Term Paper on "Nokia N95 Cell Phone Marketing Plan"

Term Paper 16 pages (4468 words) Sources: 15

[EXCERPT] . . . .

Nokia N95 Cell Phone Marketing Plan

This is a marketing plan for the introduction of the Nokia N95 Cell Phone. A serious entry into the burgeoning field of PDA's, or Personal Digital Assistants, the N95 includes all of the tools which are necessary to be competitive with the leaders in this segment of the market, including sync with PC's, GPS for localization and direction finding, and a series of other features which are necessary to the business user.

The N95 is meant to compete with PDA and messaging manufacturers, such as BlackBerry, Palm Treo Series, HP, Samsung and a series of other manufacturers who have been producing PDA's and adding phone characteristics. New entrants to this market segment include heavyweights Apple and Microsoft. Apple's direction is coming from the multimedia side, while Microsoft is able to employ its strength in office and server software to help drive adoption.

The following pages will detail how to define and track the target segments, how to work with the product, services and accessories in a way that rounds out the strategy, and how to build the franchise to win sustainable competitive advantage. The accompanying budget suggests that this product will become contribution positive in the second quarter after introduction, and that it could return significant margins to the corporation in the second and third year.

Executive Summary

Presents a brief summary of the main goals and recommendations of the plan for management review, helping top management to find the plan's major points quickly. A table of contents should follow the executive summary.

Nokia is at a crossroads. It has put its major 'traditional' competitors, Sony-Ericsson, Siemens and Motorola, behind it as it has marched to 40% market share in 2007. The company has pursued unit market share globally, with the fastest-growing areas in Africa and Asia also the areas with the lowest ASP.

Nokia has two major risks: it could become a commodity supplier of lower-value handsets as it continues to gain share in lower-priced markets; at the same time, it is facing competition from companies which were outside the cell phone industry, including Apple, Microsoft, Intel and others. These companies look at the cell phone not only as a communications device for voice, but also as a computer which is broadly connected to the Internet and to desktop and laptop computers. If those companies are successful in redefining the high-end phone, Nokia will face an uphill battle in maintaining its lead.

The N95 represents an opportunity to Nokia to redress two problems -- its drift to lower-priced phones, and its lack of market share in the United States. By carefully targeting two segments, "road warriors" and large organization (corporate, government) users, Nokia can regain its reputation in this crucial segment.

The company will have to change some of its marketing policies in order to make the N95 and subsequent models successful. These changes include the addition of a direct salesforce, direct and focused R&D and technical support, and the introduction of services and strategic alliances which fit within the overall corporate-directed N95 strategy.

Introduction

Executive Summary

Current Marketing Situation

Marketing Situation Analysis

Threats and Opportunities Analysis

Strengths

Weaknesses

Opportunities

Threats

Objectives and Issues

Marketing Strategy

Positioning:

Price strategy:

Distribution strategy:

Marketing Communications Strategy:

Marketing Research:

Marketing Organization:

Action Programs

Step 1: Market Research

Step 2: Product development

Step 3: Market test

Step 4: Market introduction

Step 5: Securing market dominance

Budgets

Controls:

Appendix a: Nokia N95 Review

Appendix B: Nokia News Release

Bibliography

Current Marketing Situation

Describes the target market and the company's position in it, including information about the market, product performance, competition, and distribution. This section includes:

market description that defines the market and major segments, then review customer needs and factors in the marketing environment that may affect customer purchasing. Targeted segment, customer need, corresponding feature/benefit, market environment (i.e. market trend, potential market, market growth rate, market share product review that shows sales, prices, and gross margins of the major products in the product line a review of competition, which identifies major competitors and assesses their market positions and strategies for product quality, pricing, distribution, and promotion a review of distribution that evaluates recent sales trends and other developments in major distribution channels. A list distribution channels, sales trends, developments in major distribution.

Marketing Situation Analysis

Nokia dominates the cellular phone market in all parts of the world except the United States. This situation has developed as a result of Nokia's ability to bring out telephones which fit into the local culture -- how customers use cell phones -- and frequent updates to their models. The result has been that Nokia's market share has climbed to an all-time high of nearly 40% of the global market (O'Brien). When measured outside North and South America, the market share figure is higher than 40%.

Nokia's cell phone unit growth has come in low-priced areas, including an increase in the most recent quarter of 45% in Africa and the Middle East, 37% in China and 41% in the rest of Asia. Unit sales actually declined 2% in North America to 5.4 million, which represents a market share of only 10% in that market.

Nokia has been particularly effective against its traditional rivals, such as Sony-Ericsson and Motorola. The latter, which is the number two manufacturer of cell phones in the world, has seen its market share decline particularly due to tough competition from the Koreans and Nokia (eWeek). Its market share was 30% at the end of 2004, at the time of the introduction of its Razr. Despite the Razr's groundbreaking design, Motorola's global share dropped to 16% by 2005. Motorola's global unit share has continued to decline, reaching 13% in the second quarter of 2007, pushing Motorola to third-largest supplier, passed by Samsung. Other "traditional" handset manufacturers, such as Sony-Ericsson, have had similar sales declines (Mobiledia). Siemens, once a strong competitor, spun off its handset business to BenQ, which went bankrupt in 2006.

Samsung has now climbed to the number two position, behind Nokia, with 14% global share. Its ASP has sunk particularly quickly, as it has pursued unit growth in low ASP countries, such as China and Africa.

Nokia's position is far from secure, as there are new entrants in the higher-end market. According to Olli-Pekka Kallasvuo, Nokia's CEO:

I am really paying a lot of attention to what Apple and RIM are doing," Kallasvuo said. "We will invest more money where we feel we not only can match, but where we can beat, that competition (O'Brien)

Nokia is right to be concerned about new entrants at the high end of the market. The merger of PDA's, computers and MP3 (and M4P) players has created an opportunity for new entrants to redefine the handset. Nokia's danger is, that in chasing unit volume at the expense of ASP, it could become a lower-margin, commodity supplier while the higher-margin (and higher-featured) handsets are ceded to Apple, Microsoft and Intel.

Threats and Opportunities Analysis

The SWOT Analysis [Strengths, Weaknesses, Opportunities (might be competitors€ ™ weaknesses), and Threats (might be competitors€ ™ strengths)] assesses major threats and opportunities that the product might face, helping management to anticipate important positive or negative developments that might have an impact on the firm and its strategies. You want to highlight and explain each issue within the SWOT. Tips: consider 4P's, positioning, target market, market environment, etc. Of our own company as well as our competitors

Strengths

Promotion: Nokia has gained against its traditional handset manufacturers through a conscious strategy of pushing in high-growth markets, such as China, Latin America and Africa.

Product: Nokia has been able to demonstrate the ability to tailor products to specific regional needs. It has been especially successful with this strategy in high-value Japan with a "fight-back" strategy using 3G as an entry component, as well as in Africa and China with high-value, low-priced offerings (Shannon)

Product: Nokia has been able to secure low-cost component supplies and manufacturing in a way that has flat-footed most of its competitors. The best-known example of this is Nokia's ability to respond to the lack of ability to supply a key chip component which is used by the entire handset industry. Nokia was able to respond much more quickly, which resulted in it gaining significant additional share from arch-rival Ericsson (Hopkins)

Price: Nokia has gained share in low-ASP countries through a relentless focus on lower-cost manufacturing (Fitchard).

Weaknesses

Price: Nokia's push for lower product prices in low-priced areas has had a significant effect on overall ASP and margins, which have dropped faster than its average manufacturing cost. In 2006, its margins for handsets decreased from 31% to 27% (Fitchard).

Physical Distribution: Nokia's troubles in the United States are due to a fundamentally different method of distribution than other areas of the world. In the U.S., the five major cell phone providers exercise considerable control over the features and types of handsets being offered (Marek).

Positioning: Nokia's position is strong in handsets, but not in multi-function handsets. That… READ MORE

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