Published on March 15, 2010
Slide 1: Nokia Pricing Strategy Presentation on Story of Nokia About Nokia Market of Nokia Presented By:- Priyank raj Shambhawi singh Ankit malik Roopali vyas Shruti uperti Copyright ©2009 JIMNOIDA. Slide 2: About Nokia When mobile phones were introduced in India in the mid-90s, US based Motorola, Sweden's Ericsson and Finland's Nokia dominated the handset market in India. Over the years, the old order has changed. Asian players like Samsung and LG, European brands Philips and Siemens now compete with Motorola and Sony-Ericsson. However, Nokia has been able to race ahead of all other players to become the leading mobile handset maker across the world. In India its dominance is even more pronounced with a 70 per cent market share, compared to around 30 per cent globally. Its closest rival in the Indian market, Samsung, comes a poor second with less than 10 per cent market share. Copyright ©2009 JIMNOIDA. Slide 3: Story of Nokia The Beginning The Mobile Evolution Mobile Revolution The first Nokia company began with idestam’s Paper mill on the banks of nokianvirta river. Between 1865 and 1867, the company would Become a major industrial force; but it took a Merger with cable company and a rubber firm To set Nokia corporation on the path to electronics.. Eduard polon founds finnish rubber works, which Later became Nokia’s rubber business. Copyright ©2009 JIMNOIDA. With the start of Finnish cable works, Nokia venture into cable and electronics Business started. Cable works starts its first electronics department, Selling and operating computers. Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation. Slide 4: Copyright ©2009 JIMNOIDA. Story of Nokia The Beginning The Mobile Evolution Mobile Revolution In 1981 Nordic mobile telephone NMT, the first international Mobile phone network is built and simultaneously in 1982 The Nokia DX200, the company’s first digital telephone switch, goes into operation. Nokia launches it first hand held mobile phone and then Equipment made by nokia is used to make the first GSM Call. In 1992 nokia decides to focus on its telecommunication business, GSM technology became more famous and Jorma olila Became the president of nokia and with his effort, before the End decade nokia became the master of the business Today nokia has n-series and e-series and is recognized as the Fifth most valued brand in the world, also has launched OVI, its new internet service brand. Slide 5: Copyright ©2009 JIMNOIDA. The Brand Indian Success Innovation The reasons for Nokia's stupendous success in India include amazing branding, a focused marketing exercise and distribution strength, among others. Nokia is one brand name that inspires all those who are into mobile culture Of all the different brand that touch our lives, nokia stands out significantly It has taken mobility step by creating product with continuous innovation And flooding the market with mobile of every segment. In a marketing first, in March this year Nokia opened a dedicated Concept Store which features the full range of Nokia products including handsets, mobile enhancements, ring tones, graphics, games, software and exclusive Nokia merchandise. Slide 6: Copyright ©2009 JIMNOIDA. Presence Relevance Performance Advantage Bonding Do I know about it? Does it offer me something? Can it deliver? Does it offer me something other than the others? Nothing else bests it? Weak relationship/ Low share of category expenditure Strong relationship/ High share of category expenditure Brand Dynamics Pyramid Slide 7: Copyright ©2009 JIMNOIDA. Market Segmentation Unique Messages Product Differentiation Top Segment ----------Classy Product Middle Segment--------Best Alternative Low End Segment-----High Tech Product @ Low Price Slide 8: Copyright ©2009 JIMNOIDA. Slide 9: Copyright ©2009 JIMNOIDA. Skimming Pricing Price Sensitivity Estimating Demand Curves Price Elasticity of Demand Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time. It is a temporal version of price discrimination/yield management. It allows the firm to recover its sunk costs quickly before competition steps in and lowers the market price. Price skimming is sometimes referred to as riding down the demand curve. The objective of a price skimming strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay. In practice it is impossible for a firm to capture all of this surplus. Slide 10: Copyright ©2009 JIMNOIDA. Inelastic Demand Elastic Demand Rs 15 Rs 10 100 105 (a) Inelastic Demand Rs15 Rs 10 Price Elasticity of Demand Rs 18000 (2000) Rs 8000-10000 (2004) NOKIA 8250 Slide 11: Copyright ©2009 JIMNOIDA. Nokia’s Skimming price strategy Slide 12: Copyright ©2009 JIMNOIDA. Examples of Price skimming NOKIA 8250 NOKIA 6600 NOKIA 9500 Communicator Rs 18000 Rs 42000 Rs 21000-22000 Rs 8000-10000 Rs 26000 Rs15000-16000 Rs 9000-10000 Rs 24000 Rs 10500 Slide 13: Copyright ©2009 JIMNOIDA. Penetration Pricing Nokia’s Adoption Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than to make profit in the short term. Now if Nokia would have adopted this policy then the prices of the new high technology and high quality sets would have been low in the starting which would have led to… Slide 14: Copyright ©2009 JIMNOIDA. Nokia Reinventing Netbook The Morph Concept Environment We:recycle We:concept Like most of the companies today Nokia is also reinventing itself through innovation and becoming more environment friendly… Launch of Netbook The Morph Concept we This is an initiative by Nokia to become more environment friendly itself and Also running awareness program for the people Slide 15: Copyright ©2009 JIMNOIDA. A Example of Morph concept “WE” concept production cycle we Slide 16: Copyright ©2009 JIMNOIDA. Questions for Discussion Discuss how Nokia used the skimming pricing strategy for its products. Give your comment on the strategy 2. What would have happened if Nokia have used the penetration pricing strategy instead of skimming? 3. Discuss the segmentation strategy of Nokia and comment on its efficacy? THANKYOU.