A SPECIALISATION PROJECT

REPORT ON

“A STUDY OF MARKETING STRATEGIES OF

NOKIA IN INDIA”

A project Submitted to

University of Mumbai for partial completion of the degree of

Master of Management Studies

Under the Faculty of Commerce

SUBMITTED BY:

Shital Baburao Patil

Roll No.19082

Under the Guidance of

Prof.: Dharmraj sir

SWAYAM SIDDHI COLLEGE OF MANAGEMENT AND RESEARCH, BHIWANDI
April 2021
BATCH: 2019-2021

1
 DECLARATION BY THE LEARNER

I the undersigned Mrs. Shital Baburao Patil hereby declare that the
work embodied in the project work titled “A STUDY OF
MARKETING STRATEGIES OF NOKIA IN INDIA” form my own
contribution to the research work carried out under the guidance of
Prof. Dharam raj is a result of my own research work and has not
been previously submitted to any other University for any other
Degree/ Diploma to this or any other University.

Whenever reference has been made to previous work of others, it has

been clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has

been obtained and presented in accordance with academic rule and
ethical conduct.
Name and Signature Of the learner

Certifies by

Name and signature of guiding teacher

2
 CERTIFICATE

This is to certify that Mrs. Shital Baburao Patil has worked and
duly completed her project Work for the degree of Master of
Management Studies in the subject and her project is entitled “A
STUDY OF MARKETING STRATEGIES OF NOKIA IN INDIA
under my supervision.

I further certify that the entire work has been done by the learner
under my guidance and that no part of it has been submitted
previously for any Degree or Diploma of any University.

It is her own work and facts reported by her personal findings and
investigations

Name and Signature

Of Guidance teacher

Date of submission:

3
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Director Dr. Arloph johnvieira for providing
the necessary facilities required for completion of this project.
I would like to express my sincere gratitude towards my project guide
Prof. Dharm raj whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents
and Peers who supported me throughout my project.

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ABSTRACT

This research studies the marketing strategies of Nokia, a high technology company in a developing

country India. The study attempts to check the role of marketing activities in success of Nokia in

India. After studying the past of the company and the history of Indian mobile industry, Nokia’s

marketing strategies are examined through secondary resources.

Then to check the effect on the consumers, semi-structured interviews of a few mobile phone dealers

in India are taken. Here, interviews as a tool of qualitative research is adopted to create a deep

understanding of the customers perceptions. To get a generalized view, mobile phone dealers are

interviewed as they deal with many consumers and can give the opinion of the market as a whole.

The findings advised that consumers preferred Nokia over all other brands due to features of the

phone. Features such as user friendliness, rough and tough body, long life etc were believed to be the

reasons of success. Though the marketing strategies have been aggressive, they were not the reasons

for high market share of the company.

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 INDEX

Chapter Chapter Page No

No

1 Introduction 7

2 Literature Review 10

3 Industry Analysis 20

4 Research Methodology 30

5 Marketing Strategy 37

6 Analysis

6.1 Introduction 48

6.2 Backgrounds of respondents 48

6.3 Success of brand 50

6.4 4 Ps 51

6.5 Findings 53

7
7.1 Conclusion 54

7.2 Recommendations 55

7.3 Limitations of research and 56

suggestions

8 References 57

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 CHAPTER 1

1.1 Introduction

Day by day, mobile phones are turning into more of necessity then a luxury. The benefits of the

mobile phone are far too many. Ease of communication, the anywhere, anytime contact - with

friends, relations, colleagues and in theory at least the efficiency brought to busy lives (Web 21).

Nokia’s growth in India has been substantial. They have led the market with 70% share for long time

now. What is interesting is that there is further scope of improvement in sales. It is a high technology

market and India being developing country, will see more and more subscribers to this technology in

the future. As noted by, Olli-Pekka Kallasvuo, the president and chief executive of Finnish telecom

giant Nokia “India is now Nokia's second-largest market, displacing the U.S. and behind only

China”

1.2 OBJECTIVEs

This research aims at studying the strategies applied by Nokia in India, and analyzing the effects of

these strategies on the sales of the company. For this purpose, secondary data in form of case studies

and news articles have been used to gather the information about the marketing strategies that were

applied by Nokia in India. Then dealers on Nokia in different parts of India were interviewed with

semi-structured interviews to check the impact of these strategies. The objective was to study the

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main reasons of success of the market leader Nokia, and also to study the drawbacks of the

company. It was intended to study the areas where there was scope of improvement and note down

some recommendations.

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1.3 About Nokia

In 1865, engineer Fredrik Idestam established a wood-pulp mill in southern Finland and started

manufacturing paper. This company was named Nokia. Nokia soon became successful, this was due

to the European industrialization and the growing consumption of paper and cardboard. In 1895,

Gustaf Fogelholm, son in law of Fredrik Idestam, took over the reins of the company. Nokia started

exporting products to Russia and then to the UK and France (Web 1). In the early 1900s, the

companies grew in spite of external threats. In addition to the traditional forestry industry, the other

industries also achieved a good position on the Finnish market (Web 2).

Small community grew up around the Nokia factory as it attracted a large workforce. In southern

Finland, a community called Nokia still exists on the riverbank of Emäkoski. The wood pulp mill

used hydroelectricity (generated from the river Emäkoski). This attracted the Finnish Rubber Works

to establish a factory in Nokia. Hence in 1920, Finnish Rubber Works became a part of the company,

and later on in 1922, Finnish cable works joined them (Indu P., 2005). In addition to footwear

(galoshes) and tyres, the company later went on to manufacture rubber bands, industrial parts and

raincoats.

The period between and immediately after the two World Wars was dedicated to developing the

businesses. All countries had new products developing in all industries. The outside world found it

feasible to have Finnish products as alternatives for other industries as a result of the use of modern

production methods. These changes in world economy led the company to concentrate on domestic

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markets for its different businesses. This would later be reversed as the company started shifting its

focus onto international markets.

After World War II the Finnish Rubber Works bought the majority of the Finnish Cable Works

shares. Increasing need for power transmission and telegraph and telephone networks resulted in

rapid growth of the Finnish Cable Works company. Gradually the ownership of the Rubber Works

and the Cable Works companies consolidated. It was later in 1967 that all three companies were

merged to form the Nokia Group. The following are the logos of three original companies that

formed Nokia Corporation (Web 1).

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 CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

“Reviewing the literature on a topic can… provide an academically enriching experience but only if

it is done properly.” Hart (1998)

According to Hart, Literature review is of prime importance to the research. To achieve this, review

should be regarded as a process of fundamental to any worthwhile research or development work in

any subject irrespective of discipline. It is the responsibility of the research student to find out what

already exists in the area in which research is intended to be done before doing the research itself.

The researcher will define framework of his work with the help of ideas and work of others.

As Burger says, ‘A literature review summarizes the major findings of scholars and researchers who

have conducted research in the area you are interested in investigating’. The literature review for this

research will have its prime stress on theories of globalization, effects of culture on marketing of a

product internationally, COO effect, comparison of Global and Glocal strategies, pricing and

distribution strategies for international firms strategy for International brands. Here the attempt is to

make a note of what has been written in context of international marketing strategies of brands.

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Instead of being specific, the review here is of more of international marketing as whole instead of

specifically on Nokia. What is noteworthy is Nokia forms a part of the upcoming electronics

industry and has an important role to play in the developing markets of countries such as India.

12
2.2 Country of Origin (COO) Effect

Mort & Duncan (2000), “COO effects can be summarized as the effects generated by a product’s

perceived geographic origin on the part of the customer and how it affects the latter’s purchasing

patterns”.

Kinray( 2006) It’s a tendency of consumers to generalize their attitudes and opinions across

products from a given country, The basis of this generalization is products familiarity and

background with the country, and their own personal experiences of product attributes such as

“technological superiority”, “product quality”, “design”, “value for money”, “status and esteem”,

and “credibility of country-of-origin” of a brand.

Balky and Nes (1982) Systematic research for COO effect began in 1965 with Scholar’s article

“Product bias in central American common market”. It was considered to communicate by the

phrase, “Made in (name of country)” in 1980s, as noted by Influence of COO on the product quality

perception was indicated by both empirical observations and experiments in their research. As the

research continued in the field, new perspective developed new concepts.

Johansson (1985) believed, COO has been defined as the country where the corporate headquarters

of the company marketing the product or brand is situated.

Chao (1998) stressed on examining the multidimensional constructs of the country concept and how

they impact consumer evaluations of product and design qualities. Specifically, country-of-

assembly, country-of-design, and parts-source country are incorporated into the research design. The

reason for division of country of origin into country-of-assembly, country-of-design, and parts-

source country is basically the trends followed by global brands. Today most of the brands have

production processes in developing countries as the labour is cheap in such countries. Therefore,

country of origin of brand may not be the country of origin of the product.

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Chao’s research revealed that whereas country-of-assembly and country-of-parts only affect the

product quality perception and country-of-design only affects the design quality perception. The

result was noteworthy for the manufacturers and marketers of hybrid products. This was of particular

importance when outsourcing of different aspects the production process were to be considered.

Thakor and Lavack (2003), believed that perceived origin associations are a powerful source of

brand appeal. This can be noted as marketers have focused on origin associations in many product

categories in the advertisements of their products. The examples for this are, Porsche ads often show

a German test track, this is to reinforce its German origin. Consumer tends to sometimes substitute

other informational cues such as products brand name as a substitute to country information not

considering where the product, in reality, is made. Here we can look at the example of a Sony

Walkman being perceived to be Japanese whereas it may have been assembled in Malaysia.

However, it is noticeable that a heightened consumer global awareness and sensitivity to the

mounting prevalence of hybrid products in the marketplace may help to diminish this perception.

Anime al(2005) noted, on the basis of a meta-analysis of COO research, Verlegh and Steenkamp

(1999, p. 521) conclude rather pessimistically that “[d]espite a large body of research, [COO] effects

are still poorly understood.”

2.3 Culture

Hosted(1994) It is a universally accepted fact that, ‘Management is the art of getting things done

through (other) people’. Here the stress is on work to be done and effort of others. Hence, the pre-

requisite for it to happen is that one knows both work to be done and the people through which it has

to be done. To understand people it is very important to understand their back ground, so that,

present and future behavior can be predicted.

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According to Usunier (2000), the abstract sense of culture probably originated from Germany where

the word Kultur was used to refer to civilization in the eighteenth century. However, as Kale (1991)

noted, defining culture concisely presents unanticipated difficulties as the literature contains a

multitude of definitions.

Kroeber and Kluckhohn (1952) gathered 164 definitions of culture. Even then they added one

definition of their own. Conceivably, the most popular definition is the one suggested by Linton

(1945). He says, “A culture is a configuration of learned behaviors and results of behavior whose

component parts are shared and transmitted by the members of a particular society”.

Operating marketing communications is one of the greatest challenges for an international marketer.

And according to a large body of literature, significant cultural differences across countries are

believed to be root of most problems in international marketing communications or promotions. It is

in the area of cross-cultural communications that most blunders in international marketing occur

(Kale, 1991). Hence, the study of culture is considered very important for marketing a product

internationally.

Duesenberry( 1949) observed that all of the activities people engage in agriculturally determined.

Also that almost all purchases made were either to satisfy some physical need or to apply the actions

that make up the life of a culture. He also notes that culture has a multi-faceted and ubiquitous effect

on marketing. Culture has a strong impact on people’s tastes, color preference, attitude towards

product classes. However, culture’s impact is the maximum in how the information is received,

stored, retrieved and employed for decision making. This clearly indicates to the importance of

culture while making decisions regarding marketing activities.

“Culture may be reflected in general tendencies of persistent preference for particular states of

affairs over others, persistent preferences for specific social processes over others, and general rules

for selective attention, interpretation of environmental cues, and responses. It is generally known that

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Hofstede (1994) identified five dimensions of national culture, namely Appendix 1)

1. Power Distance – This is defined by the degree to which the less powerful people of the

organization or institution accept and expect the power to be distributed unequally. The more the

power distance, the more is inequality. However it is defined from below (less powerful members)

and not from above (more powerful members). It is a sign that inequality in the society has been

approved by the leaders as well as followers. This is important as power and inequality are

particularly fundamental.

2. Individualism versus Collectivism – This is the degree to which individuals are integrated into

groups. The individualist societies are the ones where ties between individuals are loose. It is

expected that everyone will look after himself/herself and their immediate family. Whereas in the

collectivist societies, people are integrated into strong, unified in-groups, usually extended families

(with uncles, aunts and grandparents) from birth. These groups continue protecting these people in

exchange for unquestioning loyalty. This difference by noted to be high amongst the countries and

hence is of extreme significance.

3. Masculinity versus Feminity – This is determined by the degree of distribution of roles between

the sexes in the society. It has been noted that men’s value across countries are from very assertive

and competitive as well as very different from women to modest and caring and very similar to

women. Also men’s values differ more among societies in comparison to women’s. Name given to

assertive pole is ‘masculine’ and the modest and caring one is called ‘feminine’. Though the women

are not as caring and modest in masculine countries as they are in feminine but the degree of

difference is less than men.

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4. Uncertainty Avoidance – It refers to society’s tolerance for uncertainty and ambiguity. This

tells us how much the members of society feel either uncomfortable or comfortable in unstructured

situations. These situations are novel, unknown, surprising and different from usual. In cultures that

avoid uncertainty, there is an attempt to minimize the possibility of such situations by strict laws and

rules, safety and security measures. These people tend to be more emotional and motivated by inner

nervous energy. It is exactly the opposite in uncertainty accepting countries.

5. Long term versus Short term Orientation – Thrift and perseverance are the values of long

term orientation, whereas values associated with short term orientation are respect for tradition,

fulfilling social obligations, and protecting one’s ‘face’. It was originally called ‘Confucian

dynamism’; however, the dimension also applies to countries without a Confucian heritage.

In fact in Jessop’s (1999) view, the definitions of globalization in literature remains “chaotic”. It is

believed, that the reason for this probably is that globalization is studied independently from a

number of disciplinary perspectives, each with its own disciplinary filter (Clark & Knowles, 2003).

Vignali (2001), defined Globalization the best, “Globalisation involves developing marketing

strategies as though the world is a single entity, marketing standardized products in the same way

everywhere.

Whitelock (2002) The internationalization theories concentrate on decision to internationalize or

deciding on which market to enter and how to enter. Different approaches have been taken by

different authors to solve this problem of internationalization. Though all the theories, to some extent

depend on existence of market information to inform internationalization decisions.

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Johanson and Vahlne (1977) developed a model of internationalization process of the firm on the

basis of empirical research. The model focused on the gradual acquisition, integration and use of

knowledge about foreign markets and operations, and on the incrementally increasing commitments

to foreign markets. The focus of the model is particularly on the increasing involvement in the

individual foreign country. Here the concept of psychic difference was considered important, as it

was believed that firms expand first into market which are psychically close, and in to more distant

markets as they gain more experiential knowledge. This was considered critical as it can be gained

only through personal experience and not taught as other objective knowledge in international

marketing. The model gained particular support in the early stages of international involvement.

However in 1990, Johanson and Vahlne suggested three exceptions to their model as a response to

increased market knowledge. These exceptions were when firms have large resources they may be

expected to make larger internationalization steps; when market conditions are stable and

homogeneous market knowledge can be gained in ways other than through experience.

Dunning(1998) the eclectic paradigm is set out to explain “the extent, form and pattern of

international production” and is founded on “the juxtaposition of ownership-specific advantages of

firms contemplating foreign production… the propensity to internalize the cross-border markets for

these, and attractions of a foreign market for the production”. The entry decisions hence are made in

rational way, through transaction cost analysis (TCA). TCA is considered particularly useful for

evaluating the vertical integration decisions. TCA approach is based on the assumption that the

markets are competitive hence the performance of supplier is efficient. When the range of suppliers

is restricted, there is little threat of replacement and the transaction costs are high.

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Johanson and Mattsson (1986) noticed that both Uppsala model and eclectic paradigm concentrate

on firm or individual perspective of market entry. The firm decides the entry method for specific

market abroad. They believed that both models ignore the characteristics of the firm and market,

which appear to be important in industrial systems.

Turnbull (1986), the chief limitation “is the one-sided focus upon the activities of manufacturer

together with the intermediary in the flow of goods and services to the customer”. Whereas,

definitions of industrialization system stress on developing and maintaining lasting relationships.

The four variable of integration defined are: the element and process of interaction, characteristics of

parties involved, the atmosphere surrounding the interaction, and the environment within which the

interaction takes place.

Ried (1983) believed that nature of market opportunity, firm’s resources and managerial philosophy

are the basis of deciding expansion strategies which may in turn result in foreign expansion. The

factors which need to beassessed in this approach for market selection are market attractiveness,

psychic distance and accessibility and informal barriers. Whilst choice of organizational structure

will depend on these market characteristics in addition to company specific factors as international

trading history, size export orientation and commitment. Also number of competitors is considered

important factor.

Levitt (1983) defines global brands as brands that use the same marketing strategy and mix in all

target markets.

Johansson and Ronkainen (2004) assert that global brands benefit from the scale and scope of

having presence in multiple markets. The researchers define global brand as “a brand that is

marketed under the same name in multiple countries with similar and centrally coordinated

marketing strategies.” However there are some selected global brands that don’t have the same name

but share some marketing program elements. For example, “Mr. Clean” also sells under the “Mr.

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Proper” and “ Maestro Limpio” names, among others. Although global brands play a dominant role

in today’s world, the advantages of the local brands are still stronger and this is reviewed in the

following part.

Pricing and Distribution

Solberg et. al. (2006) the literary topic of international pricing had not been completely ignored by

the scholars. However the studies published till then stressed chiefly on the normative dimension of

international pricing. Hence, the emphasis had been laid on ‘how pricing decisions ought to be

made’

Cavusgil 1988, 1996; Walters 1989; Weekly 1992 -They say that though a few of these studies

have been based empirical evidence, the major drawback amongst most of them had been that they

have been less generalized. Either too broad and examined only general nature of international

pricing; too specific, focusing on a specific country’s exporter or focused on issues such as the

impact of technology on international pricing, pricing in emerging markets, the development of gray

markets, and the control of the pricing mechanism under different environmental conditions.

International pricing decisions are inclined to be a function of the relationship between the external,

market-related complexities that shape firm operations and the capabilities of the firm to respond

effectively to these contingencies.

The importance of international pricing is going to improve. One of the reasons being ‘dynamics that

govern international marketing activities are likely to accelerate rather than slow down as a function

of faster technological progress, the proliferation of new products and services, intensifying global

competition, rapid changes in the global legal environment, and the economic uncertainty that these

will generate. To maintain the firm’s financial prosperity under these conditions, a better

understanding of the economic and competitive environment, the development of more sophisticated

pricing strategies, and the effective execution of these will become more important’.

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Pricing acts as an essential function in the internationalizing firm’s effort to be globally integrative

yet locally responsive. However the international pricing as a research topic as been underdeveloped.

The importance of role played by information in international pricing decision is critical in nature.

The vital reason behind this is, when the business is conducted at international level, it is utmost

important to monitors wide array of influences that can affect the pricing decision and vary across

markets.

According to Nagle & Holden (1995), the degree of importance attached to price of the product by

the management depends on the extent to which the firm seeks competitive advantage by offering its

customers a less-expensive product for the value being delivered as compared to the rivals.

As noted by Solberg et. Al. (2006), Solberg’s (1997) framework includes two dimensions: industry

globality and the degree of the firm’s preparedness for internationalization. He defines “industry

globality” as a condition in which the actions of the players that operate in world markets are

affected by one another to the extent that a relatively stable price level is created across the markets

in which they operate. Thus, prices vary as a function of only tariffs, transport, and distribution

costs, expenditures that are outside the control of the exporter for the most part.

In Solberg’s framework,(2006) a global industry is epitomized by a few, large, major competitors

that “rule” their categories in world markets within their product category. Thus, the degree of

globality along this dimension is considered to vary between two extremes, a monopoly at one end

and atomistic competition at the other.

The effectiveness of strategic pricing by the exporter is dependent on his control over the decision

making and the actual outcome of pricing activities in its markets. The literature stresses two facets

that need to be considered in this context: the issue of centralized versus decentralized pricing and

the issue of control within the distribution channel.

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Solberg et. Al. (2006), also categorized firms into four categories on the basis of low and high

preparedness for internationalization on the Y axis and Multilocal and Global markets in which they

operate in X axis. The categories were:

Prototype 1: The Local Price Follower Firm

Prototype 2: The Global Price Follower Firm

Prototype 3: The Multilocal Price Setter Firm

Prototype 4: The Global Price Leader Firm

Distribution

Arnold (2000) Once a corporation is well established in its market, it starts looking for new

international markets. In such cases chances are that it forays into an emerging market and to limit

its exposure appoints a local distributor. In the beginning, sales take off, revenues grow, and the

entry is praised as a smart move. But after a while, stagnation sets in and sales plateau. These

partnerships nearly always blow up in the end.

Much of the blame lies with the multinationals themselves. What remains missing is the need to

understand how their new partners (local distributors) are different from the ones at home. The other

reason that can be noted is fault from the local distributors. The managers of the corporation observe

that the major hindrance in the path of growth is that the local distributor that got the company to a

flying start has run out of ideas. Mostly it is the management which finds faults in the work of

distributor. Some examples quoted by are:

"The distributor didn't know how to grow the

market” "The distributors didn't invest in business

growth” "The distributor just wasn't ambitious

enough."

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In both the cases the actual problem is difference in thinking of the company and the distributor.

Neither the multinational nor the distributor invests sufficiently in strategic marketing or in

aggressive business development in these ‘less developed’ markets. To work together it is important

to be unidirectional and go hand in hand.

Arnold (2000) discusses what goes wrong and why. According to him, most multinationals stumble

onto a stepwise strategy for penetrating markets in emerging countries through a series of unplanned

actions to reinvigorate sales. As the pattern recurs with entries into subsequent markets, this

approach, dubbed the "beachhead strategy," becomes official policy in many organizations. Hence

he laid seven rules of international distribution

1. Select distributors. Don't let them select you – Objective market assessment should lead to

strategic decision of entry into a new international market. However, Arnold (2000) noted that it was

not the case usually. His studies revealed that companies moved into new market as reaction to

proposals from prospective distributors. In fact, the most eager potential distributors may be

precisely the wrong people to partner with. So there is a need to find distributors, one should the

market led approach rather than distributor.

2. Look for distributors capable of developing markets, rather than those with a few obvious

customer contacts – Multinational’s long term goals should be kept in mind and given prime

importance while choosing the distributor and deicing the terms of relationship. As Arnold (2000)

noted, "The most obvious distributor is not necessarily the best partner for the long term".

3. Treat the local distributors as long-term partners, not temporary market-entry vehicles –

There is a need to structure the relationships in such a way that the distributors become marketing

partners. Thus, will be willing to invest in long-term market development.

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4. Support market entry by committing money, managers, and proven marketing ideas – It is

very important for the multinational to maintain strategic control. For this purpose, multinationals

must commit adequate corporate resources. It holds particular importance at the time of market

entry, as the multinational are least certain about their prospects in new countries.

5. From the start, maintain control over marketing strategy – Distributors should be allowed to

adapt a multinational's strategy to local conditions. However multinationals should pilot the planning

sessions about the decision making. This helps the multinational to exploit the full potential of a

global marketing network.

6. Make sure distributors provide you with detailed market and financial performance data –

The quality of information that the multinational has about the market, determines its ability to take

advantage of its competitive advantages. Since the corporation is new to the country, it has to rely on

distribution channel for such information. Also in a few countries they may be the only source of

such information.

7. Build links among national distributors at the earliest opportunity – The key objective for the

multinational establish a customer base in the new country. However it is important to create links

24
 CHAPTER 3

INDUSTRY ANALYSIS

3.1 Mobile phone industry in India

Mobile telephony was introduced in India in 1995. The first call was made by Nokia 2110 on its own

network. The start to this industry in India, however, was very slow. The Indian government was not

supportive to the new companies of the industry. As a result of unfriendly telecom policies, high

licensing fees and absence of a proper telecom regulatory body lead to exit of these private players

in the next few years.

The industry got a new life in 1999, when the Government of India announced a new telecom policy.

The plan was to provide telephones on demand by 2002. A major point of the policy was to allow

unrestricted private entry into almost all mobile service sectors. The mobile service providers were

allowed to share their infrastructures with other operators. It also helped the private operators to

25
break even faster by allowing them to migrate from fixed license to one-time entry fee with revenue

sharing.

However, by 2001, there was steady increase in the demand for mobile services. The private

companies concentrated on providing basic telephonic services to consumers. By 2002, the industry

was on a high, and with the popularity of mobile phones the customers started demanding better

services and lower prices. This led to new innovations and come out with better products and

26
services. In 2002, the industry’s growth got fueled as incoming calls on mobile phones were made

free. The sudden increase in growth on mobile phone subscriber can be seen in the following table:

Growth of mobile phone subscribers

No of mobile subscribers Time taken

0 – 1 Million 1995-1998
1 – 5 Million 1998-2001
5 – 10 Million 2001-2002

By May 2005, the number of cellular phone subscribers in India had risen to 55 million. Out of

these, 43 million were GSM and rest 12 million were CDMA. In June 2006, “India’s mobile phone

subscriber base has crossed the 100 million mark, making the country the fifth largest in the world in

number of subscribers. According to a report in PTI, GSM-based subscribers number 75 million

while CDMA-based subscribers total around 25 million” (Dutta, 2006). According to IDC

(International Data Corporation), the number was expected to reach 148 million by 2009.

In India there were two major types of mobile service operators, namely; Global Systems for Mobile

Communications (GSM) and Code Division Multiple Access (CDMA). GSM was the service

introduced in India in 1995 and had key features of nationwide roaming as well as international

roaming for US and Europe for both pre-paid and post-paid subscribers. They are the main service

providers in India and hold almost 75% of the market as notes above. Lowering mobile tariffs and

low entry barriers helped the growth of GSM mobile services. This also led to ownership of more

than one mobile phone in a family, as compared to other consumer durables such as television. The

middle class population in India is about 350 million. Being middle class of a developing country,

27
They are cost conscious. This lead to a dramatic rise in prepaid (26.7%) as compared to postpaid

(6%) in the fiscal year 2003-04.

CDMA was also known as Wireless Local Loop (WLL) in India. WLL consisted of mobile as well

as fixed. The fixed phone handsets were to replace fixed landlines with functionality within the city

limits. These were also known as FWT/FWP (Fixed Wireless Telephone/ Phone). WLL mobiles

were to give competition to GSM phones. The major benefit that they provided was connectivity to

internet (at 114kbps) as a bundled package. This could be done by connecting the phone to PC with

the data port. To begin with, these services were provided by government organizations BSNL

(Bharat Sanchar Nigam Limited) and MTNL (Mahanagar Sanchar Nigam Limited). However, they

were not successful in capturing the market. Then, Reliance infocomm became the first private

operator to offer CDMA services in India. And CDMA became an instant success. A major factor

was supply on Samsung and LG handsets with subscription. The other successful private name in

CDMA was that of Tata Indicomm.

There were many small GSM providers. In 2001, there were 18 operators on GSM and to withstand

competition from CDMA, the bigger operators started acquiring small operators which could not

afford heavy investment needed in the industry. Hutch (now Vodafone) had then acquired Sterling

Cellular, Hutchinson Essar, Aircel Digilink, Hutchinson and Max Telecom; Airtel acquired

Hexacom; Idea acquired Escotel. As a result, the number of GSM operators reduced to 8 by 2004.

28
The four main regulators of wireless include (Strother, 2004):

• Department of Telecommunications (DoT): Sets policy and controls licenses for both fixed and

wireless telephone operators

• Telecom Regulatory Authority of India (TRAI): Regulates policies of DoT, and monitors licensees

• Telecom Dispute Settlement Appellate Tribunal (TDSAT): Resolves disputes brought by licensees

or consumers

• Wireless Planning and Coordination Wing (WPC): Manages spectrum allocation

In one of Asia's top three deals for 2007, UK giant Vodafone took over Hutch (Web 6). UK's

Vodafone has paid a discounted price of $10.9 billion in cash for acuqiring the 52% stake held by

Hutchison Telecom International (HTIL) in Indian mobile firm Hutch-Essar to complete a deal. This

figure was reached after a cut down of $180million was made (Web7).

There were a few points noted in 2004 that showed great potential in Indian mobile phone market.

Firstly, the mobile phones sales growth was amongst fastest in world by mid 2005 with additional

1.7 million subscribers every month. Also, in 2004, the mobile subscribers in India were 5 per

hundred, which was very low as compared to China (25.9 per hundred), Russia (42 per hundred),

Brazil (37.5 per hundred) and other developing countries (Indu. P, 2005).

29
3.2 Nokia in India

Nokia has been the pioneer of mobile telephony in India, the existence here is from 1994. As noted

above, the first ever GSM call in India was made on a Nokia 2110 on its own network. Although the

conditions in Indian telecom industry were not very conducive, Nokia maintained an aggressive

strategy. Import of mobile phones was not easy and the tariff applied on them was as high as 27%.

Consumers too were not interested in purchasing mobile phones as call rates were as high as Rs16

per minute ($0.40).

Another problem faced by Nokia was highly competitive environment in the industry. Powerful

global players like Motorola, Siemens, Sony and Ericsson already had there presence in India in

consumer durables, electronics and engineering sectors, and hence were aware conditions prevailing

in Indian market. However, overcoming all odds, Nokia India came out as the market leader with

56% share in 2003-04 and still continues to lead with 80% in 2007 (Indu P., 2005) (Web 4).

Asia is the fastest growing market for Nokia. Competitors such as Samsung, Motorola nad Sony

Ericsson have captured huge market shares. The consumer is going for high technology at

reasonable prices. They respect any provider who gives the best combination of both. Nokia has

retained the top spot for quite some time in India, the recent figures are;

“Finnish handset major Nokia has retained the top slot in Indian GSM market with 79 per cent share

in 2006”(Web 5) “Nokia came from behind to stun the likes of Ericsson and Motorola and corner

nearly 80% of the GSM handset market in 2007”(Web 4)

Nokia in 2006, Started a manufacturing in Sriperumbudur, Chennai. His plant as on December 2007

employed approximately 6000 people. The current investment on this is about US$ 210 million in

the plant since January 2006. Nokia announced to further invest US$ 75 million in year 2008.

30
3.3 SWOT ANALYSIS

Strengths

-Is a dominant player in the smart phone market via its majority ownership of Symbian and its

proprietary Series 60 user interface which are projected to represent majority of the 100M smart

phones sold in the next 4 years.

- Huge market share

- Size should enable Nokia to amortize Research and Development costs and to get cost advantages

- Brand position: second most popular brand in India

Weaknesses

- The Engage is considered a flop.

- Being the market leader, its increase role in Symbian is giving Nokia a bad image, much like

Microsoft in the PC industry.

- Slow to adopt new ways of thinking: a good example is clamshell phones which are preferred by

many customers. Nokia was reluctant to produce a clamshell until this year, when it launched its first

model.

Opportunities

- Increase their presence in the CDMA market, is still dominated by LG, also concentrate on 3G and

Edge

- New growth markets where cell phone adoption still has room to go, including India and other

countries.

- Leverage its infrastructure business to get preference and a stronger position with carriers

31
Threats

- Delayed entry in 3G sector creates a risk to be displaced by leaders like Motorola, LG, NEC and

others.

- Asian OEMs who are entering the market very aggressively (TCL, nGo Bird)

- ODMs (HTC and others) enabling carriers to leverage their customer power bypassing the handset

vendor. Operators want to lessen their dependency on handset vendors and the dominance of Nokia.

Orange, O2, and many other operators globally are selling their own brand of phones

32
 CHAPTER 4

REASERCH METHODOLOGY

4.1 Introduction

Selection of type of method for data collection is one of the most critical parts of any research. This

chapter is all about discussing the different techniques and method of data collection and selection of

the most suitable method for the particular study. This is done through evaluation of the strengths

and weaknesses of each method.

The federal definition of research by Messiah College as defined in the federal policy is “Research

means a systematic investigation, including research development, testing, and evaluation,

designed to develop or contribute to generalizable knowledge.

Data can be collected in two forms, namely, primary and secondary data. The data collection

methods used in this research involves the search for both primary and secondary data. Information

gathered by observing phenomena or surveying respondents. Primary data are originated by the

researcher for the specific purpose of addressing the problem at hand. Also that obtaining primary

data can be expensive and time consuming Malhotra (2005). Since primary data is collected with

specific purpose, it is the most significant. Depth interviews, focus groups, observations and surveys

are the major methods of gathering primary data. In this particular study, depth interviews have been
33
used as a means for obtaining primary data. Information compiled inside or outside the organization

for some purpose other than the current investigation.

According to Malhotra (2005), Secondary data are data that are collected for some purpose other

than the problem at hand. Usually journals, existing reports, and statistics by public and private

authorities are used collect Secondary data. Here, the secondary data have been collected using

marketing journals and other existing reports that were based on the topic. Specifically a case study

from ICFAI, India on “Nokia’s Strategy in India”. Secondary data in this particular case helped the

researcher to comprehend marketing strategies implemented by Nokia in India. As a general rule

stated by Malhotra (2005), “Examination of available secondary data is a prerequisite to the

collection of primary data. Start with secondary data. Proceed to primary data only when the

secondary data sources have been exhausted or yield managerial returns.” The study hence, involved

collection and analysis of primary data in foundation with the secondary data.

Even before a research is started, the researcher needs to evaluate and select the type of method they

will to be used for collecting the data for the research. The Quantitative research methods and the

Qualitative research methods are two options of approaches available for the researcher. As noted by

Creswell (2003), “The situation today is less quantitative versus qualitative and more how research

practices lie somewhere in continuum between the two (eg Newman & Benz, 1998)”. In most

researches, in some way or the other both form of data collection are used.

In this research, since, the study was conducted to understand the perspective of consumers and their

brand image, more stress was laid on qualitative research rather than quantitative. According to

Cassel and Symon (2005), ‘Qualitative methods’ is what people recognize and which is widely used,

it is actually very problematic. They could only talk about the characteristics of qualitative research,

34
Even before a research is started, the researcher needs to evaluate and select the type of method they

will to be used for collecting the data for the research. The Quantitative research methods and the

Qualitative research methods are two options of approaches available for the researcher. As noted by

Creswell (2003), “The situation today is less quantitative versus qualitative and more how research

practices lie somewhere in continuum between the two (eg Newman & Benz, 1998)”. In most

researches, in some way or the other both form of data collection are used.

The federal definition of research by Messiah College as defined in the federal policy is “Research

means a systematic investigation, including research development, testing, and evaluation,

designed to develop or contribute to generalizable knowledge.

purpose of qualitative research. These include, case study, personal experience, introspective, life

story interview, observational, historical, interactional, and visual texts that describe routine and

problematic moments and meaning in individuals' lives.

35
According to Malhotra (2005), Secondary data are data that are collected for some purpose other

than the problem at hand. Usually journals, existing reports, and statistics by public and private

authorities are used collect Secondary data. Here, the secondary data have been collected using

marketing journals and other existing reports that were based on the topic. Specifically a case study

from ICFAI, India on “Nokia’s Strategy in India”. Secondary data in this particular case helped the

researcher to comprehend marketing strategies implemented by Nokia in India. As a general rule

stated by Malhotra (2005), “Examination of available secondary data is a prerequisite to the

collection of primary data. Start with secondary data. Proceed to primary data only when the

secondary data sources have been exhausted or yield managerial returns.” The study hence, involved

collection and analysis of primary data in foundation with the secondary data.

Even before a research is started, the researcher needs to evaluate and select the type of method they

will to be used for collecting the data for the research. The Quantitative research methods and the

Qualitative research methods are two options of approaches available for the researcher. As noted by

Creswell (2003), “The situation today is less quantitative versus qualitative and more how research

practices lie somewhere in continuum between the two (eg Newman & Benz, 1998)”. In most

researches, in some way or the other both form of data collection are used.

In this research, since, the study was conducted to understand the perspective of consumers and their

brand image, more stress was laid on qualitative research rather than quantitative. According to

Cassel and Symon (2005), ‘Qualitative methods’ is what people recognize and which is widely used,

it is actually very problematic. They could only talk about the characteristics of qualitative research,

36
without an overarching definition, because there were such a variety of methods that might claim

this title and little consensus over a core meaning. The simplest definition is to say it involves

methods of data collection and analysis that are non-quantitative (Lofland & Lofland 1984).

This traditional view is that quantitative enquiry examines data which are numbers, while qualitative

enquiry examines data which are narrative (Easterby-Smith et al., 1991). Inherent in this dichotomy

is the view that quantitative enquiry generally adopts a deductive process, while qualitative enquiry

generally adopts an inductive process (Hyde, 2000).

There was a need to get the researched open up so that it can give more information. Also, there may

be a need to modify the questions to get the right data. Thus, qualitative approach was adopted with

an in-depth and semi- structured interview process. As it was rightly said by Bate (1997) that

qualitative research is about digging into the everyday life of people. It has also been noted that

qualitative research gives more quality in data and also results in very specific and in-depth

information.

“The relationship between theory and methodology is important. Researchers need to use

methodologies that are consistent with the assumptions and aims of the theoretical view being

expressed” (From the Editors, p.456). It can be noted from above quote, how important it is to

choose proper methodology of collecting the data.

37
4.2 Qualitative Research

“any kind of research that produces findings not arrived at by means of statistical procedures or

other means of quantification” (Golafshani, 2003).

It is believed that qualitative research originated in recent times. However, as noted by Milliken

(2001) noted, Hamilton (1994), believed that the real roots of qualitative research could be traced

back to an eighteenth – century disruption that occurred in the fortunes of quantitative research.

Here, in order to explore the selected topic of the study, qualitative research is selected as the means

for research. Gephart has defined three methodologies of qualitative research. Positivism and

postpositivism are based on realism and involves comparisons of results and findings with

preliminary propositions. Interpretive research aims at understanding the actual production of

meanings and concepts used by social actors in real settings. Whereas, critical postmodernism is a

combination of critical theory and postmodern thought, which assumes that realities are value laden

and contain contradictions. Gephart(2004).

“A qualitative study is defined as an inquiry process of understanding a social or human problem,

based on building a complex, holistic picture, formed with words, reporting detailed views of

informants, and conducted in a natural setting” (Cresswell, 1994). Another way of defining it is to

say it focuses on "quality", a term referring to the essence or ambience of something (Berg 1989).

Others would say it involves a subjective methodology and your self as the research instrument

(Adler & Adler 1987). A variety of empirical material is needed to be collected and studied for the

38
purpose of qualitative research. These include, case study, personal experience, introspective, life

story interview, observational, historical, interactional, and visual texts that describe routine and

problematic moments and meaning in individuals' lives.

As cited by Golafshani N. 2003, Glesne & Peshkin, 1992, say “enjoying the rewards of both

numbers and words” i.e. the knowledge obtained through detailed interviewing process with focus

on compatibility or a qualitative analysis is different a quantitative analysis. Researchers have argued

that that unlike quantitative research where the tool is the most important in qualitative research the

researcher himself poses as a tool and is the most important part of the research. So it is very

important role of the researcher in qualitative research.

As Sankar (2006) noted, Qualitative research is unstructured, exploratory in nature, based on small

samples, and may utilize popular qualitative techniques such as focus groups (group interviews),

word association (asking respondents to indicate their first responses to stimulus words), and in-

depth interviews (one-on-one interviews that probe the respondents’ thoughts in detail) (Malhotra,

2005). The qualitative research interviews differ in practical features such as length, style of

questioning, and participant numbers (group or individual). Though most of them are face-to-face, it

can also be carried out via internet or on the telephone (Cassell and Symon, 2004). This study uses

the mode of telephonic interviews as a qualitative research tool.

39
4.3 Quantitative Research

Quantitative research methods are the orthodox way of researching. In very technical terms,

“Quantitative data is data expressing a certain quantity, amount or range. Usually, there are

measurement units associated with the data, e.g. meters, in the case of the height of a person. It

makes sense to set boundary limits to such data, and it is also meaningful to apply arithmetic

operations to the data”

Quantitative Research methods are important and the traditional form of data collection and analysis.

We need to develop some understanding of this them. Quantitative research provides a more general

outcome rather than more specific. Since the answer is made exactly to what the question is, there is

no scope extra input from the interviewee. Also there is no personal touch to encourage the

interviewee to give concentrate and give answer. Another problem being one can not check the

genuineness of data very easily. However when the sample is large or more generalized views are

needed than quantitative research method is a better option.

4.4 A Qualitative Approach

Quantitative research gives measurable quantities as the outcome. However, here the human nature

is under consideration. The objective is to comprehend and assess perceptions of different consumers

towards the mobile phone. More stress may be given to feature, looks, cost, software or any other

feature of the mobile phone. Since the study kind of tests out the effect of marketing activities by

checking the brand loyalty of the interviewee, it is important to understand the emotion associated

40
with the answer given by him. People have different perspective for different concepts, it is amazing

how some may react in a positive way, some in negative way and some may have no reaction at all

to it. In words of Hancock (2002), the human behavior is very complicated and unique to every

individual. Thus there is a need to have a deeper understanding than an ordinary survey. Human

behavior is strange, and cannot be measured in quantitative terms. Kaplan (1964) suggested that

there is only one thing that distinguishes human from natural world; it is our ability to talk, interact.

This ‘interactive nature’ of qualitative research makes it possible to measure the reactions of a great

many people to a limited set of questions thus facilitating comparison and statistical aggregation of

data. Hence, a flexible qualitative approach is followed.

4.5 Data Collection

Since the objective of this research is to measure degree of success of marketing strategies

implemented by Nokia, it is very important to first identify the marketing strategies applied by Nokia

in India. For this purpose, the best available sources are case studies, news articles and personal

knowledge of the marketing strategies. After getting a complete picture of the existing scenario,

there was a need to get the public interpretation of the brand and its value. For the purpose of getting

more generalized view, the dealers of mobile phones were interviewed. Since they deal with buyers

and prospective buyers on a regular basis, they can give an overview of the market. Also it was

thought that their personal choice will be considered for the same. Hence for a new research a

primary research was conducted. A secondary research was also carried out to understand the

marketing activities and future in general.

41
 CHAPTER 5

MARKETING STRATEGY

5.1 Introduction

Marketing strategy of a company in a new country plays a vital role in determining its future in that

country. Knowing that Indian market is very different from other markets it was already operating

in, Nokia came up with an India–specific strategy or a glocal strategy. It adapted the to Indian

conditions by launching new products and enhancing the products with features designed

specifically for local customers, as well as promotional campaigns targeted at Indian audience to

gain a foothold in the market. To capture the widespread Indian market, it developed an extensive

distribution network which also helped it take its products to rural markets in India. Here, to discuss

the strategy, we consider the simple concept of 4 P’s, namely; product (customization), price, place

(distribution) and production.

5.2 Product

42
1998 was 51st year of Indian independence, hence Nokia provided the ring tone of National son

“Saare Jahan se Achha ye Hindustan Hamara” in 5110 model. The introductory offer for this model

also had inter-changeable covers. The success of 5110 initiated Nokia to focus on feature-specific

localization. In1999, Hindi (national language, and mother tongue of 43% Indians) user interface

was provided in Nokia 3210. Also, Nokia also tied up with Sony music for top 20 hit songs as ring

tones. Nokia 3210, became an instant hit. The model 3610 was launched with an enhancing Hindi

text messaging facility in 2001.

The most successful customization came in 2003 when Nokia came with 1100 and 1108 specifically

designed for Indian market. It had features of anti-slip grip, dust resistance and torchlight. Since, in

India people don’t know English in villages, Nokia came up with “Saral Mobile Sandesh” (SMS in

Hindi). Nokia sales increased from 58.2% in July 2003 to 59.6% in July 2004.

Nokia was also the first handset manufacturer to launch games download in India in 2003. It had

spearheaded the industry in online distribution of tones, graphics and game downloads. These

services did not just increase their sale of mobile phones but were also fruitful as they made huge

profits by selling the games. In 2005, Nokia also launched games based on Indian mythology namely

‘Makhan chor’ and ‘Swayamvar’. Both were arcade games involving two most of the famous

characters namely, Lord Krishna and Arjun.

43
Nokia was also the first handset manufacturer to launch games download in India in 2003. It had

spearheaded the industry in online distribution of tones, graphics and game downloads. These

services did not just increase their sale of mobile phones but were also fruitful as they made huge

profits by selling the games. In 2005, Nokia also launched games based on Indian mythology namely

‘Makhan chor’ and ‘Swayamvar’. Both were arcade games involving two most of the famous

characters namely, Lord Krishna and Arjun.

Another feature that Nokia came up with attract youth was one which enabled the customer to slide

in his or her photograph or for that matter the loved ones,' in the picture frame behind the phone.

This was a part of Nokia 2112 model (CDMA), wherein the message is clear-personalize your

phone. Earlier they had a similar feature in GSM handset Nokia 2100. "We have made a personality

statement through the campaign. The feel of the campaign is such that it would evoke a 'sense of

being,'" said Sanjay Behl, Head of Marketing, Nokia India. Menon, M. (2005)

44
Nokia also tied up with Bharti cellular in 2005 to customize its handsets through which its users

could access multimedia services by using an additional key on the mobile phone. Also since many

FM channels were introduced in India in early 2000’s, Nokia banked on the opportunity by coming

with FM phones attracting a lot of youth. Later on in 2005, Nokia came with SMS services in other

Indian languages including Marathi, Tamil, Bengali and Kannada.

In November 2007, Nokia came with Bollywood classic movie ‘Sholay’ preloaded in N95 8GBand

N81. This gave opportunity to cinema buffs to now watch the movie Sholay on the go. The N series

is a multimedia sub-brand of Nokia. "It is one of the biggest blockbusters that the Hindi film

industry has churned out. There could have been no better option than this flick, which is liked by

every age group equally," said Vineet Taneja, business director of multimedia, Nokia India.

“As part of its strategy to connect with the young population in India, Nokia has been associating

with youth passions like Cool Sports, Music, and Fashion. In the genre of Cool Sports, Nokia hosted

the Ngage QD Gaming Championship, Defend Your Turf, the first ever futsal Championship. Over

the last few years, in music Nokia has brought several world class music artists including, Shakira,

Shaggy, Mark Knopfler, Sting and Enrique Iglesias to India. In Fashion, Nokia has a strong

association with Wills Lifestyle India Fashion Week and Nseries lifestyle led campaigns amongst

others.”

45
In another attempt to give India handsets which will enable them to use more features, Nokia is in

process of making cheap GPRS enabled handset. In this handset, the users can surf the net at a very

reasonable price. Again targeting the low and middle income class, who are interested in using the

new facilities available. "We are planning to bring internet access to all the masses in India through

our low-cost handsets... the company is working diligently towards it," said Nokia's Senior Vice

President - Entry Business Unit (Mobile Phones Business Group) Soren Peterson in an interview.

5.3 Pricing

Pricing of the phones was of prime importance for success in India. Being a developing country, the

purchasing power of the people was not high as compared to other developed countries. Research

unveiled that phones of lower price range (below Rs8000 or $200 approx.) amounted for 65% of the

total sales in India. Nokia depended majorly on rural market, therefore, pricing was a major success

factor for the company. Nokia did achieve success in India, in spite of the fact, that its handsets were

not the cheapest in the market.

Nokia 1100, which was specially launched for India, was priced at Rs. 4000. This price, although

was at a premium as compared to entry level phones, but was enhanced with several special features

which were not available in other phones of the same price. The head of marketing at Nokia India,

Sanjay Behl said, “The phone is a combination of product benefits and pricing” (Web 14). This

model further became the bestselling model ever in India. It also increased the brand preference of

Nokia from 66% to 77% within 9 months of its launch. This show how nature of Indian consumer is

46
value sensitive. The major strategical move by Nokia in this regard was that it charged a lower price

in India than most of other countries for the same model.

5.4 Place (Distribution)

Mobile phones in India are considered as to be consumer durable, hence they are not just sold

through exclusive telecom retailers but also through general retailers. Nokia designed modeled its

distribution strategy on lines of FMCG business.

An important reason for the success of mobile phones in India was limited reach of the landline

phones in several parts of the country. By mid-2005 the mobile phone sales in smaller towns and

cities was higher than those of the metropolitans. The sales in these urban markets were beginning to

saturate. The distribution in these small towns called for nontraditional channels. Nokia strengthened

their distribution network, and selected distributors from FMCG line or experience holders for

durables or automobiles. In fact, about a fifth of the mobile phone sales in India were consumer

durables or service providers’ shops.

In 1995, Nokia tied up with HCL Infinet for sales and distribution of its phones and appointed them

as Nokia distributor for GSM handsets in India. HCL Infinet provided a complete range of Nokia’s

GSM mobile phones, data products and mobile services. The retail network they developed was very

strong and dedicated. They came up with Nokia Professional Centers (NPCs), Nokia Priority Dealers

(NPDs) and redistribution stockiest all over India. NPCs were one stop shops for the complete range

of Nokia mobile phones, batteries, chargers, accessories, covers, hands free kits and car kits amongst

others. It also provided the after sales services for Nokia’s handsets. NPCs were multibrand retails

outlets with 60% of their area dedicated to Nokia. While redistribution stockists were for supplying

handsets across India.

47
HCL also came with Nokia Care Centers (NCCs) for providing solutions to mobile related problems.

These were spread all over the country and provided phone repairing software up-gradation services.

They also displayed complete range mobile phones, data products and complete mobile phones

accessories. Another effective concept that Nokia up with in 2005, was that of Nokia Concept Store

in Bangalore in south India. It was located in the city centre, MG Road. “This concept store is being

set up with an objective to provide Indian consumer with a truly enhanced mobility experience

through its cast and exciting range of Nokia products and mobile accessories. We are keen to lead a

unique mobile retailing experience for consumers through these thouch points” Sanjay Behl, Head

Marketing, Nokia India (Web 15). Details as per Nokia website are given below.

“Nokia Concept Store in Bangalore was the country's first concept store in India to provide

customers a complete experiential mobile experience. The store measures approximately 2,000

square feet and is designed to reflect the design ethic of the Nokia brand. The layout and design of

the store follows the same pattern as Nokia Concept Stores around the world to guarantee an easy

and informative shopping experience. With a simple-to-navigate setup, open doorways and low-

glare lighting, the store provides a relaxed and satisfying customer experience. The high-tech display

terminals and dedicated areas for Imaging, Smart, Multimedia, Business and Entry phones make it

easy for the public to keep up to date on the latest technologies and trends in the mobile industry.

48
Nokia today has eight Nokia 'Concept stores' in Bangalore, Delhi, Jaipur, Hyderabad, Chandigarh,

Ludhiana, Chennai and Indore” (Web 12).

Nokia kept its promise of enhancing the mobile experience of its customers. In October 2007, they

launched the first 'global format' Nokia Concept Store in Western India at Indore. “Located at MG

road and spread over 3500 sq. feet, square feet, the state-of-the-art Nokia Concept Store will provide

mobile phone consumers in Indore a world class interactive and informative shopping experience,

allowing them to get a first-hand experience before making a purchase decision.” (Web16). Nokia’s

vast distribution network covered almost every city or town where mobile network was available.

5.5 Promotion

Nokia entered India with one for mobile services to start, and had to establish its non-popular brand.

To build credentials the company used both print and television campaigns. In the early days, print

media concentrated on Nokia’s status, global R&D and international awards won to establish brand

awareness. Even after the market grew, Nokia’s advertisements concentrated on product attributes.

Gaining acceptance of Indian consumer is not as simple as other countries. India is a multicultural

country, where people have strong believe in their mythology, nationality and cultures and to add to

it, their purchasing power was not as high as other countries where Nokia was operating. Hence, to

achieve approval of the mobile consumers in India, Nokia decided to localize its products heavily.

For the purpose of developing the products specifically for markets with high population and low

penetration, Nokia developed a team called Mobile Entry Business Unit.

49
Until 2003, Nokia used all their international advertisements with slight modifications in India. For

instance, the advertisement for NGAGE showed two young person’s getting bored stuck in traffic

jam and then they show them combat with super natural powers. It showed how NGAGE could help

them pass their time. But it did not have a very good effect on the Indian audience as they could not

relate themselves to the people over there. There was needed to make special advertisements for

India.

Nokia India marked its special presence in advertisement world with ‘Made for India’ ad campaign

on the launch of Nokia 1100 (Appendix 3). This was the fourth advertisement created in India but

created maximum stir in the industry. The advertisement showed that the Nokia 1100 was launched

first in India and addressed all the concerns of Indian consumers. The advertisement made a clear

deviation from hitherto hip urban-focused advertisements that Nokia are known for. It aimed at

highlighting the broad appeal of mobile phones across all socio-economic segments of India. The

aim was to highlight Nokia’s Indian image.

Analysts believed that Nokia would lose the top end consumers who attached lot of importance to

mobile phones as a style statement. Sanjeev Sharma, Managing Director, Nokia Mobile Phones

India, said “No, not in the least does the latest piece communication create dissonance in the minds

of consumers with regard to Nokia’s brand image. The technology driven ads have created a rub-off

on the entire Nokia range. And fashion and lifestyle products create a desire at all levels first-time

urban or rural user (Dixit, 2004). The advertisement was a success, and Nokia 1100 went on to

become best seller not just in India but also worldwide.

50
The major reason for handset was, Nokia was expecting exponential growth in small towns and rural

areas. The company planned to build brand loyalty amongst this segment. They conducted research

to get to know the needs and concerns of the users of this segment. As Sanjeev Sharma said, “One of

the things we found out was that the torch is of high value. Besides that a major concern was dust…

People feared that dust might penetrate through the gaps of their keypad, and that explains the

extensive use of handset covers in India. Another major concern was the grip of the phone, because

of the climatic conditions in this country people usually have sweaty palms, and therefore the, what

if the handset slips?”

One advertisement that Nokia made in 2000 was a public interest advertisement, urging users to

switch off their cell phones while watching movies. It showed a clip where hero picks up an

argument with person sitting in front row in a movie theatre. One of the advertisements was for

Nokia 2280 which was offered in bundle with reliance mobile connection. This was a simple one

which educated the audience of availability of cheap handset with bundled airtime.

Cricket is considered a religion in India. Nokia has had a strong association with the sport through its

advertisements. In an advertisement released during cricketing season of 2003, a cricket fan was

watching cricket with his daughter and a prospective groom walks in, the father throws the ball to

him, which he is unable to catch. The dejected young lad starts to walk away, just then the television

51
gets blank. The enthusiast fan is frantically trying to find the score. The boy gets a message of latest

score update on his Nokia mobile phone, impressing the father. The advertisement targeted the

middle class youth of India. Recently, Nokia sponsored the ICC World Twenty20 2007 in South

Africa. To its luck, India won the world cup and this format of the game was an instant hit in India.

In 2007 itself, Nokia was the 'on air' sponsor for the West Indies World Cup and for the Champions

Trophy held in India, 2006.

In 2004, network provider Hutch came up with television on mobile phone. “Clips from these 13

television channels can be accessed by Hutch and Orange users through their EDGE-enabled mobile

phones, said Mr Harit Nagpal, Chief Marketing Officer, Hutch” (Web 18). Hutch then came with an

advertisement showing people watching television on Nokia 6630 which was EDGE enabled. This

helped Nokia to increase its sales.

Another successful, India-specific campaign was the one where phones with Saral Mobile Sandesh

(Hindi SMS) were promoted. It targeted the rural India, where mobile penetration is low. The

advertisement showed a postman giving a mobile to a girl which was sent to her by her brother so

that she can exchange Hindi SMSes with her brother. It was a audience specific advertisement and

encouraged the use of Hindi SMS amongst the rural population

Nokia was not the market leader in colored handsets. To regain its share, it came up with

advertisement ‘Har Jeb mei Rang’ (color in every pocket) for Nokia 2600.

52
It was a very colorful advertisement, showing colors spreading out of Nokia phone. It showed the

idea of color spreading happiness in every life.

Nokia came up with some good advertisements around the end of 2007. One of them starring the

superstar of Hindi cinema, Shah Rukh Khan calling Nokia as his friend and companion for 10 years.

He expresses how it brings and spreads happiness and how it has been with him through the ups and

downs of his life. Other advertisements have been model specific as Nokia’s advertisements have

always been. Other advertisements include Nokia 7900 Prism, “The new edge in fashion” and Nokia

E series, “Success is the name of the game”. Another advertisement shows Nokia 1650 with features

of cricket game, alarm amongst others at a very reasonable price.

“As a part of its strategy to enrich mobile user experience, Nokia announced its association with

Bollywood's most awaited multi star blockbuster, Om Shanti Om (OSO). As a part of this tie-up,

Nokia users can exclusively watch OSO movie clips, behind the scenes videos, ring tones and

wallpapers on their mobile phones. Nokia has created a special 'OSO Crazy mobisode', animated

characters of 'OM' (played by Indian superstar Shah Rukh Khan) that can be downloaded exclusively

on all Nokia GPRS enabled handsets by dialing 55555 or from www.nokia.co.in/oso, a special

website created for Nokia and OSO association”.

Nokia followed model-specific advertising for most part. Different advertisements were made for

each model of Nokia, making it easy to target the specific audience, which will demand that model.

Even different media was used according to the audience.

53
 CHAPTER 6

INDUSTRY ANALYSIS

6.1 Introduction

Analysis of the data is very important part of any research. The quality of data collected matters, but

what matters more is the interpretation of that data. This chapter deals with Analysis and Discussions

of the findings. Firstly, data of all the respondents to the interview was compared to give better

understanding of the situation. Then, this comparison was used to achieve the objectives of the

research by evaluating them on the basis of secondary data. Unique personal quotes from

respondents were taken as a basis of comparison of the different views to consolidate it into finding

of the research.

To get a more generalized view of the thoughts, mobile dealers were interviewed. These dealers deal

in many brands and have the firsthand knowledge of market and consumer perceptions. However,

the thoughts still vary due to personal choices and the type of customers they deal in, which in turn

depends on location. To begin with we will discuss the background of the respondents.

54
6.2 Background of the Respondents

For the purpose of collection of primary data, 8 dealers of mobile phones in India within the age of

20-40 were interviewed. Out of this one was considered not valid for the research. The number of

interviewee was restricted to such a small number because of uniformity of the responses from the

responses. It was believed that information was getting repetitive and no new information was being

achieved.

55
Out of the 7 respondents, 5 owned Nokia phones. The youngest respondent was 23 years of age and

the eldest 39. Being the dealers of mobile handsets, these respondents had more than decent

knowledge of the phones, making it easier for the researcher to conduct the interview. The

background details of these respondents are given below:

Name Age City Dealership Handset owned

Pradeep 39 New Delhi Nokia, All major Samsung

companies

Srikant 29 Chaibasa Nokia (Distributor and Nokia E50

Dealer), Samsung,

Sony Ericsson

Rishi 27 Gurgaon Nokia, All major Nokia NGAGE

companies

Sumit 23 New Delhi Nokia, All major Sony Ericsson

companies

Akshay 31 New Delhi Nokia, All major Nokia 6230i

companies, Chinese

brands

Sourav 25 Kolkata Nokia, All major Nokia N73

56
 companies, Chinese

brands

Yuvraj 27 New Delhi Nokia, Sony Ericsson Nokia N95 8GB

6.3 Success and the Brand

Not surprisingly, when asked about the market leader, every respondent had no doubts that it was

Nokia all the way. In a way, reconfirming Nokia’s status in the market with almost 70% share in

GSM handsets. However, they believed that companies like Samsung, Motorola and Sony Ericsson

are giving Nokia good competition and have seen major increase in sales. When asked about reasons

of Nokia’s success, the respondents believed that features of the phone were main driving force for

the sales of handsets. Other important reasons included, brand image due to past experience, long

battery life, user friendliness, sturdiness, number of models offered

Importantly, the reasons for Nokia’s success were believed to be the features of the phone, as every

respondent had only Nokia on mind when asked for the market leader. The marketing strategies

implemented by them were not mentioned by most of the respondents. Srikant however believed that

Nokia had better distribution strategies than its competitors. He believed that Nokia was the first to

enter a new market and create a brand name amongst the new users. Though, according to him it

worked like a circle, as this increased Nokia’s sale, higher sales helped them evade new markets. He

was quoted as saying,

“Though has a superb brand image, I believe the key to their success lies in deeper penetration…

They are the first to each every new market… this increases their sales and in turn increase their

ability to invade more markets…”

57
The respondents being dealers of Nokia had fair amount of knowledge of the company. When asked

about the origin, they all knew that Nokia is a Finnish brand. Nokia’s case is similar to that of Tiger

beer - people do not associate Finland with high-tech products. So the name Nokia (which sounds

Japanese), helps them disguise their origin. The buyers according to them, however, earlier felt it

was an Japanese company. Also, people were more interested in the manufacturing of the handsets

rather the origin of the companies.

6.4 The 4 P’s

Not very strangely, there was no mention of the marketing strategies in success of Nokia. The

indication here is on promotions. Nokia’s promotion strategies have been very aggressive in India,

also they have had special strategies to attract Indian audiences. However, what drive their sales are

the product features and not its marketing strategies. To extract some information, the respondents

were asked to comment on their advertisements, they believed that Nokia’s advertisements were not

extra ordinarily great, but were simple. Also the reach of their advertisements to target audience was

appraised.

“Nokia’s ads touch you… in very simple ways they convey the message” Pradeep

“What is special with Nokia’s ads is their reach to the audience… with model specific ads its very

important to reach the target audience for that model… Nokia has done that more than any other

brand” Srikant

When asked about Nokia’s advertisements, the respondents believed that the advertisement for

Nokia 1100 was a phenomenon by itself. The phone was made especially for Indian conditions and

advertisement showing a truck driver using the phone was perfect for the campaign. According to

respondents, the advertisement changed the way Indian audience felt for Nokia. The advertisement

58
made the audience feel a bond between them. People almost forgot that Nokia was a foreign

company.

“ Made for India’ ad campaign was revolutionary… it changed the way people thought about

Nokia… it became more of a home company than other… people could relate to it”

“The Nokia 1100 ad increased my sale by a fortune… I cater to the lower level customers, and the

phone was made for them… the ad highlighted its features… the impact was such that customers

new to mobile phone believed that it was an Indian company”

Nokia was seldom referred to as the price leader of the market. It was very clear in the market that

Nokia charged a premium for their brand, though it was not very large. Chinese handsets were sold

because to cheap price, but were not reliable. Amongst the branded phones, prices of Motorola and

Samsung were believed to very competitive in low range segments.

“The cheapest handset in the market is not Nokia’s… It has been so since last few years… Motorola

leads on this front… Motorola along with Samsung provide more feature a reasonable rate…

The features of the phone were believed to be the main driving force for the sales of handsets. As

can be seen in the comments above, features such as rough and tough body, long life of the handsets,

user friendliness, extended battery life, universal charger and high ringing volume have had pivotal

contributions in the sales of the company. The major shift came with the launch of ‘Made for India’

Nokia 1100. This phone was specially made for India, keeping in mind the dusty and greasy

conditions. It went on to become the best-seller amongst all mobile phones in India.

59
6.5 FINDINGS

Any market with high technological environment goes through rapid changes. There are many

changes taking place in mobile phone market in India. The demands of consumer are changing. They

prefer purchasing phones with most features. The idea was to carry a gadget with everything in it,

from camera to mp3 player to internet surfing to office support.

The respondents were happy with Nokia overall, especially in comparison to other companies. Even

then, they had a few complaints to make regarding their after sales services, limitations of the

handsets, similarity of the handsets and price.

The respondents believe that Nokia’s future is bright as they expect the company keep coming up

with the kind of handsets that give them technological edge as they have done in the past. This is

what differentiates Nokia from the others. However, they feel Nokia needs to overcome the above

mentioned limitations to continue the percentage of sales they have. There was specific stress on

improving the after sales service. “The market is moving fast… competitors are getting better… if

you don’t improve all your services you are bound to loose on the sales”.

60
 CHAPTER 7

7.1 Conclusion

This chapter concludes the study by highlighting the key findings of the study and then some

recommendations for Nokia for future. Then the chapter discusses to the limitations of the study and

endows the suggestions for future research.

The aim of the study is to critically analyze Nokia’s marketing strategy in India and to examine the

effect on its sales. For this purpose secondary sources were used to collect the information of

marketing strategies and semi-structured interviews of mobile phone dealers in India were conducted

to check the market response of Nokia.

The conclusions that could be drawn were, the main drivers of sales of Nokia are the product

features. The marketing strategy though aggressive and very customer specific was not the prime

force towards the sales. The prices of Nokia phones are competitive but they are not the price

leaders. However, much information on the distribution network could not be gathered.

7.2 Recommendations
61
There is need for Nokia to differentiate itself from the past. This should be done by becoming more

customer-friendly to the Asian markets. Nokia should project itself more aggressively to the low

end, mass market with its low range (but hi-quality) products. There is also a need to develop a PDA

phone for its high range customers. Over the time, quality has been Nokia’s success factor.

They have developed a brand name, and the consumers have a high brand preference. There is need

to in-cash on this by continuing to launch the good quality products. The major drawback was not up

to the mark after sales customer services.

The key strategy that can be suggested is to maintain its leadership with reasonably quality driven,

low end products for the mass market. Considering the future, this will be wise investment. With this

they can bank upon the brand preference and increase the margin instead of sales.

7.3 Limitations of the research and Suggestions

62
The biggest limitation of this research was time. Due to time constraints, the interviews were

restricted to a very small number. Cost was also disadvantage in the process of the research. The

dealers were chosen for interviews as it was believed that they would give a more generalized view

of the whole market. However, their answer replicated their specific customer base and personal

choice. If time is no limitation, the consumers should be directly contacted for their views.

Another aspect that can be considered in the analysis is the balancing act between market share and

profit margin. Right now, Nokia is in position to take advantage of their brand name and may change

their strategies to increase the profit margins. As the other companies are gaining on market share,

this could be the solution to Nokia’s problem. This view can also be considered by the researcher.

63
 CHAPTER 8

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