furthermore, Nokia operates a website that is nokia.com, where it advertises its new products, as well as smart phones. In these websites, users are able to download certain applications that can be used in the mobile phones manufactured by Nokia. Matsuo (2013) explains that this merger of Nokia and Microsoft has the capability of challenging the dominance of Apples and Samsung in the mobile phone industry. Nokia will manage to use the distribution channels and marketing strategies of Microsoft to promote its series of smart phones, which includes Lumia 930, 635 and 630. Conclusion: In conclusion, the mobile phone industry is characterized by great innovation, without which, it is difficult to achieve a market growth. In as much as a company might develop good and innovative products, without proper marketing, then chances are high that the organization would fail in achieving market growth. In the 1990s, and 2000s, Nokia was the leading mobile company in the world; however, because of its failure to develop products that catered for the needs of the new generation market, companies such as Samsung And Apples were able to surpass it, in terms of sales. Its merger with Microsoft is aimed at addressing these weaknesses, and help the company regain its market share. References: Andersen, M. M., & Poulfelt, F. (2014). Beyond strategy: the impact of next generation companies. Oxford: Oxford University Press. Bowerman, B. L., Connell, R. T., & Orris, J. B. (2004). Essentials of business statistics. Boston, Mass.: McGraw-Hill/Irwin. Gartner. (n.d.). Gartner Says Worldwide Mobile Phone Sales Declined 1.7 Percent in 2012. Gartner Says Worldwide Mobile Phone Sales Declined 1.7 Percent in 2012. Retrieved June 26, 2014, from http://www.gartner.com/newsroom/id/2335616 Mathur, V., & Raj, J. (2013). Nokia Morph Technology Concept Phone (1. Aufl. ed.). Saarbrücken: LAP LAMBERT Academic Publishing. Matsuo, T. (2013). Electronic business and marketing new trends on its process and applications. Berlin: Springer. Millar, C. C., Millar, P. H., & Choi, C. J. (2010). Technology standards and increasing returns: Microsoft versus Nokia and Linux. International Journal of technology Management, 49(4), 357. Read More