Nokia incorporated and headquartered in Finland operates worldwide. The company is composed of three groups which include: mobile phones, telecommunications and others (Rapp, 2002). The marketing strategy of Nokia can not be overlooked in the company’s success globally. According to Kurtz, MacKenzie & Snow (2009) every successful marketing strategy takes into consideration the marketing environment which includes the competitive, economic, political, legal, technological and social-cultural factors that affect the way a company formulates and implements its marketing strategy. Kurtz, MacKenzie & Snow (2009) established that “Nokia’s marketing strategy helped the company to predict how long it would take to achieve the goals set out by the strategy” (p. 168).
Kurtz, MacKenzie & Snow (2009) continue to say that when Nokia launched its N-Gage, a handset that played games, the company used its marketing strategy that included determining how it would effectively distribute, promote and price its handsets. Through expanding its well known communications product line to include a new handheld game device, Nokia came up with a new marketing strategy that set its new product in direct competition with game machines made for example by Nintendo and Sony (Kurtz, MacKenzie & Snow, 2009).
Over the time sound marketing strategies have enabled Nokia to negotiate deals with major wireless service providers to distribute N-Gage. The marketing strategy also enabled Nokia to expand the products distribution through offering trials, purchase and downloads of popular games from its website. According to Kurtz, MacKenzie & Snow (2009) Nokia spent an estimated $100 million promoting the initial handset.
Through its marketing strategy Nokia touched the right chord with customers when the company successfully managed to position its portable phones as fashion objects with a special look and flashy colors (Viardot, 2004). During this time its competitors were emphasizing power, price, small size or performance (Viardot, 2004)
Moreover, marketing strategies have enabled marketing savvy firms to emphasize their positioning when communicating with their customers. According to Viardot (2004) Nokia positioned its brand in the highly competitive mobile phone marketplace in which its message clearly conveyed to consumers both the technology and human side of its offer in a powerful way. Viardot (2004) continues to say that Nokia uses a combination of benefits, emotional attributes and competition based marketing strategies. He also comments that the company holds the human dimension of mobile communications forcing its opponents to find a different and weaker position in the consumers mind (Viardot, 2004).
Viardot (2004) established that “many marketing strategies failure comes from lack of coherence between the various elements of the marketing mix” (p. 150). In order to avoid this error Nokia has opted positioning as the keystone of the marketing of its products. The company also segments its markets in order to optimize its resources and to correctly respond to customer needs. Viardot, 2004 argued that “when Nokia incorporated segmentation in its marketing strategy the company was able to regroup its customers who have the same demands for their products and probably the same buying habits and other characteristics” (p. 152).
An assessment of the importance and the use of information in their marketing strategy
Information has played an important role in Nokia’s marketing strategy. This is on the basis of formulating and drawing and effective marketing strategy for the company. Rapp (2002) maintained that “the need for information in Nokia’s marketing strategy was driven by the fact that by 1997 some 59 telecom operators in thirty one countries were using Nokia’s GSM systems” (p. 255). The company was selling 40 mobile phone products in 130countries from 12 plants (Rapp 2002). This information was vital for the company in order to come up with a marketing strategy that will optimize the companies product distribution and pricing in different parts in the globe. Rapp (2002) continues to say that “product distribution information enabled Nokia to determine that the company required some hundred billion components each year delivered in the right amount at the right time in the right place” (p. 255).
The use of information enables Nokia suppliers to operate through a private Nokia network which its customers also can access (Rapp, 2002). Rapp, 2002 indicated that “the marketing team in the company asks suppliers to make firm specific investment in time, money and organization so that Nokia will have an integrated and coordinated end to end solution to its customers” (p. 255). Use of information in Nokia’s marketing strategy indicates how the company benefits by building an inventory that does not become obsolete (Rapp, 2002).
Through the use of information Nokia’s experience is that by working towards establishing strategic marketing plans the company requires a joint understanding and mutually beneficial experience (Rapp, 2002). Rapp (2002) stated that “information obtained in their marketing team and partners Nokia is able to build trust with its suppliers and in turn its customers because everyone runs their business better” (p. 255). Rapp (2002) established that Nokia works with second-line suppliers when a first-line supplier thinks that would be helpful for the company to enhance its marketing strategy.
The aspect of information has played critical role in Nokia’s marketing strategy success. This is because it encompasses the use of information technology to support the marketing strategy hence it is driven from the top to meet the demands of global sourcing and marketing (Rapp, 2002). Rapp (2002) continues to say that the “companies supply chain management is a fundamental part of its marketing strategy” (p. 255). According to Rapp (2002) this is because Nokia sees itself as an extended enterprise involving customers and suppliers and organizes itself around this principle. The marketing strategy emphasizes that the primary focus is on the customer and the customer needs and therefore information remains as the only enhancer or enabler of the marketing strategy (Rapp 2002).
Rapp (2002) argues that “while managing demand-supply chain is key to controlling costs and responding rapidly to demand shifts one must still generate demand” (p. 256). Information has helped the company to create an advantage and resources through alliances or partnering with the potential partners. Rapp (2002) says that “this has been important in developing the supply chain and new network products and services and therefore beneficial to Nokia’s business plans in terms of production of, demand for, marketing of, and distribution of handsets” (p. 256).
A discussion of how their marketing strategy is related to their overall organizational strategy
Nonaka & Teece (2001) indicated that new managerial and organizational ways of acting emerged during the period between 1970s and 1980s. First Nonaka & Teece (2001) determined that Nokia learned to appreciate a close and open customer interface when developing new products and systems in cooperation with demanding customers. Secondly, Nonaka & Teece (2001) says “the company learned how to create new technology quickly and efficiently by utilizing commercially available components and open standards” (p. 252).
The opportunity to innovate with the market has always been highly appreciated in Nokia (Nonaka & Teece, 2001). Based on the market demands and strategy, at Nokia individual tasks are largely perceived as open-ended and continuously changing, requiring an innovative approach to problem solving. This goes inline with organizational structure and strategy hence from the knowledge point of view this means that basic structural component of the firm is creative and innovative by nature and subject to being continuously challenged by its customers (Nonaka & Teece, 2001). The innovative nature of Nokia’s organizational structure enabled the company’s home market to provide an excellent stepping stone to international markets.
In addition Kumar (2004) established that “the literature on marketing strategy focuses on business units and ignores the role of marketing at the corporate level” (p. 245). Kumar (2004) continues to say that “most of the marketing functions and almost all marketing activities in an organization have fallen to the divisional and country organizational levels, but more firms are enhancing this role at the corporate level” (p. 245).
In his further studies Kumar (2004) established that “today marketing strategy is in a perfect position to galvanize an organization” (p. 245). For example at Nokia value creation strategies shift from the financial engineering of the past to more advanced ways of reaching its products to their customers (Kumar, 2004). Although the challenges to marketing are many each unearths new opportunities for seizing organizational leadership and strategy.
Kumar (2004) continues to say that “marketing must prove that it is willing and ready for its leadership role in transforming the company” (p. 245). The correlation between these two factors has been significant in the success of Nokia and its advances in technology. According to Kumar (2004) the organizational transformation brought about by marketing strategy has been able to convince others of its unique capabilities, resources and skills and its mind set to lead and that it has matured as a discipline to become more strategic, cross-functional and bottom-line oriented (Kumar, 2004).
On the other hand Nonaka & Teece (2001) established that “Nokia interlinks and upgrades individual and organizational tacit knowledge and converts it into explicit knowledge” (p. 256). The highly egalitarian and straightforward management culture offers a good opportunity for anyone to challenge the future directions of the company (Nonaka & Teece, 2001). This means that Nokia deploys managerial and organizational mechanisms that keep their marketing strategy continuously intertwined with implementation (Nonaka & Teece, 2001).
An analysis of how the global context has been incorporated into their marketing planning.
Nonaka & Teece (2001) indicated that in order to keep its current businesses around the globe out of comfort zones, Nokia used its marketing strategy to establish a new venture organization. Nonaka & Teece (2001) continues to say that “the venture was geared towards accelerating the development of new growth business around the globe” (p. 256). Nonaka & Teece (2001) also said that high quality global operations require standardized process in addition to shared values and management principles. As a result Nonaka & Teece (2001) noted that Nokia is considering new ways and means to interlink people, actions and knowledge globally.
The marketing strategy according to Nonaka & Teece (2001) has enabled Nokia to have a globally unified action, perception and reasoning in time and this can be translated into an ability to deploy creative and interactive strategies, structures, processes and actions that draw their substance simultaneously from different markets and environments. Globally Nokia’s growth has been an outcome of market maker behavior and strategy which is mutually constitutive creation of markets with customers (Nonaka & Teece, 2001).
The biggest challenge for Nokia globally is how to use its marketing strategy to interlink, worldwide, the foresight of both individuals and management for time paced strategies as well as for innovative interaction and reflective actions (Nonaka & Teece, 2001). In order to address this challenge Nokia emphasizes on the role of individual reflective actions more than that of structures or even processes (Nonaka & Teece, 2001).
Rapp (2002) says that through the marketing relationship with the trading company Mitsui & Co., allowed Nokia to monitor technology developments in Japan and other parts of the world. He thus says that Nokia was able to build brand credibility better than any foreign suppliers (Rapp, 2002). According to Rapp (2002) Nokia was aided in its international marketing by the knowledge and expertise accumulated from working with the earlier NMT standard. In 1991 Rapp (2002) established that Nokia decided to develop a phone that would work globally that is not only with the new European standard. This was one of the great steps that the company made as it promoted its global capability of being one of the global leaders in mobile phone manufacturing.
In order to enhance it marketing capabilities Nokia has developed various e-business solutions that is applications and platforms. United Nations Conference on Trade and Development (2007) says that “Nokia has created an electronic platform on the internet that allows about 2.5 million users to obtain any kind of information about Nokia products that they may need in order to develop new solutions” (p. 201). This is a e-marketing strategy that turns users into partners of the company. United Nations Conference on Trade and Development (2007) continues to say that “this network of users is integrating Nokia into broader open source community a strategy that makes it easier for the company to spot users changing needs and tastes and to innovate in response” (p.201).
O'Sullivan (2009) says that “in 2000, ICL formed a joint venture with Nokia to support Nokia Information Managements e-business strategy” (p. 68). This made Nokia a world leader in its industry because of implementing e-business and customer relationship management solutions and services to support the company’s strategy. O'Sullivan (2009) continues to say that “the arrangement ensured that in addition to its growing resources; Nokia had the best expertise in the field at the service” (p. 68). Through the use of e-business strategies Nokia has allowed other small and medium enterprises to gain access to new potential customers and collaborators and therefore increasing their market share (O'Sullivan, 2009). The e-business platforms and applications at Nokia therefore assisted the company to gain its competitive advantage in home and globally.