Nokia Corporation

Business Overview

Nokia Corporation is a multinational corporation that engaged in communication devices and mobile phones production. The organization operates in 150 different countries with roughly worldwide annual sales of 42 billion and profits of 2 billion in 2010. Nokia was first established in 1865 as a groundwood pulp mill in Finland. The founders, mining engineer Fredrik Idestam and statesman Leo Mechelin transformed Nokia into a share company in 1871.

Nokia started its involvement in telecommunication industry with Nokia DX 200, an electronic digital switch in 1970s. Then, Nokia had a strategic alliance with Salora which allowed the production of its first automatic cellular phones system in 1981. Next, Nokia successfully came out with the first car phone which was Mobira Senator. As it grew, Nokia involved itself into the production of Global System for Mobile Communication, personal computers and computer devices such as CRT and TFT LCD. It also had collaboration with Symbian for its N-Series phone. According to Phone Arena Statistic, Nokia used to be the world's leading mobile telephones manufacturer.

The organization's mission is to create a linkage between people and to get them connected with each other as Nokia's tagline is Connecting People. Nokia's vision is "Voice Goes Mobile. If it can go mobile - it will". Through its goals and objectives, Nokia tries to build great communication products, help people eliminate the gap between what matters most to them, allow more life's opportunities and capture sales volume. Unfortunately, Nokia was among the latest mobile phone companies who created the 3G, which hold a higher risk of being displaced by competitors such as Samsung, Apple and LG. Since the demand for smart phones is soaring, Nokia has many rooms for improvements to regain its leadership status in the mobile communication industry.

Nevertheless, Nokia believes in providing everyone's needs as a mobile manufacturing industry. Nokia consistently studies its surroundings to understand the needs and wants of its customers. Since Nokia has various types of products, Nokia has unique target market settings. As illustration, Nokia 7210 is designed for young adults of 15-27 years old, Nokia Lumia 920 which is yet to be released is mainly targeting youth smart phone users, whereas Nokia 5530 Pink is meant to attract female customers.

Marketing Mix Strategies

Product Strategy

Product quality is an important determinant for the customers for choosing a brand that helps in the development of brand reputation. Quality belongs to the product perspective of a brand's identity whereas perceived quality is how a brand's quality is seen by consumers. It is one of the key dimensions in Aaker's brand equity model. A higher price is a sign of high quality to the consumers. Perceived quality is a source of consumer satisfaction it makes them to repurchase the product which leads to loyalty.

Nokia provides various designs of product such as Flip sets, Flat sets, Slide sets, and Sets with rotating camera. Not just that, Nokia has released Lumia, its smart phone series to satisfy the growing population of users that prefer smart phones. Although Nokia smart phone market is not a total success compares to other brands such as Samsung or Apple, but Nokia still able to gain market share of 22.5% because of its quality and brand personality. Each set of Nokia series has its own unique features. For example, Nokia's Lumia smart phone was a product which Nokia incorporate with Microsoft through a strategic alliance. Other than smart phone, Nokia main products which are Symbians and Ovi platform design.

Since 1994, Nokia has been offering over 200 kinds of phone models. It introduced a wide range of product to the market as compared to its competitor, Apple Inc. Nokia believes that introducing a wide variety of products in a short period will cover various price segments while maintaining lower development cost. Nokia also improves its efficiency in development and manufacture of products within each series. Without any big efforts, Nokia changes its competition from a single market to global level.

Price Strategy

Price influences the brand choice in seeking the lowest price to avoid financial risk or seeking the higher price to gain product quality (Macdonald & Sharp 2000). For some consumers, the price is vital particularly when they are purchasing everyday products. Consumers may choose a brand just because it has the lowest price, while other consumers may choose a brand just because it has the highest perceived price inferring that it is of high quality. Price is also affected by cost of the production, demand of the customer and market competition.

Based on Nokia's products, it emphasizes on its aesthetic phone design, personalize user interface and its unique software features in each series. Nokia phone has common design across standards despite of its numerous series of phone. Both of its features lead to the strong brand image creation. This brand image will enable it to set prices that are based on more on customer value rather than on production cost.

Moreover, Nokia also uses price skimming strategy. Price skimming is a strategy that marketers set a relatively high price for a product or service at first, then lowers the price over time. It is also known as temporary price discrimination. It allows the firm to recover its sunk cost quickly before competition steps in and lowers the market price.

Nokia pricing is mainly competitor based. It usually tries to set its product lower as compared to its competitor. However, Nokia does not lower its price to the lowest because consumers will not mind to pay a little more for the extra features and technology. Nokia also focused on offering suitable product for suitable market segmentations. For example, low cost phone for lower income class which will only cost approximately RM 100.

Promotion Strategy

Promotion is the communication link between companies and customers. Companies use an assortment of ways to communicate effectively with customers about their products, services and ideas. They may promote directly through salespeople or indirectly through advertisements and sale promotions. Nokia uses AIDA concept which stands for Attention, Interest, Desire and Action. This concept states that a company must attract the attention of the customers, raise the customers' interest, create customer desires towards products and lead customers to take action to purchase the products.

Nokia grabs customers' attention by advertising through television, sign boards, bill boards,