NOKIA’S MARKETING STRATEGIES

IN INDIA

by
Nikunj Daga

2006-2007

A dissertation presented in part consideration for the degree of MA in Marketing

No portion of the work referred to in the dissertation has been submitted in

support of an application of another degree or qualification of this or any

other university or other institution of learning.

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 ACKNOWLEDGEMENT
_________________________________________________________________________________________________

Writing a dissertation is always the most challenging part of a student’s life. It was definitely the

most important academic contribution by me. This however would not have been possible without

the encouragement and of a few people. Here I take this opportunity to display my gratitude towards

them,

First and foremost, I would like to thank my professor, Dr Heidi Winklhofer for being a source of

support and encouragement, guidance and persistent help. Thank you ma’am for your time, support

and patience. My Sincere thanks to both academic and non-academic staff of the Nottingham

University Business School, for all their assistance.

I would like to thank my parents for love and support bestowed on me. Thank you for your

blessings. Also I would like to thank my friends for staying by me during the difficult parts of life.

Thanks for help and love irrespective of the situations. I would also like to thank all my respondents

for taking out time from their busy lives to help me with my research.

Last but not the least, I would like to thank God for all.

Thank You!!

Nikunj Daga

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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
_________________________________________________________________________________________________

ACKNOWLEDGEMENT 3

ABSTRACT 4

1. INTRODUCTION 7
1.1 Introduction and Objectives of Research 7
1.2 Outline of Chapters 8

2. LITERATURE REVIEW 10
2.1 Introduction 10
2.2 Country of Origin effect 11
2.3 Culture 14
2.4 Internationalization and Globalization theories 18
2.4.1 Uppsala Model 19
2.4.2 Eclectic Paradigm and TCA 20
2.4.3 Interactive Network Approach 21
2.4.4 Business Strategy Approach 21
2.5 Pricing and Distribution 23
2.5.1 Pricing 23
2.5.2 Distribution 26

3. INDUSTRIAL ANALYSIS 30
3.1 Mobile phone industry in India 30
3.2 About Nokia 34
3.3 Nokia in India 38
3.4 SWOT Analysis 40

4. METHODOLOGY 42
4.1 Introduction 42
4.2 Qualitative Research Methods 45
4.3 Quantitative Research Methods 47
4.4 A Qualitative approach 47
4.5 Data Collection 48
4.6 Interviews 49
4.7 Summary 51

5. MARKETING STRATEGY 52
5.1 Introduction 52
5.2 Product 52

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 5.3 Price 55
5.4 Place (Distribution) 56
5.5 Promotion 58

6. ANALYSIS 64
6.1 Introduction 64
6.2 Background of Respondents 64
6.3 Analysis and Discussion 66
6.4 Success of the Brand 68
6.5 The 4 P’s 71
6.6 Future and Scope of improvement 74

7. CONCLUSION 77
7.1 Conclusion and Recommendations 77
7.2 Limitations of research and Suggestions 78

REFERENCES 79

APPENDICES 92

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 1. INTRODUCTION
_________________________________________________________________________________________________

1.1 Introduction and Objectives

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” (Web 22).

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

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.

7
1.2 Outline of the Chapters

Here, a very brief synopsis of the chapters that follow in the study is given.

Chapter two – Literature Review, summarizes all the past researches that have been conducted in

the field of international marketing. The main topics discussed here are Country of origin effect,

impact of culture in international marketing, Internationalization and Globalization theories and

Pricing and Distribution in international markets.

Chapter three – Industry analysis, to begin with this chapters deals with the analysis of mobile

phone industry in India. Then, history of Nokia is studies. When did the company start, how changes

occurred resulting Nokia venturing into mobile phone business. Finally history of Nokia in India is

conferred.

Chapter four – Methodology, talks about the methodology used in the research to collect data. First

all the available methodologies are discussed and then the best suited one is selected. The important

terms used in this chapter are Primary data, Secondary data, Quantitative research methods,

Qualitative research methods and semi structured interviews.

Chapter five – Marketing strategy, points out the marketing strategies applied by Nokia in India

since the time of foundation in the country. The data here is secondary and thus is collected with the

help of case studies and news articles. Here the strategies are discussed on the basis simple concept

of 4 P’s.

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Chapter six – Analysis, deals with discussing and analyzing the research results to conclude the

objectives of the study. Here, the interviews taken are scrutinized and conclusive lines are drawn.

Chapter seven – Conclusion, concludes the study with fulfilling of the objective. It further offer

recommendations to the company for future planning. Last but not the least, it discussed the

drawbacks of the study and offers suggestions for further researches.

9
 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.

10
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.

2.2 Country of Origin (COO) Effect

As Piron says, in developing a corporate imagery of a product, the importance of various marketing

mix variables (e.g. product appearance, brand name, price) is firmly established, as well as that of

the imagery elicited by a product’s COO. Hence now we need to define the COO effect. In words of

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”.

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 (Kinra, 2006).

Systematic research for COO effect began in 1965 with Schooler’s article “Product bias in central

American common market”. It was considered to communicated by the phrase, “Made in (name of

country)” in 1980s, as noted by Bilkey and Nes (1982). Influence of COO on the product quality

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

11
research continued in the field, new perspective developed new concepts. As Johansson et. al.(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.

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; Christian Dior uses the French word,

“Parfum”, in its advertising to reinforce its French origin association. Brand has been considered as a

12
purely extrinsic variable in COO effects and consumer perceptions of origin have been manipulated

almost through “made in” label information (Mohamad et. al., 2000) (Sankar, 2006).

According to research works, COO image plays an important role in consumer’s evaluation of

foreign products and brands. It is also noted that product attributes such as product quality have

favorable perception, if country perceptions are favorable. This indicates that consumer evaluations

are governed by influences other than the quality of the product (Peterson and Jolibert, 1995)

Noticeable increase has been seen in outsourcing as a result of firm’s continued pursue for global

market expansion strategies. This does not remain limited to taking advantage of lower labor wage

rates prevailing in many developing countries, but major design and engineering tasks have also

been outsourced to manufacture component parts, they have also increasingly outsourced by either

enlisting the services of professional talents in collaborating foreign partner firms or establishing

design centers overseas. Multinational production operations got very complex due to these activities

and it has also led to tension in domestic workplace. Most of the products available today are of

hybrid variety, and hence no one firm in a single country can claim to be the sole manufacturer of

these products. Consequently, the traditional notion in COO literature, that assumes that product can

be associated with one country, seems to be lost (Chao 1998).

“Common sense has it that the stronger a country’s national image, the more useful is it likely to be

as a marketing tool in that it may then be used more extensively in the export promotion of products

originating from that country” (Niss, 1996). In his research, Niss noticed that most of the industrial

13
exporters represented in the survey choose either to play down their nationality or disguise

themselves behind a local or global image. This did not come as a surprise, as in general Denmark’s

image was considered very weak and one-sided, and hence was not considered to use it as a

prominent marketing tool for Danish products abroad.

It has also been noted that the 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 (Chao 1998).

However, as Anime et. 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

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

14
behavior can be predicted. Their background can be determined by having knowledge of the culture

they belong to. (Hofstede, 1994)

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.

Culture consists of a series of response to recurring situations. These responses are a consequence of

“collective mental programming” and all aspects of marketing transactions are affected by it. As

Kale (1991) noted, Duesenberry in 1949 observed that all of the activities people engage in are

15
culturally 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

culture may provide detailed prescriptions (norms) for specific classes of situations while leaving

other domains relatively unregulated.” (Tse et al 1998)

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.

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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.

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.

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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.

Due to similarities, mostly the comparison is of Eastern countries versus the Western countries. As

cited by Hofstede (1994), the basic difference between Eastern thinking (represented by, for example

Confucianism, Buddhism, and Hinduism) and Western thinking (dominant in the Judaeo-Christian-

Muslim intellectual tradition) is that in the East, a qualification does not exclude its opposite, which

is an essential element of Western logic (Kapp, 1983). However, Tse et al (1998), noted that studies

using Singaporean subjects found that traditional Chinese values were fading slowly because of

Western influences. This means that slowly the cultural differences are reducing as less importance

is being given to it. This thought, however, is not supported by most.

2.4 Internationalisation and Globalisation theories

Even though the concept of globalization has been around for long, it was only in early 1980’s that it

became a topic of serious discussion among academics. Since then, the term has become a

ubiquitous and potent symbol of the age. Nevertheless, the exact meaning and significance of

globalization has been and remains an intensely debatable topic across the academic community, and

beyond. 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

18
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.

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. As Whitelock (2002) documented, there

are four major theories of internationalization, namely;

The Uppsala Model of internationalization

The eclectic paradigm and transaction cost analysis

The interactive network approach of international marketing and purchasing group

The business strategy approach

2.4.1 The Uppsala Model of Internationalization: Johanson and Vahlne in 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

19
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; when the firm has considerable

experience from markets with similar conditions it may be possible to generalize this experience to

the specific market.

2.4.2 The eclectic paradigm and transaction cost analysis: The concept of the eclectic paradigm

of international production was first put forward by the Dunning in 1976 at a presentation to a Nobel

Symposium in Stockholm on The International Allocation of Economic Activity (Dunning, 1998).

As Whitelock cited in 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.

20
These benefits of integration should however be compared to the costs of integration (i.e cost of

resource commitment). According to Johanson and Vahlne (1990), eclectic paradigm has high

descriptive power for firms having experience from many regions of the world.

2.4.3 The interactive network approach of international marketing and purchasing group: In

1986, Johanson and Mattsson 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. In words of 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 (Whitelock, 2002). The

interpretation of these variables helps the firm decide on the market to enter and which customers to

deliver. Hence, there is a need to assess its own position in relation to the customers and also the

environment of market which is affected by the other actors or competitors.

2.4.4 The business strategy approach: As Whitelock (2002) cited in Welford and Prescott (1994)

“The business strategy approach is based on the idea of pragmatism”. 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 be

21
assessed 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

(Whitelock, 2002).

Global V Glocal

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.

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.

Such strategies are implemented by man Multinationals. These are known as the Glocal Strategies.

“Whereas ‘Globalization’ monolithic sameness as a result of convergent worldwide economic,

financial and cultural flows, the coined word ‘Glocalization’ at the very least, suggests some sort of

accommodation. Globalization challenges notions of cultural imperialism because the term suggests

a negotiation process that appears to start from inside out, i.e., a process that begins with high regard

22
for the local. The term ‘glocalization’ connotes a successive development, as well as a challenge, to

the top-down hegemony implicit in term ‘globalization’” (Maynard, 2003).

2.5 Pricing and Distribution

2.5.1 Pricing

According to Solberg et. al. (2006), until their research, 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

23
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’ (e.g., Monroe

2003; Myers, Cavusgil, and Diamantopoulos 2002). Another reason being complexity, even though

acts such as internet, regionalization and attempt made towards price harmonization should make

international pricing easier, but decision making in international pricing will remain complex

enterprise (Samiee and Anckar 1998).

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.

24
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, 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 (Appendix 2).

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.

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

25
Prototype 3: The Multilocal Price Setter Firm

Prototype 4: The Global Price Leader Firm

2.5.2 Distribution

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 Arnold (2000) 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."

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

26
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 led.

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". Hence

27
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.

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

28
among its national distributors as soon as possible. This will lead to transfer of ideas and hence

provide a better and consistent performance in the implementation of international strategies.

29
 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

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

30
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,

31
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.

32
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).

33
3.2 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

34
markets for its different businesses. This would later be reversed as the company started shifting its

focus onto international markets (Web 2).

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).

35
The oldest was Nokia Ab (est. 1865) in the forest industry and power production. Suomen

Gummitehdas Oy (Finnish Rubber Works, est. 1898) was manufacturing galoshes and other rubber

products, and Suomen Kaapelitebdas Oy (Finnish Cable Works, est. 1912) was producing telephone

and power cables. The current Nokia logo dates from 1992. The arrows were later dropped. (Martti

Häikiö, 2002/04)

The Finnish Cable Works had a history of manufacturing cables for telegraph and telephone

networks and in the 1960 they established the Cable Works Electronics department. However, the

Cable Work's Electronics department started to conduct research into semiconductor technology in

the 1960´s. In this way, probably, the seeds of Nokia's global success in telecommunications were

planted. At the time of formation of Nokia Group in 1967, Electronics generated three percent of the

Group's net sales and provided work for 460 people.

It was in 1970s that Nokia started taking an active interest in the power and electronic business. At

this time, the majority of telephone exchanges were electro-mechanical analog switches. Nokia

began developing the digital switch (Nokia DX 200). These were successful. Nokia DX 200, which

was equipped with high-level computer language and Intel microprocessors gradually evolved into

the multifaceted platform that is still the basis for Nokia's network infrastructure today. About the

same time, the Finnish telecommunications authorities were able to set up a mobile network which

connected the car phones to public network with the help of a new legislation (Web 1).

36
During the 1980s, Nokia's operations rapidly expanded to new business sectors and products through

corporate acquisitions and became the European market leader in several fields, such as rubber

industry and TV set manufacture. The strategy was to expand rapidly on all fronts. However, as the

90s approached, Nokia strived to radically cut down the number of different businesses it had,

especially like the non-core IT and focus on two core business – mobile phones and

telecommunications. This strategy was formulated by Jorma Ollila, the CEO in 1994. This task

proved to be challenging. Nevertheless, the implementation of the new strategy helped the

company's finances reach a sound standing, created the basis for a successful conquer of the world

markets and rooted more efficient operational methods in the company.

By late 1980’s, consumer electronics became Nokia’s major business. In 1981, Nokia made Nordic

Mobile Telephony (NMT) mobile phone standard. This was the world’s first multinational cellular

network. In 1987, it launched Mobira Cityman, the first NMT phone. At the end of the 1980s a

common standard for digital mobile telephony was developed. This standard is known as GSM

(Global System for Mobile Communications). A Finnish company, Radkilinia, was the first

company receive GSM network from Nokia in 1991, and in the same year Nokia made agreements

to supply GSM networks to nine European countries. And by August 1997 Nokia had supplied GSM

systems to 59 operators in 31 countries. In 1992, Nokia 1011 – a precursor for all Nokia’s current

GSM phones was introduced. The company had incredible success in form of 2100 series phone.

The goal for 1994 was set to sell 500,000 units, and Nokia managed to sell 20 million.

The global demand for mobile phones increased in early 2000s and Nokia maintained its leadership

37
in the market. In January 2004, Nokia reorganized itself into four business groups – mobile phones,

multimedia, enterprise solution and networks. The mobile phone group developed mobile phones

and devices on technologies such as WCDMA, GSM/EDGE, CDMA and TDMA. The multimedia

group provided advanced mobile devices and solutions to the consumers. They developed new

models as well as system, applications and sales channels for the market. The enterprise group was

for helping businesses ensure security and reliability of their network. They developed solutions for

e-mail, internet, virtual private networks and firewalls for the businesses. Network infrastructure,

communication and network platforms were provided to the operators and service providers by the

network group (Indu P., 2005).

By 2004, Nokia was a world leader in digital technologies such as mobile phones,

telecommunications networks, wireless data solutions and multimedia terminals. However, there

have been rumors that, a group of businessmen tried to offer Nokia to the Swedish telecom company

Ericsson during the recession in 1990´s (Web 1).

3.3 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).

38
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.

Nokia's key strategy has always been to lead the market on the basis of technology as it has always

held. The difference it holds is the capability to be more sensitive to the people with lower

purchasing power which hold the major share of these growing and developing countries market.

(Web 3 and Web 23).

39
3.4 SWOT ANALYSIS (Web 8)

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 Ngage 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

40
- 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

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 (Web 9)

41
 4. 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

[45CFR46.102(f)] is “Research means a systematic investigation, including research development,

testing, and evaluation, designed to develop or contribute to generalizable knowledge.” (Web 9).

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 (Web 10). 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 used as a means for obtaining primary data. Information compiled inside or outside the

organization for some purpose other than the current investigation (Web 10).

42
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,

43
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.

44
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

45
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.

46
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” (UNECE).

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

47
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.

48
4.6 Interviews

“A qualitative research interview is an interview whose purpose is to gather descriptions of the life-

world of the interviewee with respect to interpretation of the meaning of the described phenomena”

(Kvale, 1983)

As King (2004) says, ‘The interview remains the most common method of data collection in

qualitative research, employed in various forms by every main theoretical and methodological

approach within qualitative applied psychology.’ It is therefore important for the researcher to look

at the problem from the perspective of the interviewee. Hence, there is a need to not completely

structure the interview.

The study also involves semi-structured interview as qualitative research tool. Drever (1995) defines

semi-structured interviews as ‘the interviewer sets up a general structure by deciding in advance

what ground is to be covered and what questions are to be asked. This leaves the detailed structure to

be worked out during the interview. The person interviewed can answer at some length in his or her

own words, and the interviewer responds using prompts, probes, and follow-up questions to get the

interviewee to clarify or expand on the answers’.

According to King (2004), qualitative research interviews a variously referred to as depth,

exploratory, semi structured or unstructured. In the research, in-depth interviews were carried out as

a qualitative research tool. In-depth interviews are taken with a small number of people on a

particular topic. The researcher’s job here is to find out detailed information about the interviewee’s

49
actions, behaviors and perceptions through intense interviews. The questions of what, how and why

can be answered using interviews (Boyce et. al., 2006).

A major benefit that interviewing gives is that the interviewer can modify the questions according to

the need. Question such as ‘could you throw more light on that?’, ‘What reason do you think for

this?’, ‘Any other reason you think…?’ and many more can help the interviewer get more

information from the interviewee. He can also judge by the expressions of the interviewee, and may

need to understand the question which interviewee is not comfortable answering in. In such a case

the interviewer needs to develop a sense of confidence with the interviewee to make him

comfortable. Actually this can be done in the beginning of the interview so that rapport develops and

interviewee answers all question with interest. The technique of stimulating respondents to answer

more fully and relevantly is termed probing (Cooper and Schindler, 2000). This is another benefit of

conducting an interview, as usually people do not like to spend their time and try to finish of the

process as soon as possible. In case of survey via form, this can lead to improper answers filled in a

hurry rather than with concentration.

For the purpose of this dissertation 8 semi structured interviews of Nokia’s dealers were taken. Here,

one of the interviews was considered as not useful, due to uninterested attitude of the interviewee

and extremely short answers. The number of interviews was restricted to such a small number as it

was felt that the information was more or less repetitive and no new information was there for

taking. Three out of these were taken on telephone due to large distances. Despite being expensive,

telephonic interviews did help the researcher to converse with the respondents who are far beyond

50
the reach. All the interviewees were explained why the interview was being conducted and what the

main theme of the interview was. The interviews were open-ended and gave interviewee the option

to answer the way they wanted. As a result, some interviews were longer than the other was.

4.7 Summary

This chapter was used to explain the methods available for conducting the study. Case studies and

news articles were used for secondary data. After discussing the pros and cons of each method, the

right method for this research, i.e. qualitative analysis was selected, where in-depth, semi-structured

interviews were adopted as a source of primary data. The personal effect of interview was used to

develop rapport with the interviewee and modify the questions according to the need. Also due to

some distant interviewees telephonic interviews were used.

Next chapter will involve deep discussion of the analysis and findings of the gathered data.

51
 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

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

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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.

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)

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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. (Web

11)

“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.” (Web 12)

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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.

(Web 13)

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 best selling 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

55
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 non traditional 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

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

handsets across India.

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.

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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.

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

instance, the advertisement for NGAGE showed two young persons 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 affect 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 o 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, be it the

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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.

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

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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 (Web 17).

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. It was a very colorful

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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” (Web 19).

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. Nokia even faced the problem of brand

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identification in the early stages as there were no specific signs suggesting that it was an

advertisement from Nokia. Since 2005, Nokia has embarked a new advertising plan to consolidate its

ad campaigns and strengthen its brand identity.

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 6. 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 first hand 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.

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

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

achieved.

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

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 companies, Chinese

brands

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

6.3 Analysis and Discussion

To start the conversation and make the interviewee comfortable, more general questions were asked.

First of all they asked to comment on the cellular phone market of India. They were asked about the

way the market has grown and about the future of the market. As we know, the Indian cellular phone

industry has witnessed exceptional growth in the past few years. The future also seems to be bright

as mobile phone is considered as consumer durable in the country. The respondents reply was as

follows:

“Launched about 10-12 years ago, cellular phone was considered a luxury and very costly affair…

Establishment costs for the network providers was very high… But now scenario has changed…

prepaid connections and lifetime connections are the major factors for the boom in the market…”

Sourav

“There has been tremendous growth in the past few years…” Akshay

“The market has seen a growth in terms of both quantity as well as quality… Probably the most

booming market at the point of time…” Rishi

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Everybody believed that market had shown dramatic growth in past few years. Few reasons were

mentioned too. 25 years old Sourav, who has a vast experience of 8 years, believed reasons such as

prepaid connections and lifetime connections played important roles in getting the industry where it

is now.

“Mobile phone has become a part of everybody’s life… It is almost impossible to imagine a life

without it… This by itself tells about the future of the market…” Pradeep

The above statement by Pradeep marks the importance of mobile phone in the life of a middle class

man today. When asked for the future of this business, the opinion was general of the respondents

that the industry has a very bright future. However, different reasons were given to comprehend their

beliefs.

“This business has a very good and bright future… The margins are getting lower but the turnovers

are increasing by the day…” Srikant

“I have a strong feeling that it will keep on growing for some time before it reaches a saturation

level… Since the average life of a handset is 1-2 years, scope of sales will always be there…”

Akshay

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“In the current situation, due to competition customer is enjoying the position of a king… with

margins as low as 1-2% its not easy for the retailers… the increasing demand is attracting more and

more retailers, so the future is bright for the prospective buyers…” Sumit

“Will definitely continue to grow in similar fashion for next 2-3 years, resulting in a lot of scope…

Future will see more stylish and feature specific phones demanded…” Rishi

The call rates in the future were believed to have more uniformity. Probably the purpose to say so

was that this will lead to more usage of the mobile phones, further increasing the sales and talking

about better future for the market.

“Future will see universal rate for any call made, irrespective of the distance…” Sourav

6.4 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

“People look for durability and simple ness in usage” Sumit

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“Nokia has always satisfies the customer, now they believe that this company is reliable… there is a

strong brand preference…” Yuvraj

“People purchasing Nokia also had problem, but that was really rare… in comparison users of

other handsets faced problems on a more regular basis” Akshay

“Easy to operate, excellent resale value, universal charger…” Sourav

“Long life and user friendliness… People have faith in Nokia due to its good history” Pradeep

However, one of the respondents, Sourav, believed there a few reasons for success in Indian

conditions. He believed battery was a major driver of the sales and Nokia had the best. To better that

they had a universal charger for all handsets helping people to charge phone almost everywhere. He

also believed that, high ringing volumes and rough and tough features were special advantages in

Indian conditions.

“In India working class people prefer high ring volumes due to noise pollution, Nokia solved this

purpose… Nokia is also associated with a rough ‘n’ tough image, people are confident that it can

take more dust and shock, which unfortunately is in abundance in India…” Sourav

As noted above, the Nokia brand image was that of the best. They incorporated the meaning of a

mobile phone as Nokia. This can be noted in Akshay’s answer when asked about the market

response of Nokia, where he compares Nokia to pioneers in other industries. He said,

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“Excellent… its like what Maruti is for cars… what Bisleri is for mineral water.. the Pioneer”

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…”

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 (Web 20). 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.

“Though the company is Finnish, handsets these days are manufactured in Asian countries such as

China” Sourav

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“Earlier any new brand was considered as Japanese or Western, probably because of the name…

now they realize the difference… but the brand already has its status by the past…” Pradeep

“My customers are not literate enough to understand the country of origin… they believe in my

words and the company that has done well in the past…” Sumit

To check how brand loyal people are to Nokia, the following question was asked, “Given the phone

is homogeneously same, which company would you for? Would you still go for Nokia?”

Interestingly, leaving 2 of the correspondents, no one was sure which brand to go for. “Nokia only.

When everything is the same, why take the risk?” Akshay said. The others were flexible, saying that

they would make the decision based on the added features such as looks, warranty, battery life and

after sales service. This shows how the population of India is flexible to changes. This however, is

not very good for the future of Nokia. This means that people will not feel very uncomfortable while

changing the brand. They are brand conscious but not brand loyal.

6.5 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

71
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

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” Rishi

“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” Sumit

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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…”

Sourav

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.

As noted above, Srikant credits Nokia’s distribution channels for the success for the company.

“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 increase their sales and in turn increase their

ability to invade more markets…” It is a fact that Nokia has its dealers and distributors not just in the

cities but also in small town and now in villages. This helps them not just increase their sale but also

create a better brand image, as when their phones are available everywhere, then it gives customer

the confidence to purchase the phone.

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6.6 Future and Scope of Improvement

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.

“Many phones such as Blackberry, iPhone, O2 etc have changed mass’s thinking… they act like a

mini laptop” Sourav

“Features like camera and radio attract people more nowadays… its particularly helpful for those

who can afford these devices otherwise…” Sumit

“The sales are also brand driven… according to Brand Equity 2007, Nokia is the second most

popular brand in India” Srikant

“Everybody is running after particularly feature packed phone…music, gaming, executive, camera,

multimedia…” Rishi

The recent threat has been that of cheaply priced local Chinese handsets. The respondents are

however not very convinced with them. The futures of these handsets are not really great. Here too is

the customer is the beneficiary. As Akshay says, “they will keep the prices of branded handsets

under check”. Yuvraj though does not seem amused with them, “they are having high sales… they

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are meant for those who don’t value their money… useful for some as features like dual sim are not

present in the brands”.

The respondents were happy with Nokia overall, specially 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.

“They are not the cheapest in the market… there is a need to develop a phone especially for low

price section… amongst the enviable range, the place for a PDA is still empty…” Pradeep

“Customer services needs a major makeover… the staff there are not very well trained… software

problems exist… they keep on modifying the same model to just increase the number of handsets on

offer… no real change can be noticed… as example we can see N95 is available in 3 different

models…” Sourav

As respondent Akshay notes, “A major problem for Nokia is its good image… they have set high

standards for themselves… the trick lies in maintaining their image… a small fault by other

companies may not be as a big a issue as it will be with Nokia… they have a set platform and need to

bank on it”. This is a very interesting point of view, indicating towards the drawbacks of a company

with high expectations. Rishi made and interesting comment, “Nokia are taking its brand image for

granted”.

This shows that in such a fast moving market, there marketing can not be put to rest at all.

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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” Srikant.

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 7. CONCLUSION
_________________________________________________________________________________________________

7.1 Conclusion and Recommendations

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.

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

77
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.

7.2 Limitations of the research and Suggestions

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.

78
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 APPENDICES
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Appendix 1 (Hofstede, 1994)

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93
Appendix 2 (Solberg et al., 2006)

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Appendix 3 (www.agencyfaqs.com)

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96