Assignment No.5

Submitted To : Dr. Rachna Mahajan

Submitted By : Raghav Gandotra

27-MBA-10

Nokia Corporation, a Finnish multinational communications corporation,

headquartered in Keilaniemi, Espoo. Nokia is focused on wireless and wired

telecommunications. Nokia India is a subsidiary of Finland-based Nokia

Corporation. Nokia has played a pioneering role in the growth of cellular

technology in India. In the past one decade, Nokia has emerged as one of the

most recognized brands in India, surpassing some of the Indian business

conglomerates in terms of revenues.

Nokia started its India operations in 1995, and presently operates out of offices

in New Delhi, Mumbai, Kolkata,Jaipur,Lucknow,Chennai, Bangalore,

Hyderabad, Pune and Ahmedabad. The Indian operations comprise of the

handsets business; R&D facilities in Bangalore, Hyderabad and Mumbai; a

manufacturing plant in Chennai and a Design Studio in Bangalore.

How Did Nokia Succeed in the Indian Mobile Market, While

Its Rivals Got Hung Up?

By most accounts, India is among the world's fastest-growing markets for

mobile phones. The country has some 170 million subscribers and adds 6

million to 7 million more each month. (China, in contrast, adds 5 million

subscribers, and the U.S. 2 million subscribers a month.) Recognizing this

potential, several global telecom giants jumped into the fray when the Indian

government first opened up the country's telecom market to private

enterprise in 1994. Among them, one company -- Finland-based Nokia --

forged ahead of rivals and today commands a 58% market share for mobile

phones (also called "handsets"). In specific segments, such as GSM telephony,

Nokia's market share in India is as high as 70%. (GSM, which stands for Global

System for Mobile, is the world's most popular standard for mobile

communications.)

How did Nokia take the lead in the Indian mobile phone market, ahead of

companies such as Ericsson, Motorola, LG and Samsung? According to

company executives and industry experts, Nokia's strategy combined focusing

on the mobile phone market, establishing crucial distribution partnerships,

making early investments in manufacturing and brand-building, and

developing innovative product features -- such as mobile phones that could

double as flashlights. Ravi Bapna, professor of information systems at the

Indian School of Business in Hyderabad, says, "As far as Nokia's India strategy is

concerned, the numbers speak for themselves. The company is a key cog in

India's wireless value chain, and it has used India as its emerging market lab."

Nokia 1100, A Success Story

The Nokia story in India has not been about grafting a model that has worked

abroad. In fact some of its models -- the handsets, not the strategies -- are

unique to India. Consider this example: It would probably be inconceivable to

mobile phone users in the U.S. or Europe that their mobile phones should

incorporate a flashlight, or torch. But in India -- where large numbers of the

rural population do not have electricity, and power cuts are commonplace

even in the cities -- having a torch built into a mobile phone is a distinct and

tangible benefit. The Nokia 1100, the first made-for-India phone, has been a

runaway success. Manufactured at Chennai, it is also being exported. The 1100

incorporates a torch, an alarm clock and a radio. "Innovation is something

which consumers reward in this market," says D. Shivakumar, Nokia India's vice

president and country manager.

Nokia is, however, willing to talk about the "shared" phone. This is, again,

something that mobile phone users in affluent countries might find puzzling,

but the concept is simple. For reasons of affordability, in rural areas a phone

may be shared by several people. The models being launched to cater to this

need will have separate address books, individual billings and more. Will it

work? People initially doubted the torch phone, too, but it became a popular

product.

Product Life Cycle Strategies for Nokia 1100

Marketing Strategies - Introduction Phase :

• Nokia India thought of introducing a product in the Indian market which is very

Price-Conscious. The basic strategy was to target the rural market by offering a

product that caters their needs.

• Launched in India in 2003 as an entry level mobile handset.The 1100 was designed

especially for emerging markets such as India, and was the outcome of detailed

studies of users and market conditions. The findings? Users in these markets placed

a premium on ease of use and durability. A no-frills phone was acceptable as long as

it provided necessary services such as text messaging and an alarm clock at an

affordable price. The perfect handset would also be hardy enough to withstand

India's heat, dust and humidity, and would have a battery that could cope with

uncertain recharging schedules, given the erratic power supply.

• Due to their large distribution network in India, positioning of the product as a

localized product was made possible. This idea was promoted with a tagline

“Nokia 1100 -MADE FOR INDIA”.

• Product awareness was made among the early adopters and dealers in making the

market aware of the benefits of the product.

Marketing Strategies - Growth Phase :

• Marketshare maximization was given a boost with the large chain of service centers

and local repairing centers.

• Cheaper and affordable accessories made 1100 a big success.

• With the heavy consumer demand, Nokia penetrated the market by reducing the price.

• With intensive distribution, nokia indulged into mass marketing.

Marketing Strategies – Maturity Phase :

• In order to maximize profit while defending marketshare, Nokia diversified the

product and introduced the successor Nokia 1101 with a green backlighting and a

simple wap 1.1 browser.

• Nokia went on to exporting the product to other parts of the world in order to

encourage product switching.

Marketing Strategies - Decline Phase :

• Reduced the 1100 production and smartly phased it out.

• Introduced Nokia 1208 with the same menu but a coloured screen and with a price

to match and beat competitor’s.

The Result : 250 million 1100's were sold since its launch in

late 2003, making it the world's best selling mobile phone handset

as well as the best selling consumer electronics device in the world.