Contents
Declaration Preface 1. Introduction 1 . 1 R e v i e w o f L i t e r a t ur e 1.2 Objective of the study 1.3 Methodology 1.4 Limitations of Study 2. Introduction 2.1 Nokia 2.1.1Nokia Vision/Mission Statement 2.1.2 About the Company 2.1.3History of Nokia 2.1.4Company Profile 2.1.5SWOT Analysis 2.2Introduction to Marketing 2.3Market Segmentation 2.3.1Considerations for Market Segmentation 2.3.2Segmentation Basis 2.3.3Effective Segmentation 2.4Market Segmentation for Nokia 2.4.1Segmentation of Nokia 2.4.2Nokia mobile phones by Series 2.4.3Lifestyle and Psychographic Basis for Nokia 2.4.4The Segmentation of Nokia conducted on the basis of Price 3.Analysis and Interpretation 4. Conclusion 5. Recommendations 6. Bibliography 7. Annexure
i ii 1 3 4 5 6 7 8 10 12 14 20 24 33 37 42 58 59 60 63 66 67 82 86 87 iv
Introduction Introduction to Project This Project deals with Various Market Segmentation done in Mobile Industries. This Project mainly focuses on Various Market Segmentation done by Nokia Co. Ltd. in the Market. Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses. Nokia provides equipment, solutions and services for network operators and corporations. Marketing is one of the most important functions in business. It is the discipline required to understand customers' needs and the benefits they seek. Academics does not have one commonly agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it consists of the social and managerial processes by which products (goods or services) and value are exchanged in order to fulfill the needs and wants of individuals or groups. Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. Companies often favor this method of marketing to the one-size-
fits-all mass marketing approach, because it allows them to target specific groups that might not be reached by mass marketing programs. The market can be divided into segments by using four "segmentation basis":
Psychographic,
behavioristic,
geographic,
and
demographic
basis.The basic criteria for segmenting a market is are customer needs. To find the needs of the customers in the market it is important to undergo a market research.Psychographic and behavioristic bases are used to determine research. preferences and demand for a product and advertising content, while geographic and demographic criteria are used to determine product design and regional focus.
Review of Literature This literature review will analyze the project on ‘Market Segmentation of Nokia’ and on past and current research that has been done which relates to the market segmentation. This critical analysis of literature contains data about marketing and segmentation strategies collected from various sources. It is important to understand why people and market needs to be divided into different segments. A segmented market is seen as an opportunity to effectively focus on particular customers. This appeals to potential customers and also marketers, as they know that this is what they will have to do. This study also shows how Nokia, a mobile giant, segments its market and focuses its products efficiently towards the customers of a particular segment. This gives a competitive advantage to the company by serving its customers well.
Objective of the Study The objectives of the present study are:1) To know about Nokia Company. 2) To know about the strengths, weaknesses, opportunities and threats of Nokia. 3) To know about marketing. 4) To know about market segmentation. 5) To know the market segmentation used by Nokia.
Methodology Research always starts with a question or a problem. Its purpose is to question through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied. Marketing research is the function which links the consumer, customer and public to the marketer through informationinformation used to identify and define marketing opportunities and problems generate, refine, and evaluate marketing actions, monitor marketing
actions,
monitor
marketing
performance
and
improve
understanding of market as a process. There are two types of data collection method use in my project report. – Primary data – Secondary data. For my project, I decided on primary data collection method by approaching customers directly and through references to know their views about the company. Secondary data collection method was used by referring to various websites, for collecting information regarding project under study.
Limitations of Study 1 ) The study is based on secondary data, the information provided 2nd hand about Nokia. 2) The present study suffers from all the limitations of case study method.
Introduction The company I have chosen to analyse in my project is the mobile phone giant Nokia. This project tells us briefly what Nokia actually is, its company structure and overall view on the size and sales of the company & also the Various Market segmentation Strategies followed by them. Since January 2004, Nokia Group has consisted of four different business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. “In addition, there are two horizontal groups that support the mobile device business groups: Customer and Market Operations and Technology Platforms.” In the year 2004 Nokia’s net sales for mobile phones were 18507 million euro, which went down 12% from 2003. Nokia’s market areas were Europe/Africa/Middle East (55% of net sales), Asian Pacific and China (25%) and Americas (20%). Nokia’s market share in Europe was 45.8% in 2003, in 2004 it was 34.8% and in the third quarter of 2005 it was 36%. The average number of personnel for 2004 was 53511. At the end of 2004, Nokia employed 55505 people worldwide. In 2004, Nokia′s personnel increased by a total of 4146 employees. Nokia’s turnover for the third quarter of 2005 was 8403 million euro from which mobile phones brought in 62%, multimedia 17%, Enterprise solutions 2% and Networks 9%. “The year 2004 was demanding for Nokia. In response, the company set five top priorities in the areas of customer relations, product offering, R&D efficiency, demandsupply management and the company’s ability to offer end-to-end solutions. Nokia is making good progress in these areas, and is now better positioned to meet future challenges.
Nokia Vision/Mission Statement Our Vision • A world where everyone can be connected. • In 2015, 5 billion people always connected, and 100 fold more network traffic. • It’s a world of experiences, shared experiences.
Our Promise • We help people feel close to what matters to them. • One of our basic needs as human beings is the need to communicate and share. • Our promise is to help fulfil this need, to help them feel close to what matters to them.
Our Approach • Consumer understanding drives us. • We observe first, then design. We act on our consumer insights. • We take a very human approach to technology 1. Simple 2. Reliable 3. Intuitive 4. Experiences to fall in love with. • Internet is our quest. Internet innovation, creativity, media and services will be available anytime, anywhere. •Nokia wants to bring the best of internet to mobile . Our Resolution-Grow, Transform, Build • Grow the number of people using nokia devices. •Transform the devices people use. • Build new businesses • Our business and people’s expectations for mobile devices and services are changing. Nokia’s promise is to help people feel close to what matters to them.
About the Company Nokia- Connecting People ! Nokia Corporation (NYSE: NOK) is one of the world's largest telecommunications equipment manufacturers. With headquarters in Keilaniemi of Espoo, Finland, this Finnish telecommunications company is best known today for its leading range of mobile phones. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers. Nokia provides mobile communication equipment for every major market and protocol, including GSM, CDMA, and WCDMA. Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of Nokia rapids. Finnish Rubber Works established its factories in the beginning of 20th century nearby and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works acquired Nokia wood mills as well as Finnish Cable Works, a producer of telephone and telegraph cables. All three companies were merged as Nokia Corporation in 1967. The name Nokia originated from the river which flowed through the town of the same name (Nokia). In the 1970s Nokia became more involved in the telecommunications industry by developing the Nokia DX 200, a digital switch for telephone exchanges. In the 1980s, Nokia offered a series of personal computers called MikroMikko. However, these operations were sold to International
Computers, Ltd. (ICL), which was later merged with Fujitsu-Siemens AG. Nokia also began developing mobile phones for the NMT network; unfortunately, the company ran afoul of serious financial problems in the 1990s and streamlined its manufacturing of mobile phones, mobile phone infrastructure, and other telecommunications areas, divesting itself of other items, such as televisions and personal computers. In 2004, Nokia resorted to similar streamlining practices with layoffs and organizational restructuring, although on a significantly smaller scale. This, however, diminished Nokia's public image in Finland, and produced a number of court cases along with, at least, one television show critical of Nokia. Recently, Nokia joined other mobile phone manufacturers to embrace Taiwanese Original Device Manufacturers. Nokia signed a contract with BenQ, a Taiwanese Original Device Manufacturer, to develop three highend mobile phones, which are scheduled to retail by the end of 2005.
History of Nokia Nokia's history started in year 1865, when engineer Fredrik Idestam established a wood-pulp mill in Southern Finland and started manufacturing paper. Due to the European industrialization and the growing consumption of paper and cardboard Nokia soon became successful. In 1895 Fredrik Idestam handed over the reins of the company to his son-in-law. Nokia was Actually founded in 1965 by Fredrik Idestam in Finland as a paper manufacturing company. In 1920, Finnish Rubber Works became a part of the company, and later on in 1922, Finnish Cable Works joined them. All the three companies were merged in 1967 to form the Nokia Group. Nokia created the NMT mobile phone standard in 1981 and launched the first NMT phone, Mobira Cityman, in 1987. The company delivered the first GSM network to Radkilinia, a Finnish company in 1991, and in 1992, Nokia 1011 - a precursor for all Nokia’s current GSM phones - was introduced. In the 1990s, Nokia provided GSM services to 90 operators across the world. Another significant move of the company during this period was the divestment of its non-core operations like IT. The company focused on two core businesses - mobile phones and telecommunications networks. In the 1990s, Nokia provided GSM services to 90 operators across the world. Another significant move of the company during this period was the divestment of its non-core operations like IT. The company focused on two core businesses - mobile phones and telecommunications networks. Nokia's history contains many achievements that were the first of their kind in the world. Many milestones have been experienced in the mobile phone business since the 80’s. The success with the NMT and GSM technologies and the products they spawned secured Nokia's position as the world's
leading telecommunications company. The list of Nokia's milestones provided a good insight in the history of wireless communications. Nokia has been involved in making the world's first NMT network and the world's first pocket-sized mobile phone. The world's first device to use the Symbian OS was also produced by Nokia. Nokia was able to offer advanced products from the beginning of the 90s. Early investments in R&D were thus handsomely rewarded. Nokia ensured its continued growth by reforming its production in the middle of the 90s. The new phone models and standardized technical solutions made it possible to produce an increasingly extensive product range more effectively. The extensive range of mobile phone models, covering all user groups, is one of the reasons why Nokia became the market leader.
Company Profile Nokia’s first century:1865-1967 The first Nokia century began with Fredrik Idestam's paper mill on the banks of the Nokianvirta river. Between 1865 and 1967, the company would become a major industrial force; but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics… 1865: The birth of Nokia Fredrik Idestam establishes a paper mill at the Tammerkoski Rapids in south-western Finland, where the Nokia story begins. 1898: Finnish Rubber Works founded Eduard Polón founds Finnish Rubber Works, which will later become Nokia's rubber business. 1912: Finnish Cable Works founded Arvid Wickstrom starts Finnish Cable Works, the foundation of Nokia's cable and electronics businesses. 1937: Verner Weckman, industry heavyweight Former Olympic wrestler Verner Weckman becomes President of Finnish Cable Works.
1960: First electronics department Cable Works establishes its first electronics department, selling and operating computers. 1962: First in-house electrical device The Cable Works electronics department produces its first in-house electrical device - a pulse analyzer for nuclear power plants. 1967: The merger Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation.
The move to mobile:1968-1991 The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products... 1979: Mobira Oy, early phone maker Radio telephone company Mobira Oy begins life as a joint venture between Nokia and leading Finnish television maker Salora.
1981: The mobile era begins Nordic Mobile Telephone (NMT), the first international mobile phone network, is built. 1982: Nokia makes its first digital telephone switch The Nokia DX200, the company’s first digital telephone switch, goes into operation. 1984: Mobira Talkman launched Nokia launches the Mobira Talkman portable phone. 1987: Mobira Cityman – birth of a classic Nokia launches the Mobira Cityman, the first handheld NMT phone. 1991: GSM – a new mobile standard opens up Nokia equipment is used to make the world’s first GSM call.
Mobile revolution:1992-1999 In 1992, Nokia decided to focus on its telecommunications business. This was probably the most important strategic decision in its history. As adoption of the GSM standard grew, new CEO Jorma Ollila put Nokia at the head of the mobile telephone industry’s global boom – and made it the world leader before the end of the decade...
1992: Jorma Ollila becomes President and CEO Jorma Ollila becomes President and CEO of Nokia, focusing the company on telecommunications. 1992: Nokia’s first GSM handset Nokia launches its first GSM handset, the Nokia 1011. 1994: Nokia Tune is launched Nokia launches the 2100, the first phone to feature the Nokia Tune. 1994: World’s first satellite call The world’s first satellite call is made, using a Nokia GSM handset. 1997: Snake – a classic mobile game The Nokia 6110 is the first phone to feature Nokia’s Snake game. 1998: Nokia leads the world Nokia becomes the world leader in mobile phones. 1999: The Internet goes mobile Nokia launches the world's first WAP handset, the Nokia 7110.
Nokia now:2000-today Nokia’s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future... 2002: First 3G phone Nokia launches its first 3G phone, the Nokia 6650. 2003: Nokia launches the N-Gage Mobile gaming goes multiplayer with the N-Gage. 2005: The Nokia Nseries is born Nokia introduces the next generation of multimedia devices, the Nokia Nseries. 2005: The billionth Nokia phone is sold Nokia sells its billionth phone – a Nokia 1100 – in Nigeria. Global mobile phone subscriptions pass 2 billion. 2006: A new President and CEO – Nokia today Olli-Pekka Kallasvuo becomes Nokia’s President and CEO; Jorma Ollila becomes Chairman of Nokia’s board. Nokia and Siemens announce plans for Nokia Siemens Networks. 2007 Nokia recognized as 5th most valued brand in the world. Nokia Siemens
Networks commences operations. Nokia launches Ovi, its new internet services brand. 2008 Nokia's three mobile device business groups and the supporting horizontal groups are replaced by an integrated business segment, Devices & Services.
SWOT Analysis SWOT Analysis, is a Strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a Project or in a Business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. SWOT Analysis of Nokia Modern SWOT Analysis A SWOT analysis conducts an external and internal scan of Nokia's business environment, it is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S), or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic
environment
is
referred
to
as
a
SWOT
analysis.
The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.
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 smartphones sold in the next 4 years. • 33% market share still the largest cell phone vendor by far, with double the market
share of
nearest
competitr
• Size should enable Nokia to amortize R&D costs and to get cost advantages • Brand position: probably one of the top 20 brands in the world
Weaknesses • The
N-Gage
is
considered a
flop
• Being the market leader and 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 are clamshell phones which are preferred by many customers. Nokia was reluctant to produce a clamshell until this year, when it launched its first model.
Opportuntiies • Increase their presence in the CDMA market, which they are just entering, as well as 3G and Edge • 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 • Late in the game in 3G 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.
Production Units Networks technology • China • Finland • Germany • India
Mobile devices and technology • Brazil • China • Finland • Great Britain • Hungary • India • Mexico • Romania • South Korea
Introduction to Marketing "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives." The new definition of marketing, as released by the American Marketing Association is:Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. "Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others." (Kotler & Armstrong 1987) The Mission of marketing is satisfying customer needs. That takes place in a social context. In developed societies marketing is needed in order to satisfy the needs of society's members. Industry is the tool of society to produce products for the satisfaction of needs. Marketing is one of the most important functions in business. It is the discipline required to understand customers' needs and the benefits they seek. Academics do not have one commonly agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it consists of the social and managerial processes by which products (goods or services)
and value are exchanged in order to fulfill the needs and wants of individuals or groups. Although many people seem to think that "Marketing" and "Advertising" are synonymous, they are not. Advertising is simply one of the many processes that together constitute Marketing.
What is Marketing? The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place. The Chartered Institute of Marketing define marketing as ‘The management process responsible for identifying , anticipating and satisfying customer requirements profitability’ If we look at this definition in more detail Marketing is a management responsibility and should not be solely left to junior members of staff. Marketing requires co-ordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organisation.
Philip Kotler defines marketing as ‘satisfying needs and wants through an exchange process’ Within this exchange transaction customers will only exchange what they value (money) if they feel that their needs are being fully satisfied, clearly the greater the benefit provided the higher transactional value an organisation can charge. P.Tailor of www.learnmarketing.net suggests that 'Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’.
Advantages • Identifies needs and wants of consumers • Determines demand for product • Aids in design of products that fulfill consumers needs • Outlines measures for generating the cash for daily operation, to repay debts and to turn a profit • Identifies competitors and analyzes your product's or firm's competitive advantage • Identifies new product areas • Identifies new and/or potential customers • Allows for test to see if strategies are giving the desired results
Disadvantages • Identifies weaknesses in your business skills • Leads to faulty marketing decisions based on improperly analyzed data • Creates unrealistic financial projections if information is interpreted incorrectly • Identifies weaknesses in your overall business plan
Levels of Marketing Strategic Marketing Strategic Marketing attempts to determine how an organization competes against its competition in a market place. In particular, it aims at generating a competitive advantage relative to its competition. Operational Marketing Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived from them, as well as to satisfy the customer with prompt services and meeting the customer expectations. Operational Marketing includes the determination of the marketing mix.
Functions of Marketing • Market research • Advertising and sales promotion • Public Relations • Selling • Servicing • Methods of payment and credit
The Social Function of Marketing In modern society production and consumption are apart from each other. Marketing connects them. From the societal point of view, marketing is a philosophy, which shows how to create effective production systems and consequently prosperity. Business is a subsystem of society, which has both a social and an economic role. Thus, a company must operate in a way that will make possible the production of benefits for society and, at the same time, produce profits for the company itself. (Davis, K. et al. 1980) The role of marketing in society means also responsibilities. In addition to economic and social responsibility, ecological responsibility is nowadays emphasized. According to some definitions, environmental responsibility is part of social
responsibility. Improvement of marketing is related to the changing emphases of economic, social and environmental responsibility. Goodpaster and Matthews (1982) analyzed three patterns of thought, which can be distinguished for a company's social responsibility: 1. The invisible hand; 2. The hand of government; and 3. The hand of management. 1. The invisible hand view (promoted by e.g. Milton Friedman) concludes that the only social responsibilities of business organizations are to make profits and to obey laws. Free and competitive market-place will ensure the moral behaviour of companies. The common good is best served when individuals and organizations pursue competitive advantage. 2. The hand of government view (promoted by e.g. John Kenneth Galbraith) concludes that companies are to pursue rational and purely economic objectives. It is the regulatory hand of the law and political process which guides these objectives towards common good. 3. The hand of management view (presented by Goodpaster & Matthews) would put the responsibility of a company's actions into the hands of the company itself. It is concluded that the moral responsibilities of an individual may be projected into an organization, and that the concepts of an individual's responsibility and a company's responsibility are largely parallel. Therefore, organizations should be no less or no more responsible than ordinary persons.
The Traditional and Integrated Functions of Marketing Traditionally, marketing has been seen as a link between production and customer. The situation could be captured better by using the term selling. Selling is associated to the so- called "Production and Sales Eras of Marketing". Slogans: "Make what you can make" and "Get rid of what you have made" describe the traditional view of marketing/selling. The following figure shows the role of traditionally oriented marketing in (traditionally oriented) management. Marketing was born out of a need to take better into consideration the demand factors in production planning. The function of marketing is to channel information of consumer needs to the production and satisfaction of needs to consumers. The basic power of marketing is the aspiration to produce and sell only that kind of products which have demand. Marketing integrates the whole company to serve this demand. Marketing aims at effective production systems, where information is transmitted effectively between production and consumption.
Market Segmentation Market segmentation is one of two general approaches to marketing; the other is mass-marketing. In the mass-marketing approach, businesses look at the total market as though all of its parts were the same and market accordingly. In the market-segmentation approach, the total market is viewed as being made up of several smaller segments, each different from the other. This approach enables businesses to identify one or more appealing segments to which they can profitably target their products and marketing efforts. The Market-Segmentation process involves multiple steps. The first is to define the market in terms of the product's end users and their needs. The second is to divide the market into groups on the basis of their characteristics and buying behaviors. Possible bases for dividing a total market are different for consumer markets than for industrial markets. The most common elements used to separate consumer markets are demographic factors, characteristics, geographic location, and perceived product benefits. Demographic Segmentation involves dividing the market on the basis of statistical differences in personal characteristics, such as age, gender, race, income, life stage, occupation, and education level. Clothing manufacturers, for example, segment on the basis of age groups such as teenagers, young adults, and mature adults. Jewelers use gender to divide markets. Cosmetics and hair care companies may use race as a factor; home builders, life stage; professional periodicals, occupation; and so on.
Psychographic Segmentation is based on traits, attitudes, interests, or lifestyles of potential customer groups. Companies marketing new products, for instance, seek to identify customer groups that are positively disposed to new ideas. Firms marketing environmentally friendly products would single out segments with environmental concerns. Some financial institutions attempt to isolate and tap into groups with a strong interest in supporting their college, favorite sports team, or professional organization through logged credit cards. Similarly, marketers of low-fat or low-calorie products try to identify and match their products with portions of the market that are health-or weight-conscious. Geographic Segmentation entails dividing the market on the basis of where people live. Divisions may be in terms of neighborhoods, cities, counties, states, regions, or even countries. Considerations related to geographic grouping may include the makeup of the areas, that is, urban, suburban, or rural; size of the area; climate; or population. For example, manufacturers of snow-removal equipment focus on identifying potential user segments in areas of heavy snow accumulation. Because many retail chains are dependent on high-volume traffic, they search for, and will only locate in, areas with a certain number of people per square mile. Product Benefit Segmentation is based on the perceived value or advantage consumers receive from a good or service over alternatives. Thus, markets can be partitioned in terms of the quality, performance, image, service, special features, or other benefits prospective consumers seek. A wide spectrum of businesses—from camera to Automobile Marketers—rely on this type of segmentation to match up with customers. Many companies
even market similar products of different grades or different accompanying services to different groups on the basis of product-benefit preference. Factors used to segment industrial markets are grouped along different lines than those used for consumer markets. Some are very different; some are similar. Industrial markets are often divided on the basis of organizational variables, such as type of business, company size, geographic location, or technological base. In other instances, they are segmented along operational lines such as products made or sold, related processes used, volume used, or end-user applications. In still other instances, differences in purchase practices provide the segmentation base. These differences include centralized versus decentralized purchasing; policy regarding number of vendors; buyer-seller relationships; and similarity of quality, service, or availability needs. Although demographic, geographic, and organizational differences enable marketers to narrow their opportunities, they rarely provide enough specific information to make a decision on dividing the market. Psychographic data, operational lines, and, in particular, perceived consumer benefits and preferred business practices are better at pinpointing buyer groupings—but they must be considered against the broader background. Thus, the key is to gather information on and consider all segmentation bases before making a decision. Once potential market segments are identified, the third step in the process is to reduce the pool to those that are (1) large enough to be worth pursuing, (2) potentially profitable, (3) reachable, and (4) likely to be responsive. The fourth step is to zero in on one or more segments that are the best targets for
the company's product(s) or capacity to expand. After the selection is made, the business can then design a separate marketing mix for each market segment to be targeted. Adopting a market-segmentation approach can benefit a company in several specific areas. First, it can give customer-driven direction to the management of current products. Second, it can result in more efficient use of marketing resources. Third, it can help identify new opportunities for growth and expansion. At the same time, it can bring a company the broad benefit of a competitive advantage. A company cannot serve all customers in a broad market such as computers or soft drinks. The customers are too numerous and diverse in their buying requirements. A company needs to identify the market segments it can serve effectively. Here we will examine levels of segmentation, patterns of segmentation, market segment procedures, bases for segmenting consumer and business markets, and requirements for effective segmentation. Many companies are embracing target marketing. Here sellers distinguish the major market segments, target one or more of these segments, and develop products and marketing programs tailored to each instead of scattering. Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments.
Considerations for Market Segmentation To identify segments, marketers examine consumers' interests, tastes, preferences, and socioeconomic characteristics in order to determine their patterns of consumption and how they will respond to various marketing strategies. The primary information marketers seek is why consumers purchase specific products or services but not others. Catalog retailers and direct-marketing firms make up some of the key users of market segmentation, although many other kinds of companies and organizations use this technique.
To whom do you sell and how do you promote sales? Market segmentation, however, works effectively only for certain kinds of products and services. First, to determine whether to segment a market, marketers must find out if the market can be identified and measured, which entails determining which consumers belong to specific market segments. Second, marketers must determine if the segments are large enough to be profitable. While marketers can easily divide the total market into smaller groups, these groups might be so small that they do not justify the expenses associated with market segmentation. Third, marketers must be able to reach the segments through their advertising. If the members of a particular segment do not share interest in a
common magazine or television show, for example, then marketers have no way of reaching the segment and so the segment is superfluous. Fourth, marketers must gauge the responsiveness of the segments and find out if a proposed segment would likely respond to a marketing campaign. If it is not probable that a segment will react to a promotion, then the segment is not useful. Fifth, marketers must determine if the segments will change in the near future. Since it takes time to prepare a marketing strategy for specific segment and since it takes time for market segmentation to be profitable, creating segments where consumer needs and wants are likely to change would not be productive.
Representation of Market Segment Market Demand Aggregate of the demands of all potential customers (market participants) for a specific product over a specific period in a specific market. Market segment Identifiable group of individuals, families, firms, or organizations, sharing one or more characteristics or needs in an otherwise homogenous market. Market segments generally respond in a predictable manner to a marketing or promotion offer. 1. Set of potential customers: • Who have similar needs • Who reference each other when buying 2. Are alike in the way they: • Perceive value • View products and services • Purchase products and services
Why Define A Market Segment? • Easier to understand customer needs • Focus “whole solution” to a narrower set of customer needs • Easier to become a leader in a smaller market (Big fish in small pond) • More effective use of marketing dollars • Generally more profitable
Why Market Segmentation? A major key to a company’s success is its ability to select the most appropriate market segmentation because a company cannot target whole market. There are general guidelines for selection of target markets: •
Target market should be compatible with the organization goals and image.
•
The target market should match the marketing opportunity with the company’s resources.
•
An organization should consciously seek markets that will generate a sufficient sales volume at a low cost to result in a profit.
•
A company should select a market wherein the number of competitors and their size are small.
The total markets for many products is to varied-too heterogeneous. This variation Is due to the differences in buying habits ways to use the products motives for buying etc. Market segmentation takes these difficulties into account.
Benefits of Market Segmentation • Better marketing job and efficient use of marketing resources. • Small firm with limited resources can compete effectively in one or two market segments. • A company can design products that really match the market demands. • Advertising media can be used more effectively toward each segment of market.
Drawbacks of Market Segmentation upto some extent • It is an expensive proposition in both the production and marketing of products. • Segmentation increases marketing expenses in several ways i.e. Inventory cost goes up, advertising cost goes up, administrative expense goes up.
Segmentation Basis The market can be divided into segments by using four "segmentation basis": Psychographic, behavioristic, geographic, and demographic basis. The basic criteria for segmenting a market is are customer needs. To find the needs of the customers in the market it is important to undergo a market research. Psychographic and behavioristic bases are used to determine preferences and demand for a product and advertising content, while geographic and demographic criteria are used to determine product design and regional focus.
Different market variables Geographic segmentation Geographic basis focus on preferences contingent on regional factors, such as region (e.g., North or South), county, population density, urban or rural location, and climate. Collecting and analyzing information according to the physical location of the customer or other data source. Geographic segmentation is often used in marketing, since companies selling products and services would like to know where their products are being sold in order to increase advertising and sales efforts there. Geographic segmentation calls for dividing the market into different geographical units such as nation, states, regions, countries, cities, or neighborhoods . The company can operate in one or a few geographic areas, or operate in all but pay attention to local variations .
Demographic Segmentation Market segmentation based on differences in demographic factors (which normally match consumer wants and needs) of different groups of consumers. It is one of the five common segmentation strategies, and aims to define specific niches that require custom-tailored promotion. Demographics include personal characteristics such as gender, age, marital status, social attributes (such as ethnicity and religion), and income level.
In demographic segmentation , the market is divided into groups on the basis of variables such as age , family life cycle , gender , income , occupation , education , religion , race , generation , nationality , and social class. Demographic variables are the most popular bases for distinguishing customer groups. One reason is that consumer wants, preferences, and usage rates are often associated with demographic variables. Another is that demographic variables are easier to measure.
• Age and Life-Cycle Stage Consumer wants and abilities change with age. Age and life cycle can be tricky variables. For example, the Ford Motor Company designed its Mustang automobile to appeal to young people who wanted an inexpensive sports car . But Ford found that many mustangs were purchased by older buyers. It then realized that its target market was not the chronologically young but the psychologically young.
• Life Stage Person in the same part of the life cycle may differ in their life stage. Life stage defines a person’s major concern, such as going through a divorce, going into a second marriage, taking care of older parents, deciding to cohabit with another person, deciding to buy a new home, and so on.
• Gender Men and women tend to have different attitudinal and behavioral orientations, based partly on genetic makeup and partly on socialization practices. Gender differentiation has long been applied in clothing, hairstyling, cosmetics and magazines. The automobiles industry is beginning to recognize gender segmentation, since there are now more women car owners, some manufacturers are designing features to appeal to women, although they stop short of advertising the cars as women’s cars. • Income Income segmentation is long- standing practice in such products and services categories as automobiles, boats, clothing, cosmetics, and travel. However, income does not always predict the best customers for a given product. • Generation Many researchers are now turning to generation segmentation. Each generation is profoundly influenced by the times in which it grows up- the music, movies, politics, and defining events of that period. Demographers call these groups “cohorts”.
• Social Class Social class has a strong influence on preference in cars, clothing, home, furnishings, leisure activities, reading habits, and retailers. Many companies design products and services for specific social classes.
Psychographic Segmentation The division of a heterogeneous market into relatively homogeneous groups on the basis of their attitudes, beliefs, opinions, personalities and lifestyles; sometimes called "State-of-Mind" Segmentation. Personality the distinctive character of an individual; used as a basis for the psychographic segmentation of a market in which individuals of relatively similar personality, with similar needs or wants, are grouped into one segment. In psychographic segmentation, buyers are divided into different groups on the basis of lifestyle or personality or values. People within the same demographic group can exhibit very different psychographic profiles.
• Lifestyle People exhibit many more lifestyles than are suggested by the seven social classes. People differ in attitudes, interest, activities, and these affect the goods and services they consume. Companies making cosmetics and
furniture are always seeking opportunities in lifestyles segmentation, but lifestyle segmentation does not always work. • Personality Markers have used personality variables to segment markets. They endow their products with a “brand personality” that corresponds to a target consumer personality. The company utilizes product features, services, and image making to transmit the product’s personality. • Values Some markers segment by core values. Core values go much deeper than behavior or attitude, and determine, at a basic level, people’s choices and desires over the long term.
Behavioral Segmentation Market segmentation based on differences in the consumption behavior of different groups of consumers—their life-styles, patterns of buying and using, patterns of spending money and time, etc. One of the five common segmentation strategies, its objective is to define specific niches that require custom tailored promotion. In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. Many marketers believe that behavioral variablesoccasions, benefits, user status, usage rate, loyalty status, buyer-readiness
stage, and attitude—are the best starting points for constructing market segments. • Occasions Buyers can be distinguished according to the occasions when they develop a need, purchase a product, or use a product. Occasions segmentation can help firms expand product usage. For example in Pakistan tea is usually consumed at breakfast. A company can consider occasions of critical life events or transitions-marriage, childbirth, illness, relocation, career change —as giving rise to new needs. • Benefits Buyers can be classified according to the benefits they seek, people vary considerably in the benefits they seek from the same product. 1. Road Warriors: premium products and quality service. (16%) 2. Generation F: fast fuel, fast service, and fast food. (27%) 3. True Blues: branded products and reliable service. (16%) 4. Home bodies: convenience. (21%) 5. Price Shoppers: Low price. (20%)
• User Status Markets can be segmented into nonuser, ex-users, potential users, first time users, and regular users of a product. Market-share leaders tend to focus on
attracting potential users because they have the most to gain. Smaller firms focus on trying to attract current users away from the market leader.
• Usage Rate Markets can be segmented into light, medium, and heavy product users. Heavy users are often a small percentage of the market but account for high percentage of total consumption • Loyalty Status Consumers have varying degrees of loyalty to specific brands, stores, and companies. Buyers can be divided into four groups according to brand loyalty status: 1. Hard-core loyals: Consumers who are buy one brand all the time. 2. Split loyals: Consumers who are loyal to two or three brands. 3. Shifting loyals: Consumers who shift from one brand to another. 4. Switchers: Consumers who show no loyalty to any brand.
• Buyer-readiness stage A market consists of people in different stages of readiness to buy a product. Some are unaware of the product, some are aware, some are informed, some
are interested, some desire the product, and some intend to buy. The relative numbers make a big difference in designing the marketing program.
• Attitude Five attitude groups can be found in a market: enthusiastic, positive, indifferent, negative, and hostile. Door-to-door workers in political campaign use the voter’s attitude to determine how much time to spend with that voter. They thank to enthusiastic voters and remind them to vote; they reinforce those who are positively disposed; they try to win the votes of indifferent voters; they spend no time trying to change the attitudes of negative and hostile voters.
Usage Segmentation There are two ways of carrying out usage segmentation; firstly customers are split according to their weight of use. - heavy users/buyers being more important targets than light users. This segmentation can be carried out directly on customer databases and can be extremely powerful in focusing activity based on the value to the business, not just the number of contacts.
Segmentation
Data
Variables
Geographic World region Country Cities Density Climate Demographic Age Gender Family size Family life cycle
Asia Pakistan All major cities of Pakistan Urban Hot and Dry All ages Male, Female 1-2, 3-4, 5+ Young, Single; Young, Married, no children; Young, Married with children; Older, Married with children; Older, Married with no children under 18; Older, Single; Other Rs.30,000+ From middle class to upper class Schools, Colleges, Universities Major religion of Islam, Christianity and Hinduism
Income Occupation Education Religion Race Nationality Psychographic Social class Lifestyle
and small percentage of others Asian Pakistani Working class, Middle class, Upper class. Actualizes, Fulfilled, Believers, Achievers, Strivers, Experience’s makers and Strugglers
Behavioral Occasions Benefits User status Attitude product
Parties, Birthdays, Sports and Regular Occasions Quality, Taste, Economy, Health First time user towards Positive
Patterns of Market Segmentation Market segments can be build up in many ways, one way is to identify preference segments. For example cookies buyers are asked how much they value sweetness and saltiness in biscuits as two product attributes. Three different patterns can emerge. 1. Homogeneous Preferences: shows a market where all the consumers
have roughly the same preferences. The market shows no natural segments. We would predict that existing brands would be similar and cluster around the middle of the scale in both sweetness & saltiness.
2. Diffused Preferences: At the other extreme, consumer preferences
maybe scattered throughout the space, indicating that customers vary greatly in their preferences. The first brand to enter the market is likely to position in the center to appeal to the most people.
3. Clustered Preferences: The market might reveal distinct preference
clusters, called natural market segments. The first firm in this market has three options. It might position in the center, hoping to appeal to all groups. It might position in the largest market segment (concentrated marketing).It might develop several brands, each positioned in a different segment. If the first firm developed only one brand, competitors would enter and introduce brands in the other segments.
The Segmentation Process Once a company has gathered information from these segmentation bases, it must decide how to divide the market, bearing in mind that market segmentation seeks to minimize the differences within a segment and maximize the differences among segments. Consequently, depending on the product or service to be marketed, simple divisions along age, gender, or geographic lines alone may yield segments that are too vague to be of use. Instead, marketers may have to consider several characteristics or clusters of characteristics in order to divide the market into useful segments. For example, when considering beer consumption, marketers must look at both age and gender: the majority of beer drinkers are both young and male. • To begin segmenting the market, marketing managers must select the segmentation bases they will use to develop the segments, depending on the products or services to be marketed. Marketers may select a few segmentation bases they believe are the most relevant at the outset and develop market segments using them. On the other hand, they may compile a large array of information using all the segmentation bases and use this information to group consumers in various segments. • Next, marketers conduct any primary market analysis they may need, by preparing questionnaires and samples and by assessing the response to them. Using this information, marketers try to determine the most fruitful segments—the ones with greatest similarities within them. Because this process can be labor-intensive and require advanced knowledge of statistics, companies often rely on outside
firms or artificial intelligence technology to produce meaningful market segments. •
Once relevant, stable, reachable, profitable market segments are established, marketers can target the segments they believe will offer the best opportunities for growth given their products and resources and the ones they believe that correspond to the products being marketed the best. Finally, marketers can develop and launch advertising campaigns that appeal to the various segments.
Companies tend to choose the largest segments, although the segments with the most consumers are not always the most profitable and usually have the most competition. Consequently, marketers might benefit from considering targeting smaller segments or segments ignored by competitors, such as lowincome consumers, which is frequently referred to as “niche marketing.”
Method of Segmentation A company also may opt to target just one segment of the market, employing the market segmentation method of concentration. After considering various segmentation bases and conducting research, a company might find that its competitors are not reaching specific segments and decide to target this segment or niche exclusively. A computer maker, for instance, could concentrate solely on the home-user segment of the market and ignore the needs of the other segments. To do so, the computer maker would have to offer products that meet home-user needs at prices these consumers could afford. Since concentrated marketing costs less than differentiated marketing, it may appeal to small businesses in particular. After choosing a method of market segmentation, marketers must integrate the method into an overall marketing strategy. The marketing strategy will try to make the target product or service appeal to the target segment through an advertising campaign developed based on segmentation information such as age, gender, or location. Marketers also consider what a company's strategic position in a market is—e.g., if it is a computer supplier to home users or businesses—and creates a marketing program that will help a company achieves or maintain this position. If the segment is properly defined for a specific product or service, then developing promotional strategies and reaching the target segment should be relatively easy. The information used to help create the market segments should help marketers choose among promotional techniques (e.g., direct marketing, advertising, publicity, and sales promotion), pricing strategies, and distribution
strategies. This information also should help marketers choose among various advertising media. After collecting a large amount of information about their customers, marketers can plan promotions and products that will appeal to various segments over a long time by determining what products a segment wants in the future and offering them at the appropriate time
Target Costing Is a disciplined process that uses data and information in a logical series of steps to determine and achieve a target cost for the product. In addition, the price and cost are for specified product functionality, which is determined from understanding the needs of the customer and the willingness of the customer to pay for each function. The Basic Process: rocess the basic stages in the Target-Costing process: 1. define the product 2. set the target 3. achieve the target 4. maintain competitive cost The stages are market-driven: • Define the Product answers the fundamental questions of “What are you selling?” “To whom?” “What do they want it to do?”
• Set the Target addresses the issue of “What will they pay for it?” “What should it cost to produce?” • Achieve the Target is concerned with “How can we get there?” “Are we getting there?” • Maintain Competitive Cost deals with “How can we stay ahead?”
Entrepreneurial Strategy: • Define market segment small enough to allow you to capture 25% to 30% share • Be a “Big fish in small pond” • Ideal: Be the only supplier in a very narrowly defined market.
Effective Segmentation Not all segmentation is useful. For example, table salt buyers could be divided into blond and brunette customers, but hair color is not relevant to the purchase of salt. Furthermore, if all salt buyers buy the same amount of salt each month, believe all salt is the same, and would pay only one price for salt, this market would be minimally segmentable from a marketing point of view. To be useful, market segment must be: Measurable: The size, purchasing power, and characteristics of the segment can be measured. Substantial: The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars for people who are under four feet tall. Accessible: The segments can be effectively reached and served. Differentiable: The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments. Actionable: Effective programs can be formulated for attracting and serving the segments.
Market Segmentation for Nokia The decibel levels in the cellular market are increasing with service providers stepping on the gas. Not to be left behind, handset manufacturers are using precise segmentation to carve up their share. Divide and rule seems to be working! According to a report published in May 2001, the all-India cellular subscriber figures stand at 38,71,514. With aggressive marketing by service providers, this figure is expected to increase at a very rapid rate. If current decibel levels in the market are anything to go by, these expectations are well on the way to being met. However, amidst this entire melee one cannot ignore the efforts of the handset manufacturers. Both service providers and handset manufacturers have been complementing each other well with each fuelling the demand for the other. Industry observers attribute the success of handset manufacturers to shrewd market segmentation. The big three of the mobile handset market - Nokia, Ericsson and Motorola, have studied the market and segmented it precisely.
Segmentation of Nokia Connecting people! Nokia, arguably the biggest player in the world, has divided the market into four segments: •
Hi-fliers: The biggest segment as far as Nokia is concerned consists of 'Hi-Fliers', corporate executives who use a mobile phone to increase productivity at work. Aged between 25-45, the segment looks for data transmission and other business-related features. In most cases, the company sponsors the handset, hence price is not a major consideration.
•
Trendsetters: In any technology adoption cycle, the first segment to adopt an emerging technology is dubbed as 'the early adopters'. For Nokia, these early adopters are 'Trendsetters' who are most receptive to advanced models. This was the segment at which WAP-enabled models were aimed.
•
Social contact: The third segment for Nokia is the upwardly mobile, socially-conscious segment that uses a mobile to stay in touch. Today's youth and affluent housewives constitute two major chunks of the segment.
•
Assured: The fourth and last segment as defined by Nokia comprises of CEOs, high-profile celebrities, industrialists and other high "net worth" individuals. The fact that the segment cannot do without a mobile phone makes it the 'assured' segment.
Geographic World region – Asia Country – India Cities – Reach out maximum places Demographic Age – All age group Gender – Male, Female Income – All income groups Occupation – Every sector Religion – Irrespective of religion Psychographic Social class – All class of people Lifestyles – Urban, rural, and even far villages Behavioural Benefits – Quality Loyalty status – Strong
Nokia mobile phones by Series •
Nokia 1000 series
1011 · 1100/1101 · 1110/1110i · 1112 · 1200 · 1208 · 1600 · 1610 · 1650 • Nokia 2000 series 2110i · 2115i · 2310 · 2600 · 2600 classic · 2610 · 2630 · 2650 · 2651 · 2700 classic · 2730 classic · 2760 • Nokia 3000 series 3100/3100b/3105 · 3110 · 3110 classic · 3120 · 3120 classic · 3155 · 3200/3200b/3205 · 3210 · 3220 · 3230 · 3250 · 3310 · 3315 · 3330 · 3410 · 3500 classic · 3510/3590/3595 · 3510i · 3600/3620/3650/3660 · 3600 slide · 3720 classic • Nokia 5000 series 5070 · 5100 · 5110 · 5130 Xpress Music · 5200 · 5210 · 5220 Xpress Music · 5230/5235 · 5300 · 5310 Xpress Music · 5320 · 5330 Mobile TV Edition · 5500 Sport · 5510 · 5530 · 5610 · 5700 · 5730 · 5800 • Nokia 6000 series 6010 · 6020/6021 · 6030 · 6070 · 6085 · 6100 · 6101 · 6103 · 6110/6120 · 6110 Navigator · 6111 · 6120/6121/6124 classic · 6131/6133 · 6136 · 6151 · 6170 · 6210 · 6210 Navigator · 6220 classic · 6230 · 6233 · 6255i · 6260 Slide · 6265 · 6270 · 6275i · 6280/6288 · 6290 · 6300 · 6300i · 6301 · 6303
classic · 6310i · 6315i · 6500 classic · 6500 slide · 6555 · 6600 · 6600 fold · 6600 slide · 6610i · 6620 · 6630 · 6650 · 6650 fold · 6670 · 6680 · 6681/6682 · 6700 classic · 6710 Navigator · 6720 classic · 6730 · 6800 · 6810 · 6820 · 6822 • Nokia 7000 series 7110 · 7160 · 7210 · 7250 · 7280 · 7360 · 7380 · 7390 · 7500 Prism · 7600 · 7610 · 7650 · 7700 · 7710 · 7900 Prism • Nokia 8000 series 8110 · 8210 · 8250 · 8310 · 8600 Luna · 8800 · 8850 · 8910 • Nokia Communicator 9000/9110/9110i · 9210/9290 · 9210i · 9300/9300i · 9500 • Nokia Cseries C6 • Nokia Eseries E50 · E51 · E52 · E55 · E60 · E61/E61i · E62 · E63 · E65 · E66 · E70 · E71 · E72 · E75 · E90 Communicator • Nokia Nseries
N70 · N71 · N72 · N73 · N75 · N76 · N78 · N79 · N80 (Internet Edition) · N81 (N81 8GB) · N82 · N85 · N86 8MP · N90 · N91 (N91 8GB) · N92 · N93 · N93i · N95 · N95 8GB · N96 · N97 • Nokia Xseries X3 · X6 • Internet Tablet 770 · N800 · N810 (WiMAX Edition) · N900 • N-Gage Classic · QD · QD Silver Edition • Others •
Vertu luxury phones
• Concept •
Nokia Morph · Nokia Aeon · Nokia 888 · Nokia Eco Sensor · Nokia SURV1
Lifestyle and Psychographic Basis for Nokia The descriptors of segmentation are: • Activities • Interests • Opinions
The Segmentation of Nokia conducted on the basis of Price The price ranges are as follows: • 1000 – 5000 • 5000 – 9000 • 9000 – 15000 • 15000 – 21000 • 21000 - 30000 • 30000 - above
Range 1: (1000 – 5000) Workers and labourers • nokia 1650: rs 3,750 • nokia 1200: rs 2,400 • nokia 1208: rs 3,000 • nokia 2610: rs 3,950 • nokia 2626: rs 4,100 • nokia 2310: rs 3,650 • nokia 1112: rs 2,800 • nokia 1600: rs 3,050 • nokia 1110i: rs 2625
• nokia 3110: rs 4750 Features: • The nokia phones falling in this range are mostly used by the manual workers because they cannot afford a high price mobile phone. • Some students also use cell phone from this range as they have the fear of snatch of mobile phone. • Mobile phones falling in this category are simple phones who only meet the purpose of messaging and calling. These phones do not have additional features such as camera, blue tooth or infra red. • The only feature available in this phone is FM radio, which is most preferred by laborers, security and watch men.
Activities: • These people are mostly laborers, plumbers, security guards and watchman. • They work in places like factories, construction sites and houses etc. • They have hobbies like listening to radio. They have no other special hobby, as they don’t get spare time for themselves. • They only celebrate events like Eid Ramzan and weddings. • They don’t have any vacations as they belong to the lower class who works day and night to earn money. They work to on daily and hourly basis.
• They cannot afford any special entertainment but the only entertainment available to them within their range is FM radio. • They have no club memberships • They only shop for things that are essential and required for daily use.
Interests: • They have big families. • They live in areas like lyari, lalokheth and landhi etc. • They work in factories, construction site and are not well paid. They often work on daily or hourly basis. • The only recreation facility available to them is zoological garden, small parks and seaside. • They don’t follow any fashion. • They don’t spend money on hoteling. Opinion: • They are not concerned about themselves; their only priority is their family. • They tend to act very emotionally towards social issues. They trust their leaders blindly. • They are not sure about their future so they tend to live in present and think only about the present.
• They are strong followers of the culture. They pass their cultural values to their ancestors and give great importance to them. Range2: (5000 – 9000) middle managers • Nokia 2630; Rs 6250 • Nokia 6080; Rs 5800 • Nokia 6070; Rs 5350 • Nokia 6020; Rs 5850 • Nokia 7360; Rs 7050 • Nokia 3110 Classic; Rs 8100
Features: • The main users of this segment are middle managers because they have limited and average salary and cannot afford to spend it on unnecessary expenses. • They do not keep mobile for show off purpose. • The core feature of this segment is Audio Video Player, FM Radio Camera, EDGE, GPRS and Expandable Memory. • This segment offers up to maximum 3 hours of talk time. • The need to remain in connection with internet, this segment offers EDGE connectivity so they can faster access information, including emails or news clips.
• With the VGA camera, users can capture special moments with images and video clips or connect to their colleagues using push to talk technology. • Affordable, business tool for any occasion. Activities: • They are mostly middle managers in factories and offices. • They earn a reasonable amount of money which is limited and spent on their personal and daily use. • They spend most of their time surfing on internet. • They are part of parties and dinners organized by friends or in offices. They tend to spend their free and leisure time with their friends on dinner. • They like to spend their vacations in their home. They do not go out of the city for vacations as they want to relax and get a break from office work. • For entertaining themselves, they go out with friends on dinners and parties. They like to watch movies and internet surfing is also common. • They go out on places like Tariq road, Sadder etc to shop for themselves. Most of their salaries are spent on their personal use. • Cricket and games like FIFA are of their major interest. Interests: • They are the earning members of their family but their salaries are spent mostly on their personal use. • They go out to eat at places like bundoo khan, KFC, McDonalds.
• They are moderate followers of fashion. They tend to adopt fashion which are in their range and suitable to them.
Opinions: • They are self oriented, spend their salary on themselves. They are confident are have a strong belief in themselves. • They are not politically loyal to any specific group neither are they affected by the political movements of the group. • The have a strong focus on the work they are doing. They are highly determined and focused about their work. • They have education of bachelors or bcom degree. • Their main focus is on their future development. They are always thinking about profit maximization. They want to achieve success in short time. • They are not strong followers of culture.
Range 3: (9000 – 15000) university students • Nokia 5200; Rs 9400 • Nokia 6151; Rs 9750 • Nokia 7610; Rs 10150 • Nokia 6111; Rs 10500 • Nokia E50; Rs 11350 • Nokia 6230i; Rs 11350
• Nokia 6131; Rs 11700 • Nokia 5300; Rs 11900 • Nokia 7500 Prism; Rs 12000 • Nokia 6233; Rs 12300 • Nokia 6300; Rs 12650 • Nokia N72; Rs 13500 • Nokia E62; Rs 13200 • Nokia 7373; Rs 13500 • Nokia 6120 Classic; Rs 14900 Features: • The cell phones falling in this range are mostly used and popular in university or college students. • These cells have a stylish look and have all the essential features such as Audio Video Player, FM Radio, Bluetooth, Camera, EDGE, GPRS and Expandable Memory. • They are popular among this group because they have high resolution mega pixel camera, they like to click photos of family and friends and they want to save their memories. • They have high memory, so they can download songs videos and share it with their friends. • They are stylish phones usually used to show off their personality and attitudes. Activities:
• These students spend most of their time in universities and their friends. • They like to keep these cell phones to show off and to give impression about their status. • Their main hobby is to sleep, watch movies, listening to music, going out with friends and partying. • They are active members of societies made in universities and college. • Their main source of entertainment is internet, they like net surfing, chatting and orkutting and watching movies. • They are fashion conscious and shop from places like dolmen mall, forum etc. • They play internet games and cricket.
Interests: • The university students have high level affiliation for their friends. They spend less time with their families due to their busy schedules. • They do not have any job as they are studying, they sometimes do internships. • They go out to places like arena, millennium mall and snooker clubs etc. • They are most fashion conscious people; they adapt themselves with the latest fashion. • They like to eat junk food. They go out to hoteling on regular basis, pizzas, burgers, tikkas are their favorites.
Opinion: • They are the most self-confident people, they like to be popular and recognized. • They have social issues like conflict between friends, disagreement with family or parents on various issues. For e.g. spending nights at friends place and coming to home at late hours. • They use foreign products of high quality which shows status and image. • They are care free and do not spend time worrying about their future. • They are less culture oriented. They easily adapt to western culture.
Range 4: (15000 – 21000) music lovers/ high memory • Nokia N70 Music Edition; Rs 16000 • Nokia 5310; Rs 16400 • Nokia 6288; Rs 16750 • Nokia 3250 (1GB);Rs 16750 • Nokia 7390; Rs 17300 • Nokia 5700; Rs 18400 • Nokia E51i; Rs 20000 • Nokia N73; Rs 20000
• Nokia 5610; Rs 20500
Features: • This segment contains cell phones for music lovers. • These mobile phones are specifically optimized for entertainment, music and games. • These Music phones offer dedicated music or gaming keys, expanded memory, large LCD screen and extended battery performance to provide quick and easy access to entertainment content. • These phones offer up to 18 hours of music playback, memory for up to 3,000 songs on an optional 4GB microSD card and dedicated music keys. Activities: • They like to listen to music and download songs from the GPRS. They download movies and share it with their friends. • They like to take part in music events such as concerts or functions. • They spend their vacations surfing on net, watching TV and listening to music. • They are most fashion conscious people; they are trend followers and like to adopt fashion that is most popular and unique. • They go out for shopping at places like forum, dolmen, and millennium mall. • They like to play games on their mobile phones.
Interests: • Their social circle includes people who are also interested in music and movies. • For entertainment purpose, they go out to concerts and attend various functions • They are the most fashion conscious people. They spend their pocket money on buying products that show attitude and their image. • They are fond of eating pizzas, burgers, donuts etc. Opinions: • They are highly confident and are mostly wannabe’s. • They have social issues of recognition and self esteem. • They use high quality products that show off their image. • They look themselves as future singer and their main focus is on becoming another singing idol. They are most weak followers of culture. They easily adopt western culture. And forget their cultural values.
Range 5: (21000 – 30000) communicator/ high and young business people • Nokia E65; Rs 21300 • Nokia N73 Music Edition; Rs 21500 • Nokia E61; Rs 22500
• Nokia 9300i; Rs 22700 • Nokia E70; Rs 22700 • Nokia 6500 slider; Rs 23300 • Nokia 7900 Prism; Rs 23250 • Nokia E61i; Rs 25950 • Nokia N76; Rs 26800 • Nokia N81; Rs 27200 Features: • Young and energetic business men fall into this category of age 30 – 40. • These people are young and adapt new changes quickly. • They are busy most of the time so they want quick solutions for their problems • They want easy access to everything. They like challenging and new things. • The cell phones falling in this category are business phones including communicators and high memory storage phones. • These phones enable to connect the business people to one another. They have a lot of storage space and connect to GPRS anywhere. They can take their office work with them and can even download heavy files. Activities:
• They are young business people who are business oriented. The have most emphasis on achieving their targets in the shortest means time. • Their hobbies are surfing on internet and finding out knowledge about latest technology etc. • They attend business meetings and business ceremonies. • They go out to foreign countries for vacation as they want to spend some time away from work and relax. • They member of various clubs such as Karachi club, country creek club, golf club etc. • They buy foreign products and shop from foreign country. They mostly buy branded products. • They play sports such as golf and yachting etc. Interests: • They have small and growing families. • They have houses in posh and popular areas. • They are future oriented and tend to maximize profits. • They are very conscious about their diet. They go out to dinner on restaurants like bar b Q tonite and hotels like PC, AVARI etc.
Opinions: • They are future oriented their main emphasis is on profit maximization. • They give less importance to political issues.
• They are highly concerned about the economic conditions in the country. • They use high quality and branded products.
Range 6: (30000 - above) educated politician • Nokia N95; Rs 36750 • Nokia N93i; Rs 39750 • Nokia 8600; Rs 41000 • Nokia N82; Rs 44300 • Nokia N95i; Rs 44300 • Nokia E90; Rs 49700 • Nokia 8800; Rs 50800 Features: • It is both a mobile phone and media player rolled into one. Similar as the N95 and G600, the candy bar N82 is packed with lots of advanced function and features such as HSDPA, Bluetooth 2.0 with A2DP, WiFi, integrated GPS, FM radio, microSD and TV-out. Activities: • The segment using these cell phones are mostly educated politician. • Their hobbies are hunting, horse riding, clubbing and yachting.
• They spend their vacations in foreign countries. • They have membership in Karachi club, creek club etc. • They shop from foreign countries and mostly buy expensive and branded products.
Interests: • They have small families and usually they are mostly less family oriented, they spend less time with their families. • They live in highly posh areas such as Defence and Clifton etc. • They have highly reputed ranks in the society. • They go out to clubs and for horse riding, golfing etc. • They buy products that are branded and most expensive. • They like to eat continental, Chinese and Italian foods. • They take high interest in media. They keep themselves up to date with the latest news related to politics, business and society. • They are economically and financially well-off. • They get education from foreign countries and also send their children abroad for higher education. • They are not concerned or followers of their culture. They change themselves as the society progresses and trend changes.
Analysis and Interpretation We asked total 10 questions, which were mainly close-ended questions. Out of 10, 7 were answerable in either YES or NO. And the remaining 3 questions had options for each. The results of the question Number 1,2,3,4,6,7 and 9, which are answerable in either YES or NO are below, Question No. Yes % No % 1. 87.5 12.5 2. 87.5 12.5 3. 100 0 4. 62.5 37.5 6. 75 25 7. 50 50 9. 37.5 62.5
In question number 5, I asked that Nokia is costlier as compared to other mobile handsets that provides same features as Nokia, but still why do you prefer Nokia? 57% people told that because it is user friendly. 29% people told that it is because of the NOKIA Brand Name. Where 14% people told that it is because of better features. In question number 8 I asked that Except Nokia what are your other preferred mobile phone brands? 25% people told that they prefer Samsung, 12.5% told LG, 37.5% told Motorola and remaining 25% told they prefer other brands. Q1. Do you think Nokia handsets are updated with the latest features?
13%
yes no
87%
Q2. Are Nokia mobiles readily available in the markets? 13%
yes no
87%
Q3. Do you think Nokia mobiles are user friendly?
0%
yes no
100%
Q4. Do Nokia provide good after sales service compared to other mobile
phones?
30% yes no 70%
Q6. Does a Nokia phone come with reasonable price?
25% yes no 75%
Q7. If a mobile company offers same features, quality and price as Nokia,
will u still go for Nokia?
50%
50%
yes no
Q9. Will you go for other mobile phone brand with less price and more
features?
38% yes 62%
no
Q5. Nokia is costlier as compared to other mobile handsets that provides
same features as Nokia, but still why do you prefer Nokia?
32%
user friendly brand nam e
52%
better features
16%
Q8. Except Nokia your other preferred mobile phone brands?
25%
25% samsung LG 13%
37%
m otorola others
Conclusion From the above project I have come to this conclusion that Nokia has implemented various segmentation strategies for its products on a large scale & becoming no.1 leader in the world of mobile phones. Nokia segments its market according to various variables. The main segmentation is done on the basis of price. As per my opinion Nokia had introduced various schemes to attract people & gain more goodwill into market. I would like to conclude that Nokia had been launching various new products & strategies throughout the year but still it is the no.1 brand leader in mobile phones. Many people around the globe are purchasing Nokia phones, as they are very cheap, good & efficient to operate. Nokia have used better & efficient market segmentation strategies to market its products according to various segments of customers in the market. Nokia as such has used all modern & good techniques to tackle problems of customers in market. Customer care & feedback is also given more importance. Better, efficient & advanced techniques are used to increase the sales of product. Also Nokia is largest manufacturer of mobile phones in India & also the no.1 leader in it. Various segmentation strategies are being enrolled into the market to increase the sales of the products. New models & their strategies are being well utilized to enhance the product.
Recommendations I would like to provide certain recommendations towards this Project report. They are as follows: I would like to suggest that the Marketing areas for Sales should be increased. They should try to adopt new strategies to regain whole sales force in the market. As far as launching of new models is concerned, the Company should try to offer sales of such products at an affordable Price. The Company should try to bring more attractive offers & discounts to the customers of segments to make them more brand loyal towards them.
Bibliography
Websites visited:
www.nokia.com http://www.nokia.com/about-nokia/company
www.google.com http://www.google.co.in/#hl=en&source=hp&q=market+segmentation +of+nokia&meta=&aq=7&aqi=g10&aql=&oq=market+se&gs_rfai= &fp=fe4cbc854b7cd67d
www.scribd.com http://www.scribd.com/search? cat=redesign&q=project+on+nokia&sa.x=43&sa.y=15
Annexure 1. Do you think Nokia handsets are updated with the latest features? a) YES b) NO 2. Are Nokia mobiles readily available in the markets? a) YES b) NO 3. Do you think Nokia mobiles are user friendly? a) YES b) NO 4. Do Nokia provide good after sales service compared to other mobile phones? a) YES b) NO 5. Nokia is costlier as compared to other mobile handsets that provides same features as Nokia, but still why do you prefer Nokia? a) Nokia brand name b) Better features c) User friendly d) All the above
6. Does a Nokia phone come with reasonable price? a) YES b) NO 7. If a mobile company offers same features, quality and price as Nokia, will u still go for Nokia? a) YES b) NO 8. Except Nokia your other preferred mobile phone brands? a) Samsung b) LG c) Motorola d) Others 9. Will you go for other mobile phone brand with less price and more features? a) YES b) NO 10. How do you rate the after sale service of Nokia? a) Very good b) Good c) Neither good nor bad d) Bad e) Very bad
