Marketing Case Problem

Case Problem Nokia takes four-lane road to consumers. NEW DELHI​ After having grabbed a king size 79% share of the 15,000 crore mobile handset market in India, Nokia India has found a new way of connecting people. The mobile handset manufacturer has embarked upon a brand new retail strategy that is based on a classification of its consumers into four major groups that separates people in terms of usage, income level and lifestyle. The classification is based on an extensive survey— the Nokia Segmentation Study —that was carried over two years involving 42,000 consumers from 16 countries. It studied the impact lifestyle choices and attitudes have on the mobile devices consumers buy and how they use them. The strategy, which was announced globally in June last year, is being unfolded in India now. While the nitty-gritty of the new strategy is still being worked out, it is likely that the company would follow separate marketing strategies for the four different segments. The advertising campaigns could be different for the segments. Nokia’s entire product portfolio has now been re-aligned towards these four groups to address the specific needs of each. The first of these segments Live, aimed a first time users whose basic need is to stay in touch with voice as the main driver, would have basic handsets low on features and price. “These may be functional phones but the target group for these phones range from SEC C (low socio-economic class) to SEC A1+ (very high socio-economic class) markets”, says Nokia India marketing head Devinder Kishore. The second segment Connect looks at more evolved users who look for more functionality and features and connectivity. Accordingly, phones in this segment would have GPRS, camera and music capabilities. The next two categories, Achieve and Explore, are aimed at high-end users and have Nokia’s top-end handsets, e.g., Achieve segment looks at enterprise users who need to have business functionalities in their phones. Nokia’s new E-series has been put under this segment with handsets having QWERTY keyboards and full Internet capabilities. Aimed at high-end lifestyle users, Explore would be the most prominent segment for the company in the coming years. Says Nokia India multimedia business director Vineet Taneja, “This segment would see the most vibrant growth in the coming year. It will look at five different areas—applications, imaging, mobile, TV, music and gaming. We are fast developing (the ecosystem to support Ihese areas.” Nokia acquired music solution and content provider LoudEye and GPS solution provider Gate5. It is all slated to launch its most high-profile handset, which boasts of having a 5 mega pixel camera and GPS capabilities apart from iPod quality music, in February. Says Taneja, “There is increasing demand for convergence and multiple functionalities in high-end handsets. The N-series will try to address that”. Nokia feels that the new platform strategy wherein different handsets are launched under a platform, like the N-Series, will become a status and style statement and drive numbers. 1​. Identify the four market segments that Nokia plans to address as per the news report above. Ans: L ​ ive, Connect, Achieve and Explore. 2​. What is the basis of classification of the market used by the company? Ans: S ​ EC Socio-Economic Class, usage and lifestyle 3​. What do you mean by realignment of product portfolio? Illustrate this from the case above. Ans: I​ t means that whatever product Nokia is planning to develop now, it will be according to the needs of the consumers. The four different handsets are Live, Connect, Achieve and Explore, being planned keeping the needs of four different types of users. 4​. Identify the points that can be highlighted in marketing campaigns for each segment. Ans: T ​ he points that can be highlighted in marketing campaigns for each segment can be (i) Latest model (ii) Reasonable price (iii) Better performance (iv) Advanced technology (v) Consumer friendly. 5​. What are the different considerations in the mind of consumers of each segment while purchasing mobile phones as given in the above case? Ans: D ​ ifferent considerations in the mind of each segment while purchasing mobile phones are (i) The first of these segments Live, aimed at first time users whose basic need is to stay in touch with voice as the main driver. So, here price of the phone is the main consideration. (ii) The second segment connect looks at more evolved users who look for more functionality and features and connectivity. So, here the features of the phone as well as an economic price tag are considered. (iii) The next two categories, Achieve and Explore, are aimed at high-end users. So, here the uniqueness of the handset and its business functionalities are the main points considered by the consumer.