Marketing Audit & Barriers : case study Nokia

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Marketing planning

Unit - 19

Assignment-1: Marketing Audit & Barriers

Task- 1

Introduction of Nokia

Nokia is a mobile company who are committed to connecting people. In September 2013, Nokia announced to enter into an agreement with Microsoft. Nokia build with combined advanced technology with personalised services, which makes people to stay close. Nokia plans to focus on three established business in the market segments where NSN is leader in network infrastructure and services. Nokia established their business in many places around the world as Brazil- Manus established in 1998, China- Beijing established in 1995, Hungary- Komaron established in 1999, India- Chennai established in 2006. Nokia chairman and interim CEO is Risto Siilasmaa. Around the world, 1.3 billion people are connecting Nokia device with mobile phone to smart phone and work with high performance mobile computers every day. Integrating Nokia device with innovative services through Ovi customers may be able to download music, google maps, apps, email and more. So globally, Nokia provides solutions and services for communication network.

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1.1 & 1.2

Changing perspective and evaluation of organisation’s capability for planning its future marketing activity

Nokia is focusing on key business areas like high-end smart phones and mass-market mobile phones where each unit departments will see profit and loss responsibility including product development, product management and product marketing for all customer experiences.

Nokia is creating a new leadership team and operation structure by which they plan for future marketing activity. Nokia is launching new smart phone like Nokia Lumia 925, 630, 520. These symbian Smartphone is creating a winning windows phone when other phone companies are updating mobile phone applications, Nokia was continuing to focusing on mobile phone devices rather than mobile phone applications. Thus Nokia missed the major changes in Smartphone revolution of its market as the customer transition from traditional mobile phones to smart phones, which the other phones companies are marketing cheap handset with various features. The price of Nokia was comparatively high. The business of Nokia has become product focused rather than customer focus. So, Nokia missed the opportunity. But now Nokia has updated their handsets and added some special applications and features like music, google maps, apps, email, games media sharing, online store etc in their smarts phones. As the customers of Nokia can download from ovi stores online and they can also download number of programmes and mobile software for force. In addition, Nokia website provides the solution of the problem of their consumer’s device and software. Hence, the target of Nokia is to connecting people. Therefore, it can be said that Nokia can spread their business in the future by updating their hardware and adding some exclusive features in their product.

1.3

Organisational auditing and analysing of external factors and techniques that might affect marketing planning

Definition of SWOT analysis:

SWOT analysis is used to analysis company’s situation by which it evaluates the company’s overall strength, weakness, opportunities and threats. (Ferrel & Hartline,2012)

SWOT analysis of Nokia:

Positive Negative

Internal

Strength

Weakness

Opportunities

Threats

External

Diagram of SWOT analysis

Strength

  1. Nokia is the world’s biggest producer, manufacture and distributor of cell phones.
  2. Nokia phones are long lasting, durable and reliable.
  3. Around the world, Nokia is leading the global cell phone industry.
  4. Nokia follows all fashion strategies with new generation features and style from manufactures.
  5. Nokia workforce works with advanced technology.
  6. Nokia has variety of product in different price range.

Weakness

  1. Nokia profit margin has dropped 40% in 2010. (Bloomberg.com/ new 2010-07-22)
  2. Nokia phones prices are higher compare to other cell phone.
  3. Some model of Nokia phones has been cancelled by the distributor due to low market demand, like E-71.
  4. Nokia has few servicing centre compare to other phone company.
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Opportunities

  1. Today in Asia mobile phone industry is one of the fastest growing industry. Because the population is higher in Asia beside than other continent. Hence Nokia has the opportunity to grab these market.
  2. Nokia has enormous demand of potential in developing countries like China, India, and Bangladesh.
  3. Nokia has opportunity to make profits by selling mobile phone in different countries.
  4. In Asia young people wants stylish and fashionable handsets, which Nokia has.
  5. People from different income group can choose Nokia handset according to their budget.

Threats

  1. Nokia is in a pressure to keep their price low from other mobile producers.
  2. For some Chinese product, Nokia is losing global market.
  3. It is very difficult for sellers to compare their product and keep loyalty.
  4. Some Chinese handsets in the market make very complicated to choice the customers need.
  5. Nokia handsets are not update compare to their rivals as a result people are choosing Nokia handsets over other cell phones.

PEST analysis and its use

Pestle analysis is defined as (political, economical, social, technical factors) analysis which are used as analytical tools for assessing the impact on a company. Pestle analysis is used to find the actual or potential factors which affect objectives of a company. (Ruth, 2010)

Political factors

In Asia region countries like Bangladesh, India, Nepal, political instability is a major problem. In Bangladesh government directly involved in some factors like tax policy, employment laws environmental regulation, say whether the workers are getting minimum wages, maximum hours are given in health and safety regulation. In some cases government increase their tax and put new regulatory system. These are the political factors Nokia has to face.

Environmental factor

Bangladesh is a mid level income country. Slowly the country GDP (Gross Domestic Product) per capita income is rising high as people purchasing power is increasing especially when it comes to mobile phone everyone is using it. People want to buy phone which is long lasting and which has new features. Among them Nokia is one of those brand where people can rely to use. So Nokia can capture the market by bringing new smart phones with good features.

Social factors

Socially every people in Bangladesh is using mobile phone. There are many mobile phone companies is Bangladesh like Nokia, Samsung, Symphony etc. among them most of the people prefer to by Nokia mobile phone because they are long lasting, easy to use and hard. These days Nokia brings new features phones like Nokia Lumia, Asha, and moddle aged and young people loves to use these windows phone as they can easily adapt and they can used to support in different aspects of individual lifestyle and behaviour.

Technological factor

Day by days technological factors changes. Without bringing advanced technology with good features its very difficult to exists with competitors. So Nokia built new windows phone like Lumia, Asha, N8 by using upgraded equipments for better manufacturing.

Political environment

Economical environment

Social environment

Technological environment

Diagram of Pest Analysis (source; Ruth, 2010)

Porter 5 force and its use

Porter five forces is a framework where organisations can analysis the impact of the company. Porter five force is used to work on strategy formulating, cost leadership, differentiate and get focused.

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Diagram of Porter five forces

Threat of new entrants

According to analysis of Nokia the threat of new entrant is very low because Nokia phone technology and feature is much advance compare to other phones. As Nokia holds 29% of market share in the mobile industry (BBC news 2011). Like Nokia, Samsung, Symphony doing these mobile phone business for a long time. So if any company want to come and do these mobile phone businesses, they need a lot of investment beside they have to earn the trust of the customers. So the chance of new entrants is very low and Nokia will not to have worry about in the near future.

Power of supplier

Nokia rely on its supplies to supply the equipment for their advanced mobile phones. There are large number equipment makers from whom Nokia bargaining with the suppliers. Nokia also have their software supplier for their smart phones, like now Microsoft built Nokia software. As a leading phone company, Nokia has a very strong position to bargain with the supplier. Because there is a high number of equipment supplier who are ready to supply the equipments.

Power of buyer

Nokia has wide range of mobile phones with different features and price so all people can able to buy the mobile phones within their budget. Old people also prefer Nokia mobile phones because it is easy to operate. Nokia follows all fashion strategies with new generation features and style so customers get more attracted.

Threats of substitute’s products

Nokia has wide range of mobile phones with different features and prices. So all people can able to buy the mobile phone with their budget. Old people also prefer Nokia mobile phones because it is easy to operate. Nokia follows all fashion strategies with new generation features and style so customer get more attracted.

Threats of substitute’s products

Nokia do not much customer care centre, if any customer stay very far, they might use other brand mobile phone which customer care are available. Nokia smart phones are capable of lot of function beside there are many substitute functions where customer might buy e.g. digital camera which takes better photos than smart phones. Customers rely on mobile phones and they expect all the functions will be there on their handset if some functions or features are not there the customer might go and buy other brand smart phones.

Competitive rivalry

Nokia make smart phone like Nokia Lumia which are symbian software windows phones besides their rivals already by Android mobile phones which are more advanced such brands are Samsung, Symphony etc. so there is very little differentiation between the competitors which means new smart phones like Nokia Lumia will find difficult to fight with their competitors. So competitive rivalry is very is very high and Nokia must be aware of the threat that competitors have on their business.

1.4

Organisational auditing and analysis of external factors that affect marketing planning of the company

Porter 5 force analysis affect marketing planning of Nokia

Porter five-force analysis affect marketing planning of Nokia by helping to understand Nokia strength of current position of the company. Porter 5 force analysis helps to know the company Nokia which are affecting others companies to enter the market. It also helps to know whether the other companies are affecting Nokia product as a threat of substitute product for their lower prices or better performance.

It also know how dependent the company is to their suppliers are available, which supplier are giving goods at lower price. The company Nokia should know their beginning power to buyers like how many customers can buy their product within their range. Compare to other companies Nokia is fulfilling customer needs by given new generation features with attractive style. By doing porter 5 force analysis it helps Nokia to do marketing planning like how Nokia will do this business in coming days.

Task- 2

2.1

The main barriers to marketing planning for Nokia

The main barrier of marketing planning of Nokia is that Nokia has lack of knowledge and marketing skills. There is lack of systematic approach in marketing planning. Nokia is confused between the marketing function and marketing concept. Their tactics and business strategy is good. Comparing to other companies Nokia is not bringing new product with high-tech features within a short period of time where Samsung, Symphony can. The price of mobile phone is comparatively high than other companies according to the features and applications of mobile phone. Therefore, they cannot fight with their competitors.

2.2

How to overcome barriers

To overcome these barriers Nokia should re-examine their market strategy and marketing skills. To fight with competitors Nokia can divide into smaller market segment where the suitable product for that chosen market segment. Nokia should low the price of their mobile phone and they also should add more features and applications in the phone. Nokia should increase their advertising and promotion, these is how Nokia may able to overcome their barriers.

References

  • < www. Nokia.com/ global/about us>
  • Ferrell, O.C and Hartline, M. (2012), Marketing Strategy, 6th edition, UK: Cengage Learning.
  • Ruth, M. (2010), Management of risk, Ireland, TSO
  • Henry, A. (2011), Understanding Strategic management, UK, Oxford University Press

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