Nokias Customer Service Theory Based on Its Marketing Mix - Case Study Example

Nokia’s customer service theory based on its marketing mix Name Institution Course Instructor Date Executive summary Although there is high competition in the telecommunications market, Nokia still controls a substantial segment of the market due to its strategic application of customer service theory in its marketing strategy. The report introduces the current marketing statistics of the company followed by a contextual analysis of the learning theory as the original model pursued by Nokia in establishing a global recognition of its brand. Thereafter, the report discusses the psycho-Analytical theory which is the current customer service theory used by Nokia to retain existing customers, attract potential customers and counteracts high threats of competition. Nokia’s customer service theory based on its marketing mix Introduction Nokia, as a manufacturing company, specializes in the production of mobile handsets with diverse protocols such as GSM, W-CDMA and CDMA for all types of market segments around the globe. Additionally, the company produces mobile phone softwares such as messaging, media, games and map applications, among others. It manufactures telecommunication network equipments via ‘Nokia Siemens Networks,’ which is a subsidiary company. Moreover, it provides its customers with free information and services that pertains to maps and navigation. As such, Nokia operates as a market leader in telecommunications that relate to mobile handsets. According to Yim, Tse & Chan (2008, p.742), the company relies on its accurate marketing strategy, vast experience and constant innovations not only to maintain its market status, but also acquire new markets. In the product category of its marketing mix, the company’s approach towards its customers enabled it to secure a top spot in mobile phone branding. Whereby, the company depends on technological advances to produce attractive handset designs, coupled with sophisticated applications while at the same time pricing the products affordably (Klaus & Maklan 2007, p.120). In this regard, this paper seeks to present a report that discusses Nokia’s customer service theory based on the evaluation of the company’s extended marketing mix. Nokia’s customer theoretical concept Background It is observable that many business organizations nowadays utilize various customer service concepts in the product marketing mix. It comes with a critical necessity to secure the performance and success of the business organization. Alternatively, businesses that neglect such tactical concepts do not only fail to achieve a significant position in the market, but also fail to create an impression to loyal or rather potential customers (Scharl, Dickinger & Murphy 2005, p.172). As competition persists and business organizations diversify their marketing strategies, it is important for any company to make use of the available customer service theories to counter competition, secure a market for its products and woe many customers. Modernity defines customer service theories as concepts that determine the procedural pattern of how people and organizations purchase products and services that satisfy specific needs (consumer behaviour). Therefore, by determining consumer behaviour, business organizations get insights on how to strategically position product brands to befit the preferences of the consumers or market the product brands in manner that attract customers into purchasing the products (Viardot 2004, p.2). That is why the study of consumer behaviour is important in understanding the market statistics of a given business organization. Initial Nokia’s customer service theory Similarly to Olson, Slater & Hult (2005, p.53), Nokia relies on different customer service concepts to study the behaviours of its consumers, in order to customize a marketing strategy that secures high market sales for its products and services. The company applies the concepts at a customary basis to ensure that the customers acquire ‘preferred products’ at consumer ‘preferred prices.’ This means that the customary identity enables Nokia to alter product brands thereby giving the company a competitive advantage in the mobile telecommunications market and designing products that meet the current preferences of the consumers (Rust, Moorman & Bhalla 2010, p.99). The application of different consumer behaviour theories appropriates Nokia in quality product and service providence that suits targeted consumers. As such, all theoretical concepts pursued by the company in its product marketing mix affects the purchasing power and preference behaviour of loyal and potential or rather prospective customers (Collin & Lorenzin 2006, p.428). The applicability of the concepts helps the marketing strategy of Nokia by influencing the consumers’ behaviour towards the purchase of the mobile phone brands. It operates on the concept of survivability by offering its target customers with essential products that exceed the value of products offered by other competitors. The company accomplishes such initiatives by analyzing current consumer behaviours. Research shows that consumer behaviour analysis significantly influences a business into developing appropriate products and positioning its marketing mix to positively influence the desires of the customers. Basing on such discussions, it is evident that Nokia uses various theoretical concepts of consumer behaviours to promote the purchase of its mobile phone brands. The Stimulus Response Theory that relies on the basics of ‘Learning Model’ constituted the initial viable customer service theory utilized by the company (Hultén 2011, p.257). Ivan Pavlov, a Russian psychologist, constructed the theory to imply that the consumers’ behaviours are controllable by use of certain approaches. Therefore, the entirety of learning depends on four main aspects that include drives, cues, responses and reinforcements. Drives refer to the intrinsic business spur that stirs action on the customer side; cues represent surrounding frail spur that dictates when, where and how people respond to the drives; response dictates the cues’ action and finally, reinforcement represents the positive reaction of consumer response (Lee, Ha & Widdows 2011, p.1998). Nokia initially used the model for influencing its customers into purchasing the company’s initial mobile phone brands. In this regard, the company created high demand for its products by linking the mobile phones to appealing drives such as next generation handsets (Kulviwat, et al. 2007, p.1086). Additionally, the company used cues in form of motives that promoted the positivity of reinforcements. It motivated the customers by ensuring that the products featured advanced characteristics portrayed by stylistic designs of the handsets. The model helped the company to market mobile phones in the initial competitive environment following its formation and colonization of the world’s telecommunication market. For instance, in fostering brand loyalty, the company displayed the phones’ features and software applications. Such evidence shows that Nokia used the learning approach in influencing the consumer behaviour. Alternatively, the company influenced consumer decision making process in terms of purchase of goods on the learning and experience platform. This implies that the marketers of the company’s products positioned the mobile phone brands to align with intrinsic drives rather than relying on extrinsic drives (it utilized internal stimuli as opposed to the occasionally used external stimuli). In a nutshell, the company associated its mobile handset brands to intrinsic consumer drives such as advanced technology, innovated applications and technological accessories, among others. The usage of the learning model proved effective in the initial market; however, in modern times the competitive environment is dictated by the extrinsic environment as opposed to intrinsic environmental stimuli (Daft 2010, p.137). Therefore, originally, the theory aided the company in the process of consumer segmentation on the aspects of diverse intrinsic drives. With the emergence of high competition from mobile handset companies such as Samsung and Apple, among others, the company sensed the need to replace the initial customer service theory, or risk losing the already depreciated market for its products. Current Nokia’s customer service theory As such, psycho-Analytical Model is the most considerable consumer theory used nowadays by Nokia. Nokia has been switching several models from time to time, but Psycho-Analytical model provides the most formidable perspective for Nokia to study the patterns in their consumer behaviours. Making use of this model enables the company to introduce some of the psychological elements in the company’s marketing plan. The model is, therefore, responsible for the formulation of a perfect strategy by Nokia which directly matches up with the needs of its customers (Lowe, et al. 2005, p.185). Nokia as a company is able to market and sell its handsets based on differentiation, segmentation and positioning. All the above mentioned factors are done on the basis of identifying the emotional, personal and socio-cultural factors that influence the purchasing decisions of its customers. It is a well known fact the consumers make decisions of their needs based on the above mentioned elements. Nokia is therefore capitalizing on these factors to formulate a strong marketing strategy that will propel them through and enable them to thrive in the market. All the above mentioned factors that influence customer’s decisions on what to buy cannot be directly controlled by the marketer. Taking the factors into account, on the other hand, supports Nokia into making marketing decisions such as positioning, segmentation and differentiation (Ding 2007, p.10). Adoption of the Psycho-Analytical model significantly helps Nokia sell its handsets all over the world. The fact that Nokia is able to analyze each country individually and make good marketing strategies helps the corporation to sell more handsets worldwide and widen their consumer capacity. The four factors that are used by Nokia Corporation are also identified according to how the company makes use of them (Lee, Broderick & Chamberlain 2007, p.200). The first factor considered by Nokia is cultural diversity. Every country in the world has its cultural diversity. It is, therefore, justifiable to deduce the fact that what works in one country will not do for another country (Chang & Horng 2010, p.42). Cultural factor as already described impacts on the decisions made by consumers before they buy anything. Nokia Corporation, therefore, makes its marketing decisions based on the cultural diversity of each country. This is done through operating with factors such as social classes and other subcultures being exhibited by consumers. Social factors are also closely related to cultural factors. Social factors do play a greater role in influencing what the consumers buy. Social factors that commonly affect many potential consumers in their marketing decisions include family, social statuses and most generally, the consumer’s reference group (Finkelstein, Hambrick & Cannella 2009, p.67). Nokia, therefore, makes use of all these factors in its marketing strategy to convince consumers to buy their products. Personal factors are the next category that any potential marketer who is aiming to double the sells should consider to review. Most of what people consume and their purchasing decisions are made on the basis of personal status. Sub-factors under personal status include age, level of income and the lifestyle adopted by an individual. Based on these three factors, people are able to buy what fits best to their status in the society (Campbell 2007, p.28). Nokia, therefore, capitalizes on this by providing range of handsets that fit people of all lifestyles and includes moderate income earners to high income earners. To finalize on the marketing decisions that influence people on what they consume are the psychological factors. Every individual has a different set of beliefs. Perception and attitude are also different within people based on how they view issues. Successful marketers need to understand all these factors to be able to convince consumers into buying their products. Nokia are well versed with this factor and have incorporated consumer perception and attitude in its marketing strategy. The application of Psycho-Analytical model has enabled Nokia to penetrate in many locations of the world and enabled it to be among the top contenders in the industry. What is done by Nokia proves that it is very effective to get more customers if a corporation thinks like the customers themselves (Rader 2009, p.104). After analyzing factors that influence consumer’s behaviour patterns, Nokia makes its marketing strategies like differentiation, positioning and segmentation as discussed in the text. Market segmentation After a close scrutiny on most of the factors that affect consumer behaviour and especially decision making in what they buy, a good marketing company should be able to identify the fact that every consumer has different needs that can be fulfilled by the mobile phone. Consumer preferences vary with some wanting devices with the latest technology while others varying to basic voice connectivity (Lim, Widdows & Park 2006, p.217). Based on the psychological needs affecting consumer behaviour identified by Nokia, the corporation has identified various segments that perfectly suit most of its consumers in the world. These segments are fashion, fundamental, expression and traditional. Fashion is for the person going with the current trends while fundamental is for the individuals who just want voice connectivity. Expression segment is for individuals who want custom made features while traditional is for those who just want traditional representation. Other factors include value for consumers who want quality and communicator for the person who needs handsets with all possible features of communication (Enderwick 2009, p.7). The above mentioned approach is adopted by Nokia who provide segmented products that are able to quest its customers’ needs. Positioning and Differentiation After analyzing its consumer behaviours, Nokia Corporation has securely positioned itself among the top contenders and this is because of its differentiation strategy (Easingwood & Koustelos 2000, p.33). Nokia has made itself well known among its customers based on the type of brands the company releases into the market. These brands are released into the market after carefully studying consumer preferences and producing differentiated products that basically fits every consumer’s choices. The position taken by Nokia Corporation on the type of handsets they produce is easy to use, durability, reliability, design and unique styles that best fit its customers. According to the Nokia’s study, these features are the ones that their customers want most. Various positioning strategies are used by Nokia to market their devices. The position adopted by Nokia uses the position of placing itself on the attribute of human communication. This deviates from what the competition is doing (Chang & Horng 2010, p.42). Through the use of Psycho-Analytical model, Nokia has been able to use different points as its positioning strategy. In terms of differentiating its products from other competitors in the market, Nokia uses both product and image differentiation. In a nutshell, it is justifiable to conclude that Nokia superbly uses the psycho-analytical model to study its consumers and deliver as per their expectations. Conclusion In conclusion, the report discussed Nokia’s customer service theory based on the evaluation of the company’s extended marketing mix. In this regard, the learning model enabled Nokia to achieve global market recognition by analyzing the intrinsic drives of the customers. However, with the emergence of high competition, the initial model became obsolete thereby forcing the company to adopt the psycho-Analytic theory, which up to date enables the company to control a large market share of telecommunication handsets. Therefore, customer service concepts are important in the marketing strategies of every company’s products brands. References Campbell, N 2007, ‘The technological gaze in advertising,’ Articles, p. 28. 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