Marketing Products and Services in a Dynamic Environment - Report Example

Marketing Products and Services in a Dynamic Environment Table of Contents Table of Contents 2 Introduction 3 Entry inOman 3 Propositions 4 Porter five force model 6 Brand management 7 Industry analysis 9 Threat of substitutes 9 Degree of rivalry 10 Threats of new entrants 10 Purchasing of power of consumers 10 SWOT analysis 11 Nokia’s strengths 11 Nokia weaknesses 11 Opportunities 12 Threats 12 Reference List 13 Introduction Nokia a mobile phone manufacturer once dominated the telephone industry. The company controlled the largest market share globally. However, the company’s fortunes started to dwindle, and the corporation began to lose its grip with the introduction of Smartphone early 2007. With the introduction of the iPhone, a new stage of technological war was set in the industry. Nokia remained adamant in embracing Smartphone technology as consumers’ scrambled for the newly developed devices. Consequently, the company paid a dear price with declining sales being reported. Nokia lost a significant market share to its competitors in a short time spun. Recently, the company entered into a strategic alliance with Microsoft with the intention of redeeming itself. In addition, the company opted to introduce Smartphone with an aim of countering its competitors so as to regain its lost glory. The Nokia Lumia is one of its lines of product developed by the company in aim re-engineer the business of the multinational. Unfortunately, the strategy seems to have been ineffective given that much has not been achieved in realizing the objective of the partnership (Tung, 2013). Entry in Oman Companies usually strive to expand their scope of operation with the intention of tapping into the emerging opportunities that exist in those new markets. In order to the companies to succeed in the new markets, they have to overcome challenges. Market strategies are formulated to deal with those challenges amicably (Kalyanaram and Gurumurthy, 1998). It is essential that Nokia evaluates the viability of the Oman market before making a decision of entering the market. New markets have a set of unique threats that risk operations of a new venture. Precisely, political, social cultural, economic, and legal environment may expose the corporation to a number of risks that may hinder the success of Nokia. Furthermore, the newly developed mobile devices may have to adapt and cope with new conditions in Oman without isolating other brand consumers. It is important that Nokia understands the traits of users in the Oman market with more focus given to their demographic and socio-cultural aspects (Kalyanaram and Gurumurthy, 1998). Propositions Nokia may choose to reduce the price of the smart phones. Organizations use the strategy of reducing prices to penetrate into a new market and lure new customers. In the long run, the overall effect is that firms are positioned to secure an extensive customer base. In addition, the low prices may encourage clients who are loyal to other brands to change their preference and start purchasing the Nokia Lumia. It is possible that the other industry will respond by following suit and reduce their prices. It implies that Nokia will take pride in controlling the actions of the competitors and will be perceived as a market leader in Oman (Husso, 2011). Nokia should learn from its previous lessons that brought the company to its knees. The company failed to respond to the customer needs and wants which keep rising. The organization should monitor the large technological breakthroughs and respond proactively especially in the technical market. The company failed to embrace the Smartphone technology a decision that was suicidal for the organization. Launching the Nokia Lumia in Oman is not the end itself, rather, the organization needs to listen to customers’ needs and expectations and provide them satisfactorily. Customer feedbacks are imperative for coming up with new prototypes that can be used to develop more advanced phones that a lot of clients run for. In order to achieve the goal of technological advancement, Nokia needs to promote innovation of a variety of new phones that will be instrumental in creating an appealing image of Nokia as a brand in Oman. In addition, introduction of newer models of Nokia Lumia will position the company in a better place to fight with the existing competitors who dominate the industry in Oman. In addition, the company will manage to attract new customers who will have the urge to try the new line of products (Breshanan and Greenstein, 1999). The external environment which has political, economic, socio-cultural, and economic environment forces influences the success or failure of a business in a new market. Political environment includes taxation policies in Oman. Taxation has a direct influence in determining the operational costs that Nokia will incur in Oman. When the tax rates are high, operational costs for Nokia will be high, and this may cause Nokia to price highly the Nokia Lumia. Nokia may fail to penetrate the Oman market if the prices of the new phones are expensive. The economic environment includes the interest rates charged, national income. Unemployment levels, foreign exchange rates and inflation rates. Favorable economic conditions will offers Nokia lucrative opportunities in selling the Nokia Lumia in Oman. A robust economy symbolizes a broad customer base which has a high purchasing power. On the other hand, the socio-cultural factors include aspects such as the aging population that exists in Oman, attitudes, and beliefs towards certain products. Given that the Nokia Lumia embraces a high level of sophisticated technology, the device may bot be effective in addressing needs of an aging group in Oman. Precisely, the target market in this situation will be a youth and young adults who are usually interested in new technology and are always willing to explore other alternatives. Conversely, evaluating the technological environment in Oman is very essential for forecasting the potentiality of success on Nokia Lumia as a brand. Technical issues include the level of innovation, introduction of new products and the obsoleteness of mobile devices. The introduction of the Nokia Lumia in the Oman market will offer customers the opportunity to try a new technology. Customers have a tendency of comparing the functionality of mobile devices and usually prefer those brands that offer them a variety of features. Nokia needs to apply needs to use technological approaches as one of the leading branding strategies. The company needs to convince customers that they are the providers of technical solutions in Oman. Nokia can only demonstrate this by ensuring that they continuously improve the existing mobile phones and introduce new ones (Breshanan and Greenstein, 1999). Competition in the mobile phone industry is influenced by the interaction of five forces just like in other sectors. The effects include threat of new entrants, threat of substitute products from other companies such as Samsung, rivalry amongst competitors, the bargaining power of suppliers and buyers. The success of Nokia in Oman will depend on the interaction of these forces. A careful analysis of the effects is very vital because the forces are essential in determining the attractiveness of an industry (Porter, 2008). Porter five force model Source :( Porter, 1979) However, critics of the model argue that assumptions made are not realistic. The model assumes that an industry is composed of customers who are not uniform. In addition, corporations amass resources that position them strategically to counter the moves of their rivals. The funds are also used to short-change market entrants. Further, the model has existed for over three decades that critics argue it has been overtaken by events. The business environment is very dynamic, and new issues arise every day. The model cannot be able all the problems that face new industries that seek to expand their scope of operation (Porter, 2008). Conducting business in Oman will require the application of a number of approaches. The strategies may include the use of contractual agreements with mobile phone dealers in Oman. Further, Nokia may choose to export the Nokia Lumia directly to the purchasers or may have to enter into partnerships with the existing mobile phones suppliers. The company should be tactical when choosing the most efficient method of operation in Oman since it may determine the organization success in the Oman market (Porter, 2008). Brand management A brand is as an identifying mark or characteristic that is usually associated with a product or service. The features are used to differentiate a product from those of competitors with the main purpose being to create awareness and influence customers to pledge their allegiance for goods or services (Dickson and Ginter, 1987). Business carried out in a global setting is can be affected by fixed patterns of varying issues as it had been mentioned earlier on in the paper. Managing the Nokia Lumia brand will require evaluating the language spoken in Oman and the cultural practices that people value (Drucker, 1973).A standard language of communication used in Oman is Arabic. It is, therefore, necessary that Nokia develop phones that have the capability of changing the language settings to Arabic. The feature will increase the chances of Nokia succeeding in Oman since the product incorporates the needs of the target market. Furthermore, in order to successfully manage the Nokia Lumia brand in Oman, the company should ensure that the perception of the business among consumers in Oman is desirable and indifferent to the country. A good case study is McDonalds; that has managed to provide customized products to different market segments of its customers (Dickson, and Ginter, 1987). Nokia has been widely known for maintaining a distinct brand strategy internationally. With the recently forged partnership with Microsoft, a window was opened for the company to have a chance of renaming its brand. The agreement offers the company to allow other manufacturers to use its name for newly developed mobile devices. The phones are only differentiated in terms of product features that are unique depending on the precise model. The company has also managed to introduce a new line of phones which targets those who like gaming activities (Hakkarainen, 2010). Although sometimes-environmental forces may be outside the control of Nokia, there are some aspects that the company can successful manage. Nokia still benefits from the initial brand name that it had managed to create initially. The logo of the mobile phone company is widely recognized in most countries and therefore the penetration of the Nokia Lumia in Oman might not be a difficult task (Shaw, 2012). Distribution strategies significantly differ amongst companies that conduct their businesses in international levels. Apple incorporations usually use a selective approach that critics feel discriminates the advancement into the numerous potential markets that exist. It mainly depends on a chain of stores that are owned by the company to distribute the products offered. On the other hand, Nokia uses an entirely different approach. The company does not discriminate any potential market; rather only luxurious models are distributed to selective stores. Accessibility of the brand in Oman is, therefore, likely to be easier since the company does not discriminate its market. The Nokia Lumia is considered a brand that targets high-end customers; however, the company also offers other Nokia Lumia models that usually go with affordable prices (Husso, 2011). The introduction of Nokia Lumia is a strategy that was taken to differentiate the Nokia brand in the market. The company usually targets different market segments and uses different approaches to cater for the different market segments it has managed obtain. The strategy has emerged to be very effective because product differentiation allows the use of various price strategies. Specifically, the game plan is widely applied when new products are launched into the market. However, the mobile phone company uses similar marketing strategies for all Nokia Lumia during the introduction stages. The move has led to the enterprise being overtaken by Samsung that seems to be applying effective marketing strategy (Dickson and Ginter, 1987). Industry analysis Rivalry among existing competitors A product can be rendered obsolete in the mobile industry within a short time frame after its launch. The Nokia Lumia risks being made obsolete in Oman if the company fails to track the releases of other industry players. Customers usually go for newer products which they deem to be better as compared with the existing commodities. It imperative that the organization sells the phones it intends to supply to Oman within a short time. Reducing the prices of the Nokia Lumia may help the business achieve the goal but may set the stage for cutthroat competition which is usually unhealthy (Hakkarainen, 2010). Threat of substitutes Smartphone currently do not have any significant alternatives. They incorporate important features such as media players, cameras, and other critical applications. Nokia does not have to worry about the threat of substitute products. Personal computers that may be considered potential alternatives are very inconvenient when it comes to mobility (Baumgartnerand Steenkamp, 1996). Degree of rivalry Competition is based on the number of competitors, pricing strategies, brand differentiation, and the market share controlled by other players. The industry is very unpredictable due the escalating tastes and preference of customers. Companies that dominate the market usually dictate the prices of mobile phones in the Oman market. Consequently, Nokia may be forced to adjust the prices of Nokia Lumia accordingly to reflect the desired market value in Oman (Husso, 2011). Cutthroat competitions usually originate from numerous parts. Commodity prices are among the most significant factor utilized to create fierce competition. It is important that Nokia differentiate the Nokia Lumia as a unique product by providing the product according to the specifications of customers in the Oman market (Shaw, 2012). Threats of new entrants Entering the mobile industry is a very expensive venture. Companies like Nokia have invested massive financial resources in establishing a business in its present state. In addition, intensive technological investments are required and drive the development of the companies to greater heights. Furthermore, Nokia will also be required to conduct market research in order to establish the possibility of the company surviving in Oman. Other than the known mobile manufacturers that people are familiar with such as Samsung, Nokia should not be concerned about the threats of new entrants. The reason is that it has already established a desirable brand name edges ago (Hakkarainen, 2010). Purchasing of power of consumers The power of consumers can be determined using different parameters. It may include the size of the customer base. Nokia should consider the power of buyers in the Oman market because they have the authority to dictate the reception Nokia will receive in the Oman market. Mobile phones companies usually consider brand preferences of their customers because they significantly affect the performance of the organization (Baumgartner and Steenkamp, 1996). SWOT analysis It involves analyzing the strengths, weaknesses, opportunities, and threats of an organization. Once an organization establishes its strengths it utilizes them to outcompete its rivals. Threats and weaknesses usually hinder an organization from achieving its vision. It is important that the organization mitigate weaknesses they have and risks they face (Husso, 2011). Nokia’s strengths Nokia pride itself as one the best mobile phone manufacturers in the world. They mobile manufacturer once controlled the largest market share before it loosed its grip on the way. The company had built a brand that most customers preferred. Since 1998, the company enjoyed market leadership. The reputation of the business’s name is likely to influence buyers in Oman to purchase a new Nokia Lumia (Hakkarainen, 2010). Nokia weaknesses Nokia is not proactive when it comes to responding customer needs and preferences. The company was adamant to enter into the Smartphone technology despite among the first players to discover the technology. The hesitation significantly affected the performance of the company in the subsequent years as the sales began to decline. However, the company seems to have realized its mistakes and the recently formed strategic alliance with Microsoft has proved useful. Cooperation between the two companies has seen Nokia enter the Smartphone with the new Nokia being introduced in Oman, representing the fruits of the cooperation. Nokia is likely to regain its loyal customer in the Oman market who had migrated to other brands; as a result, the measure taken (El-Ansary, 2006). Opportunities The strategic partnership between Microsoft and Nokia is a landmark deal for Nokia. Microsoft is a technology giant and cooperation of the two companies will offer Nokia an opportunity to embrace fresh ideas that help the company redeem its market position. Nokia Lumia, which uses windows operating system, will be in Oman given the reputation that is associated with Microsoft software (Husso, 2011). Threats Competition remains the major threat for Nokia in the new market. Established Smartphone from Samsung, HTC, and Motorola are in Oman. Convincing customers to change their preferences will require the use of effective marketing strategies (El-Ansary, 2006). Reference List Baumgartner, H. and Steenkamp, B. (1996), exploratory consumer buying behavior: Conceptualization and measurement, International Journal of Research in Marketing. Breshanan, T. and Greenstein, S. (1999), Technological competition and the structure of The computer industry, The Journal of Industrial Economics, vol. 41, (1). El-Ansary, A. (2006). Marketing strategy: Taxonomy and frameworks. European Business Review, 18(4). Dickson, P. R., & Ginter, J. L. (1987). Market Segmentation, Product Differentiation, and Marketing Strategy. Journal of Marketing, 51(2). Drucker, P. (1973). Management: Task, Responsibilities and Practices, New York: Harper and Row. Hakkarainen, A. (2010), Behind the Screen: Nokia’s success story in an industry of Navel-gazing executives and crazy frogs. Klaava Media. Husso, M. (2011).Analysis of Competition in the Mobile Phone Markets of the United States and Europe. Aalto University. Kalyanaram and Gurumurthy, (1998).Market Entry Strategies: Pioneers Versus Late Arrivals. Porter, M. E. (2008). The Five Competitive Forces that Shapes Strategy. Harvard Business Review, 86(1). Shaw, E. H. (2012). Marketing strategy: From the origin of the concept to the development of a conceptual framework, Journal of Historical Research in Marketing, 4(1), 30–55 Tung, L (2013).Despite the Microsoft takeover, what’s left of Nokia can still make mobile phones-and soon. [21.12.2014]. < http://www.zdnet.com/article/despite-the-microsoft-takeover-whats-left-of-nokia-can-still-make-mobile-phones-and-soon/> Read More