Case Seminar
Nokia
1. How do you think the marketing task for Nokia is different in developing markets (versus in developed countries)?
Nokia has conducted a customer-driven marketing strategy. They segment the market by income and they have divided their target group into developing markets and developed ones. They sell phones to over 150 countries and among them European countries contributes to 39 percent of its total net sales while Asia, Latin America, and other developing markets account for 56 percent. It is shown from the numbers that developing markets are essential for Nokia.
Nokia takes over the market shares in a way similar to Honda. It started by focusing on developing countries and selling them entry-level phones. In this way Nokia gains customers loyalty ahead of its competitors and after the economic emerges, those customers would be more likely to stick with them. In order to capture customer value, Nokia has put an effort in understanding the marketplace and customer needs, which is the first step to create value for customers and build customer relationships (Kotler, Armstrong and Parment, 2011). In this market segment, they position themselves as entry-level phones and to create differentiation in the market, Nokia has done some primary data collection to gain customer insights. They did ethnographic research to get to know customers. To meet the need of cheap phones, they changed the packaging and managed to cut down the cost by more than SEK 1 billion per year. They also developed icon-based address book for those who can't read or write. Moreover, they made multiple phone books for their customers when they realized several people were sharing one phone.
As for developed countries, Nokia transforms their device to more than just an entry-level phone. They analysis the macro environment of the market and recognised the trends of this