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LG Strengthens distribution network and customer support to revive its handset sales across diverse geographies Distribution Network
Focuses on strengthening distribution channels and diversifying sales network through carrier partnerships and setting up retail outlets Tied up with four major mobile carriers namely, AT&T, Verizon Wireless, T-Mobile and Sprint in US and Vodafone in Europe for distribution of Optimus One (Sep 10) Further, is expected to tie up with AT&T as exclusive US carrier for initial sales of its new Windows Phone 7, to be launched in 4Q 10 (Sep 10) Partnered New Zealands new mobile network, 2 Degrees, for distribution of LG phones and also, introduced handset GS108 exclusively with 2 Degrees network (Aug 10) We are very excited to launch our first Preferred Partner shop. Our objective is Acquired a prominent location at Karachis upcoming Port Grand for its state of art LG to offer world class experience along with Showcase Outlet to display exclusive collection of LG phones and plasma TVs (Sep 10) world class products. This shop will offer width and range of LG Mobiles to Indian Opened its first Preferred Partner Shop (Spice Communications) in India, to deliver a consumers. With this launch, we aim to wide range of LG mobile phones to customers (Aug 10) provide the environment that aligns with the Also, started a Dealer Relationship Program among its top 6000 trade partners (Aug 10) brand identity platform." Opened a new LG Lifestyle Gallery to sell LG products, including mobile phones, in Rahul Puri, Regional Manager, Mobile Doha, Qatar (Jul 10) Communication, LGEIL (Aug 10)
Carrier Partnerships
Distribution Outlets
With the aim of enhancing retail presence in India, LG is betting big on channel expansion, in store promotion including installation of special counters and placement of specialized sales persons for selling LG phones in the select outlets
Business Intelligence 3Q 10
LG
Consumer Segmentation
Focuses on targeting particular customer segments through targeted handset launches
Youth Segment
Receiving consumer feedback and incorporating it across its products designs has been a key focus area for LG Launched Optimus One and Optimus Chic handsets developed on basis of consumer insight received from first-time smartphone users (Sep 10) Also, set up 28 Interactive Power Poles for point-of-purchase (POP) customer communication, installed at high-traffic locations in large malls across different Middle East nations (Aug 10) This has been set up in cooperation with Specialized Software Services Registers crucial information about audience and creates a database that offers LG in-depth marketing information and operational tools to optimize LGs marketing strategy
Opened a $15.0 million Learning Centre in Dubai, to provide training
Targets youth with phones having enhanced texting, music and social networking capabilities along with touchscreen interface
Launched three phones under Wink series namely, Wink or Cookie Lite, Wink Style and Wink 3G Also, extended its Cookie series of handsets with Cookie Snap GM360i and LG Cookie Zip LG510, that feature a touchscreen
Mass Market
Focuses on the mass market segment with its low-to midrange of feature phones
Released low-to mid-range phones LG SU920/ LG KU9200 and LG LU4500 in its domestic market, Korea, in a bid to increase its market share Further, launched low-end/ entry level phones in the US in partnership with major carriers, to revive its competitive position Introduced low end mobiles like LG A130, GB125r, GS170 on T-Mobiles network, GU295 on AT&T, and LG 101 on Virgin Mobiles network
facilities for its employees and partners in the Middle East, so they can better serve consumer requirements (Aug 10)
Consequently, has received awards for customer satisfaction
LG is committed to working with our customers to find new and innovative ways to better serve their needs. To be recognized by J.D. Power and Associates for a fourth consecutive time is truly a great honor and we look forward to building even stronger relationships with our consumers in the future." Ehtisham Rabbani, corporate VP, Marketing and Innovation, LG (Sep 10) The ultimate goal for LG with these installations is to successfully introduce a range of new mobile phones to the market and communicate instantly the features of each phone to potential customers. By reaching potential customers directly, we are able to receive accurate and up-to-date feedback on the new mobile phones. These include the LG Arena, Chocolate BL40, GM900 Chrystal and GM730 Windows Mobile. H.S Paik, president, LG Gulf FZE (Aug 10) LG Mobile Phones received the highest in customer satisfaction with wireless mobile phones by J.D. Power and Associates for fourth consecutive time in the US LG has been ranked highest in overall customer satisfaction performance (Sep 10) LGs Interactive Power Poles
LG Cookie Snap LG SU920/ LG KU9200 LG Wink Series By the end of this year, LG will expand the product line-up, both low and high, for a greater market penetration. Ahn Seung-kwon, mobile chief, LG (Sep 10)
Business Intelligence 3Q 10
LG
Industry Conferences
LG leverages participation in various industry event and networking conferences to build its brand image and showcase its new handsets to the industry and consumers Participated in Berlin edition of IFA Trade Show, to display its breakthrough technology in mobile and home convergence , which would make sharing of multimedia files on Optimus 7 extremely easy (Sep 10) Also, participates in regional industry events like the 3rd Mobile Expo which took place in Nepal (Sep 10) and the launch event at NagaWorld Hotel and Casino, Cambodia (Aug 10)
Celebrity Endorsements
Digital Signage
Business Intelligence 3Q 10
Operates through a two fold distribution channel comprising direct and indirect channel. Direct channel includes Nokia proprietary stores and indirect channel consists of retailers, distributors, operators, and online
Carrier Partnerships
Focusing on improving operator collaboration in the US by developing specific products for the US market, to bolster its position in the country Recently, launched customized versions of 5230 Nuron and E73 Mode for T-Mobile in US, to suit the US market Further, aims to leverage upcoming 4G LTE networks from Verizon Wireless and MetroPCS, to launch phones on new generation of platforms Forges several partnerships with carriers and third-party distributors to launch its handsets across geographies Launched Nokia E5 with 3 Sweden, offering the device without a contractual obligation, with different pricing plans for residential clients and business users (Sep 10) Released Nokia C3 in Australia with Vodafone, with various recharge options (Sep 10)
Distributor Partnerships
Partners with third-party distributors to expand presence in several markets Introduced Nokia N8 across more than 150 stores and official website of Beijing Zoomflight Telecommunication Equipment in China (Sep 10) Collaborated with Kanematsu Communications to distribute handsets in Shanghai, catering specifically to Japanese customers (Aug 10) Distributed Nokia N8 in Germany through online mobile retailer Sparhandy.de (Sep 10)
Experience Centres
Nokia maintains experience centers, which include special zones for hardware repairs, services support, learning zone, and free Internet access, for consumers to explore features of Nokia mobile phones Opening experience centers in emerging market of India, to offer enhanced mobile services Opened experience centers in Hyderabad (Aug 10), Chennai, and Bangalore (Jul 10), India, and further, plans to open five new Nokia care experience centers in metro and Tier-1 cities by 2010end
Collaborated with DTAC to launch Nokia E5 in Thailand, offering DTAC internet service with 100 MB free internet for three months (Aug 10)
Segmentation
Targets mass markets by launching affordable range of mobile devices Launched two entry level dual SIM phones, C1 and C2 (Aug 10) Also, launched affordable line of QWERTY phones in Philippines, including Nokia C3 (Jul 10) Released the affordably-priced, QWERTY phone, Nokia C6 in India, with free push mail service (Jul 10)
Source: Company website and reports; industry reporting; Pipal Research Analysis
Business Intelligence 3Q 10
phones, by clicking on flashing widgets on any of the participating blogs (Jul 10)
Industry Events
Participates as well as organizes industry events to grow industry-wide network as well as have higher brand visibility Key events in 3Q 10 include Nokia World 2010, Visvesvaraya Technical Universitys one-week workshop, and Mobey Forum member meeting
Advertising
Leverages several media channels like TV, print, to promote its brand and create product awareness Released a TV campaign for N8, created by Wieden &
Marketing Initiatives
Kennedy, with emphasis on Nokia technology, with the tagline It's not technology, it's what you do with it (Sep 10) Per AdEx analysis, Nokia was #1 for advertisement of Cellular Phones in Print during Jan 10 Aug 10, with highest share i.e. 17.0% of overall Cellular Phones print ads pie (Sep 10) Further, positions brand by leveraging celebrity sponsorships. Selected Pamela Anderson to feature in a short film, to be shot in HD on N8 handset, to promote its launch (Sep 10)
Contests
Organizes several contests and competitions for developers to launch new, enhanced applications
Collaborated with AT&T, to launch developer contest, The 2010 Calling All Innovators, requiring developers to create apps North American consumers, awarding $10.0 million in cash to the winning application (Sep 10) Introduced a competition for Levant mobile and web application developers, asking for submission of locally relevant applications and content for Nokia N8, in Arabic or English, awarding cash prize to the winning application (Sep 10) Launched Make My App contest in India allowing consumers to send ideas for app (Sep 10)
Source: Company website and reports; industry reporting; Pipal Research Analysis
Business Intelligence 3Q 10
Digital Media
Focuses on leveraging digital media platforms including social networks to enhance customer base and reach a wider audience Collaborated with Vodafone UK to launch a competition called 'Mobile Mayor Challenge, on mobile application and social network, Foursquare, to coincide with the launch of Nokia N8, awarding winners with a new N8 (Sep 10) Leveraging Twitter's Promoted Tweets ad format as part of a major social media campaign to promote its smartphones till the festive season (Sep 10) Nokia Canada launched a promotion for N97 smartphone, under which a group of bloggers travelled to various Canadian cities, documenting the trip by updating a Facebook page with their phones and participating in several challenges (Jul 10) Aims to integrate its offline and online marketing activities utilizing QR codes, which are logos that direct users to a web page when scanned with a mobile phone, in its offline ads (Sep 10)
Challenges
Per industry statistics and opinions, Nokia is still struggling with its position in the market, and is experiencing a declining share in the smartphone segment Per market research company Interbrand, Nokias ranking in the worlds most valued brands list fell from #5 to #8, with Nokias brand value reaching $32.1 billion (23.0 billion), a decline of 15.0% over 2009-2010 (Sep 10) Gartner predicts Nokia's share of the smartphone market will decline from current 40.0% in 2010 to 34.2.0% by 2011 and 30.2% in 2014, while competitor Google Android is expected to emerge as the leader, with market share of 29.6.0% in 2014 (Sep 10) Also, the company is experiencing dwindling sales in North America, primarily due to weak portfolio of high-end smartphones One of Nokias key weaknesses is its lack of progress in North America where it only held a 4 per cent share of the smart phone market in the second quarter of 2010. This, combined with its lack of products to compete at the high-profile, high-end of the smart phone market where the media focus their attention, are the two biggest problems facing Nokia at present. - Tim Shepherd, analyst at technology research firm Canalys (Sep 10)
Source: Company website and reports; industry reporting; Pipal Research Analysis
Business Intelligence 3Q 10