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Marketing Plan of Nokia in Hong Kong
Sep 14, 2017 in Marketing
Each and every day, mobile phones become a basic necessity of life. The use and ownership of a mobile phone has become a necessity rather than a luxury. According to Ure (2008), the benefits of owning a mobile phone are far too many, for instance, mobile phones have eased communication and sharing of ideas, skills, knowledge and information. This has led to a massive influx of firms that manufacture mobile phones into the telecommunications industry. Some of the major manufacturers include Nokia, Motorola, Siemens, Apple Inc., Vodafone and Sony Ericsson. According to Hong Kong Information Services Department (2011), the increase in number of mobile phones companies has led to stiff competition among the firms. As a consequence, each firm has been struggling to find ways of gaining competitive advantage in the already flooded market. Major players in the telecommunications industry such as Nokia Corporation have opted to redesign their marketing strategies in order to enable them to attract and retain more customers whereas other firms such as Apple Inc. have chosen to produce highly differentiated products in order to lure consumers to purchase their products. The change in Nokia marketing strategies forms the basis of this paper. This paper aims at developing a feasible and realistic marketing plan that would enable Nokia Corporation to market its products effectively and successfully to consumers in Hong Kong. According to Steinbock (2011), Hong Kong is one of largest markets in China targeted by Nokia.
Nokia is the market leader Â of the telecommunications industry in Hong Kong; its market share had been more than forty percent for nearly a decade as from 1997 to 2006 (Steinbock 2011). However, an increase in competition in the recent past has seen the market share of Nokia Corporation in Hong Kong drop rapidly by approximately five percent every year between January 2007 and June 2010 (Steinbock 2011). The sales volumes also dropped by twelve percent between January and December 2009 (Qui 2010). The stiff competition led to overtaking of Nokia Corporation by Apple Inc. and Samsung. Currently, Nokia Corporation is the third largest manufacturer of telecommunication devices in Hong Kong. Therefore, it is important for the company to adopt and implement new marketing strategies as outlined in this marketing plan in order to curb further drop in market share in Hong Kong and to enable the company attain higher market share in Hong Kong. This paper provides a marketing plan which Nokia Corporation should adopt and implement in order to create sustainable competitive advantage over its competitors. The paper outlines various activities and courses of actions that should be undertaken.
Audit of Nokia Current Marketing Activity in Hong Kong
Nokia Corporation was once the leader of the telecommunications industry in Hong Kong. Its existence in Hong Kong dates back to 1996. Although the telecommunications industry in Hong Kong was not very conducive, Nokia Corporation managed to remain the market leader in the industry between 1997 and 2006 by formulating and implementing aggressive marketing strategies that enabled the company to effectively explore the consumer market in Hong Kong. In the late 1990s, Nokia enjoyed great dominance in the telecommunications industry in Hong Kong because there were only a few industry players (Hong Kong Information Services Department 2011). According to Ure (2008), Nokia Corporation became the national leader in mobile phones market in Hong Kong in early 1997.
However, over the last few years, Nokia has been facing stiff competition from other rival firms especially Samsung, Apple Inc., Huawei, Siemens and Sony Ericsson which entered the market (Hong Kong Information Services Department 2011). Although Nokia Corporation has been able to overcome some of the challenges it faces, its market share and performance in Hong Kong market have remained relatively low and poor. For example, Grunewalder (2011) estimates that the market of Nokia Corporation in Hong Kong dropped from Â thirty-eight percent in 2007 to twenty-five percent in 2010. However, the company has been striving to create and maintain a higher market share by formulating and implementing new marketing strategies by effectively utilizing the market mix elements such as product, place, price and promotion. The company has been trying hard to attract new customers as well as to maintain its existing customers. Moreover, Grunewalder (2011) argues that Hong Kong was one of the fastest growing markets for Nokia Corporation in Asia between 2004 and 2007. According to Grunewalder (2011), Nokia was able to create and maintain a higher market share because it had adopted suitable and viable marketing strategies. Some of the marketing strategies that were used by Nokia to market its products in Hong Kong include advertising, extensive distribution of products, personal selling, provision of free gifts, offers and sales discounts to customers and promotions. For example, Nokia Corporation had a well-established supply chain which it used to market its products in Hong Kong. The company also sold its products through telecommunication service providers such as New World Telephone Limited, Wharf T & T Limited and Hong Kong Broadband Network Limited as well as through retail traders. According to Qui (2010), Nokia Corporation also had the largest number of intermediaries and wholesalers who were responsible for extensive and massive distribution of the company's products. This helped the company in ensuring that the products are delivered to the customers at the right time and place.
However, in the recent past, Nokia Corporation has suffered from a decline in market share due to improper marketing strategies. The company also lacks service centres where it can sell and service its products for customers. The company also does not offer highly personalized services similar to those of its competitors such as Samsung and Apple, Inc. Grunewalder (2011) also affirms that the sales services of Nokia Corporation are poor and of lower quality.
Marketing Plan Objectives
Based on the findings of the situational analysis and the overall business strategy of Nokia Corporation, the following are the marketing objectives that are to be achieved using this marketing plan. First and foremost, this marketing plan aims at enabling Nokia Corporation to easily penetrate the target markets through adoption of appropriate market penetration techniques such as pricing strategies, increased advertising and provision of free gifts and offering sales discounts to customers.
Secondly, this marketing plan would ensure that the company provides a wide range of products to consumers in Hong Kong. This would be achieved through increased diversification and evaluation of the buying patterns and sales trends in the Hong Kong market. This would help in identifying factors such as religion, occupation and social class that affect the buying behavior of consumers. Thus, the company will be able to produce and market products that are customer-focused and be able to adequately meet the consumers` needs and wants. Moreover, the company will also approach more local wholesalers, retailers and mobile phone dealers as well as mobile phone service providers in order to seek for possibilities of increasing the distribution of its products in Hong Kong. Customised after-sales services would also be offered by experts in mobile technology from the company at designated Nokia Service Centers. Promotional services such as free gifts and sales discounts would be also provided to customers in order to encourage them to make repeat purchases in the future. Thirdly, this marketing plan aims at creating a suitable marketing mix that will enable Nokia Corporation to effectively explore the consumer market in Hong Kong. The marketing mix refers to a combination of elements within the marketing strategies of a company designed to give consumers what they want and to achieve long-term maximisation of profits. The major elements in the marketing mix shall include the product, price and promotion. This marketing plan also aims at increasing the market share of Nokia Corporation in Hong Kong by twenty percent within the next two years. It also aims at reaching the target customers such as young people and college and university students through the social media such as Facebook, Google+, Twitter and Ovi mail.
These marketing strategies are also formulated based on five major marketing principles which include ensuring a high degree of customer satisfaction, building strong customer perceptions of the company`s products, focusing on the customers` needs, wants and preference, ability of individual strategies to generate sufficient revenue for the company and awareness of the prevailing market situation or environment.
Situation Analysis (SWOT Analysis)
Strengths refer to favorable factors within an organisation that enable it to gain competitive advantage over its competitors. Nokia Corporation has an above average market share of the mobile phone industry in Hong Kong. The company also has a well-established supply chain that it uses to distribute and sell its products. The supply chain of Nokia Corporation is highly organised and very strategic. This has enabled the company to effectively meet the consumers` demands in the highly expansive mobile phone market in Hong Kong. In my view, a strategic supply chain has also enabled Nokia corporation to gain a greater competitive advantage over is major rivals such as Sony Ericsson and Motorola.
Secondly, Nokia Corporation has an optimal production system that enables it to produce products in large quantities. This has enabled the company to enjoy benefits of economies of scale.
Thirdly, Nokia Corporation manufactures high-quality mobile handsets with laudable and impressive features. The mobile phones are also simple to use. The company also manufactures a wide variety of mobile phones. This enables consumers to choose the type of products they want from a variety of mobile phones. The production of cheap and affordable products has also enabled the company to gain an above average market share in Hong Kong. For example, the company manufactures simple phones such as the Nokia 2700 Classic that are suitable for teenagers and people who do not require complicated phones and the Nokia Lumia and N8 smartphones which target professionals who need complex phones.
Fourthly, Nokia is currently the third most popular company in Hong Kong. The company has a good reputation and brand image among consumers which it can utilize to increase its market share. This has facilitated its marketing efforts. Global popularity has also enabled Nokia Corporation to easily penetrate international markets including the market in Hong Kong. Moreover, Nokia Corporation has specific marketing strategies that it uses to market its products in different countries. The marketing strategies are developed based on the characteristics of the target markets, laws and legislation of the host countries where it operates and cultural values of local people.
Weaknesses refer to limitations and drawbacks within an organization that may prevent it from gaining a competitive advantage over competitors. One of the major weaknesses of Nokia Corporation in Hong Kong is prices of its products. Most mobile handsets of Nokia are relatively expensive compared to those of its competitors such as Samsung and Huawei. This has hindered the ability of Nokia to attract more customers thus gain larger market share. Secondly, there are no Nokia Services Centers in Hong Kong. The company mostly uses dealers to provide after-sales services to consumers. The company is also not concerned with the low-income class of consumers. Thus, it has not developed marketing strategies to target them.
Opportunities refer to favorable external conditions that are likely to be favorable for an organization`s benefit. The main opportunities available to Nokia Corporation in the Hong Kong market include the growth and development of the national market of mobile phones in Hong Kong and expandable markets in the rural areas of the country. Thus, Nokia Corporation can easily increase its market share in the telecommunications industry in Hong Kong by focusing on markets segments that have not been explored.
Threats refer to external conditions that are likely to hinder the success of an organization. One of the main threats to Nokia Corporation in Hong Kong is a rapid technological advancement in mobile phone market and market saturation. In addition, Nokia Corporation faces stiff competition from rival companies such as Apple, Inc., Samsung, Motorola and Sony Ericsson. Due to the stiff competition, Nokia Corporation should strive towards staying ahead of the competitors by developing and implementing appropriate marketing strategies that would enable the company to gain a competitive advantage in the telecommunications industry. A detailed review of the market share in Hong Kong by the major telecommunication companies is shown in the table below.
Percentage market share as at 2011
Source: Hong Kong Information Services Department (2011)
According to the table above, Nokia is the third largest telecommunication company in Hong Kong based on market share. Its two major rivals are Apple Inc. and Samsung. The increase in competition due to an increased number of telecommunication companies in Hong Kong is a threat to Nokia. The major competitors of Nokia Corporation in Hong Kong include Apple, Inc., Samsung and Motorola. The main challenge posed by these competitors to Nokia Corporation is that the companies are well established and have managed to acquire large portions of the Hong Kong market. Hong Kong Information Services Department (2011) also asserts that there is an increased rivalry among mobile telecommunication manufacturers in Hong Kong.
Nokia Corporation will segment its Hong Kong market into the following customer groups:
a) Young people and teenagers between 10-18 years of age.
b) College and University students
c) Low and middle-income classes of people
The company will ensure that it achieves its marketing objectives by offering differentiated products to each of the target groups or market segments, for example, college and university students and potential consumers in the middle-income class category would be offered high-tech mobile handsets because they are techno-savvy and may require complex phones such as smartphones. On the other hand, young people and teenagers and people in the low-income class would be provided with cheap phones that can be easily afforded.
The following are the marketing strategies that will be used to ensure that the marketing objectives are met and attained.
a. Launching new products
One of the major goals of this marketing plan is to enable Nokia Corporation to launch new products in the Hong Kong market. Although Nokia Corporation is a big company with a good brand reputation that is internationally recognized, its market share in Hong Kong has tremendously reduced over the past two years. Thus, launching new products that effectively meet the needs and wants of the target markets in Hong Kong would help in boosting the company` products in Hong Kong by revitalizing its presence in the mobile phone market.
b. Adequate Market Segmentation
Nokia Corporation will subdivide the Hong Kong market into segments based on similarities in consumers' needs. Market segmentation will involve subdividing the Hong Kong market into several units based on the findings of market research studies. Different types and models of mobile phones will be offered to each market segment with an aim of attracting different consumer groups.
c. Development of a Competitive Strategy
Nokia Corporation will develop a competitive marketing strategy to enable it to market its products effectively in the Hong Kong market. The competitive strategy will aim at improving the innovative ability of Nokia Corporation in order to win a competitive advantage over its competitors in the Hong Kong market. In my view, strong technological innovation ability will make products of Nokia Corporation the most preferred products in the Hong Kong market. This will make Nokia Corporation the leader in the telecommunications industry in Hong Kong.
d. Marketing Mix
Nokia Corporation will use integrated marketing mix which encompasses product, place, price and promotion to market its products in Hong Kong. For example, sales would be increased through developing appropriate or sensitive advertisements.The company will commit itself to the creation of consumer value through the development of high-quality mobile phones with high-performance capabilities and appealing features. The company will also ensure that it adequately builds a strong brand reputation in the telecommunications market in Hong Kong. This would be achieved through focusing on the consumers` needs, wants and preferences. The elements of the marketing mix that will be used by the company are discussed below.