Nokia’s mission is simple, Connecting People.

Our strategic intent is to build great mobile products.

Our job is to enable billions of people everywhere to get more of life’s opportunities through mobile.

News - new strategy, new leadership, new operational structure

Nokia has recently outlined its new strategic direction, including changes in leadership and operational structure
to accelerate the company’s speed of execution in a dynamic competitive environment.

Major elements of the new strategy include:

• Plans for a broad strategic partnership with Microsoft to jointly build a new winning mobile ecosystem.
• A renewed approach to capture volume and value growth to connect ”the next billion” to the Internet in
developing growth markets
• Focused investments in next-generation disruptive technologies
• A new leadership team and organizational structure with a clear focus on speed, results and
accountability
“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” said
Stephen Elop, Nokia President and CEO. “Today, we are accelerating that change through a new path, aimed at
regaining our smartphone leadership, reinforcing our mobile device platform and realizing our investments in the
future.”

The strategy

Nokia’s strategy is about investing in and ensuring Nokia’s future. “I have incredible optimism because I can see
fresh opportunity for us to innovate, to differentiate, to build great mobile products, like never before, and at a
speed that will surpass what we have accomplished in the past,” Elop said. “We are going forward. We are not
going backwards. We have a strategy. We have a path. We have a future. And we can deliver great mobile
products. And despite all of these changes, we remain true to our mission, that of Connecting People.”

Regaining our leadership in the smartphone space

Nokia plans to form a broad strategic partnership with Microsoft to jointly build a global ecosystem that creates
opportunities beyong anything that currently exists. It brings together highly complementary assets and
competences. The Nokia-Microsoft ecosystem targets to deliver differentiated and innovative products with
unrivalled scale in product breadth, geographical reach, and brand identity.

Nokia would adopt Windows Phone as its primary smartphone platform, helping drive and define the future of the
platform by leveraging its expertise on hardware optimization, software customization, and language support.
Nokia and Microsoft would also combine services assets to drive innovation. Nokia Maps, for example, would be
at the heart of key Microsoft assets such as Bing and AdCenter, and Nokia’s application and content store would
be integrated into Microsoft Marketplace. Under the proposed partnership, Microsoft would provide developer
tools, making it easier for application developers to leverage Nokia’s global scale.

While Nokia transitions to the Windows Phone platform, Symbian will continue to offer considerable value to
Nokia, to our customers, developers and consumers. 200 million people use Symbian globally, and Nokia will
modernize the platform through investments in completely new devices with new features, hardware
improvements such as GHz+ processing capabilities and significantly increased graphics speed, as well as
software improvements.
Maintaining our volume and value leadership in the mobile phones space

In feature phones, Nokia’s strategy is to leverage its innovation and strength in growth markets to connect the
next billion people to their first Internet and application experience. By providing compelling and affordable,
localized mobile experiences, particularly to the emerging markets, our ambition is to bring the next billion online.
We will continue the renewal of our Series 40 platform in QWERTY, touch&type, dual SIM, Nokia services,
including Maps, Browser, Life Tools, Web apps and Money. We are also investing in the future; developing
assets (platform, software, apps), which will bring a modern mobile experience to the mobile phone consumers
and enable business opportunities for developers. These investments will be especially focused on growth
economies.

Sustaining our future as the world’s leading mobile manufacturer

To make sure we get ahead of the game on industry innovation evolution, our MeeGo efforts will transition into
an ongoing long-term market exploration of the next generation of devices, platforms and user experiences.

New leadership team, operational structure and governance to drive the change in strategy

This new strategy is supported by significant changes in Nokia’s leadership, operational structure and approach.
The renewed governance will expedite decision-making and improve time-to-market of products and innovations,
placing a heavy focus on results, speed and accountability. The new strategy and operational structure are
expected to have significant impact to Nokia operations and personnel.

April, 2011

Smart Devices: our business unit which focuses on smartphones, and additionally on exploring next-generation
opportunities in devices, platforms and user experiences to support our industry position and longer-term
financial performance.

Mobile Phones: our business unit focused on bringing a modern and affordable mobile experience to people
around the world.

NAVTEQ: a leading provider of comprehensive digital map information and related location-based content and
services for mobile navigation devices, automotive navigation systems, Internet-based mapping applications, and
government and business solutions.
Nokia Siemens Networks: jointly owned by Nokia and Siemens, is one of the leading providers of
telecommunications infrastructure hardware, software and professional services globally.

December 2009

Networks technology
China
Finland
Germany
India
Mobile devices and technology
Brazil
China
Finland
Great Britain
Hungary
India
Mexico
Romania
South Korea

February 2011
 2010 EURm 2009 EURm Change %
Net sales 42 446 40 984 4
Operating profit 2 070 1 197 73
Profit before taxes 1 786 962 85
Profit attributable to equity holders of the parent 1 850 891 108
Research & development expenses 5 863 5 909 1

2010 % 2009 %
Net debt to equity (gearing) -43 -25

February 2011

2010 EUR 2009 EUR Change %

Earnings per share, basic 0,50 0,24 108
Dividend per share 0,40* 0,40
Average number of shares (basic, 1000 shares) 3 708 816 3 705 116
Reportable segments
February 2011

2010 EURm 2009 EURm Change %

Devices & Services
Net sales 29 134 27 853 4
Operating profit 3 299 3 314 5
Research & development expenses 2 954 2 984 1
NAVTEQ
Net sales 1 002 670 50
Operating profit/loss -225 -344
Research & development expenses 751 653 15
Nokia Siemens Networks
Net sales 12 661 12 574 1
Operating profit/loss -686 -1 639
Research & development expenses 2 156 2 271 -5

April 2011
Personnel, Dec. 31

2010 2009 Change, %

Devices & Services 60 492 54 773 10
NAVTEQ 5 452 4 571 19
Nokia Siemens Networks 66 160 63 927 3
Corporate Common Functions 323 282 15
Nokia Group 132 427 123 553 5

10 major countries, personnel, Dec. 31

2010 2009
India 22 734 18 376
China 20 668 15 419
Finland 19 841 21 559
Germany 11 243 11 582
Brazil 10 925 10 288
USA 7 415 7 294
Hungary 5 931 6 342
UK 3 859 4 010
Mexico 2 554 2 619
Poland 2 122 1 937

Back to top

April 2011
10 major markets, net sales

2010 2009
EURm EURm
China 7 149 5 990
India 2 952 2 809
Germany 2 019 1 733
Russia 1 744 1 528
USA 1 630 1 731
Brazil 1 506 1 333
UK 1 470 1 916
Spain 1 313 1 408
Italy 1 266 1 252
Indonesia 1 157 1 458

Small package makes a big difference

The materials we choose for our packaging are selected to offer the best, most beautiful and most protective
solution with least environmental impact. An effective way to reduce the environmental impact of packaging is
through making the sales packages smaller, selecting sustainable materials and making sure packaging can be
recycled when it’s no longer needed. Already in 2006 Nokia introduced small, compact packaging which
consequently has become the industry standard for mobile phones. Our compact packages are made of a single
material, which makes them much easier to recycle.

The weight and size of packaging affects not only material use but also the emissions and energy required to
transport and store the products. In 2005 - 2010 we reduced the packaging size of our most affordable devices
by over 70%. This amounts to 240,000 tons of saved paper. Smaller and lighter packaging has also reduced
transportation needs. In theory, we now only need one third of the trucks to transport these products.
Looking at our entire portfolio, our packages are now 50 % smaller* in size than in 2005 and we keep making
them even smaller. More than 95% of our packaging is made from renewable, paper-based materials, of which
up to 60 % is recycled content. And when plastic is used, we are able to include up to 90% recycled content. We
are constantly working with our suppliers to increase the amount of recycled content in our packaging. All our
packaging is 100% recyclable.

* The weighted average volume reduction 2005 -2010

Excluding charger from the sales box

In May 2010 Nokia started selling the Nokia 6700 slide also without a charger at the Nokia Branded Retail shops
in the UK and Portugal. The device comes in an ultrathin Flat package that comprises also small user guide,
short data cable and a headset. The environmental impact of selling the Nokia 6700 slide without a charger in a
tiny package is around 25 % smaller when compared to the standard Nokia 6700 slide package with a charger.
This is basically due to reduced use of materials and reduced logistical impact. Excluding the charger from the
sales box also enables reductions in both energy consumption in the production phase and in the end of life
treatment needs.
Nokia has piloted product sales without a charger already during 2007 in the UK telesales by O2, and in early
2009 the Nokia online stores in UK, France, Spain and Italy sold the N79 black version without a charger. By
selling the phone without a charger we encourage people to reuse their old, compatible charger. Additionally it's
possible to use the PC data cable for charging.

Energy efficiency features

We're making our phones more energy efficient. But did you know that if your charger is plugged in and
connected to your phone it's still using energy, even if your battery is full?

We call this the no-load mode and typically two thirds of the energy that goes into a phone during its life is lost in
this way. We've been investigating and implementing ways to reduce this and overall energy consumption of our
devices.

• Our devices have a power-saving standby mode.

• Over the last decade we've reduced the amount of energy our best in class chargers use in no-load
mode by 95 percent.
• In May 2007 we became the first mobile manufacturer to put alerts into phones encouraging people to
unplug their chargers. We began with three new mass market phones and the alerts will be rolled out
across the product range.
• The energy that could be saved globally by all Nokia phone users unplugging their chargers when
their phones are full is equivalent to the amount needed to power 100,000 average-sized European
homes. So pledge to unplug!
• Our newest chargers go beyond the US Environmental Protection Agency energy targets, using up to
90 percent less power in no-load mode than the Energy Star requirement, and also meet the highest
European Union standards.
• We've introduced new Power Save mode with some of our latest devices, and plan to implement this
to many of our new products to come. Power Save mode helps you to save energy and can be
manually activated from the Power menu of the device.
We're also looking at the best way to use new sources of energy such as solar and fuel cells. In addition to
company activities, Nokia is driving energy efficiency in cooperation with industry. Nokia is part of of the
European Union's Code of Conduct focusing on energy consumption on no-load of mobile phone chargers. We
were among the firsts mobile phone manufacturers to sign the Energy Star agreement with the US Environmental
Protection Agency

Services

Ovi Maps

Free walk navigation shows you the shortest route to your destination on foot.

• Download Ovi Maps

Do Good on Ovi

Do Good for yourself, your community and the planet with a little help from Ovi.

• Go now

Nokia Green Explorer

Discover green lifestyle inspiration and share your eco-friendly travel tips.

• Join the community

MobilEdu

Providing wireless learning directly to your device.

Environmental strategy

Nokia aims to be a leading company in environmental performance. Our vision is a world where everyone being
connected can contribute to sustainable development. We want to shape our industry and drive best practices.

Achieving environmental leadership means minimizing our own environmental footprint. With the expansion of
mobile communications, this is all the more important. We strive to reduce the environmental impact of our
products, solutions, and operations. We also collaborate with our suppliers to improve the environmental
performance of our supply chain.

We have a user base of more than one billion people which means that we have a unique opportunity to make an
impact that goes beyond our own activities. That's why we aim to offer people products and solutions that help
them make sustainable choices. Together, we can achieve more.

Minimizing our environmental footprint

Nokia's environmental work is based on life cycle thinking. This means that we aim to minimize the environmental
impact of our products throughout our operations, beginning with the extraction of raw materials and ending with
recycling, treatment of waste, and recovery of used materials. We achieve this by better product design, close
control of the production processes, and greater material reuse and recycling.
Our environmental efforts focus on four issues:

• Substance management. We work closely with our suppliers and require full declaration of the
substances we use in our devices. Our work is based on the precautionary principle and we aim at
continuously reducing the amount of substances of concern. In addition, we explore the opportunities
for using new, more environmentally friendly materials, such as bio plastics or recycled metals and
plastics.

• Energy efficiency. We make sure our devices use as little energy as possible. We also work to
reduce the energy consumption of our operations, and agree on energy efficiency targets with our key
suppliers.

• Take back and recycling. We want to increase consumer awareness of recycling, offer superior
recycling in all markets and promote the recycling of used devices through specific initiatives and
campaigns. The backbone of Nokia's take-back program are the around 5000 collection points for no
longer needed devices in almost 100 countries.

• Promoting sustainability through mobile applications. We are developing mobile applications to

help people make sustainable choices and consider the environment in their everyday lives. A variety
of eco services are freely downloadable to Nokia devices via Ovi store.

Basic principles

Our environmental work is based on global principles and standards. Our targets are not driven by regulatory
compliance but go way beyond legal requirements. Environmental issues are fully integrated in our business
activities and are everyone's responsibility in Nokia. It is a part of everything we do.

We believe that environmental management has to be fully incorporated in our business processes.
Environmental issues are everyone's responsibility at Nokia and an integral part of managing our business
because they are related to all we do. Our environmental work is based on global policies and standards.

The Nokia wide Environmental Management System (EMS) according to the ISO 14001 standard covers our
production sites and large offices. All Nokia production sites are included in the company wide ISO 14001 single
certificate. The first manufacturing sites have completed the certification end of 2000. Certification is an ongoing
process, with all new production sites being covered by the certificate.The EMS in our large offices and R&D
sites is verified internally. We also require a certified EMS of our contract manufacturers and EMS is one of our
supplier requirements.

Our Environmental Management System consists of:

• Nokia's Environmental Policy

• Identification of environmental aspects, and evaluation of their significance
• Objectives and programs for achieving environmental targets
• Compliance with legal and other regulatory requirements
• Audits, management reviews, and continuous improvement
• Operational management (data and processes) for energy and water consumption, waste etc.
The goal of the Nokia EMS is to improve our environmental performance, focusing on:

• Energy consumption
• Water consumption
• Air emissions
• Ozone-depleting substances
• Waste management
• Packaging

Nokia's Environmental Policy

Basic Principles

• A successful business requires a solid product life cycle-based environmental performance.

• Nokia takes an active, open and ethically sound approach to environmental protection.
• The objective of Nokia's environmental policy is sustainable development in accordance with the
International Chamber of Commerce (ICC) Business Charter.
Implementation

• The environmental policy is part of the general management process.

• Line organizations plan and implement the action programs by using environmental specialists and
the best available technology.
• The action programs are based on understanding of the environmental impacts of a product
throughout its life cycle.
• Minimizing the environmental impacts requires continuous efforts and follow-up of the results; it is
thereby a part of the total improvement activities.

Managing our materials and substances

Nokia is an industry leader in substance management. Our main objective is that we know all the substances in
our products, not just those that raise concerns, and that they are safe for people and the environment when
used in the proper way.

Nokia is the first mobile phone manufacturer which, in close cooperation with its suppliers, has full material
declaration for our mobile devices. This means we can respond swiftly if new concerns arise about substances
we use.

Meeting health and environmental regulatory requirements is a basic requirement. It is our practice to use legal
compliance not as a mere baseline but as a starting point from which to grow.

We follow the precautionary principle. Where we have reasonable grounds for concern over the possibility of
severe or irreversible damage to health or the environment, we believe that lack of full scientific certainty should
not be an obstacle to triggering actions to gather and assess additional data. That may lead us to voluntarily take
steps, e.g. to substitute substances of concern with safer alternatives, where feasible alternatives are available.

We aspire to go beyond legislation and compliance, and proactively drive the development and efficient use of
more sustainable materials. We promote innovative and sustainable material choices, and work on this in close
collaboration with our suppliers.

We are actively researching the development and deployment of biomaterials. Biomaterials that are made of
renewable natural resources can potentially reduce dependence on fossil fuel based raw materials and thus help
minimize global warming, by decreasing CO2 and other greenhouse gas emissions. Our focus is on the
development of bio-based materials which do not compete with food industry. We've introduced fully renewable
materials in the Nokia 3110 Evolve. 50 percent of the plastics in its cover were bioplastics, made from renewable
sources. Since Nokia 3110 Evolve, we have continued to research and implement bio-plastics when those are a
viable and optimal solution for a given part and product. Nokia C7 is the industry first device to use bio paints.

Nokia C6-01 is the first device in the industry to use recycled metals, in the internal parts of the product. Metals
are recycled to some extent today, so some of the components used in this industry may contain a portion of
recycled metal in addition to the primary metal. What makes our approach different is that we have introduced a
process and clear requirements for the use of recycled metals, increasing the ratio of recycled content
significantly. For example, for stainless steel we require 75% recycled content and for nickel silver alloy a whole
97%. Nokia C6-01 uses both recycled stainless steel and recycled nickel silver in some of its internal parts.

We are actively researching the use of recycled plastics. We are working on to find ways to overcome durability
issues that currently result from the lower quality of available recycled plastics. Through extensive R&D, testing
and concepting, we make sure that all our devices - regardless of the materials used - meet the same standards
and have the highest quality, reliability and longevity. This ensures a maximum lifetime for your Nokia device and
thus reduces waste.

Nokia Substance List (NSL)

The Nokia Substance List identifies substances that we have banned, restricted, or targeted for reduction with
the aim of phasing out their use in our products. The list is divided into two sections, Restriction in Force and
Monitored Substances. We work together with our suppliers in investigating alternative materials and solutions
that will help us fully eliminate restricted or monitored substances from our total product line. The Nokia
Substance List will be updated annually. In addition, we will give interim updates on individual substance phase
outs as needed in these pages.

See the Nokia Substance list (NSL) in full. (XLS file, 785 KB)

All new Nokia devices are RoHS compliant and free of PVC. Starting from 2010 all our products will also be free
of brominated and chlorinated compounds and antimony trioxide as defined in Nokia Substance List.
About brominated and chlorinated compounds and antimony trioxide (restricted flame retardants) phase
out

A couple of years back, Nokia made an ambitious voluntary commitment to phase out not only brominated flame
retardants (BFR), but also other compounds of bromine, chlorine and antimony trioxide, as defined in Nokia
Substance List (NSL), from all our new mobile devices and accessories. Considering the breadth of the
substances to be phased out as well as our scale of operations, this project has demanded extensive R&D,
actions and cooperation with our suppliers.

By driving this phase-out project, we have been doing pioneering work, and in collaboration with our suppliers
helped clean out the industry from these substances, also for others who use same sources of components.
Despite the economic downturn, we have maintained and remain committed to our original aim. On November
2008, we launched our first device free of brominated compounds, chlorinated flame retardants and antimony
trioxide, ahead of schedule. Today, a total of 46 new Nokia models are free of these substances, based on NSL
definitions.

Looking ahead, we are proud to say that our new mobile phones and accessories to be launched during 2010 are
on track to become fully free of bromine, chlorine and antimony trioxide as defined in the Nokia Substance List.

About other materials & substances phase out

Nokia has banned the use of Beryllium Oxide since 2004 in all new products. The restriction for use of all other
Beryllium compounds has been in force since 2010 for all new products. Use of Phtalates in our products has
been restricted since 2005. The ban includes 8 different Phtalates of which 6 are restricted based on EU
regulation.

Working with suppliers on substance management

Our substance management requirements include the need to know, control and manage the material content of
the components and parts supplied. We expect our suppliers to integrate environmental considerations in their
design procedures and supply chain management.

Our suppliers must record the material content of products supplied to Nokia and make these records available to
us on request. We check that they are complying with these requirements and other social and ethical standards
through audits and inspections.

If we find a supplier is not complying, we ask them to take corrective action and check this has been done. We
work with suppliers to help them make improvements, offering examples of best practice, training and other
support. If a supplier were to refuse to address any of these issues we would be prepared to reconsider our
business relationship.

We work together with selected suppliers to develop indicators of environmental performance for the components
and materials in our devices. Involving suppliers in substance management means we can introduce new
environmental requirements quickly.

Nokia Substance management timeline:

From time to time we get questions about certain substances or general principles in our substance
management. We are addressing the frequently asked questions here.

About Nickel
All Nokia devices comply with strict global safety and quality standards. We use nickel at levels well within
current legal and safety limits. Our policy is that all our new devices are free of nickel on the product surfaces.

Since as early as 2001, we have voluntarily complied with restrictions on the use of nickel as defined in the EU
Directives 94/27/EC and 2004/96/EC amending the Directive 76/769/EEC. This directive was originally targeted
for products where the materials often are in direct skin contact for longer periods of time, such as jewellery. In
December 2008 EU Commission decided that this directive is applied for mobile phones as well. We have
addressed this requirement in advance.

The directive 76/769/EEC has been repealed by the EU regulation (EC) No 1907/2006 concerning the
Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) in June 2009.

Over 40 of our recent devices, such as the popular Nokia 5800 XpressMusic and the Supernova series, come
without nickel on the surface coatings or any underlayer, giving people with allergies lots of choice. The
information about whether a product includes nickel or not can be found in the eco declaration of each individual
product.

Some metal alloys used on product surfaces, such as stainless steel, inherently contain nickel, but standardized
testing has shown that these do not cause nickel sensitivity in the general population. However, Nokia offers a
wide range of models without stainless steel on their surfaces as well.

About RoHS Directive

RoHS stands for “the restriction of the use of certain hazardous substances in electrical and electronic
equipment”. The European Union’s new legislation restricts the use of lead, mercury, cadmium, hexavalent
chromium and two flame retardants in all electric and electronics equipment. Although this regulation came into
effect on 1 July 2006, Nokia introduced the first RoHS compliant product already in April 2005, over a year before
the legislation came into force. Currently all Nokia products are RoHS compliant not only in Europe, but globally.

RoHS legislation in the future

Nokia’s follows the precautionary principle in its material management. The Nokia Substance List (NSL)
expresses our view on the need for and application of the precautionary principle for the specific substances
relevant to our business/industry.

We are continuously and proactively phasing out substances according to these principles and welcome further
research of the environmental risks related to substances used in the ICT industry. The criteria and processes for
new restrictions need to be clear and transparent for the industry to be prepared and to be able to act proactively.
It is important to work together across our whole industry and suppliers to make this happen and gradually
replace these materials with environmentally more friendly alternatives or new technologies. In line with the
precautionary principle, Nokia favors voluntary initiatives by the industry, which is reflected in our publically
available Nokia Substance List.

In addition, the following principles should be taken into consideration:

• Restriction criteria to be based on potential risk in the full product life cycle – focus should be on
substances that are relevant for our industry
• Evaluation process well aligned with existing legislation
• Industry to be involved in the discussion about the processes and the practical implications
• For receiving CE marking on products, full material declaration should be driven forward as an
alternative for compulsory testing. In any case, compliance with legislation should be easily verified.

It is important that the enforcement of the legislation is uniform throughout the EU. Market surveillance needs to
be transparent and effective and it should be carried out together with industry parties.

To accelerate the implementation of key changes globally, further regulatory requirements may be needed. Nokia
is actively contributing to the development of systematic criteria and processes for improved RoHS legislation.
Nokia continues to support effective RoHS legislation to complement but not contradict with other legal
requirements. Nokia also supports further restrictions for chlorinated and brominated compounds, as already
committed to in our ambitious targets.

About REACH regulation

The EU regulation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH)
has been in force since June 1st, 2007. Nokia's basic principle is that the use of chemicals in Nokia products and
processes shall be safe to humans and the environment. Within REACH, Nokia has the role and responsibilities
of a downstream user. We continuously assess the substances and their uses in Nokia products and production
operations, and we are in active communications with our supply chain also regarding REACH and its
implementation. Nokia devices and accessories do not contain substances included in the current EU REACH
candidate list of “Substances of Very High Concern”, which REACH would require to be reported. However, we
voluntarily give information on our substance management, including REACH-related requirements, in the Nokia
Substance List which can be found from this page.

About Tantalum / Coltan

Nokia became aware of the potential link between mining of Tantalum and financing of the conflict in the DRC in
2001 and took action immediately.

Tantalum is a material used in many consumer electronics products. The mobile phone industry uses a very
small amount of the world’s total supply of Tantalum. DRC is one of the places where Tantalum, or rather Coltan,
one of the ores that it comes from is naturally found and mined. The country only accounts for a very small
amount of the world’s supply of this material, but it can be found in the east of the country where there is conflict,
leading to concerns that this Tantalum may be mined under conditions breaching human rights or sold to fund
war and illegal activity.

As soon as we became aware of this issue we began requiring suppliers of capacitors used in our mobile phones
to confirm they do not source this material from the conflict areas of DRC. This is checked on an ongoing basis,
and also monitored via the Nokia Substance List requirements. The DRC provides a tiny amount of the world’s
source of Tantalum. The vast majority of it is mined in other places around the world including Brazil, Canada,
Russia, China and a number of other countries in Central Africa

Climate Strategy - addressing the global challenge of climate change

Nokia created its first climate strategy in 2006. The strategy looks at the energy consumption and greenhouse
gas emissions of our products and operations and sets energy and greenhouse gas emission reduction targets
for our most important activities in areas that contribute to our direct and indirect greenhouse gas emissions.

Although Nokia is not an energy intensive company and most of the greenhouse gas emissions take place either
in component manufacturing by our suppliers or in the use phase of our products, we want to show leadership.
We do this by reducing our own energy consumption and CO2 footprint, raising consumer awareness on
measures they can take to reduce their own footprint and driving best practices in our value chain and industry.

Our current focus areas in greenhouse gas emissions reduction are within:

• Nokia products
• Nokia manufacturing, facilities and way of working
• logistics and supply chain
• enabling people to reduce their own greenhouse gas emissions
Our more specific greenhouse gas emission reduction targets can be found here.
To participate raising public awareness Nokia signed an international communiqué, along with over 150 other
global organizations, ahead of the December 2007 United Nations Climate Change Conference in Bali,
Indonesia. It urged world leaders to develop policies and measures for the business sector to contribute to
building a low carbon economy to help tackle climate change. Nokia's participation demonstrates our support for
the belief that the benefits of strong, early action on climate change outweigh the costs of doing nothing.

Targets

Check out our greenhouse gas emission reduction targets here.

Our greenhouse gas emission reduction targets

Our aspirational target is to reduce the greenhouse gas (GHG) emissions caused during the whole device life
cycle over 60% by the year 2020 compared to level in 2000.* To reach this, we have set ourselves targets for
specific areas of the device life cycle:

Product use

By the end of 2012: we aim to reduce the average charger's no-load power consumption by 75 percent from
2006 level.

We also continue to study new technologies which will use renewable energy resources, such as solar panels
and kinetic energy and develop solutions that enhance the energy efficiency in our products.

Manufacturing & our facilities

By the end of 2012: we aim to reduce energy used in production by 20% per unit produced compared to year
2008.

By the end of 2012: we aim to reduce greenhouse gas emissions per person working in Nokia Offices and R&D
by a minimum of 23% compared to year 2006.

By the end of 2020: we aim to reduce the Offices, R&D and Manufacturing facilities greenhouse gas emissions
by a minimum of 30% compared to year 2006.**

We will continue the development of our Green Data Centre strategy that is already implemented in Finland. The
development includes delivering targeted cooling, environmentally friendly backup power and power efficient
server racks.

Logistics

By the end of 2012: we aim to reduce greenhouse gas emissions per sales package produced by 20% compared
to year 2008.

Supply Chain
By the end of 2012: we aim to ensure that all our key suppliers set energy efficiency and greenhouse gas
emission reduction targets.

Travel & commuting

By 2012: we aim to maintain annual air travel related greenhouse gas emissions, both total and per employee,
clearly below 2008 level.

By 2012: we aim to renew the Nokia remote working framework and increase the number of countries where
employee public transport options are offered and where car lease policies are tied to lower emission limits.

Enabling people using Nokia phones to reduce their own greenhouse gas emissions

The above targets are what we can do in our processes but we can also enable people using Nokia phones to
reduce their greenhouse gas emissions several times more than caused during the life cycle of their devices. In
this area we aim to

• develop solutions that enable emissions reduction e.g. mobile device to replace several other
products (convergence),
• develop mobile services that replace physical products (dematerialization),
• develop services that reduce the need for unnecessary travel & commuting (navigation, virtual
meetings and remote work etc) and
• develop and apply best practices in measuring the enabling effect.

Our targets during 2008-2010

To sum up our previous targets and our performance:

• We have reached and exceeded our target of reducing no-load power used by our chargers by 50%
from 2006 to 2010.
• We created 6% of new energy savings in technical building maintenance systems between 2007 and
2010, in addition to the savings of 3.5% achieved already in 2003–2006.
• We reached and exceeded our targets to reduce facility related CO2 emissions by 10% in 2009 and
18% in 2010 compared to 2006 level

Positive impact

It is possible to reduce greenhouse gas emissions by using mobile technology. Read more here.

Reducing greenhouse gas emissions by using mobile devices

There is good evidence that information and communications technology (ICT) makes a major contribution to
GDP growth but at the same time can help to reduce the use of energy, thus slowing down global warming.
Technology enables higher energy efficiency by making homes, offices, transportation, and operations more
efficient. ICT based services and working methods such as remote working and video conferencing can result in
fashionlower overall CO2 emissions.

Today's multi-functional mobile devices can do their bit to help save the environment for example by eschewing
the need for separate navigator, camera and music players and offering all those features in one device.
Incorporating the functionalities of several products into one product can further contribute to dematerialization
and energy efficiency.

Around 1.3 billion people today own and use Nokia devices and services. We have great possibilities to
contribute to reduction of CO2 emissions with some simple and easy everyday actions. Read more about those
here.

We also provide comprehensive digital map information from NAVTEQ. According to their research, NAVTEQ
Navigation Benefits Study, drivers using navigation on a regular basis not only drive shorter distances and spend
less time driving, but also consume less fuel which decreases their CO2 emissions.

Nokia Siemens Networks is part of Nokia Group. The company provides a complete portfolio of mobile, fixed and
converged network technology, as well as professional services. Nokia Siemens Networks' goal is to develop, run
and enable environmentally sustainable business, which combines environmental and business benefits:

• maximizing the positive environmental impact of ICT by helping other industry sectors to reduce their
environmental footprint with our technology
Maximizing the positive impact
Smart energy for sustainable city living
• minimizing product impacts
Example: Nokia Siemens Networks pursues applications, partnerships in energy sector
Minimizing impacts of operations

Brand loyalty is to enhance the

competitiveness of the key mobile phone
brands
CCID Consulting recently released '2006-2007 Brand Competitiveness of China's mobile

phone research report ', pointing out that brand loyalty is the formation of the

competitiveness of China's mobile phone Industry a key indicator of the brand and improve

mobile customer satisfaction and replacement costs is to maintain the cell phone brand

loyalty degree of the main strategy.

In this study, the mobile phone Industry brand competitiveness rankings of the top five

brands are: Nokia, Motorola, Samsung, Bird and TCL. Nokia, Motorola and other
multinational brands with many years of the formation of a strong brand leadership and

brand loyalty is still living in absolute leading position. Replacement demand for mobile

phones, brand loyalty is the brand-driven consumer choice, a key factor in mobile phones.

After experiencing three years of trials, Bird, TCL, Amoi, Lenovo Mobile and other domestic

brands and gradually mature, and increase brand loyalty to these enterprises to improve the

brand's competitiveness.

'CCID Consulting brand competitiveness evaluation index system' is the brand's

competitiveness in this study of the basic theoretical framework, brand competitiveness, the

formula is as follows: Brand Competitiveness = r1 * Brand Leadership + r2 * brand market

power + r3 * brand loyalty + r4 * Brand Innovation + r5 * brand vitality, in which r1, r2, r3,

r4, r5 for the weights. In the 06-07 year, the competitiveness of mobile phone brands

comparison, the main contribution comes from brand loyalty. CCID Consulting's research

data shows that in 2006 mobile phone sales in China of 1.2 million units, of which the first

four vendors market share has exceeded 60%. Beginning in 2004, for three consecutive years

the market has been the top three manufacturers Nokia, Motorola and Samsung.

CCID Consulting nearly 100,000 in the sample survey of a sample, none of brand

loyalists only 18%, 82% of users have different levels of loyalty, of which the habits and

satisfied buyers mostly buyers, emotional dependence and absolute loyalty to account for

22%. Of which:

※ No Brand loyalists

Little or no consumer brand recognition, only the pursuit of the basic calling and

messaging features, is very sensitive to price and which low prices on the election to which

the brand, mainly concentrated in low-income consumers, the main tend to low-cost mobile

phones, PHS and so on.

※ habit of buyers

Consumers agree that certain kinds of brands, in the pursuit of basic voice and

messaging features, the pursuit of their own consumption habits and preferences in line with

features such as ring tones, camera, Internet and so on, price is also very clear, mainly

concentrated in the middle income consumers , the top five brands on the market and

tendentious. For this group of consumers, if a competitor has obvious incentives, such as
price concessions, a unique shape, promotions and other ways to encourage consumers to

try, easy to convert the brand to buy other brands. If a consumer uses the Nokia 7210 mobile

phone two years later, replaced by South Korea's days of sound mobile phone, because the

store promotions, another thin phone is suitable for women, price is also right. Replacement

demand for this type of consumer is to work hard to secure users.

※ satisfied buyers
Consumers are very satisfied with the use of the brand, but also has generated concern
on the brand switching costs, satisfaction from the product high quality, good service, high
visibility. Nokia mobile phones such as Nokia consumers satisfied with the quality, Motorola
Motorola's stylish consumer satisfaction. Clear boundaries in this category of consumers,
brand switching barriers increase. For example some consumers may feel satisfied with
Motorola Nokia some old-fashioned, while some consumers may feel satisfied with the Nokia
Motorola's software quality is worrying. But the product, marketing, and so the great
Innovation in the formation of brand switching can be the driving force. Such as smArt
phones led to the introduction of some consumers replacement, mobile phones also
contributed to Huafei for a number of satisfied buyers of replacement wave.
※ emotional buyers
Consumer brands already have a love and emotion, the brand is that they rely on
emotions and the mind, such as the Nokia Club, consumers have been using Nokia mobile
phones, the brand created around the circle of like-minded, the brand has become the
consumer's friends, life indispensable, not easily be replaced.
※ loyal buyers
Consumers not only brand that emotion, and even pride. As pArt of the high-end Nokia,
Motorola, Dopod mobile phone holders have such a mentality.
CCID Consulting released the '2006-2007 Brand Competitiveness of China's Mobile
Phone annual report 'pointed out that the main factors determine the impact of brand loyalty
are: decision-making inertia, satisfaction and switching costs. Consumer decision-making
inertia refers to the continuation of the previous decision-making habits, it is subject to
consumer Culture and consumer personality of a larger enterprise product differentiation
and decision-making related to inertia. Satisfaction is the consumer brand products or
services provided by the level of satisfaction. Studies have shown that significantly higher
than the expectations of consumers of psychological conditions (ie very satisfied) can
establish and enhance the loyalty of great help to the situation was significantly lower than
expected (ie, very dissatisfied) is to act as anti and shake the loyalty of effect. Switching costs
is the choice of consumers to shift from the original choice to pay the new price. If switching
costs are too high may result in loss of freedom of consumers can not accept other choice but
to repeat the previous decision-making. Therefore, the CCID Consulting suggested that the
mobile phone Industry to improve brand loyalty of the basic strategies are:
First, the rigid core values of the brand positioning, consistent and lasting brand in the
consumer mind status. 'Technology to people-centered' is the brand of Nokia has
consistently adhered to core values, brand communications, products and services around
this core value of long-lasting appeal. Second, differentiation, refined product and service
Innovation to meet the different levels of demand for consumer decision-making inertia.
Third, the balance between customer satisfaction and switching costs, continuing to enhance
brand loyalty. Customer satisfaction from the functional requirements, performance
requirements, psychological needs, and so many demands will be satisfied, which is the
source for brand excellence; but on the other hand, relying on emotion, the use of habit,
respected brand association is able to effectively improve the brand switching costs, thereby
enhancing brand loyalty.

'Positioning Evolution' - after the failure of the

strategy of positioning strategy
The pain in the preamble strategy - in a dilemma between the stick and change
Positioning strategies for the successful implementation of the performance excellence
of enterprises, while continuing to strictly comply with the rules of business focus on
positioning, operations and opportunities for trade-offs with that after the results are still
caught in a gradual decline, the brand had been neglected situation, which became
'positioning strategy' in actual business operations were a major cause of widespread
controversy, and even a lot of people began to doubt, as a strategic location, is not it also be
able to stand the test of time, if not withstand the test of time, how can we be worthy of pay
have made unremitting efforts to be achieve Everlasting enterprise? Strategic reason for the
strategy, there should be a long time, the stability and future of the strategic to be able to
become a beacon of the ship. 'Positioning strategy' in the end there is no such capability? If
not, positioning is not be reduced to one only has the phase of the tactical significance of
behavior? A hundred years in this business is not to constantly adjust the positioning
hundred years in order to gain a competitive advantage can be sustained forever?
As such, it is not can be said to 'change strategies' should be higher than the level of
'positioning strategy' do? The fact is that some companies do indeed experienced a century of
business focus, business transfers, and so earth-shaking changes in survival to the present,
for example, IBM is well-known Experience of a number of rebirth as a strategic
transformation, it has successfully reached the present, while the year and IBM as a strong
business because there is no implementation of the changes had to disappear.
However, puzzling, as in this is in a rapidly changing times, it was an era of rampant
opportunism, change the concept of early integration into the business of blood, many
companies are chasing the trend of the masters, like the beauty of these enterprises to
implement changes as frequently changing clothes and easy, these companies will not give
up on the market drifting across almost any hot spot, each one has to follow the trend of its
presence in the ranks, but these companies seems to have no success, a period of time after a
brief chase, suddenly discovered That turned out to be successful away from the fashionable
who are willing to lonely position.
So believe in change the ideological orientation of the entrepreneurs and believe in the
entrepreneurial ideas are beginning to depressed, location and change in the end which is
the highest guiding principle of business do? How one would like to Everlasting customized
strategy? Given the uncertainty of future trends, how to locate and change to achieve a
balance between the long-term viability and to ensure that enterprises do it?
We need to systematically look at positioning and the dialectical relationship between
the change.
 [b \ a, location - the peak of the brand into the brilliant strategy [/ b]
Location lies at the core of competition in a certain situation, to focus firmly occupy a
key position for determining the overall winner in a competitive market full, this key position
is the consumer's mind, so Marketing positioning is doing everything possible to concentrate
its resources on the core of make their own brand in the minds of consumers to gain a clear
and strong position. Positioning meet the 'focus' and 'expertise' of these two basic
management principle is to make certain competitive situations, the optimal choice.
Any positioning strategy are realistic and predictable conditions made the best course of
action is based on competition and demand to make the best choice, and through this choice
to organize enterprise resources to form a business with that system, the establishment of
clear-cut strong business focus, in the market competition to gain a competitive advantage,
into the can Industry leaders, sub-organizations can also exclusive corner, when the various
aspects of the terms are not a time when great changes took place, this advantage will
continue to maintain, and develop a dynamic equilibrium.
The value of this position lies in a balanced environment in the best competitive
advantage, and get bigger than those without targeting the enterprise market share or higher
profits. Without a clear positioning of the company or how to follow the leader, and most of
the imitators, like mediocrity, or else to frequent changes in direction, it is difficult to form
anyone, in the market; either the business spread is difficult to form a cohesive force; are
difficult to The current competitive environment, access to the dominant position, and
gradually decline and even extinction can be seen, positioning allows an enterprise to win a
war victory.
Whether the strategic positioning of the difference is, that there are positioning strategy
of the company the chance of success, there is no positioning strategy, companies have not
even had the chance of success. Significant changes in the environment does not occur when
the 'position who' will prevail 'does not target those who'; environment has undergone a
major change, 'has targeted those who' of the impact resistance is greater than 'those who do
not locate'.
A successful positioning strategy enables a company to dominate an era, the era of Coke
Coca-Cola and Pepsi have been dominated, and Wong Lo Kat herbal tea of the era was
dominated, and the era of general-purpose microprocessors are Intel dominates the search
engine google and the era was dominated by Baidu , and online fair trade market is
dominated by Taobao, and soya-bean milk was dominated by 9-yang, and humidifiers are
dominated by Asia, excluding oligopoly example is not that the brand in a highly competitive
area of highly concentrated, entrenched themselves in the market account for the vast pArt
of the share of the enterprise, there is a distinct strategic position, such as the worldwide PC
brands HP, Thinkpad, Dell, Acer, Thinkpad targeted at high-end computers, dell computers
located in direct sales. For example, Mercedes-Benz vehicles located in areas of exclusive
travel experiences, BMW located in the ultimate driving experience, these brands through a
distinct positioning strategy stands in the industry, the top of a short period of time for a
long maintained a strong competitive advantage.
Second, lose power and influence - every successful positioning of the inevitable end-
result of
Changes in the universe, after all, is the eternal theme of rapid technological innovation,
changing consumer perception, popular idea after another, companies will one day where
the market environment has changed enormously, enterprises in the initial reliance by a
variety of favorable conditions for no longer exists, the original location of the consumer
mentality which has undergone a radical change, companies face from the huge impact of
environmental change.
Even if a successful strategy for re-orientation can not be excluded a huge unforeseen
impact of losing its competitive edge.
If a new element of the changes involved, the market situation has undergone great
changes, based on this pattern, the market positioning will be tremendous changes in the
emerging influence, and some factors that influence changes in the original, if it is based on
the favorable business location factors, then the result of changes in this great location is this
competitive advantage arising from status will no longer exist.
For example, the mobile phone market, Iphone caused by the sudden accession to the
subversion effect for the "authentic" mobile phone makers, is a huge and
unpredictable changes, such change on the formation of Nokia's competitive advantage in a
huge impact, and Nokia mobile phones market leadership created a serious threat, which is
the recent Nokia and Apple's intellectual property rights progressively upgrade the main
reason for the war.
Can be basically determined, as google and other non-traditional cell phone
manufacturers gradually join, all kinds of changing the concept will be brought into the
mobile space, Nokia's dominance will be taking a step forward under threat.
In the Coca-Cola and Pepsi in the result of 'authentic Coca-Cola' and 'young Coke' and
fought fiercely, when the concept of consumers are conducive to healthy drinks in quietly
shifting the direction of the entire Coca-Cola camp in the face of being fruit juice, milk drinks
and herbal drinks quietly eroding situation.
Kodak film and Fuji film in the world of that life and death played a few years, digital
imaging is gradually growing in the quiet, when Kodak and Fuji would not be so quick to
change from my comfort when the new digital camera makers are tight at full speed to
chasing a catch, until the gradual improvement of image quality of digital cameras and to
completely capture the many advantages of digital consumers, however, Kodak and Fuji was
felt before the tsunami waves, can be all it was already too late, even after a number of
struggling to no avail later, Kodak and Fuji already lost consumer digital camera market.
An example of this is too much, every time a major change within our industry, basic
industries are a major reshuffle, once all-powerful in the Industry giant dinosaur-level, very
few can continue to maintain a competitive advantage. Not only that, in the face of great
changes in the environment, it had the advantage and success will often become a stumbling
block to adapt to change. These enterprises are operating a high degree of focus on the status
of the Industry positioning of prominent enterprises in a relatively predictable market
environment, companies positioned for success to win the advantage in a time when
enterprises are faced with unexpected change, the original location model has become
further the Development of fetters.
Question boils down to, in fact, is an enterprise to adapt to the environment and
advantages of survival. In order to better adapt to the current environment, location-based
enterprises in the operating mode, the personnel structure, management style and other
aspects of corporate Culture and even take a lot of choice, there is no fat on the formation of
the adaptive system in the current environment in order to become the most good, and to
continuously strengthen the process in operation and distribution of such trade-offs, said the
competitive environment in order to fit the height, forming a strong positioning strategy, so
that enterprises in the process of gradually implementing targeted approach would be to
inculcate a 'paranoia 'The trade-off culture, that Culture very well in helping to keep the
focus of the enterprise can continue to maintain your advantage, but the disadvantages of the
corporate Culture that is easy to form' businesses paranoid personality '.
 The performance of this paranoia is the biggest new technology, new models, new trends
of 'selective blindness', the most fundamental reason for the success of the original is still
extremely worship, incomparable to the original concept of identity, for any conflict with the
original glory ideas and things from the heart, in the negative, there is even more to talk
about being moved, and thus still less adapted. So watching their established markets have
been gradually eroded, new dynamic high-speed growth of the brand has attracted a
customer base of research throughout the pandemic, customer acceptance of new brands
increasing market share increased gradually, however, all these Like the gradual warming of
the warm water, did not sweeten this paralysis, death threats and place the frog was alert,
still immersed in yesterday's brilliant being.
Finally meet a tragic death ushered in the day, a landmark event, or an explosive news
will be all white in the world, and finally a thorough business tightly guarded by the fall of
the market, many new brands completely occupy the mainstream market, the original sub -
Marketing channels have been eroded, companies massive outflow of talent, companies are
transferred to a huge loss, business operations into a major dilemma, the original is now
reduced to a strong brand synonymous with old-fashioned and backward, completely lost the
opportunity to turn around. Complete a successful positioning of the declining trend that
day.

Third, evolutionary - change in the situation to survive the inevitable

To face their own market has compromised while they have no strength to fight back, no
one company would have no reaction to this huge change in the situation would certainly
greatly stimulate the old camp, some of the enlightened persons, self-help is a brand to do
towards the end of life up attempt.
Westernization Movement, however, efforts have also doomed in any case can not be
successful, a brand has been a complete failure to do a partial tinkering will only delay the
dying of the speed is not the power of new life, a brand because of the ultimate failure of the
basic Time to do initially targeted environment has ceased to exist, the core of the old
location remains unchanged, Zhizuo partial amendments, such amendments, which give the
brand focus is dispersed into the situation, not only did not adjust the direction of a good
also lost the original The sharpness, go from mediocre, which is the usual outcome of most of
the advantages of one brand.
The only viable strategy is to completely abandon its old location and re-establish a new
positioning, re-done in the new environment, new business focus, to re-establish a new core
competencies leaving, and around the new location re-organization and dubbed in enterprise
resource , re-fight a battle.
Do not worry about this point arise, do not worry about whether the new brand in the
market, legislation is maintained feet, you want to see that in this market dynamic new
brand is now maturing, but there will be several new brands which are destined to survive
occupy the market, you have to do is to completely put down the original brand advantage,
brand association, to abandon the operation of the original ideas, so that there is no
historical baggage itself into a new brand, and become the ultimate once again dominate the
new market brands.
At this point, a successful brand positioning, and a person's life is the same, like the
positioning and human life is life, and eventually through growth, to glory, towards the old,
final and complete the process of dying, and some positioning live longer, some shorter, but
in the end the trend of dying is inevitable, a final effort of the life orientation may be slow,
but when one is in treatment of senile by the positioning of the input-output on living
beyond their means, from the an Economic point of view it is not rational, the only value is
that the old brand of a comfort feeling.
Every successful brand is represented by an era of a hundred years after enduring
enterprise, and his brand to be gone through several major changes, gone through a number
of death and rebirth on many occasions, death and rebirth process, was to re-establish the
position of the process, after repeated positioning, enterprises be able to go now, you can say,
'positioning and orientation evolution' is a business to maintain a permanent core of
sustainable competitive advantage, positioning the evolution of long-distance relay race like
a relay baton handover process, each one participants in a sprint is the first location, position
and orientation between the 'positioning evolution'.
But the 'position evolved' and the relay still have differences, the relay rod of each player
are the same movements, each continuation is physical, while the 'position evolved' in order
to get rid of the inertia on a stick, in the new the best environment to make new moves.
Maybe someone will ask, if we did not locate, is not no need to evolve it, I do not do so
many companies choose not to do so focus on the positioning of a number of broad business
scope, change come I can follow up Well, Industry leaders do what I am going to do, go with
the flow is wrong. In fact, this way of thinking on behalf of most of the enterprises of the real
idea of where the error of this thinking it, positioning and orientation evolution of the
discussion between the top player on the gold medal race, if you do not locate, you are first to
lose a competitive advantage, reduced business players, since it is amateur, a person is to
participate in long-distance race, there are to participate in the high jump, but also table
tennis and rhythmic gymnastics could also jump, how to do can be, the result is you get a
gold medal with an opportunity to not, not to talk about non - gold medal in the on-going
too. Positioning errors of thinking evolution is a gradual improvement of superstition. Little
do they know an Olympic gold medalist re-select sports, once again won the gold medal
chance is almost zero.
Here involves a more profound question, how to define a positioning end? Positioning is
a need for the gradual optimization, and in what circumstances will null and void and
gradually improved, but must be to declare the death of a positioning?
There is only one situation must be to announce the death of a position, that is 'old
location' face 'era of change'. 'Carriage era' position facing 'vehicle age' arrival, 'shoes era of'
face 'sports shoes Age' to come. 'MiniComputer era of' positioning to face 'personal
Computer age' arrival, 'traditional business era' positioning face 'network operators age' to
come. 'Coke era positioning' face 'Juice era' of the arrival of a new era marked the decline of
the old days, in the old days, a strong dominant position will face the threat of extinction,
dinosaurs ruled the Earth up to 150 million years, but in the end with the end of the
Cretaceous completely out of the stage; Chinese civilization has always been the world's most
powerful civilization, but with the end of the decline of the feudal era.
The so-called times have changed, meaning that the basic environment has undergone
fundamental changes, revolutionary changes in Technology or the concept of the basis for
the complete destruction of the old, the old location to all the bases are broken, strong style
has become outdated now jokes, brand is a new generation of completely abandoned.
Fourth, break - a sensible evolutionary path location
If your strategic positioning, unfortunately, met with a great epoch-making changes, all
the arrogant, self-comforting, and lost their sense of are related to resolving the issue, and
consider how to rally his forces is the most important thing.
Incremental improvement is no chance of the old and new models of co-existence of the
fence there is no chance of winning the opportunity, because at this time placed in front of
the old brand is a deep and wide 'era gully', this 'era gully' to see not seen or touched, like a
generation gap between people like the abysmal, ravines on both sides represent the two
have completely different values, or two completely different alternative categories, or is
completely different, but can be alternative business models. It is this deep ravine of 'old
location' stopped in a ravine on the other side, leading to the old location can not
incremental adjustments, be achieved through the modest follow-up. Old brand the only
viable approach is to give up all the historical burden and concentrate on the full leap in
order to have chance of success.
The existing strong brand name is the first one to consider the historical baggage to be
discarded, because you do not give up the brand, consumers still think you are stuck in the
past, if the new position does not give up the use of an old brand, then the only option is to
completely abandon the old business and the old location, so that the old brand has been
completely emptied, was to recognize that consumers have and the old business has no
relationship, and then into the new business, the famous luxury brand Hermè s (HERMES ),
establishing the early stages of a focus on the brand leather harness, with the consummate
craft is known, however, as the auto age, the arrival of the horses as their means of
introduction of the stage of history, horses with complete shrinkage of the market, Hermes
(HERMES ) completely gave up the only remaining harness market, business turned to
leather travel bag business, the success of a market decline from the horse's fate, embarked
on a travel leather goods market behind.
Kodak was a classic example of a new era of abandoned, Kodak began to study digital
photography technology, the time better than any of a digital camera giants late, numerous
financial and material inputs, but also made good progress, it can be said from the full
technical ability to occupy the digital camera market, and Kodak have chosen to let the
Kodak brand is also across the traditional camera and digital camera market, although the
establishment of a new company, however, is still the name of the Kodak brand, 'Kodak
brand' in the traditional camera market The decline to a large extent an impact on his rise in
the digital market.
Taobao's rise something we can learn, with e-commerce the next line, the high battle
hiking, Ma felt it necessary to c2c Alibaba area planted one of the most important piece, but
the new pieces Zheke Alibaba b2b need to get rid of the old image of the interference. In
order to completely disassociate with the concept of entanglement between b2b, new c2c site
does not use Alibaba's name, but played a brand new name: Taobao. Taobao on brand trial
operation, with the traditional Alibaba is completely independent, without a firm foothold in
Taobao, when Alibaba internal or even most people do not know Alibaba's Taobao is the
business, so that Taobao Alibaba does not rely on any known circumstances of self-reliance,
Ma convinced that the right Business model to use a lot of brands do not need the
background of financial and personnel support only a matter of fact, too, the way Taobao
grow, until it became the pride of Alibaba Group, only when Ali glory.
Nokia and Intel transition is a typical example, Nokia was founded in 1865, after the
establishment of 100 years, are engaged in wood processing, paper and rubber and other
traditional business, until the last century, 70 years began to enter the telecommunications
equipment manufacturing area, and thus completely abandon the traditional business,
completely focused to the field of telecommunications, has today become the field of control
of the global telecommunications giant.
Intel's focus in building the business is not the beginning of the microprocessor, but
memory, memory, once occupied a great proportion of Intel's business practices until the
Japanese companies with unmatched cost advantage to launch a strong attack on the
memory market, Intel face of such situation, determined to abandon the memory business,
instead focusing on general-purpose micro-processors, micro-processors quickly establish a
competitive advantage, until now has been the world's universal micro-processor control
over 80% of the market.
To achieve a successful evolution of brand positioning, 'Clear Thinking' is very
important, the old team, holding the old way of thinking, continuation of the old
management model can only continue to go on the old road, this time at the helm as the
company's drive needs ton output capacity in this respect the Japanese approach is very
commendable, the decline Nissan eventually even commissioned the French Al Gore at the
helm, Gore just did not have the historical baggage capacity, there is no inertia of thinking
Nissan, Nissan can easily get rid of the shackles of old thinking not subject to the Nissan
intertwined within the deep-rooted interests, developed a simple and powerful strategy,
successfully Nissan out from the quagmire of the lira.
Enterprises can be made into century-old heritage, the brand can be a hundred years
long after the key to success lies in businesses to do a good job 'strategic positioning relay', at
each stage can be clear and straightforward to do a good strategic position to make a
competitive advantage in the face of 'era transformation 'such a great change, can indeed
implement the' positioning evolution ', to abandon the old thinking of the past, re-build a
competitive position. They were able to form their own clear and strong strategic positioning
of the pace to cope with the ever-changing steadily forward.

Marketing Strategy for Nokia

For this project I have been instructed to come up with a marketing

strategy for an existing company/product I have chosen to do Nokia
communications, particularly the mobile phone sector of Nokia's
business. To do this properly I will need to:

* Appropriately identify, collect and use primary and secondary data

that is relevant to the marketing strategy of Nokia.

* Produce a clear analysis of the external influences affecting the

development of a marketing strategy.

* Complete a realistic rationale for the development of a coherent

marketing mix for Nokia communications.

* Show a full understanding of a marketing strategy for Nokia with a

clear understanding of marketing principles.

* Produce a full, well-balanced marketing strategy that reflects

appropriate use of marketing models and tools.
Introducing the product
-----------------------

Nokia is a communications based company, which focuses on mobile

telephone technology. When mobile phones first became available on the
market the models were very basic with the best technology being SMS
messaging (sending written "text messages" from one phone to another).
Then the next advance in technology was being able to put different
faces on your phone (different style covers for the front and back of
your mobile device) and after that the technological advances have
come thick and fast, with advances such as:

* MMS

* WAP (internet)

* Polyphonic ringtones

* Predictive SMS (where the phone will finish off a word for you if
it can guess what you are typing)

* Camera phones and

* Video recorders

Competition in the market

-------------------------

With all this technology available in the communications market it is

obvious that Nokia will have lots of competition, they include:

* Sony Ericsson

* Samsung

* Motorola

* Siemens

* Panasonic

* NEG
* Sagem and

* Toplux

With all of these competitors in the market Nokia must keep ahead of
the game by running successful marketing strategies, to do this Nokia
must focus on the principles of marketing. At the moment Nokia are the
world's best selling phone company (see table below which shows market
share). Nokia strengthened its lead as the No. 1 vendor in the market
during 2000 with shipments growing 66 percent over 1999. Some of the
company's success was attributed to a strong second half in 2000 when
59 percent of sales occurred.

1. Nokia 37.2% (34.7% 1Q02)

2. Motorola 17.3% (15.5%)

3. Samsung 9.8% (9.6%)

4. Siemens 8.5% (8.8%)

5. Sony-Ericsson 5.2% (6.4%)

Marketing principles
====================

There are many priorities within a business, but in a marketing

orientated company like Nokia, many of the following principles will
be high on the agenda:

1. Customer satisfaction: Market research must be used to find out

whether customers' expectations are being met by current products
or services.

2. Customer perception: this is based on the images consumers have

of the organization and its products, this can be based on; value
for money, product quality, fashion and product reliability.

3. Customer needs and expectations: This is anticipating future

trends and forecasting for future sales. This is vital to any
organization if they wish to keep their entire current market
share and develop more.

4. Generating income or profit: This principle clearly states that

the need of the organization is to be profitable enough to
generate income for growth and to satisfy stakeholders in the
business. Although satisfying the customer is a big part of a
companies plans they also need to take into account their own
needs, such as:

5. Making satisfactory progress: Organizations need to make sure

that their product is developing along with the market, if a
product is developing well, then income should increase, if not
then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know

what is happening within their designated market, if it is
changing, saturation, technological advances, slowing down or
rapidly growing, being up to date on this is essential for
companies to survive.

There are also certain external factors that a company should be very
aware of, such as P.E.S.T factors (political, environmental, social
and technological) and also S.W.O.T (strength, weakness, opportunity
and threat). A business must take into account all these constraints
when designing and introducing a marketing strategy.

P.E.S.T:

Political factors- Legal constraints (such as the G3 technology

constraints that Nokia have to take into consideration) must be taken
into account because many businesses aim to make a profit so they may
be tempted to mislead their customers about prices, quality of
products and the availability of their products. They may also try to
cut expenditure by using lesser quality materials in their products
(such as weaker materials for Nokia cases and batteries), also some
companies may also dispose their waste in ways that damage the
environment (pollution) and not ensuring high standards of hygiene and
safety in the workplace and outlet stores, all of these are illegal
and can leave companies in big legal trouble.

The governmental bodies in the U.K have introduced new laws into the
business environment, which ensure that none of these procedures take
place; if a company is to be successful they must follow all of these
laws.

Environmental social and ethical factors- some businesses view profits

are more valuable then a strong ethical code and this can govern
behaviour and business conduct. Some un-ethical practices are against
the law and companies can not become involved in them (I have
mentioned these above) but there are also some practices that aren't
illegal by law but are considered highly un-ethical by the consuming
public, companies who engage in these practice's can lose a lot of
market share if they are found out. An example of this is cosmetic
testing on animals, it is legal but some of the consuming public are
not happy about it and boycott Certain products because of it,
companies must be very careful about how they conduct themselves.

Nokia have managed to be quite environmentally friendly and have not

done anything that the consuming public have taken huge offence to,
they have been very careful about this and this is one of the reasons
they are such a popular brand of mobile phones.

Technological- In the communications market technology is perhaps the

most important factor that companies like Nokia have to take into
consideration. They have to keep up to date with all the newest
technological advances (like camera and motion capture phones) if they
are going to capture the biggest market share and stay ahead of their
competitors (Sony and Seimens).

S.W.O.T

SWOT analysis is also another way of deciding on a successful

marketing scheme, we must look at strength, weakness, opportunity and
threat.

Strength (internal factors)- Is looking at the companies current

market share and researching how recognised Nokia is amongst consumers
in the target market. Nokia is currently one of the most popular
Mobile communications companies in the industry, generating over
52,000 sales in 1997, which was a 34% increase from 1996. Nokia's net
sales for the October-December period in 1997 came to a total of FIM
15 857 million (FIM 12 669 million in 1996).

Weakness (internal factors)- This is basically looking at where the

product is failing or not doing as well as it should in the market.
Nokia's problems are that:

1. They are currently aiming their products at a saturated market

segment.

2. Their wage costs are forever rising.

3. Higher import charges have now been put into place.

4. There are some quite high supply chain costs that Nokia are
currently paying.

Opportunity (external factors)- This is the area in which Nokia can

make more profit, or gain more market share. There are 2 ways in which
Nokia can currently do this:

1. Improve the technology that they are using to make their phones and
use in their products, for example, camera phones and advanced picture
messaging would attract new consumers to purchase phones under the
Nokia brand name.

2. Using innovation to re-invent their products, change and develop

within the market to offer something none of the competitors have.
Also the fact that phone call charges are being forced to fall should
prove to be an opportunity for Nokia to sell to the people, who
previously may have not purchased a phone because of higher call
charges.

Threat (external factors)- This is looking mainly at the competition

that are taking away Nokia's current market share and also government
legislations (the total costs of 3G licensing in Europe is 110 billion
euros) that could hinder Nokia's development as a company.

For an existing product it is often useful to draw up an Ansoff's

matrix, in order for Nokia to grow as a business we must look at:

· Market penetration

· Market development

· Product development and

· Diversification
Market penetration- the aim of market penetration is to sell existing
products to an existing market, to do this Nokia must do a few things:

1. Change the pricing scheme (for example, penetration or competitor

based)

2. Introduce discounting

3. Start up a different advertising campaign or consider changing an

existing one.

Market development- To complete market development successfully, Nokia must look into the
following:

· Researching and selling to a different market (in case of saturation

or poor market share)

· Change times that television adverts are aired at and alter the
places in which print adverts are being displayed (this can help your
products appeal to a whole new market segmentation)

· Lower current prices to help the products appeal to a wider range of

consumers.

Product development- This area of the Ansoff's matrix involves keeping

up to date with the latest technologies available in your chosen
market and using them to appeal to different people (for example, WAP
phones are aimed at more professional people while Camera phones are
aimed at the youth market)

Diversification- This refers to developing technology that offers

consumers something new or different, this is the most common way of
companies trying to gain greater market share and increase their
profits.

Market research

A businesses success is based on whether they can give the customer

what they want and when they want it. Market research involves the
collection, collation and analysis of data relating to the consumption
and marketing of relevant goods and services.
The purpose of market research is really to find out whether there is
a gap in the market for your product or service or whether you can
make customers want your product through persuasive adverting. We
already know that there is a market for mobile phones but the current
market gap has become saturated (or if not saturated, almost
saturated) so Nokia need to find a new market segment to aim their
products at. In order to classify the wants and needs of the consuming
population, companies need to gather information on the following:

· Consumer behaviour- How do customers react to advertising? Whether

they are partial to prize give-aways or free gifts? What are their
reactions to new and developed products?

· Buying patterns and sales trends- Organizations need to look at how

buying trends and patterns are affected by class, gender, religion and
region. They also need to understand how buying patterns change over
time and what markets are expanding and are worth trying to enter and
obviously which markets are contracting and companies shouldn't aim to
enter into.

· Consumer preferences- What customers are looking for in a product,

for example, style, colour, technology, amount of outlets, customer
service and promotional styles.

· Activities of competitors in the market- Nokia need to examine how

their rivals are adapting their prices and products to meet the
consumers need's, how well the rivals are selling and what marketing
strategies they are using.

Market research should supply the company with all the information
they require about consumers preferences, whether they buy certain
products, what design features are preferable and what kind of retail
outfits are most frequently used for purchasing certain products.

Sources of marketing information

The information that companies collect through market research can be

in one of two forms, either quantitative or qualitative data.

1. Quantitative data refers to data presented in numerical form,

usually figures, for example, Nokia's operating profit in the 4th
quarter of 1997 was 830 million.
2. Qualitative data is the information concerning the motives and
attitudes of consumers; for example, more people buy Nokia phones then
Sony phones because Nokia phones are more reliable.

The two main sources of market research information are primary

research (where the company has gathered the information about the
markets themselves) and secondary research (when researchers use
information that has been discovered by other companies).

Methods of collecting primary data:

· Face to face survey

· Open ended interview

· Telephone survey

· Postal surveys

· Consumer panels

· Observations

· Experiments

Methods of collecting secondary data:

Internal sources:

· Existing reports

· Distribution data

· Shopkeepers opinions

· Stock records

· Sales records

· Accounting records

External data:
· Government statistics

· Specialist business organization, for example, Mintel or Neilsons

retail audit.

· Consumer databases.

To help decide what market segment to aim at companies can also look
at the buying habits of customers. In order to make decisions about
the type of products to make, what advertising to use, promotional
tactics, pricing and packaging. Nokia will need to know about the
following:

1. The types of goods customers buy

2. How much they buy

3. How often they buy

There are also certain variables that can affect peoples buying
habits, they include:

1. Age

2. Gender

3. Area they live in

4. Religion

5. Lifestyle

6. Taste

7. Fashion and preferences.

Market segmentation

In order to plan their product Nokia must look at what area of the
market they want to aim the products at, as the current youth market
is more or less saturated Nokia will have to research into a new
market, I suggest the 55+ market as they will have lots of disposable
income and my research shows that most people aged 55+ do not
currently own a mobile device and could be persuaded to buy one by
certain promotions and a good advertising campaign, also the drop in
call prices should attract a lot of people who may have previously
been hesitant due the high costs.

Below is a table showing the population in terms of social grouping of

the U.K in 1999:

Socio-economic group

% Of population

A-Upper class

2.8%

B- Middle class

18.6%

C1- Lower middle class

27.5%

C2- Skilled working class

22.1%

D- Working class

17.6%

E-Low income earners

11.4%

I think that Nokia should aim their products at the socio-economic

group B (middle class) event though they aren't the biggest group they
are the group that is most likely to spend their money on a mobile
telephone as my questionnaire results showed.

Investigating consumer trends

As the main aim of market research is to develop an idea of market
opportunities, an important part of this research must be to track
sales in order to identify those products, which are likely to
experience a rise in sales and to look at those in which the sales are
likely to fall.

Changes in customer demand, which continue in the same direction for

more then 2 years, show a long-term trend or saturation is occurring
within the market. This is definitely a bad market for businesses to
be in (the mobile phone market is in the first year of a continuing
trend) and the company must consider changing their market or product
to a market or product that is currently showing a continuing upwards
trend.

The marketing mix

-----------------

The marketing mix refers to the combination of elements within a

companies marketing strategy, these are designed to give the customer
what they want and in the long term are designed to maximise profits.
The marketing mix is based around the idea of the 4 P's:

Product-The product is the centre of the marketing mix and the other
three P's are based around it. Consumers purchase goods and services
for a variety of individual reasons and a company must be aware of all
of these when selling a product (that is why they conduct market
research).

Price-Is a key factor in the selling of a product, and is usually the

one that is open to the most change based on different pricing
strategies, for example, competitor based, penetration or skimming.
The three main factors affecting the amount charged for a product or
service, are; the cost of production, customer demand and competition.

Place-This refers to the chosen outlets for a product or service, for

a product to be very successful it must be easy to access, Mobile
phones are very easy to access nowadays, they are sold in
supermarkets, specialised outlets (either by network or brand) and all
major department stores.

Promotion-This involves providing information to the customer over a

variety of media platforms, using radio, television and print
advertising as well as using other promotional tools such as "money
off deals" and "free giveaways".

The stages of marketing

-----------------------

1. Market and product research:

* Finding out what your customers want

* Technical research

2. Product launch

* Test market

* Pricing

* Branding

* Packaging

3. Product promotion

* Advertising

* Merchandising

* Publicity and P.R

* Sales promotion

4. Sales and distribution

* Managing the sales force

* Type and amount of sales outlets

* Local, national or international sales?

* Transportation of goods
5. Monitoring and analysing the sales

* Meeting customer satisfaction?

* Does the product need modifying or replacing?

* Is a profit being made?

* Is customer service satisfactory?

* Have the sales targets been met?

* Is the promotion and distribution policy effective?

If a company gets to section 5 of the marketing cycle and a

substantial amount of the goals haven't been met then they will have
to consider re-launching the product or taking it out of the market
completely and placing it in a different market or changing it to meet
the needs of the current market.

Product life cycle- Mobile phones

---------------------------------

Introduction

When mobile phones where first introduced they were low quality
technology (bad reception, poor reliability and had a short battery
life), high priced (around £100 for a basic model) and consumers had
to be persuaded to buy mobile telephones, as they were not yet
established as a necessity. When products are first released,
companies can expect high promotion fee's as the public are probably
not yet familiar with the product.

Also when mobile phones were first released they were bulky and hard
to use, as product design and development are a key figure in success,
Nokia had to design phones that were smaller and simpler for consumers
to use. As people had paid a lot for earlier, more primitive products
they were obviously not going to pay the same high prices for later
products so Nokia had to develop phones that could be sold for less
and would last longer, this is where companies can expect to pay high
production costs.
When Mobile phones were first introduced they were not such a popular
item and there weren't as many competing companies in the market. So
Nokia and a few other companies (Sony and Panasonic) could charge
higher prices then they would in the highly competitive market that
they are in today, as there aren't so many companies competing for
market share.

Growth

In the growth stage of the product life cycle companies can expect
advertising and promotional costs to be as high as in the introduction
stage as more companies will enter the market and competition for
market share will increase. Advertising is a proven way of promoting
technological advances within a market (as with the new company 3
promoting their new technology that allows people to watch video's on
their handsets) so higher advertising costs can be expected as the
technologies available get better and more advanced.

The growth stage is also the stage that companies will (hopefully)
start to make a profit, based on good market research and a strong
sense of branding and a successful marketing scheme. In the growth
stage profit isn't the only thing that will start to develop, as there
are more companies in the market it is obvious that more technology
will be developed and that will drive prices higher, this is how
companies start to make profits (because consumers have accepted the
product, in Nokia's case, mobile phones, as a necessity they will be
more willing to pay higher prices for new phones that emerge in the
market).

Maturity

When a product enters the maturity stage, advertising and promotional

prices should decrease, as consumers are more aware of the product and
will research new additions to the market instead of being told what
is new (this is because phones have been promoted as fashion items and
will be desired by the consumers). At this point in the product life
cycle the main producers (Nokia, Siemens, Sony etc) should be clear as
they will have the most money to develop and promote their phones
while the other, less popular producers of phones (Panasonic, Toplux
and NEC) will be struggling to survive and will drop out of the market
either here or they will seriously struggle in the next stage,
decline.

Decline

This is the stage that Mobile phones have entered (Nokia had recorded
their first drop in sales earlier this year), and all the remaining
companies are trying to re-launch their products by either developing
their products or entering new markets. At this point phone sales will
be decreasing and promotion and advertising costs will start to rise
again as companies fight for the remaining market share and struggle
to make a profit.

Below is a graph showing the product life cycle

[IMAGE]

Sales

Time

[IMAGE]

Sales
-----

[IMAGE]

Time
----

With successful re-launching the product life cycle should look like
the one above.
--------------------------------------------------------------------
Branding
--------

Most forms of promotion are based around the idea of having an image
to go with the product. Brand imaging plays a dominant part in an
organizations marketing strategy. This is because people make a
purchase they aren't just buying a product, they are buying a
lifestyle or an image. If branding can make people believe that the
branded product is better then an un-branded product, more people will
buy it and they will also be willing to pay higher prices for the
"extra quality" and lifestyle they are receiving with the product.
Because a lot of rival products are more or less the same (Pepsi and
Coke) the main way of making your product stand out is through
aggressive branding, This is usually achieved by companies using
slogans, logos and distinctive packaging.

Types of pricing strategies

Cost based pricing

This involves calculating the cost of production for the product and
then adding a mark-up for profit, usually 10% so a company can make
enough profit to re-invest into the business so they can grow.

Marginal cost pricing

This is the addition to total cost resulting from the production of an

additional unit of output. If a decision is made to expand by one or
more units it will be based on an assumption that the price of each
unit will be least sufficient to cover marginal costs, so that the
profit earned on all previous units is not lower then it previously
was.

Demand based pricing

This is usually pricing products based around the customer demand for
a product, if the demand is high, the prices will rise. This is
usually used when the product is unique, for example, a football match
or concert. To use this strategy companies must carry out detailed
market research to find out what prices the consumers are willing to
pay so they don't over price their product.

Market skimming

This pricing strategy is also known as price creaming and is usually

put into place in markets where the competition is limited. Market
skimming pricing involves charging a high price for new products
because the customer is new and unique so (hopefully) the consumers
will be willing to pay higher prices for them. This is the most common
strategy in the mobile phone market, as consumers will pay the higher
prices for phones that have the newest technology.

Penetration pricing

Firms who are trying to establish themselves in a new market and gain
instant market share usually use this strategy. It is a high-risk,
high cost strategy that is only an available option to the bigger
companies (like Nokia) who supply to mass markets. Penetration pricing
is based around the idea that a company will set their prices low to
encourage customers to buy their products instead of higher priced,
more established brands.

The organization may also boost sales by lowering prices if demand is

price elastic. One problem with this strategy in the mobile
communications market (or any other highly competitive markets) is
that price wars will often develop with rival companies and this can
limit to the amount of profit that can be made, and also generate
losses due to under-pricing in an attempt to hold onto market share.

Price discrimination

This is where companies can charge different prices in different

markets, because of the consumers they are aiming at, for example,
rail companies charge different prices for peak and off-peak travel
cards and fares. This strategy is only available for use when the
consumers are unable to undercut higher prices by reselling their
products from low priced markets to high priced markets.
Destroyer pricing

This is a more drastic and aggressive form of penetration pricing,

used when a company's objective is to get rid of competition
completely by lowering their prices to levels that other companies
cannot afford to drop to. The down side to this strategy is that
consumers may see the low price as a reflection of the quality of the
product and stick to the higher priced products because they offer a
product of higher quality.

External factors affecting pricing decisions

--------------------------------------------

Setting a price with regards to only production costs ignores the

influence of external factors, such as:

* Market conditions- how much are the customers willing to pay? Can
advertising increase product image and price? Is the product aimed
at a mass market or a niche market? (a niche market refers to when
a company aims a product at a very small, select segment of the
market)

* Production costs- Prices must cover the costs spent in production

if a profit is to be made. The price must cover variable costs
(for the short term) and fixed costs (for the long term) otherwise
a company will face closing.

* Taxes and subsidies- VAT and customs duties will raise the price
of a product. Government subsidies will allow businesses to charge
lower prices.

* Business objectives- Is the business looking to maximise profits?

Or is the company looking to increase its market share?

* Marketing mix- What stage is the product at in the life cycle?

What forms of promotion are being used? Where is the product being
sold?

* Marketing structure- How much competition is there in the market?

What prices is the competition charging?
Nokias current marketing strategy

The marketing mix

Price- The phones that Nokia produce are usually sold at high prices
(new phones can be expected to enter the market at around £200+, if
they carry the latest technology). The price of the new phones usually
decreases after an introductory period, which is usually around 2
months long. Nokia's prices are usually competitor based, in such a
way as, they try to keep their prices a bit lower then those of the
closest competitors, but not as low as the "smallest" competition as
consumers do not mind paying the extra money for the "extra quality"
they will receive with a well known brand, such as Nokia.

Place- Nokia phones are generally sold at all established mobile phone
dealerships such as Carphone Warehouse and The Link, although they are
also sold at other retailers such as Dixon's and other electrical
suppliers. The products are only sold in the electrical suppliers and
stores other then dedicated phone dealerships after the introductory
period so the phones can remain limited edition, as this will
encourage younger consumers to buy them.

Promotions- Nokia tend to promote the new technologies and mobile

devices they create using one big advertising campaign that focuses on
a singular technology instead of each individual handset so they can
appeal to a lot of different markets with one campaign.

Product- Nokia phones tend to include all the latest technology and a
lot of the consumers favourite aspects such as text messaging and
games like Snake and Memory. When the phones came out they were big
and bulky and quite unattractive but now they are all quite sleek and
stylish with phones now getting small enough to fit in the palm of
your hand as standard. Most of the phones produced nowadays have
accessories that consumers must buy with them (carry cases, hands free
kits and in-car chargers) these generate Nokia a lot of profit, as
they are very high priced.

Nokia's marketing mix has worked very well until recently as the
market they are aiming at has become more and more saturated and after
looking at all the mobile phone sales figures, it looks as if the
phone companies can aim at this same youth market for about another 2
years until they need to change, but they should change sooner so they
can start making a bigger profit and get a head start on the
competition who will also have to change the market they are aiming
at. Nokia's current promotional strategy is working very well as they
are able to "talk to" a large number of consumers in different markets
rather then the niche markets the old promotional strategies where
restricted to.

Market segmentation

Market segmentation refers to the different areas of the population

that companies can aim their products towards. The market segment that
Nokia has chosen to aim is the youth market focusing on students aimed
13-19 as market research has shown that some of the youth market are
receiving large amounts of pocket money and most have no real
commitments to spend it on and that means they have lots of disposable
income and will be able to spend a lot money on new mobile phones.

As a big company Nokia are able to do a lot of promoting and

advertising that smaller, less successful companies, may not be able
to afford, such as television advertising and sponsoring lots of
events that will be viewed or heard by large amounts of people in
their chosen market segment (events such as music festivals and music
awards are a goldmine for companies as they are viewed by millions of
people worldwide). Adverts such as television and print adverts will
be put into certain areas so that they can attract their chosen market
segment, Nokia tend to put a lot of their print adverts in men's
magazines such as FHM and Loaded so they can appeal to all of their
readers instead of a smaller percentage of the readers they would
attract in magazines such as Lifestyle and Good Housekeeping. I think
Nokia's way of promoting is very good as they can appeal to mass
markets and large amounts of people in their chosen market
segmentation with certain advertisement's and with sponsoring large
events like the ones I have previously mentioned.

Pricing strategy

Nokia's current pricing strategy is based on 2 main theories:

1. Penetration pricing- although this strategy is usually for

companies that are trying to gain instant market share in a new
market, companies who are already well known in the market still
do it with new products that carry new technologies so they can
take more market share form their competitors.
2. Competitor based pricing- this is used when there is a lot of
competition in the market and a company is looking to take another
companies market share by offering the same or similar products
for a lower price, this happens a lot in the communications market
and this strategy is used by every mobile phone producing company
that is still in business.

Nokia's pricing strategy has proven very effective, this is down to

the fact that they first sell their products for high prices and have
very limited sales but make big profits on each sale, they then lower
the price of their product and have lots more sales but they make less
profit, but they still make a large profit due to the amount of sales,
the other reason that they are so successful is that they offer high
quality products and they sell them for the same price and sometimes
even lower prices then the competition and have now built up the
highest market share, they currently have 37.2% of the mobile phone
market share and are the biggest selling mobile phone company in the
world.

Branding

Nokia phones are seen as being of the highest quality and this is
reflected in their massive sales figures. The fact that they are seen
to be such high quality products is partly down to successful
branding, they have a highly recognisable packaging style and the
style of their handsets is similar in every line of production with
the company name printed just above the screen and just below the
earpiece. The fact that Nokia operate such an aggressive marketing
strategy has elevated them above the competition as consumers are
fooled into believing that branded products are "better" then
un-branded products or products produced by lesser-known brands such
as One Tel and other lesser-known phone producers in the market.

Product life cycle-Nokia

Introduction

When Nokia phones were first introduced they required a lot of

promoting and advertising as they weren't established enough to sell
based on their quality and what they offer to the consumer, so this is
where Nokia spent the largest amount of money promoting their products
and establishing their brand as a leader in the communications market.
Also when mobile phones were first available there were only a few
companies as well as Nokia in the market (Sony e.t.c) so they could
charge higher prices then they can at the present time in the product
life cycle because no companies would dare to enter a price war with
such a new product.

Growth

This stage of the life cycle also has high promotion costs involved in
it, this is due to the fact that mobile phones are becoming
established as a consumer necessity and lots of other companies decide
to enter the growing market, although companies do not need to assure
customers that they need a mobile phone, Nokia have to assure the
customers that they want a Nokia phone and this is where the high
promotional costs come from.

Maturity

In this stage the promotional costs do decrease as the more popular

brands, such as Nokia and Samsung, have gathered the majority of the
market share and only have to show customers that they have a new
model out and it will sell well, as they have been established as a
quality brand and customers no-longer need to be persuaded to buy
Nokia brand technology.

Decline

This is the stage that the mobile communications market, including

Nokia, have recently entered (Nokia had reported the first drop in
sales in the first quarter of 2002), and companies are now promoting,
heavily, their new MMS products to the market in an attempt to get out
of decline and back into growth, with a new generation of
technologically advanced phones that offer motion picture capture,
camera technology and the opportunity to watch television on your
handset.

If a company has entered decline it needs to look at the S.W.O.T forms

of analysing their market strategy, which I have fully evaluated on
page's 3 and 4.

What I have found out by analysing S.W.O.T is that Nokia's main

weaknesses are:
1. They are currently promoting their products to a market that is
verging on saturation- Nokia need to re-launch some of the older
models to a different market and only promote new products to the
existing market segment.

2. Their wag costs are already high, and are always rising-

To solve this they can try and invent or discover machines that can
increase productivity so that the number of staff currently employed
(The average number of employees in 2002 was 52714 and this was a
decrease from 57716 in 2001).

3. High import charges are being implemented by the government-

To counter this Nokia need to set up factories in more companies, this

will have high start up costs but will eventually start to save Nokia
money on import and export charges.

I have also discovered that Nokia have established themselves as one

of the most popular mobile communications companies in the market with
a total of over 52000 sales in 1997 which was a 34% increase from
1996's sales.

There are many external factors that can affect a marketing strategy
from developing; this is where you must use P.E.S.T analysis. I have
outlined P.E.S.T analysis on pages 2 and 3 but have further analysed
the effect of these external factors on the development of Nokia's
marketing schemes below:

Political factors- Legal factors, such as the G3 technology licensing

which has cost companies a total of 110 billion euros so far, are
always around to stop Nokia from properly developing strategies and
further conquering the communications market. Also taxes such as
import and export have an affect on Nokia's development and these are
more-or-less impossible to avoid unless a company can afford to run
factories in every country and continent in the world.

Environmental, Social and ethical factors- Many companies may view

profit as more important then ethical practice and this can lead them
to making illegal decisions and this has been a big contribution to
many companies going out of business or loosing all their market share
to eco-friendly companies.
Technological factors- In the communications market this is probably
the most important external factor in affecting a companies
development of their marketing strategy as they must always keep up to
date with every change within the market if they are to be successful
and hold on to their market share ad hopefully gain more.

Nokia's current marketing strategy has helped them become the biggest
selling brand in the communications market to date, but now sales are
starting to decrease with the saturation of the current market segment
so Nokia will need to do one of the following; Re-launch their
products with an aggressive promotional scheme; Target a different
segment of the market that has not been entered so Nokia can instantly
gain 100% of the market share (although this is risky as the market
might not take to their products and the demand might be low, so sales
will also be low and prices will have to be high and this will further
stop people from purchasing Nokia's products); Differentiate their
products to offer something no other company can offer to the market
or simply try and offer a different product altogether, such as
landline phones or televisions.

Market research

Nokia's business strategy (statement taken from www.nokia.com)

"Our business objective is to strengthen our position as a leading

communications systems and products provider. Our strategic intent, as
the trusted brand, is to create personalised communication technology
that enables people to shape their own mobile world.

Nokia are currently creating innovative technology to allow people to

access Internet applications, devices and services instantly,
irrespective of time or place. Achieving interoperability of network
environments, terminals and mobile services is a key part of our
intent.

Nokia need to capitalise on our leadership role by continuing to

target and enter segments of the communications market that we believe
will experience rapid growth or grow faster then the industry as a
whole.

By expanding into these segments during the initial stages of their

development, Nokia have established themselves as one of the worlds
leading player's in wireless communications and significantly
influenced the way in which voice and other services have been
transferred to a wireless, mobile environment.

As demand for wireless access to an increasing range of services

accelerates, Nokia are planning to lead the development and
commercialisation of the higher capacity networks and systems required
to make wireless content more accessible and rewarding to the end
user. In the process, we plan to offer our customers unprecedented
choice, speed and value.

Nokia has a history of contributing to the development of new

technologies, products and systems for mobile communications. Recent
examples include: the commitment to the open mobile alliance; the
co-development of the new operating system for the future terminals
with symbian; short-range wireless connectivity with bluetooth; the
development of wireless LANs for enabling local mobility in fixed
LANs; and MMS for enabling mobile multimedia messaging.

In addition, Nokia have continued to be active in IP convergence. They

have established alliances with other service providers in order to
make mobile access services easier for the end user.

Nokia in 2002: IAS reported

Nokia's net sales in 2002 decreased by 4% compared with 2001 and

totalled EUR 30 016 million (EUR 31 191 million in 2001). Sales in
Nokia Mobile Phones were flat at EUR 23 211 million (EUR 23 158
million) and decreased in Nokia Networks by 13% to EUR 6 539 million
(EUR 7 534 million). Sales decreased in Nokia Ventures Organization by
22% to EUR 459 million (EUR 585 million).

Their operating profit in 2002 increased by 42% and totalled EUR 4 780
million (EUR 3 362 million in 2001). Operating margin was 15.9% (10.8%
in 2001). Operating profit in Nokia Mobile Phones increased by 15% to
EUR 5 201 million (EUR 4 521 million in 2001). Operating loss in Nokia
Networks decreased to EUR 49 million (operating loss of EUR 73 million
in 2001). Operating margin in Nokia Mobile Phones was 22.4% (19.5% in
2001), while the operating margin in Nokia Networks was -0.7% (-1.0%
in 2001). Nokia Ventures Organization showed an operating loss of EUR
141 million (operating loss of EUR 855 million in 2001). Common Group
Expenses totalled EUR 231 million (EUR 231 million in 2001).

During 2002, the operating profit was negatively impacted by goodwill

impairments of EUR 182 million and net customer financing impairment
charges related to MobilCom of EUR 265 million.

Financial income totalled EUR 156 million in 2002 (EUR 125 million in
2001). Profit before tax and minority interests was EUR 4 917 million
in 2002 (EUR 3 475 million in 2001). Net profit totalled EUR 3 381
million in 2002 (EUR 2 200 million in 2001). Earnings per share
increased to EUR 0.71 (basic) and to EUR 0.71 (diluted) in 2002,
compared with EUR 0.47 (basic) and EUR 0.46 (diluted) in 2001.

At December 31, 2002, net-debt-to-equity ratio (gearing) was -61%

(-41% at the end of 2001). Total capital expenditures in 2002 amounted
to EUR 432 million (EUR 1 041 million in 2001).

By the end of 2002, outstanding long-term loans to customers totalled

EUR 1 056 million (compared with EUR 1 128 in 2001), while guarantees
given on behalf of customers totalled EUR 91 million (EUR 127
million). Nokia also had financing commitments totalling EUR 857
million (EUR 2 955 million) at the end of 2002. Of the total
outstanding and committed customer financing of EUR 2 004 million (EUR
4 210 million), EUR 1 573 million (EUR 3 607 million) related to 3G
networks.

Global Reach

In 2002, Europe accounted for 54% of Nokia's net sales (49% in 2001),
the Americas 22% (25%) and Asia-Pacific 24% (26%). The 10 largest
markets were US, UK, China, Germany, Italy, France, UAE, Thailand,
Brazil and Poland, together representing 60% of total sales.

Research and development

In 2002, Nokia continued to invest in its worldwide research and

development network and co-operation. At year-end, Nokia had 19 579
R&D employees, approximately 38% of Nokia's total personnel. Nokia has
R&D centres in 14 countries. Investments in R&D increased by 2% (16%
in 2001) and totalled EUR 3 052 million (EUR 2 985 million in 2001),
representing 10.2% of net sales (9.6% of net sales in 2001).

People

The average number of personnel for 2002 was 52 714 (57 716 for 2001).
At the end of 2002, Nokia employed 51 748 people worldwide (53 849 at
year-end 2001). In 2002, Nokia's personnel decreased by a total of 2
101 employees (decrease of 6 440 in 2001).

Employee Value Proposition-

In a move to further attract and retain a skilled workforce, this year
Nokia developed an employee value proposition framework. The
adaptation of this has already started at country levels to reflect
and respond to local employee needs and expectations. The four
fundamentals of the proposition are (1) the Nokia Way and Values, (2)
performance-based rewarding, (3) professional and personal growth, and
(4) work-life balance.

Nokia Mobile Phones in 2002

Nokia Mobile Phones continued to renew its industry-leading product

line-up, launching a record 33 new products during 2002, incorporating
colour, imaging, multimedia, mobile games and polyphonic ring tones.
Of the total new phones launched, 14 had colour screens and multimedia
capability. This attests to the growing share of feature-rich phones
offering advanced mobile services in the company's product portfolio.

During the year, Nokia launched its first WCDMA mobile phone, the
Nokia 6650, which began deliveries to operators for testing in October
2002. The company also commenced shipments of its first CDMA2000 1X
mobile phones in the Americas. These included the Nokia 6370, the
Nokia 6385, the Nokia 3585, and the Nokia 8280.

In imaging, Nokia began shipping its iconic camera phone, the Nokia
7650, expanding the scope of the mobile market from voice to visual
communications. Feedback from customers and users across the board has
been extremely positive.

In the enterprise segment, the company expanded its product offering

from the Nokia Communicator 9200 series to include the Nokia 6800
messaging device, with full QWERTY keypad optimised for personal and
enterprise mobile e-mail.

In entertainment, Nokia announced it would bring mobility to gaming by

offering console quality games for its new mobile game deck device
category. Under a collaboration agreement with world leading games
publisher, Sega, the two companies will develop games for the new
Nokia N-Gageâý¢ mobile game deck, which will run on the Nokia Series
60 platform and the Symbian operating system.

For the full year 2002, Nokia volumes reached a record level of 152
million units, representing faster than market growth of 9%, compared
with 2001. Backed by Nokia's ongoing product leadership and user brand
preference, Nokia has again increased its market share for the fifth
consecutive year reaching about 38% for the full year 2002, bringing
the company closer to its target of 40%.

During the year, Nokia Mobile Phones took steps to accelerate growth
and enhance both agility and scale benefits with the introduction of a
new operational structure. From May 1, nine new business units were
each made responsible for product and business development within a
defined market segment. This allowed Nokia to optimise its activities
in these vertically focused areas, while continuing to achieve broad
economies of scale from horizontal functions such as application
software development and the company's market-leading demand-supply
network.

Nokia Networks in 2002

During the year, Nokia Networks signed 20 GSM network deals in Asia,
China, Europe and the US, including three new customers.

Mobile Multimedia Messaging Services (MMS) became a reality in 2002,

with its rapid implementation into most GSM operator networks. By
year-end, Nokia Networks had delivered MMS solutions to well over 40
operators.

WCDMA 3G technology implementation moved to pre-commercial and

commercial phase towards the end of 2002. Nokia signed 10 new 3G deals
in Austria, Belgium, Germany, Ireland, Japan, the UK and Taiwan. In
September, Nokia became the first vendor to commence volume deliveries
of EDGE hardware across all major GSM bands and in all continents.

In broadband access, Nokia signed nine new contracts in 2002, and

launched the Nokia D500 next generation multiservice broadband access
platform for the US and ETSI markets.

The company also further strengthened its GSM/EDGE/WCDMA product

family with several new products and solutions. Key launches included
a high-availability server platform for use in All-IP mobility
networks, and the Nokia LTX, a linear transceiver product family of
base station modules that support the definition of Open IP Base
Station Architecture.

During the year, Nokia took measures to align its operations to better
reflect current market capacity and conditions, reducing the number of
employees in its delivery and maintenance services as well as in
production. Nokia also streamlined its professional mobile radio unit
to reflect the slower than expected take-off of this market.

Nokia Ventures Organization in 2002

Despite overall flat IT spending and slow growth in the corporate

network security market throughout 2002, Nokia Internet Communications
maintained the same level of sales and market share in the enterprise
firewall/VPN appliance segment as the previous year, as well as
significantly improving its operational efficiency.

Highlights for the year include the introduction of a record number of

new products and solutions that both expand Nokia's network security
appliance portfolio and respond to emerging market opportunities.
Extending mobility to enterprise workforces, protecting corporate
e-mail content and providing firewall/VPN benefits to remote offices
were promising growth areas addressed with new product offerings from
Nokia. To help foster the creation of new security applications to
complement Nokia's own solutions, the Nokia Security Developers
Alliance was launched in July. Looking forward to 2003, Nokia Internet
Communications remains committed to building a leading position in the
corporate network security market and extending mobility to
enterprises.

For Nokia Home Communications, sales in 2002 clearly declined as the

unit began a migration towards emerging horizontal markets with the
launch of new types of terminals focused on horizontal terrestrial and
satellite markets, providing digital viewers access to a broad range
of digital services. Products, such as the Nokia Mediamaster 230 S,
introduced Bluetooth-enabled interoperability to the home environment
in the second half of the year.

Dividend

Nokia's Board of Directors will propose a dividend of EUR 0.28 per

share in respect of 2002.
Net sales by business group Jan. 1.-Dec. 31

2002

2001

Change

EURm

EURm

Nokia Mobile Phones

23 211

77

23 158

74

Nokia Networks

6 539

22

7 534

24

-13

Nokia Ventures Organization

459

585

-22

Inter-business
group eliminations

- 193

- 86

Nokia Group

30 016

100

31 191

100

-4

Operating profit, IAS,

Jan. 1-Dec. 31

2002

% of

2001

% of

EURm

net sales
EURm

net sales

Nokia Mobile Phones

5 201

22.4

4 521

19.5

Nokia Networks

-49

-0.7

-73

-1.0

Nokia Ventures Organization

-141

-30.7

-855

-146.2

Common Group Expenses

-231

-231

Nokia Group
4 780

15.9

3 362

10.8

Primary research results

[IMAGE]

[IMAGE]

[IMAGE]

[IMAGE]

[IMAGE]

Average Rating (from 1-10. 1 being the best and 10 being the worst

Battery life

Exchangeable covers

WAP

MMS

10
The style of the phone

SMS

Games

Picture messaging

Organiser

Ringtone features

[IMAGE]

Analysis of my research
-----------------------

For my primary research I handed out 30 questionnaires but only 20 of

them got answered, and above I have compiled all the quantitative data
into the Bar and pie charts. When giving out my questionnaire I had to
be very selective about who I asked questions to, as I had to make
sure that I had a representative sample population so I can make
generalisations about the entire consuming population.

From my research I have found out that 55% of people do already own a
mobile phone, but I also found out that 100% of the student population
(aged 11-21) did already own a mobile phone and the majority of the
older people in the sample (aged around 40 and 50) didn't own a mobile
phone, and I found out that everyone over 65 did not own a mobile
phone. My results show that the current youth market has already been
capitalised on by the communications companies, and the market has
become saturated or is definitely near saturation. This is reflected
in the fact that Nokia's sales have decreased by 4% and this has been
said by many Wall Street writers to be the tip of the iceberg and they
are prophesising that sales will continue to decrease until the
marketing strategy is revised.

The majority of the people who answered my questionnaire had an income

of £30000-£40000 and this shows that the current market certainly has
enough money to purchase a new phone, the youth market had an average
of under 10000, but as they have the most disposable income are more
likely to buy new models of mobile phones, but if the majority of the
population has a large income they can afford mobile phones but as a
lot of them have families and other financial commitments they may be
a bit apprehensive about spending a large amount of money on a new
mobile phone, so if a phone was launched at this market it should be a
available at a lower price then the phones aimed at the youth market.

My research also showed that "pay as you go" was the most popular
pricing option for the entire population, especially the youth in
which 100% of people had chosen this plan, but in the more mature
consumers they said that they would probably choose a "pay monthly"
system as they would not be bothered with the hassle of "toping up"
every time they ran out of call time. Also I found out that some 75%
of the youth market will change their payment plan to a "pay monthly"
system as the "pay as you go" system had proven to be very expensive,
due to the high call rates to other mobile networks, and because on
the "pay monthly" system you can get free text messages (SMS) and free
call time, but the amount depended on the network you had a contract
with.

My primary research backed up my secondary research and showed that

Nokia was the biggest selling brand of mobile phones, with 75% of my
participants claiming that they owned a Nokia phone, compared to a
very small 7% for Nokia's closest rivals, Sony. This has shown me that
Nokia are already a very well established brand amongst the consumers
and that they do not need to spend any money (or a small amount if
entering a new market) on promoting the brand as a whole and should
concentrate the majority of their promotional expenditure on singular
models or new technologies that are being discovered or being
released.

My research showed that the most popular places that mobile phones are
bought in are Carphone warehouse and The link which accounted for 85%
of the sales of mobile phones to the people I questioned. Small
dealerships such as selective network outlets and major household
appliance stores, like John Lewis or the O2 stores accounted for a
very small amount of sales (less then 10%). If a phone is to be
successfully distributed it is only logical that it should be released
in the main dealerships before the other smaller outlets if it is
going to reach its maximum selling potential.

According to my research the three most important things that

consumers are looking for in a mobile phone are; long battery life, a
stylish casing, and good SMS (text messaging) features. If a phone is
to be successful in the market environment it must include all of
these, but the consumers have to be told that your product has these
available, this is what the company should try and promote through
advertising and not just the brand name.

I have found out that most people do not conduct heavy research, if
they do any research at all (only 65% did research into mobile
phones), and the most common forms of research are magazines and
window-shopping. This means that it is important for a product to
stand out to the consumer and look good statistically in a magazine so
that it will stand out to the consuming population who research in
magazines, and the people who ask floor sales people for advice on
which handset to purchase.

Price was a difficult variable to analyse as my research has shown

that it was a 50-50 split between people who said price was a key
factor, and those who didn't really care about the price as long as
the phone was offering everything they wanted, although upon further
inspection most people would not like to spend over £175 on a handset,
but could be persuaded to pay a little more by a strong advertising
campaign or a good all-round package, that includes; cheap call rates,
free text messages and some free accessories, for example, a hands
free kit or an in car charger.

I have also found out that the most popular food shops are Sainsbury's
and Marks & Spencer, this gives us an idea of where to put promotional
fliers and leaflets about up and coming releases into the market, and
as people are usually bored while waiting in lines for a till, they
will want something to look at and if a flier is conveniently placed
near in the lines then that could get more customers interested in a
Nokia mobile phone instead of one of their competitors, also people
who shop in these 2 main supermarkets tend to be either middle or
upper class and will pay extra for "quality" in brand name products.

Revised marketing strategy

As Nokia's current sales figures are decreasing and they show no sign
of increasing again

In the near future, I have come up with a revised marketing strategy

that will re-launch Nokia and its products and increase sales to what
they have been in the past, and probably higher then they have been
since they were first released.

My marketing mix

Product- The phones will continue to be of a high quality, but will

not be as technologically advanced as the recent phones that have been
released. The phones will be easier to use and carry the less advanced
technology with WAP being the most advanced feature available in the
new range of phones that will be released, as my market research
showed that most of the people aged 40+ were technophobes or wanted
mobile technology to be easier to use if they were going to purchase a
mobile phone.

Price- If the technology released with the phones is not as advanced,

the price does not need to be as high as the prices of the phones in
the market at the moment, as less money is being spent on product
development and the phones wont cost as much to produce, there is no
need to keep the prices so high. I have decided to lower the price due
to production costs, and it is also down to the fact that nearly all
of the people who I intend to have set as the new target market (the
40+ market) said that phones cost to much and so did call rates, but
if phones were a lot cheaper (around £125 per phone on "pay as you go"
and free if a contract method of payment is selected).

Place- Nokia phones will continue to be sold at the main

communications outlets (Carphone warehouse and The link) but will also
be sold at the three main supermarkets; Sainsbury's, Safeways and
Tesco as my market research has shown that this where my new target
market do the majority of their food shopping at these outlets, it
would be an excellent place to sell phones as there is also no
competition distributing their products in these locations, and Nokia
could have 100% of the shoppers business, and it would also be a way
of promoting Nokia for free as people will look at almost anything
while waiting in supermarket queues.

Promotion-As Nokia would be aiming their new line of mobile phones at

a completely new market; there would be high promotion costs involved
as there is at the introduction stage of any product life cycle. The
best places to put print advertisements would be in supermarkets near
the tills so people in the queue can read them and hopefully become
interested in buying a Nokia brand mobile phone. Also print adverts
should be placed in magazines and newspapers where the target market
will see them, my market research showed that the most read magazines
by people aged 40+ was Lifestyle, and Vogue for the women, and the
most read by men was the observer magazine as not many men admitted to
buying a magazine regularly. The most popular newspapers were The
Observer and The Guardian on weekends and the Evening standard during
the week, so it is obvious that these are the magazines and newspapers
that adverts should be placed in as they would be seen more by the new
target market. Because we do not want to cancel out any people outside
our target market (avoiding a niche market), Nokia should continue to
place poster adverts in places that will be viewed by a massive
selection of people (such as London's West End and other popular
shopping centres).

Marketing principles

Any marketing scheme that has been developed must be based around the
principles of marketing, and my revised Nokia strategy is no
different, below I have analysed how I have followed each marketing
principle:

* Customer satisfaction- Before developing my strategy I had to

found out exactly what the consumers wanted, I found out that they
wanted phones that were; high quality (with long battery life,
good reception and good SMS features), low priced (priced lower
then £150, but could be higher if call charges dropped), and I
have offered this in the new line of phones that are being
specially developed to meet the needs of the 40+ market (simpler
technology).

* Customer perception- I had found out that Nokia was viewed as the
highest quality brand name in mobile communications, and it was
also the most trusted brand, 8 out of 10 people said that they
would look for a Nokia phone that they liked, before they would
look at another brand. Nokia's prices were considered a bit
expensive, and this was partly why I have decided to decrease the
prices of the new range of phones, although people said they
didn't mind paying the extra money for the quality they think they
will receive with a branded item.

* Customer needs and expectations- This is where you companies need

to anticipate future trends and forecast for future sales. In my
market mobile phones are not considered a necessity yet so it is
hard to anticipate future trends as no company has yet created a
foothold in the market and the customers cant say what they would
like to see in future products if they do not have any at the
moment, so a good thing to do would be to create a feedback group
with some prototype phones and see what changes they would like
Nokia to make to them.

* Generating income or profit- This is the reason why I had to

review Nokia's current strategy, the sales were starting to
decrease and this was starting to reflect in the income and
profits, and decreases in these will not satisfy the main
stakeholders in Nokia.

* Making satisfactory progress- If a product is developing with the

market then they are fulfilling this marketing principle, Nokia
are actually achieving this with their current marketing scheme,
but they are spending huge amounts of money on product development
and the sales are not currently reflecting well on the decisions
to spend that amount of money on product development.

* Awareness of the surrounding environment- This is the reason ever

ompany must complete market research, from my research I know

what the customers want, where they shop, what they watch on
television, what radio stations/programs they listen to, what the
average income is and what features people rate highest in phone
technology.

There are also many external factors that can affect your marketing
style and the decision of which strategy to use, we can evaluate these
using P.E.S.T:

Political factors- Legal constraints are the hardest external factor

to try and avoid making any serious impact on any pricing, or
marketing choices made. The only legal constraint that my new strategy
"dodges" is the G3 licensing, as the new style of Nokia product
doesn't need any of the newest technologies under the G3 frame.

Environmental and Social factors- Nokia have never really had any of
these affect the way in which they operate because they have never
done anything that is really anti-environmental, the only problem is
the fact that the mobile phones let of radiation and has been said to
increase the risk of cancer in mobile phone users, but this has not
been highly documented and hasn't affected how Nokia have conducted
themselves.

Technological factors- This is the most important external factor in

the communications as mobile phones are based around technology and
new discoveries. The new strategy does have to be careful with
technological advances as Nokia do not want to make the new phones to
complicated as my market research discovered that this is exactly what
the target market does not want, they want phones that are simpler to
use.

Pricing strategy

As Nokia will be entering a new market as part of the new market

strategy, I have decided to change the current pricing plan to a
mixture of two theoretical pricing approaches:

Market skimming and demand based pricing- Market skimming is where the
competition in a market is slim or non-existent and a company can
charge what ever price they want because there is no other company to
offer a lower one. As Nokia will be entering a new market, we will be
able to choose whatever price we want to start selling mobile phones
at, and I think they should first be introduced at around £150, as my
market research showed that consumers in the new target market would
be hesitant to pay any higher, and this is the part that relates to
demand based pricing.

Market segmentation

The market segment the Nokia was previously aiming at had become
saturated, my research showed that 100% of students already owned a
mobile phone and where not about too buy another one in the near
future. Due to the fact that this youth market is saturated, I
analysed the Ansoffs and Boston matrixes, and decided to undertake in
market penetration. The new market that I am aiming Nokia's products
is the middle aged people, because my research showed that very few
middle aged people owned mobile phones and could be persuaded to buy a
phone if the product was what they wanted and the price was right, and
of those people who said that that didn't want a phone, most of them
said they could be persuaded by strong advertising and branding.

Evaluation

My revised strategy has a lot of advantages over Nokia's previous

strategy, and I have listed them below:

· My target market is one that has never been entered before, so Nokia
will instantly gain 100% market share, whereas the current target
market is saturated and competition for market share is very strong.

· The products that are being released do not need to be as

technically advanced as the ones in the current market, because my
market research showed that the 40+ market do not want phones that are
to complicated and hard to use.

· If product research and development is not needed as much anymore

then Nokia can afford to decrease its employment numbers and this
would save Nokia a lot of money every year.

· When entering a new market with no competition a company can charge

whatever prices they want, Nokia's prices can be higher then they
currently are and this will increase income and profitability.

End

SEGMENTATION OF THE MARKET BY NOKIA N series

Major segmentation variables for consumer markets are:

1.Geographic:

Nokia Nseries has targeted towards metro and tier-I cities. The main reason behind this is the
segment size available in these urban cities. 50 percent of Nokia’s sales come from the Asian
Pacific region in which India and China hold a majority.1 As far as countries go, India and China
are the prime targets for Nokia in the near future because of the booming telecommunication
market in both these countries.
Present

Rank

Country

Subscriber Additions in

2007 (in millions)

Total Subscribers in
Dec 2007 (in
millions)
Percentage

increase over

Dec 2006

2006

Rank

China

86.22

547.3

18.7

India

84.01

233.63

56.15

Source: “Top 10 Emerging Mobile Markets 2007 ” , 30th April 2008

http://www.lightreading.com/document .asp?doc_id

=151913&page_number=1&table_ number=1 accessed on 20 th August 2008.

2.Demographic:
•

Age:

Nokia Nseries is a phone which is targets towards young adults in the age group of 18-35 years.
India has a median age of 25.1 years as of now2 and it will cross the mark of 30 years in 2025.
Nseries is a phone which is targeted towards young adults between the age group of 18-35
years. So it is completely understandable, that why Nseries is targeting this particular segment.
•

Gender :

The number of male mobile users is higher than the female mobile users, especially in India 3. But
the population sex ratio is 933 females to 1000 males4 which are almost equal. So Nseries came
out with special models for female consumers in pink and plum colors to attract female segment.
This was a marketing strategy to target the females.
Source: Compiled from http://www.pinkrainbows.net/images/pink-nokia-phone.jpg and

http://www.tech2.com/media/images/2007/Apr/img_5814_nokia-n76_red.jpg

Income Levels:

The Nseries range starts from Rs 7800/- and ranges up to Rs 35500/-. There are
many mobile dealers

who finance the mobile phone purchases. This has increased the segment size for
Nseries when it comes

1 “Nokia India ltd.,Nokia website”, http://www.indiahousing.com/nokia-india.html accessed on 18th August 2008

2 “Indian Median Age” (16th may 2008) http://indexmundi.com/india/median_age.html accessed on 18th August 2008

3 Shah, Cerius, (24th July 2008), “Most Indian Mobile Users are Male”, http://www.contentsutra.com/entry/419- most-

indian-
mobile-users-are-male-report/ accessed on 21st August 2008

“Sex Ratio of India” http://www.iloveindia.com/population-of-india/sex-ratio.html accessed on 21st

4

August 2008

to income levels. Consumers from the upper class to middle class are targeted based
on their income
levels because of the vast variation in the prices of various models.
•

Family Size:

The number of mobile phones per family is increasing in India year by year. With the
rise in the income

levels of the middle class their spending power has increased remarkably. Nokia
advertised itself as a

necessity to know about the well being of your loved ones. Although this wasn’t an
advertisement for

Nseries still this portrayed the fact that even for a small family of three, two mobile
phones are required.

3.Psychographic :
•

Life Style:

Lifestyle is a way of life. Nseries has a lot of features which are used to target consumers with
varied tastes and interests. Feature like a 5 Mega Pixel camera will attract a consumer who is
interested in photography, on the other hand the internet browser feature will attract a consumer
who travels a lot. That person can access emails via the mobile phone itself. This way Nseries
can be related to varied lifestyles but it is very tough to have a direct correlation with a particular
type.
•

Personality:

The strengths of Nseries are its music, camera and the internet browser feature. This segment
includes all who like listening to music and want to associate the “cool” image with themselves. In
a few cases who are interested in photography and browsing on mobile phones can also relate
with this phone. College going students and young executives come in this segment. Nokia came
up with Eseries which has a formal look to it, targeting other executives with more experience.
•

Values :

According to Nokia’s marketing director Mr. Wilster, values are very important aspect of
segmentation for Nokia. When a person holds a phone the “Feel good” factor should come in
.With so much of competition, products are not being bought on their functional values but on the
perceived value5. Other than this Nokia and the psychographic values cannot be interrelated. So
Nseries is a product which is specially designed to deliver more than just the operational
features.
4.Behavioral Segmentation :

.
•

Occasions :

Nokia provides discount offers on its Nseries range during festive seasons to increase their
sales. The rates of these mobiles go down during Diwali, Dhanterus, Aadi (in south India) and on
many other occasions like these. People are more willing to spend money during this period of
time. As a result, a major segment of the market is targeted during these times. Other than these,
mobiles are gifted for birthdays, anniversaries and other special occasions.
•

Benefits:

Benefits associated with the Nseries are music player, good quality camera, durability, quality,
ease of reparability, Bluetooth, internet browser, sound clarity, but most essentially a user
friendly OS and long battery life. These additional benefits are used to target the consumers.
•

User Status :

5 Steinbock, Dan”, (2001)” The Nokia Revolution” “Chapter 10: Downstream Innovation” Page 261-279.

Based on a survey conducted by Nokia, they segmented the market into four types of customers.
The Nseries is not segmented for the first time users. It is focused towards a segment termed
“Explorer”. This segment comprises of consumers who are well aware of the market and the
product. They are looking for very good features. They can be non users, users or ex users of
the brand.6
•

Usage Rate :

Nseries has a long battery backup especially when compared to its competitors.
Based on this they have

been able to target consumers who use their phones extensively.

•

Buyer Readiness Stage :

Nokia is a very prominent brand in the market with a share of above 40 percent in the global
market and around 53 percent in the Indian market7 .So most of the people are aware and
informed of this brand. Nseries is the fastest selling product line for Nokia. As a result Nseries
markets itself to attract the interested and ready to buy customers as this segment is large
enough to sustain profitable operations.
•

Loyalt y Status :

Retaining customers is essential for Nokia as people tend to change their mobiles in 2-3 years.
During this period their income levels also rise normally. So Non Nseries users who have used
Nokia in the past will tend to buy an Nseries phone. As a result “Hard Core Loyals” and “Shifting
Loyals” are very important. Shifting Loyals and switchers are targeted using other marketing
techniques also.
•

Attitude:

Market has never been negative or hostile towards Nokia. So Nseries has been able to target the
enthusiastic and positive groups very efficiently. There is a segment which is really enthusiastic
about all the upcoming products of Nseries. Nokia cashes upon this opportunity by setting high
prices initially and then lowering the price later for people with a positive attitude towards the
product.
POSITIONING STRATEGY OF NOKIA Nseries

Nseries positions its products using the following differentiation strategies and they
are as follows:

1.Product differentiation :
•

Form:

Mobile phones do not come in different forms, so this differentiation is not applied on
Nseries.
•

Size of Packaging:

Mobiles are bought because of their features, pricing, looks, style, durability, user
friendliness, size

and not based on the size of packaging. So this type of differentiation is not applied
on Nseries.
•

Features :

Nokia differentiates its Nseries mobiles by providing the latest multimedia features.
Other than the

normal features of a phone, Nseries can be used as a music player, user friendly OS,
video capture

6ArunKumar and N Meenakshi, “Nokia India Segmenting the market using multiple variables”
http://www.best

marketingtextbook.com/PDF/nokiaindia.pdf accessed on 19th August

“Nokia says India Market stake holds at 53 pct – report” (10th October 2007),
7

http://in.reuters.com/article/business

news/idINIndia-29929520071010 accessed on 18th August 2008

and photography by providing cameras of 1.3 to 5.0 megapixels, mobile gaming, good colour
resolutions, Bluetooth, internet services, touch pads, internal memory USB ports, email
assistance
and FM radio8. Nseries aims at users who e looking for a package of many features in a single
device.
•

Design :

Nseries mobiles are highly attractive phones with a basic candybar design 9, flip open design and
slide open design. The phones normally measures around 11 cm high 5 cm wide and 2 cm thick,
the gross weight varies between 100-170 grams10, making this handset very light for the user to
carry in their hands or pockets.11 The mobile comes with a dual slide mechanism. The slide up
reveals the keypad and the downward slide uncover the stylish music keys.
•

Durability and Reliability:

It is the product’s expected operating life under natural conditions. Nokia has been known for its
reliability and durability. The perception in India is “If it’s Nokia then it has to be good”. It has
been there for a very long time. Nseries handsets come with a warranty of 1 year, even the
accessories such as chargers also come with a warranty period of six months. The incident of
BL5 batteries proved that Nokia is a reliable company and cared about its customers.
•

Ease of Reparability :

Nokia’s spare parts are easily available in any of the mobile service shops. The local repair
shops and vendors have acquired the expertise in repairing Nokia phones in India. This has
really increased the ease of reparability in the case of any Nokia mobile phone including Nseries.
Still there is an issue because many technologically advanced spare parts like the cameras,
Bluetooth chips are not readily available with the local dealers. But these are easily dealt with, by
authorized service.
•

Product Quality:

There are four levels of performance quality: low, average, high or superior. Nseries has high
performance quality. Nseries also has a few certifications for its mobile operating system like
VPNC certification, ITSEC certification, EAL4 certification, ICSA Labs certification and FIPS
certification that prove its quality12.
Source: Compiled from http://europe.nokia.com/A4153224

2.Service differentiation :

8 “Nokia N Series”, http://en.wikipedia.com/wiki/nokia_n_series accessed on 20th August 2008

TheBar (orSlab, orCandybar) is a popular electronics form, where the device is a rigid cuboid. It is so-
9

named because it

resembles a candy bar or slab in size and shape. Definition taken from “The Bar”
http://en.wikipedia.com/wiki/the_bar accessed

on 20th August 2008.

Kent, German “Nokia N-series line show” 5th May 2006, http://reviews.cnet.com/4520-3504_7-6217771-
10

1.html accessed on

20th August 2008.

“Dev, Martin (28th July 2008) “Nokia N series is not Just one Thing but Many!”,
11

http://www.buzzle.com/articles/nokia-n-

series-is-not-just-one-thing-but-many.html accessed on 20th August 2008

12 “Certification”,http://europe.nokia. com/A4153224 accessed on 16th August 2008.

Ordering ease:

The Nseries is available in all leading and small-time mobile shops. These shops are located in
varied locations and are in abundance. So when it comes to ordering an Nseries, it is so easily
available that a perspective buyer has to normally travel a short distance to find an outlet to
purchase it. Hence Nseries is right in front when it comes to ordering ease.
•

Delivery:

Delivery is also another front where Nokia faces not much trouble. Since the purchase is made
by the consumer directly, no delivery services are required. Sometimes if the stock is unavailable
in a showroom, customers are either requested to go to another store where the stocks are
available or just asked to come on a later date when the product will be available.
•

Installation:

For a product like an Nseries, no installation is really required other than installing
the phone’s software

application on the user’s personal computer. Hence this is not really a differentiating
factor.
•

Customer Training:

With the level of increased awareness among the general population about the usage of the
mobile phones, the simple technology being used has made it a layman’s accessory. The only
customer training that Nokia provides is at its showrooms at the time of purchase and even later,
if required. This training is on the basic usage of the phone and when it comes to high end
phones like the Nseries.
•

Guaranty/Warranty:

Nokia provides a year long guaranty period on all of its phones. When it comes to the Nseries,
the service is far more extensive. Other than just repairs in case of any problems with the phone,
Nokia, in some special cases, also replaces the phone. This is a service that is provided only by
Nokia and no other company in the Indian Market provides a full product replacement.
•

Financial Arrangements:

This is one front in which Nokia as a company hasn’t taken any steps. All the Nokia dealers are
based on a franchisee model. Although all these showrooms have the facility of credit card
payment which can be converted to loans. This facility is not a provided by the parent firm. So
Nseries is not differentiated based on financial arrangements.
•

After Sales Services:

This is probably the most important differentiating factor when it comes to service differentiation.
Nokia has set the benchmark for providing quality after sales services. They provide fast and
effective solutions to the problems faced by their respective customers. It is well known that
Nokia has the most dominant presence in the mobile phone market and it is expected that they
will provide quality after sales services and till now they have done a fantastic job leaving their
competitors way behind in this context.
3.Personnel differentiation :9

To understand how Nokia differentiates itself based on its personnel we interviewed

the Showroom

Manager of “Nokia Concept Store” located in Hyderabad.13

“Lateef, Farhan” Showroom Manager, “Nokia Concept Store” 6-3-1086, Raj Bhavan Road, Somajiguda,
13

Hyderabad. Contact

Number: 9989711110/4/3330.

Competence:

It is the ability of personnel to understand the problem/requirement of customers14. Technical

faults in the phones are dealt by “Nokia Care”. For solving any problem, the sales executives
need proper knowledge about all the products. For this purpose all executives of “Nokia Concept
Showroom” are given training and a handbook to understand the problems of the customers. At
the same time the owner of the “Nokia Care” center is coached to train all his/her employees.
There are certain norms that have to be followed at all the “Nokia Priority” centers and “Nokia
Care” Centers. A technical representative is required to be present from 10 am to 6 pm without
fail.
•

Courtesy:

This means that the personnel should be friendly, respectful and considerate. All the sales
executive are trained to treat all the customers with respect. There are certain norms that all the
employees have to follow at all the “Nokia Priority” and “Nokia Care” centers. There is a dress
code and many do’s and don’ts while interacting with the customers. Call center executives are
trained to a much greater extent. Their responses are a bit monotonous which makes them too
courteous; it is better than sounding rude.
•

Credibility and Reliability :

Credibility is the trust we have on the personnel and reliability is the consistency and the quality
of service that is provided. Nokia showrooms are very prompt with their services compared to its
competitors, especially after the setting up of the plant in Chennai. As a result the service time
promised to the customers by the personnel are normally met. This increases their credibility and
reliability.
•

Responsiveness:

Nokia cares about its customers a lot. Any query left at the showroom or the customer care
center is attended to as soon as possible. Nokia takes the initiative to inform the customers as
soon as their problem/query is resolved. Other than that at the showroom also, the time taken for
any problem solving is really low because of the presence of properly trained employees.
•

Communication Skills:

This involves the effort to understand the customer and communicate in a clear way. For doing
so, again the training given to all the sales and call center executives pays off, as in these
training sessions proper guideline on how to communicate with the customers are given properly.
This helps the employees to make their communication skills better.
4.Channel differentiation :

Nseries has gained a huge competitive advantage by setting up many distributers throughout the
country. Nokia has over one lakh distributers across India. Nseries is available in more locations
than its competitors in the same segment. This makes the product easily available. Their
distribution channel is far more superior compared to any of their competitors. Samsung recently
has started acquiring the Nokia distributers to increase their market share. They have been
successful in other countries but this hasn’t paid off in India.15
5.Image differentiation :
 “Kotler P”,”Keller.K”,”Koshy.K” and “Jha M” (2007), “Marketing Management 12th Edition, A South Asian
14

Perspective”,

“Chapter 11: Crafting The Brand Positioning, Differentiation Strategies” Page 295-298.

“Samsung dials Nokia distributers to grab market share” (6th Match 2008),
15

http://financialexpress.com/news/Samsung-dials-

Nokia-distributers-to-grab-market-share/281156 accessed on 21st August 2008.

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