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NOKIA Nseries Positioning and Product Life Cycle

A brief introduction of Nokia

Nokia Corporation, a Finland based company incorporated in 1967, is an international communication company in global leader in mobile hand set telephones. Nokia has a worldwide share of about 40%. Nokia focused on the key growth areas of wire lines wireless telecommunications. Nokia produces mobile phones for every major market segments and protocol including GSM, CDMA, and W-CDMA (UMTS). The corporation also produces telecommunication network equipment for application such as mobile and fixed-line voice telephone ISON, broad band access, voice over IP, and wireless LAN. Nokia’s group structure is slightly different than its employment structure.

Nokia Mobile Phones (NMP) is the world’s largest mobile phone manufacturer. With its comprehensive product portfolio covering all consumer segments and standards, Nokia is one of the pioneers of Mobile Information Society. Nokia’s mission is to enable people to connect with one another and to information sources regardless of time or place. Nokia’s technology and applications are designed for human needs and based on solutions that function seamlessly and effectively together

Nokia Corporation consists mainly of Nokia Mobile Phones, Nokia Networks and Nokia Ventures. Nokia has an advanced research and development organization. Telecommunication research and product development activities employ 31% of the staff, and the financial effort accounts for ca 9% of the company’s turnover,

Nokia Mobile Phones’ net sales in 1999 amounted to MEUR 13,183, and the company employed 23,775 people worldwide at the year-end 1999. Nokia has ten mobile phone factories in eight countries: Salo, Finland; Bochum, Germany; Komárom, Hungary; Fort Worth and Dallas, USA; Reynosa, Mexico; Manaus, Brazil; Beijing and Dongguan, China; and Masan, South Korea. Nokia’s mobile phone sales volume was 128 million units in 2000. (Nokia web pages 2001.)

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Positioning of nokia mobile phone (NMP)

Nokia is among those companies which have spent years and years in their respective fields to gain confidence of people and huge market share. The first thing that comes to mind when hearing the name Nokia N series is “durable, beautiful, phone you can trust”

The positioning by nokia is quiet evident by their tag line “connecting people” that means whenever the name comes one definitely knows it’s a mobile phone. The main thing is their advertisement is also enforcing connection medium for people, with the passage of time trends did change. Nokia changed its face with respect to the trends. But the main positioning remained the same. All new features all new gizmos and gadgets by Nokia always come with one thing in common “connecting people” for example

The advertisement of nokia n 73 advocates that now you can not only play music you can make music and share it easily with your community. 3.2 megapixel camera, with carl zeiss lens shoots crisp pictures which you can share at the same time while viewing. The main objective of the discussion is all new features were launched to maintain and increase market share but the basic positioning related to the core benefit of a mobile phone that is to connect remained there all the time.

In the latest advertisement by nokia for “N900” the mobile phone expected in January they have showed all the aesthetics of the mobile then the features but at the very end of the add, it shows mom is calling and everything minimizes for that call itself. This shows they are sticking to their same positioning statement “connecting people”.

Positioning done by nokia is related to differentiation in different fields which are described ahead

POSITIONING STRATEGY OF NOKIA Nseries

Nseries positions its products using the following differentiation strategies and they are as follows:

1. Product differentiation:

Features:

Nokia differentiates its Nseries mobiles by providing the latest multimedia features. Other than the normal features of a phone, Nseries can be used as a music player, user friendly OS, video capture and photography by providing cameras of 1.3 to 5.0 megapixels, mobile gaming, good

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color resolutions, Bluetooth, internet services, touch pads, internal memory USB ports, email assistance and FM radio. Nseries aims at users who e looking for a package of many features in a single device.

Design:

Nseries mobiles are highly attractive phones with a basic candy bar design, flip open design and slide open design. The phones normally measures around 11 cm high 5 cm wide and 2 cm thick, the gross weight varies between 100-170 grams, making this handset very light for the user to carry in their hands or pockets. The mobile comes with a dual slide mechanism. The slide up reveals the keypad and the downward slide uncover the stylish music keys.

Durability and Reliability:

It is the product’s expected operating life under natural conditions. Nokia has been known for its reliability and durability. The perception in Pakistan is “If it’s Nokia then it has to be good”. It has been there for a very long time. Nseries handsets come with a warranty of 1 year, even the accessories such as chargers also come with a warranty period of six months. The incident of BL5 batteries proved that Nokia is a reliable company and cared about its customers.

Ease of Reparability:

Nokia’s spare parts are easily available in any of the mobile service shops. The local repair shops and vendors have acquired the expertise in repairing Nokia phones in Pakistan. This has really increased the ease of reparability in the case of any Nokia mobile phone including Nseries. Still there is an issue because many technologically advanced spare parts like the cameras, Bluetooth chips are not readily available with the local dealers. But these are easily dealt with, by authorized service.

Product Quality:

There are four levels of performance quality: low, average, high or superior. Nseries has high performance quality. Nseries also has a few certifications for its mobile operating system like VPNC certification, ITSEC certification, EAL4 certification, ICSA Labs certification and FIPS certification that prove its quality.

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Source: Compiled from http://europe.nokia.com/A4153224

2. Service differentiation:

Ordering ease:

The Nseries is available in all leading and small-time mobile shops. These shops are located in varied locations and are in abundance. So when it comes to ordering an Nseries, it is so easily available that a perspective buyer has to normally travel a short distance to find an outlet to purchase it. Hence Nseries is right in front when it comes to ordering ease.

Customer Training:

With the level of increased awareness among the general population about the usage of the mobile phones, the simple technology being used has made it a layman’s accessory. The only customer training that Nokia provides is at its showrooms at the time of purchase and even later, if required. This training is on the basic usage of the phone and when it comes to high end phones like the Nseries.

Guaranty/Warranty:

Nokia provides a yearlong guaranty period on all of its phones. When it comes to the Nseries, the service is far more extensive. Other than just repairs in case of any problems with the phone, Nokia, in some special cases, also replaces the phone. This is a service that is provided only by Nokia and no other company in the Pakistani Market provides a full product replacement.

After Sales Services:

This is probably the most important differentiating factor when it comes to service differentiation. Nokia has set the benchmark for providing quality after sales services. They provide fast and effective solutions to the problems faced by their respective customers. It is well known that Nokia has the most dominant presence in the mobile phone market and it is expected that they will provide quality after sales services and till now they have done a fantastic job leaving their competitors way behind in this context.

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3. Personnel differentiation: .

Competence:

It is the ability of personnel to understand the problem/requirement of customers. Technical faults in the phones are dealt by “Nokia Care”. For solving any problem, the sales executives need proper knowledge about all the products. For this purpose all executives of “Nokia Concept Showroom” are given training and a handbook to understand the problems of the customers. At the same time the owner of the “Nokia Care” center is coached to train all his/her employees. There are certain norms that have to be followed at all the “Nokia Priority” centers and “Nokia Care” Centers. A technical representative is required to be present from 10 am to 6 pm without fail.

C ourtesy:

This means that the personnel should be friendly, respectful and considerate. All the sales executive are trained to treat all the customers with respect. There are certain norms that all the employees have to follow at all the “Nokia Priority” and “Nokia Care” centers. There is a dress code and many do’s and don’ts while interacting with the customers. Call center executives are trained to a much greater extent. Their responses are a bit monotonous which makes them too courteous; it is better than sounding rude.

Credibility and Reliability:

Credibility is the trust we have on the personnel and reliability is the consistency and the quality of service that is provided. Nokia showrooms are very prompt with their services compared to its competitors, especially after the setting up of the plant in Chennai. As a result the service time promised to the customers by the personnel are normally met. This increases their credibility and reliability.

Responsiveness:

Nokia cares about its customers a lot. Any query left at the showroom or the customer care center is attended to as soon as possible. Nokia takes the initiative to inform the customers as

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soon as their problem/query is resolved. Other than that at the showroom also, the time taken for any problem solving is really low because of the presence of properly trained employees.

Communication Skills:

This involves the effort to understand the customer and communicate in a clear way. For doing so, again the training given to all the sales and call center executives pays off, as in these training sessions proper guideline on how to communicate with the customers are given properly. This helps the employees to make their communication skills better.

4. Channel differentiation:

Nseries has gained a huge competitive advantage by setting up many distributers throughout the country. Nokia has over one hundred thousand distributers across Pakistan. Nseries is available in more locations than its competitors in the same segment. This makes the product easily available. Their distribution channel is far more superior compared to any of their competitors. Samsung recently has started acquiring the Nokia distributers to increase their market share. They have been successful in other countries but this hasn’t paid off in Pakistan.

5. Image differentiation:

Logo:

Nokia has not made any significant changes to its logo in the period that it has been present in the Pakistani market. Over the 13 years of its presence in Pakistan, Nokia has changed its logo only once. Earlier Nokia had a Nokia “arrows” logo. Then it was replaced by Nokia “Connecting People”. This was a change in the marketing strategy of the company. It wanted to relate to the people by conveying the message that Nokia helps in building relations. Before these two logos, Nokia had two more logos when the firm had not entered the telecommunication sector and were producing rubber products.

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Source: Compiled form “Nokia”, http://en.wikipedia.org/wiki/nokia (Logos in chronological order from right to left)

CRITICAL ANALYSIS OF Nseries POSITIONING STRATGY:

Importance:

Positioning is really important. There are many competitors in the market who are trying really hard to snatch the market share of Nseries. If Nseries is not positioned properly, it could easily loose market share to brands like Sony W series, Samsung U series and Motorola V3i. Nokia has positioned Nseries as music oriented phone. Sony, Motorola and Samsung are trying to give Nokia a run for their money by signing brand ambassadors like Hrithik Roshan, Abhishek Bachhan and Aamir Khan in india. All three come in ads of Sony, Motorola and Samsung respectively. Nokia is not using any brand ambassador for Nseries. The advertisements given for Nseries are feature based. Although Shah Rukh Khan has been signed as the brand ambassador for Nokia, he hasn’t featured in even a single advertisement for Nseries.

Distinctiveness:

Nokia has been very successful in creating a distinct image for Nseries. The good thing about this product is the way people have perceived it as a music phone with a very good camera. It is a full package of the latest multimedia technology with the easiest user interface. A separate range for the ladies in pink and plum colours, front and back camera and slide cover for the camera has made Nseries a distinct brand in the market.

Superiority:

Nokia has been in the Pakistani market for over 13 years now. Over this period of time they have built a rock solid image in the eyes of their target segments. This image has shown its effect on the N-series range also. The Nseries uses an OS provided by Symbian which is known to be the fastest and the most efficient OS in the market. Also Nseries is known for its user friendliness. Also Nokia phones are known to provide the longest battery backup in its category.

Preemptiveness:

N-series was the first phone in its segment to introduce a phone meant for music. It also introduced phones in pink and plum colour for the female customers. This trend was then

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copied by Motorola, but it wasn’t successful. Nseries was the first phone to have a camera in the front and the back. It was preemptive in many of its design and software features also. So being preemptive helped the Nseries range to gain an edge above its competitors. Above all Nokia was the first brand to sponsor a cricket team, “Knight Riders”. Now people will relate cricket as well as entertainment with Nokia because of the Shah Rukh Khan factor.

Affordability:

Affordability is a very important aspect of positioning. The Nseries ranges from Rs. 13000 to Rs 60000 in Pakistan. With all the financial facilities available these days, we can say that the number of customers who can afford the N-series range has gone up. The customers perceive Nseries to be good value for money, so even though the prices are a bit high the brand can be said to be affordable because of the entire package it provides.

Profitability:

After setting the price, the sales figure achieved should be high enough to generate substantial profits. The annual sales figures of Nokia are rising in every quarter. The sales share of Nseries is increasing in the revenue generated. As a result we can conclude that Nseries is generating substantial profits for its parent firm, Nokia.

PITFALLS IN THE POSITIONING OF Nseries:

Under positioning:

Nseries would have suffered if it would have kept on positioning itself just as a music phone. Nokia realized that Nseries would lose its charm if this continues. As a result Nokia came out with many new models of Nseries and focused on other features while advertising Nseries.

Over positioning:

Initially the prices of the Nseries were assumed to be out of reach of the middle class. Seeing this Nokia started advertising Nseries with the prices mentioned below the respective models. This way they were able to avoid over positioning.

Confused positioning:

Nseries products were a luxury product initially because of the high prices. But as the prices went down many other income segments were able to afford the same. This could have created confused positioning, but the fact that the prices of all the competitors also fell didn’t let this happen.

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Product Life Cycle of Nokia N Series:

We would take N series as a product here and explain its different stages. For reference the product life cycle graph is as follows

Product life cycle of mobile phones and Nokia’s position

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A generalized product life cycle

1) Product developmentNokia was making conventional phones before N Series which used “nokia s 60” operating system. With the start of new internet and chatting age people were more and more interested in mobile phone which could be used for things more than just calling and texting. The sales of Nokia’s conventional phones (here s 60 phones are referred as conventional) was declining with the introduction of I mate, jasjar, O2 XDA, Motorola mate, Sony purchased Ericsson. To capture the market they started producing low budget mobile phone with latest features. To counter this development of a new series or new generation of mobile phones was underway by nokia. This was when nokia created N Series on April 27, 2005 (source http://press.nokia.com/PR/200504/991467_5.html). This moved the N Series to introduction stage

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2) Introduction StageThe first N Series mobile phones were N70, N90, and N91. It was a very smart move by nokia to introduce three different mobile phones at the same time because N70 was a big hit, N90 was a complete failure, and N91 was an ok Seller. Now the most important thing is, N70 had a 2.0 megapixel car zeiss camera yet affordable as compared to rest two. The former mobile phones were 7250, 7210 and 7650. All these models were very high priced but had the same features as SE k310i which was selling at about half the price. N70’s. in the given diagram it is evident that nokia boost it’s sale by introducing N Series at a very crucial time

The second chart shows a long term preview of nokia sales

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Here it is worth noting that in 3007 the decrease in sale is only due to rise in oil and gold prices along with start of a global economic crisis.

3) Growth StageWith the start of 2005 launch market accepted N Series and it started to grow at a whooping rate 35.5% change was recorded in sale during this year. The life cycle of mobile phones is very short hence companies like nokia keep on changing. During 2005 many new models of N series were introduced and market share kept on increasing.

4) MaturityThe maturity of this series came with middle 2005 and start of 2006 it was fully mature people were buying new mobile phones. Market share was very high but not increasing that much as compared to the first quarter. People were loving this new form of communication and multimedia entertainment.

5) DeclineThe decline started in early 2006 but the most ironic part is N Series was not facing decline due to change in trend or some competitor but in fact the decline came due to the introduction of a new series in October 2005 “E Series” basically the concept behind the series was excellent but sometimes most excellent concepts and ideas may backfire. The same happened with N Series. E was designed for those middle aged people who very used to s60 operating system but were in high class community and felt ashamed to carry crappy phones. They were also afraid to use N Series as it was youngster oriented. But the problem came in May 18 2006 with the introduction of E50 a small stylish and easy to use phone with carl zeiss camera and all the professional features of mobiles but lacking the music aspect of N series came. This was originally designed and targeted for old men. Youngsters

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also liked this mobile phone and the sale of nokia E Series increased dramatically. Due to customer shift people moved away from N Series

6) ReinforcementNokia did a witty thing and introduced N95 an N Series phone with all the features of an executive series along with a whooping 5 mega pixel camera. People started moving to N Series again and that model really tried hard to keep the N Series high. This attempt was pretty much successful but later on with the introduction of Xpress Music series and also launch of similar mobile phones in market like N95 8gb, N81, N85, etc made the market decline again. Now Nokia is working on X series to be launched soon.

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