What is 3G?
3G – or 3rd generation – technology supports the broadband, packet-based transmission of text, multimedia data – such as audio, video and digitized voice – at a high data rate. It will greatly enhance the next generation of mobile communication services, providing always-on connectivity to phones and other wireless communications, regardless of time and place. 3G has been endorsed by major standards bodies and manufacturers. WCDMA is the leading 3G standard. It has been endorsed by all major OEMS and operators.
What does 3G mean for developers? 3G is another network pipe, so in most cases developers do not need to explicitly program for it any more than they program for a GSM or GPRS network. However, the enhanced bandwidth and the always-on nature of 3G removes some practical limitations on the types of services that developers can deliver.
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What services will 3G enable? No single 3G application will dominate the market. High-speed content like video-on-demand, multimedia and always-on Internet access are just a few possibilities. Nokia believes Multimedia Messaging Service (MMS) will be one of the first successful services on the market.
Is 3G too far out to make application development profitable? The 3G network roll-out is in process, but the applications that will work best over 3G already work on today’s networks. MMS, OTA download of Java applications, and browsing applications are already in use today. As 3G bandwidth becomes more widely available, developers can enhance existing applications with richer graphics and other data-intensive services.
When will WCDMA 3G networks be available?
Nokia is already rolling out its 3G network solutions. The first Nokia WCDMA and EDGE networks will be launched commercially during the second half of 2002.
Current Market Situation
The current market share held by the 4 major producers of mobile communications in the 3rd quarter of 2002 was as follows: 1. Nokia ¡V 35.9% 2. Motorola- 14.4% 3. Samsung- 10.6% 4. Sony-Ericsson- 4.8% For the past 3 years, the mobile communications industry has taken a significant downturn. The value of the market has decreased in the region of billions of euro.
The downturn of the industry can be attributed to three main causes: 1. Investors have somewhat lost confidence in the hi-tech industries and hence now the trailing mobile communications industry 2. Market Saturation experienced by the mobile industry 3. The product life cycle of the 2G mobile phone has progressed to the decline stage, resulting in a significant drop in sales Until recently there has not been any major technological advancement in the mobile phone over the last 3 years. Due to poor technical specifications and inflated expectations (due to the promotional strategies are undertaken), WAP (Wireless Application Protocol) enabled handsets and other internet-based communications devices were commercial failures which were reflected in the poor unit sales figures for the period.
With the prospect of the 3rd generation of mobile phones coming onto the market between 2003 & 2006, the industry has started to become more lucrative. Worldwide mobile phone sales in the 3rd quarter of 2002 totalled 104.3 million units (a 7.8% increase from the same time 1 yr prior. Information source: Dataquest Inc) Nokia expects the market to grow to between 440 million- 460 million units in 2003 overall.
However, business analysts generally think to be around 435 million in the 2003 financial year. Nokia believes that Europe is the major market where consumers are looking to upgrade their handset in 2003. Mobile phone subscribers will be looking to replace their old phones with the new breed of mobiles available at the moment with digital camera/ colour screen capabilities.
Confirmation of this trend in the industry is by the sheer volume of people signing up for the new MMS (Multimedia Messaging Services), 20,000 for T-Mobile in Germany alone, and 30,000 in the UK for Vodafone, all in a 6 month period. The popularity of the SMS (Short Message Service) has been the main contributor to this new breed of messaging. When 3G is introduced it will have all the capability that these new phones have and more. However, by the time 3G is incorporated into the market place, MMS will be widely accepted and the cost of the service will have decreased.
Producers of mobile communications such as Nokia & Sony Ericcson, along with the network providers T-Mobile, Orange, Vodafone & O2 are expecting that the introduction of the new MMS services will enable them to achieve the growth objectives & provide a new untapped resource of revenue from increased unit sales. Although this new MMS service will most definitely cause an upturn in a currently flagging market, it should not be relied on too heavily as a main source of revenue or selling point.
Sending of MMS messages is still very expensive in comparison to SMS texting. Also, the handsets which have the capability to do so are still particularly expensive & may be out of reach (financially) to those who send most messages (88% of all messages are sent buy under 22-year-olds and most of them in the teen market). The current market trend of SMS messaging should not be neglected as it currently accounts for 12% of the total revenue generated for network providers.
Political and Legal Factors Political factors have increased in toughness for mobile phone operators as phones become more advanced. In particular, the way in which billing information is handled in the future will be affected by new anti-terrorism legislation imposed by the government.
The 3G mobile phones are expected to obtain data pinpointing the whereabouts of the mobile phone user to within a couple of meters. It is proposed this information is retained in the future for longer periods than mobile operators have done so in the past in order to attempt to locate criminal movement.
The government have invested in independent research into the health effects of mobile phones. The outcomes have been inconclusive, however, scientists have stated the use of mobile phones does affect brain activity. This is not proof of damage, however, the government are keen to have an answer and this could affect the use of future mobile phones.
The intervention of the government noticing the escalating crimes focused on or around mobile phones has an impact on their development. The phones have to be less appealing to thieves by some form of internal security as phone thieves begin to target children equipped with a mobile phone by parents or guardians for safety reasons.
Copyright and Patents of newly developed technology have to be confirmed by for ourselves and others.
Economic Factors The current economy in the UK is very strong, boasting high employment and high average age. In such situations, the public has increased disposable income enabling a trend to spend money on luxury items.
Should the economy begin to slow down and many of the population fearing recession, sales of 3G mobile phones would suffer. Businesses and individuals unsure of their financial standing would begin to spend less on items not deemed necessary.
The way of avoiding such dramatic effects of economic change is to perceive the goods as ‘must-have’ products. Marketable to businesses as a return on investment due to increased efficiency could be argued. This is less likely to be adopted by individual users.
There is an increasing concern with the number of masts being erected which form the networks supporting mobile phones.
As the number of mobile phone users increases, and we move into 3G technology where a higher number of masts are required to support the technology; the public are becoming concerned of the impact masts are having upon their immediate environment. Although masts have reduced in height, this reduction has been accompanied with need for them to be closer to the user.
It is necessary to be sympathetic to these concerns and where possible disguising the masts will show an increased attention to the public.
Public users have a desire to request information and receive this immediately, this has become a priority in today’s fast-moving society. This means people have less patience to wait for the information desired and this is reflected in the culture of mobile phone use. 3G has the capability to transfer desired information that is up to date, directly to the handset being used Technological Factors The increasing capability of electronics in continually smaller packages enables additional technology to be included with limited effect on the size of the product. This has had a great impact on the capability of mobile phones.
With the ability to gain remote access to the internet, it is possible to bring the internet information direct to a mobile phone user.
Development of 3G technology is expensive and time-consuming Threats and Opportunities
Market Saturation It is estimated 73% of adults own or use a mobile phone (often research), thus indicating the market is reaching saturation point with fewer new customers entering the market.
Children with mobile phones do not have justified spending on their phones to be considered the target audience. Also, the purchase expense will have to be covered by a third party, generally, the parents or guardians who can be reluctant to buy the latest models for children.
Competition from other mobile phone companies Nokia is a large company supplying mobile phones to a vast market. However, they are not the only company supplying these products. Other companies with growing reputations are:
- Sagem Of these companies Samsung is developing their own version of 3G mobile phone to be launched in the third quarter of 2003.
Others have their own development plans providing improved 2G phones with additional features.
The majority of homes have traditional telephone lines installed. The use of landlines is cheaper and can come as a package for the home television and/or internet connection.
Email communication has expanded over recent years and in some cases considered the optimum communication tool. This is especially true in professional working environments.
Email addresses can be readily created and used, just requiring an internet access point. As well as having a connection on a home PC, access can be gained from schools, universities, libraries and many places of work.
Income Currently the UK has low unemployment accompanied by a good average income. This results in a higher level of disposable income and therefore social spending.
Should the strength of our economy reduce and with it employment levels, people will become more cautious about their spending habits. in cases where the mobile phone is a necessity, this will not cause a problem, however, where the mobile is deemed a luxury item, sales will could be affected. For example, not upgrading and sticking with an older model, reverting to other communication networks etc.
Health Concerns Radiation from handset use has been a concern in recent years. Continual research is being carried out in order to prove or disprove suggestions of mobile phones having the potential to cause serious health problems to the user.
This has not halted the increasing popularity of mobile phones, however, research into this must be monitored.
Sales 3G technology will enable users to surf the internet with TV-like multimedia phones, download music, images, full-motion video and see the people they are talking to. For this privilege, consumers will purchase new handsets with the technology incorporated.
Developing tariff relationships Placing more phones on contracts for tariff companies. Where customers will sign up for contracts and subject to conditions will get the phone at a reduced rate/free.
Companies with 3G licences are: “h BT “h T-Mobile “h Orange “h TIW (Telesystem International Wireless) “h Vodafone Each of these companies will operate in the MHz range. The Nokia phones should be compatible with each of the specified ranges ensuring the product operation across all tariffs. Personal choice on tariff will affect sells, by maximising availability increase product potential.
Reputation In current plans, Nokia will be the first company to release a 3G mobile phone. This, therefore, has the potential to promote Nokia as the leading authority in the development of mobile technology.
Providing further features will be appealing for multifunction Multifunction will enable users to disregard other products they may have purchased as well, such as a personal organiser.
The Strengths of the business are: These strengths can be developed further by Costs in developing these strengths ReputationKeeping profile high. Positive publicity. Good customer service and product support.
Essentially high quality of products
Internal costs ensuring the quality of the product and service provided are of an extremely high standard
Large coverage of the 2G market
Achieving high level of distribution in 3G market. Whilst still supporting the products for the 2G customer. Internal restructuring costs for specialist 3G departments High demand for mobile handsets.
Increasing Nokia market share. Distributing to a wider audience Market research into desired areas and Promotion to those deemed potential successes Breadth of company knowledge and skillsGood quality working practices. Investment in key staff. All staff dealing with customers at all levels should have the relevant product knowledge.
Internal quality processes costs. Staff training etc Quality of products and product performance
Supplying products offering increased usability, functions and reliability
Product development costs PatentsEnhance technological achievements, which in turn enhance the product produced by NokiaProduct development in ‘confidential’ conditions and applications to patent office.
The Weaknesses of the business or are: These weaknesses can be corrected by:
Costs of weakness correction: Many mobile phone users are influenced in choice of mobile phone by tariff operator they desire.Good relationships with as many of the big tariff operators as possible. Prove the Nokia 3G is a mobile handset that will be beneficial for them to support on their network.-Tariff operators have to be convinced the phone is going to be profitable.
However, with only five main operators expected for the 3G range a new product of this interest will not need a great expense of promoting World-wide distribution??? Integrating distribution channels Operating subsidiaries in countries to be targeted distribution channels to be extended from 2G mobile phone distribution. Setting up new distribution channels will be costly. Paying royalties to incorporate with other goods will not benefit financially in the long term
OPPORTUNITIES Opportunities that can be taken advantage of are:
Effort required to benefit from the opportunities: Resources required to support effort TechnologyContinual research and development (R&D) into the use of new telecommunication technologies and the inclusion of existing technology to products provided by NokiaFinancial investment in R&D both the skills and the practices Economy
Economic research. Points of the good strong economy most likely to aid launching product
Research costs and estimate for the future state of economy local and abroad Relationships with tariff operators
Build strong bounds between the tariff operators and 3G suppliers
Early development with tariff operators to build confidence in product.
InternetIntegrate systems and enable access to particular sites of interestInternet integration development THREATS
Factors within the business or external environment that could threaten the successful implementation of this plan are:Steps that can be taken to minimise these threats:Cost considerations of taking these Steps: Competition from other mobile phone manufacturers.Begin Advertising the 3G phone before development is complete, publicising our future 3G product. Create public and businesses desire for the before it is available-Promotion will be expensive at outset.
-will be costly in lost custom and company image if advertised deadlines are not met.
– Continual use of landlines to homes and places of workBy providing additional features. Desire to have a mobile phone will reduce the threat of landline competition-Advertising -Promote benefits of mobile communications to businesses -Generate ‘must have accessory’ feeling Email, with access to a mailing service this is efficient and in common usePromote mobile phone as the most efficient form of communication. No access to the internet or mailing services is required.
Health ConcernsContinue/support research into alleged illnesses caused by continual use of mobile phones-Continual health research is costly -Should danger of handset use be detected, this will have to be publicised to the users. Having a damaging affect on the product and Nokia Market Saturation ¡V Few new potential users left to enter the marketAim towards user groups in areas of the world.
Today’s 2G user is the futures 3G user. Nokia will drive the market to evolve with technology available-In targeting groups of users the product may become ‘pigeon holed’ to a specific type of user, limiting its appeal.
-Reaching current mobile users and influencing to move for the new technology will be costly in time and finance.
Ensure legislation and regulation alterations are not a surprise to the company.Costs may be incurred to obtained legislation/regulations at change proposal stage EconomyShould the economy suffer the Nokia products will require promotion as a commodity to the target market. Should this have the image of an accessory problems would then be encounteredPromotion and advertising costs. Image creation will be costly to drive as a must have item InternetProvide more facilities in terms of communication. Being mobile is fundamental advantage and gaining access to the internet via mobile link will reduce this as a threat competition
Providing internet access and integration systems are costly in development.
Forces Driving Industry Competition
Threat of new Entrants A new company beginning to supply third generation mobile phones would have serious market considerations.
A high level of capital would be required for investment in the mobile phone product. The technology development would need to be supported as well as marketing expenditure to make consumers aware. A new entrant at this stage would be an extreme distance behind in development, and therefore product launch would be delayed.
A new brand would not carry the same reputations and confidence other companies have established whilst developing products over the past 10 years. This is felt an important commodity in today’s highly technical mobile communications market.
Industry relies heavily on the development and performance of electronic components for a variety of technological products. Many manufacturers have the expertise and experience to produce the components for the mobile phones. The bargaining power of suppliers is not strong however it is common that the company will have preferred manufacturers through previous projects and reputation.
The industry is an important and rewarding industry for the component manufacturers due to the popularity of the final product (mobile phones). As a large number of phones will be produced this enables high value contracts for the supply of reliable components.
Further to component suppliers are the tariff operators the phone will eventually operate in conjunction with. At present there are five major tariff operators expected to support the 3G mobile phone. Although it is necessary to continue good relationships these companies do not have strong bargaining power. Their future 3G business somewhat relies on supporting mobile phones the public desire, as Nokia 3G will be the first launched tariff operators are not expected to be in a strong bargaining position.
Landline The use of a landline is cheaper and in some cases clearer and BT have a begun to provide more public telephones specialising in cheap rate local calls to other landlines. Maybe a change in calling trends could be created however no additional threat to the trend of owning a mobile phone is expected from this development.
Email With access to a mailing service Email is efficient and in common use. However, this does not have the same convenience as a mobile phone. In addition, the 3G mobile phone will enable mobile internet connection whereas an installed terminal has to be used at present Overall the trend for owning a mobile phone is not going to be affected by the outlined substitutes. It is possible the usage of these phones could be affected however this will not prevent purchases of the product.
The buyer population is strong and mobile phones are a desired commodity. As the attitude has moved towards owning mobile phones a high proportion of the UK population now owns a mobile phone, it is understood 70% of the adult population own or use a mobile phone. Therefore there are few new people to come into the market place.
With these factors, the buyers have a lot of choices when purchasing a mobile phone that most suits their needs and taste. Any new mobile phone has severe competition from the market place.
Nokia’s competitors are companies which are relatively equivalent in size, experience, financial backing and mostly with good reputations. These companies siemens,¡K¡K¡K¡K. are also expected to be launching 3G mobile phones towards the end of 2003 and during 2004 creating intense rivalry in the market place.
As the mobile phone market is close to reaching saturation point industry growth has slowed considerably. The 3G mobile phone is a specialist and top of the range device; however, this is still an addition to the mobile phone market.
All of these points build a strong rivalry within the market place.
Objectives and Issues Nokia’s business objective is to strengthen the position of leading systems and products provider. The strategic intent, as the trusted brand, is to create personalized communication technology that enables people to shape their own mobile world.
Technological innovation allows people to access Internet applications, devices and services instantly, irrespective of time and place. Achieving interoperability of network environments, terminals and mobile services is a key part of Nokia’s objective.
Nokia must capitalize on the leadership role by continuing to target and enter segments of the communications market that will experience rapid growth or grow faster than the industry as a whole.
By expanding into these segments during the initial stages of the development process, Nokia has been established as one of the world’s leading players in wireless communications and significantly influenced the way in which voice and other services have been transferred to a wireless, mobile environment.
As demand for wireless access to an increasing range of services accelerates, plans to lead the development and commercialisation of the higher capacity networks and systems are required to make wireless content more accessible and rewarding to the end-user. In the process, Nokia plans to offer its customers unprecedented choice, speed and value.
Nokia has a history of contributing to the development of new technologies, products and systems for mobile communications.
To achieve Nokia’s business objective, the strategy focuses on being the preferred provider of solutions for mobile communications; creating personalized communication technology; driving open mobile architecture enabling a non-fragmented global mobile services market; strengthening and leveraging Nokia, the trusted brand; and expanding the business and market position on a global basis.
Nokia’s aim is to gain the position of preferred provider of products and solutions for mobile communications by providing leading communications networks that enable end-to-end service delivery for both cellular and broadband networks. This includes the development of leading high-capacity cellular networks, platforms and user applications for the mobile Internet, end-to-end broadband access solutions and Professional Mobile Radio systems.
Nokia must build on the core competencies in various key areas, including design and product innovations, brand development, and effective demand/supply network management, to bring new product concepts and associated services to market. And to strengthen the leadership position by using the understanding of user needs and the ability to meet and exceed user expectations to provide user-friendly, highly functional personalized products and solutions.
Nokia continues to employ open standards in technology in order to promote open competition and interoperability. The key commitment is to create a global and open mobile software and services market and aim to do this by achieving strong partnering with customers, suppliers and industry participants, and a solid focus on end-to-end solutions in all the development activities.
By driving open mobile architecture, the aim is to ensure the introduction of new, interoperable mobile Internet access and visual content downloading services worldwide, utilizing the GSM/GPRS evolution and coming 3G mobile communications networks adopting WCDMA technology. This is expected to boost innovation from independent software producers as well as provide consumers with a wide and varied selection of competitive, yet interoperable products and services.
Strengthening the Brand
According to a variety of consumer surveys, the Nokia brand is associated with well-designed, high quality and technologically advanced products and customer services that are also user-friendly. Considerable investments in establishing the Nokia name as the leading brand in mobile communication intends to sustain and enhance the Nokia brand through aggressive advertising, sponsorship and other marketing activities in all of the principal markets. Nokia believes that the leading market position provides significant opportunities to better understand and respond to the usage patterns of end-users, and thus enhance the Nokia brand.
Expanding Our Business
For more than a decade, Nokia has actively expanded the business globally, and as a result, the network systems, equipment and wireless terminals produced are sold throughout the world. Benefits from strong economies of scale throughout the organization are apparent.
The Nokia strategy is to continue the focused pursuit of global business opportunities by cultivating a strong local presence in all growing markets and pursuing partnering and acquisition opportunities in order to obtain complementary technologies and market positions.
One of Nokia’s top priorities is to continue to strengthen their leading market position in a profitable way, believing that further market share gains are key to expanding their customer base and growing their future business potential. The leading position also enhances the positive effects of economies of scale, which should strengthen the competitive position in the next generation of mobile communications.
Marketing Strategy Introduction As the 3rd generation of mobile phones made by Nokia is relatively uncharted territory, the marketing strategies adopted by Nokia could “make” or “break” the product. It is essential that all areas of the marketing mix are researched and discussed thoroughly. Each element (Product, Place, Price & Promotion) shall be discussed separately & then brought together & implemented in the action programme section.
The product in hand i.e. 3G Mobile phones are not as yet available for sale. Therefore, the most important factor in the concept/ R&D phase of the product’s life cycle is to get the marketing research correct. It is essential that Nokia find out what is important to the customer s that will utilise this 3rd generation technology. Using questionnaires such as the one shown in the index will give Nokia a helpful insight into who is their target market. Nokia will be able to design functions that will make the phones a good quality, marketable product that will be able to generate healthy revenues for Nokia.
Nokia has the advantage of having a heavy brand name and proven track record which acts as a strong asset for them. Nokia phones are well known for there “easy to use” nature and customers will often return to Nokia products for this well-known convenience. Nokia has to be completely aware of the functions that technology will allow (i.e. Network service capability, wireless solutions) otherwise the functions built into these new products will be rendered useless and the consumer will deem them unfavourable gimmicks.
3G is basically going to be able to offer what most modern equipped computers can do. The major functions being high-speed internet connection (i.e. 56k to 128k broadband) By offering customers new user-friendly high-speed multimedia services, Nokia can access new sources of revenue. Via there 2G/3G quad-band (900/1800/1900/2200 MHz)/ dual mode multimedia, users will access three main families of application & services.
Always on- for example, e-mail, personal organizer, traffic management, automation on Information- for example, web surfing, corporate intranet, net games, music, news, events & transportation services Purchasing- for example, on line shopping, banking, gambling, tickets It is estimated that by 2004 that 40% of e-commerce outside of North America will be done by a mobile device.
Pricing is also a very important aspect for Nokia to address As technology grows into the 3rd generation so does the competition. It is becoming ever cheaper for mobile phone manufacturers with the ability to now recycle older phone parts and now that mobile phones are being made on such a mammoth scale the economies of scale are impressive. Once again market research is a very important tool when looking at how to price a particular product (especially when the product has never been seen before). As the 3G products are not just mobile phones but rather small portable computers, there are over 50 producers of this type of 3G products.
All of these products will be released around the same time period. Market research will give Nokia some idea of the price range that people are willing to pay and to whom they are going to sell these products throughout the products life cycle. These phones will generally, on the launch, not be aimed at your occasional use type customer.
The price and the rest of the marketing plan will be more aimed at the “prestige/businessman” type consumer. Both of these consumer types, although not completely, will be particularly priced insensitive. Therefore, at launch, a “prestige pricing” policy may be adopted. If Nokia is in a position when launching, that they are the first product on the market a “skimming” technique may be utilised i.e. setting the price as high as they like as people who want the phone first will pay high prices for it.
A very detailed market analysis will have to be undertaken in order to set the prices competitively. As soon as Nokia release their product, at least another 10 mobile producers will release extremely similar products. Although Nokia does have a strong brand name asset behind them, they cannot rely on this too heavily.
The pricing strategy adopted will evolve as the product life cycle does. As the market becomes saturated with similar products, the price will be driven down. However, Nokia have been notorious (i.e. 3210, 3310) particularly with the UK phone networks, for having their phones subsidised. Phones are often given away or sold very cheaply to the customer directly in return for a fixed 12-month contract.
Therefore, Nokia has another avenue from which they can make substantial revenues by selling off large bulks of product to UK phone networks (Vodafone, O2, Orange, and Virgin) at a possibly reduced price. The whole product mix of Nokia has to be taken into consideration throughout all the products life-cycles.
When looking at consumer end products like Nokia, there is generally 3 channels of distribution involved: Nokia is most likely to use the 1st and 3rd of these distribution chains.
When looking at which distribution method to undertake, it is important to look at the different objectives that each member of the distribution chain embodies. The consumer wants to get the best deal for the price paid. The retailer (i.e. high street shops such as link, phones 4 U, car phone warehouse) are more interested in getting the contract rather than selling the phone. The wholesaler & producer (Nokia) have similar objectives in that they want to sell as many units as possible. Therefore, it would be beneficial for Nokia to utilise a “dual policy” when it comes to distribution policies.
Nokia keep a limited number of products at Nokia, hence keeping warehouse costs low. Also, Nokia can keep all the replacement parts at Nokia & hence make a good profit margin on them. The rest of the products would be handed over to the wholesaler at a lower than retail price which are the sold on to retailers. Also in recent years, the internet has become very important in the sale of mobiles communications. Consumers tend to buy from the internet more and more as they often offer very competitive prices as they lack the overheads that the high street shops have to maintain.
This means that Nokia must make their products available to the smaller internet-based companies at competitive prices. Also, the type of retailer that stocks this kind of product is widening. As the new 3G products are incorporating more computer-like functionality, the scope for supplying to large retail stores such as PC World and Curries. This would make these products available to a much larger consumer range. Utilising these distribution methods will enable Nokia to maintain a flexible outlook with regards to distribution.
The promotion mix elements are: This area of the marketing mix is the most dependent on an accurate vision of who the target market/markets are. An awful lot of Nokia’s resources could be unduly wasted promoting to the wrong market. Also a good promotional mix required in order to meet Nokia’s marketing objectives. These would be to inform & sell to as many people, the new range of phones by Nokia.
As the price of the product will initially be comparatively high, this has to be reflected in the advertising campaign. This firstly involves choosing the right media. e.g. Broadsheet newspapers, men’s magazines (i.e. FHM, Loaded, Men’s Health) television and billboard advertisements. These will be aimed at the high earning business person who will most probably use the product for work just as much as personal use.
The fact that these phones claim to introduce quick, real-time video conferencing is a selling point which must be stressed. The initial adverts will be far more informative than persuasive. The vast majority of people will not be aware of the capability of these new products. Once the informative period is over, the prices drop and the market becomes less narrow, the advertising shall be far more persuasive & aggressive. The advertising will change throughout the different periods of the product life cycle.
Selling The only form of personal selling that Nokia themselves will have to do is persuading the Wholesaler/Retailer to take on a large amount of there new products. However, Nokia is going to have to educate staff from the retail outlets on the features of these new products. These are the person who has the most direct contact with the end-user/ consumer. Ultimately, these are the people selling your product along with their own objectives. Offering special training schemes and fringe benefits to this personnel will be worth doing as these are the people that Nokia wants on there side working as efficiently as possible.
Direct Marketing undertaken by Nokia at the beginning of the 3G products life cycle is not really appropriate for this kind of product. It would ultimately send out the wrong message to the consumer. However, when the market becomes saturated and market forces push the price of these products is pushed out of the prestige range and the product is possibly being given away with contracts, then direct marketing could be very effective. Such techniques as direct mail, internet spam and cold calling may be appropriate.
There is room for good sales promotions with technologically advanced products of this ilk. It is likely with the introduction of Bluetooth technology (an up-and-coming communications standard for short-distance wireless connections. It replaces the many proprietary cables that connect one device to another with one universal short-range radio link), there will be plenty of “add on” accessories for these products to increase their functionality.
These, like the product itself, when first launched are likely to be particularly expensive. A good sales promotion to sell more units would be to give these accessories away with the main product. Possible “cash back” and money off vouchers to be spent on Nokia products could also be utilised. These sale promotions, although promoted in the advertising of the product, should be aimed at the wholesaler/retailer as well as the end consumer.
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