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Question 1 Technological advancement in todays fast pace world has seen the evolution of the Smartphone era where

a mobile phone no longer serve its function as just a phone but a mobile phone that also function as a small computer on the move. Nokia, the worlds largest mobilephone maker has been an established brand in the mobile market space well ahead of its competitors until Apple makes its entry with its one and only mobile gadget, the Apple iPhone. There are a number of reasons why Apple iPhone command a high popularity in the mobile industry so much so that Nokia, a pioneer in the Smartphone industry struggled to dominate the market and is now, even losing out to the Apple iPhone. The Brand Asset Valuator of advertising agency Young and Rubicam (Y&R) measures Brand Value by applying four broad factors namely Differentiation, Relevance, Esteem and Knowledge. Differentiation is the ability for a brand to stand apart from its competitors. Though Nokia managed to establish an early lead for Smart Phones in the mobile industry, it is finding hard to surpass the Apple iPhone, a relatively new player in the mobile space. In my opinion, Nokia lack the differentiating factor. In terms of technology, Nokia has invested in extensive R&D, almost six times as much as Apple, in its Smart Phones arena yet it failed to develop a device on time to compete with the Apple iPhone. The crux is Nokia failed to grasp the new market context for Smart Phones. When Nokia pioneered their P Series Smart Phones, it was just around the time that the early Blackberry handsets were gaining in popularity. At that time, Smart Phones were primarily productivity enhancing as most enterprises provide the device to employees for realtime mobile email. Nokia rival the Blackberry in the enterprise mobile email market when it acquired Intellisync, an enterprise push email software vendor in 2005 to bolster its enterprise server capabilities. More investments and development was carried out through 2006 in the Smartphone arena such that Nokias market share at one point exceeded 70%. With the Blackberry model as a benchmark, Nokia failed to recognize the new market context that Smart Phones were slated to move from being 'niche' devices used by the white-collar users to mass market multimedia devices (loaded with technology) to be used by consumers of all professions. Apple, on the other hand, capitalized on this trend with the launch of the iPhone in summer 2007. This differentiating factor makes Apple a brand that differentiates its Smartphone from the rest.

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Relevance measures of the breadth of a brands appeal. According to research, Apple has triumphed at two crucial qualities, that is, status and simplicity. The very first iPhone launched by Apple was the iPhone 2G, which is simply a conversion of Apple iPod, equipped with the phone functionality. It was the most expensive camera-phone that could not record video, could not support Multimedia Messaging Service (MMS), was not 3G-enabled and it was the simplest gadget, which could not even constitute as a real Smartphone as it could not support any application on it. Yet, Apple iPhone sells like hotcakes and their winning formula is, it was perceived as the best-looking phone ever at that point of time. The attractiveness of the iPhone gadget being the large 3.5 inch screen but it was not the world record at the time as Nokia had a 3.5 inch touch screen earlier in 2005. However, Nokia did it on a phone that was very bulky and ugly hence making it very undesirable. Many who bought an iPhone in the beginning did so because most Smart Phones looked nerdy while the iPhone looked slick and cool. For that sole reason, buyers can be nonchalant to the fact that it does not support even the most basic features that every other phone does. Esteem how well the brand is regarded and respect. Apple succeeded in creating the typical marketing perception of better to look good than to feel good. Apple iPhone owners proudly displayed their brand new gadget wherever they are so much so that it has become a fashion icon. This is the Status quality that Apple successfully created a status that equates to a strong brand name. Knowledge how well and intimate consumers are with a brand. Those who bought iPhone will know that iPhone will provide than the best and user friendly phone. The other quality that made iPhone successful is its Simplicity. The biggest technical innovation in the iPhone was their touch screen technology, which incorporated multitouch and capacitive touch whereas others have developed big screen no-keypad touch-only design for phones touch screens based on resistive touch. Apple came up with a phone with only one button and the rest as touch screen which make the phone so intuitive, that even pre-school age kids knew how to use it, and it is so easy to use, that even grandparents who hated the tiny clustered buttons on their SonyEricssons, Motorolas and Nokias, totally fell in love with the iPhone. Hence, Apple iPhone has since earned the recognition as the easiest phone to use, in the world with a fantastic screen and a great Graphic User Interface. Today, we see the latest model of iPhone continuing to gain popularity as there are now more than two hundred thousands of applications providing vast amount of information, entertainment, ease of web surfing as well as an excellent advertising platform.

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Essentially, I believed that the main factor that Nokia Smart Phones are losing out to Apple iPhones is time. Time is the essence. Nokia is in Mobile technology since Stone Age and they could have come to the same kind of technology way before Apple but Nokia loses to Apple due to their slow pace of new product roll out and ambivalence on the evolution of its Operating System on handsets. While Apple iPhone has obvious flaws like antenna issue, which is a major design flaw, causing the inability of the phone to perform basic tasks of a phone properly, Nokia being a market leader in mobile phone development could easily develop a gadget that could supersede the iPhone. Nokia may be losing to Apple now but they are certainly not out as the former commands unprecedented brand equity globally.

Question 2 (a) The first step in setting prices for Nokia will be selecting their pricing objective. Based on Nokias current position as the worlds largest mobile phone maker, it would be in Nokias advantage to use maximum market share as its dominant pricing objective. This objective would enable Nokia to maintain its position as the worlds number one mobile phone maker. The maximum market share objective is known as market penetration pricing, which involves setting a low price for the products as the mobile phone market is highly saturated and consumers are sensitive to price changes. Nokia will be able to attract a large proportion of consumers by setting lower prices for their Smartphone. By having a significant amount of market share, Nokia will be able to lower, their production and distribution costs as the cost per unit will be lower when the production volume is large due to savings from economies of scale. This will allow Nokia to achieve higher long-run profits as their operating costs will be lower and their low prices will put pressure on existing competitors and deter potential competitors from entering the market. The second step in setting prices is determining demand. Only prestigious goods will have an upward sloping demand curve, as consumers are willing to pay more for luxurious goods that are considered superior. Nokias new range of Smartphone can be consider as normal goods as Smartphone have been made available for quite a number of years and they can be found commonly in many countries.

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Another factor to determine demand is price sensitivity, which is the sensitivity of consumers to changes in prices. Smartphone users generally would be young adults and white-collar professionals who want to have access to the internet on the go. As information is freely available on the internet, they would be aware of other substitutes and can easily compare the quality between the different types of Smartphone at any shops selling mobile phones, which leads to increased price sensitivity. Nokia can use statistical analysis of past prices and quantities sold to estimate their demand curve, which they can use to help in setting the prices of the new Smartphone. It is important that other variables such as responses of competitors be factored into measuring the price-demand relationship, as it will affect demand. In addition, if other marketing mix factors besides price have been altered, it will be difficult to measure the effect of price itself. The price elasticity of demand has to be considered in order to know the responsiveness of demand to a change in price. The demand for Smartphone will most likely be highly elastic as the Smartphone market is highly competitive and there are a large number of similar substitutes. If consumers deemed Nokias Smartphone to be too expensive, they can simply buy from another competitor. Thus, it is important that Nokia do not price their Smartphone out of consumers range. Conversely, if Nokia price their Smartphone lower than other competitors, they will be able to attract a large number of consumers. The next step in setting prices will be estimating costs. If Nokia can establish the total costs of producing, distributing and selling each product, it can set a floor on how to price its products. The total costs are made up of fixed and variable costs. Fixed costs refer to the constant expenses that have to be paid for monthly like rent and salaries, while variable costs are linked by the amount of raw materials and processing needed to produce each unit of Smartphone. Therefore, as more units of Smartphone are produced, variable costs will increase proportionately. Total costs will be the sum of the fixed and variable costs at a given level of production while average cost will simply be total costs divided by the level of production to give the average cost of producing each unit of Smartphone. As more Smartphone are produced, the average cost will decreased, as fixed costs (which are constant) will be divided among more units of Smartphone. Nokia will have to know how its average cost changes accordingly to different levels of production and utilize the benefits of economies of scale by producing at the optimum level of production. This can be done by finding out the point where its marginal costs of production equals its average costs of production. This is the point whereby producing an additional unit of Smartphone does not bring down the average cost of a unit of Smartphone.

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There are three types of methods for Nokia to estimate their costs, which includes the accumulated production, activity-based cost (ABC) accounting and target costing. The best method for Nokia would be to use ABC accounting to estimate their costs. As Nokia distribute their products to different buyers in many regions, the terms of agreement with these buyers will be different such as daily delivery to a mobile phone service provider in a region and monthly delivery to another buyer in another region. By employing ABC accounting, Nokia can find out the fixed and variable costs of serving each individual customer and set their price accordingly for each customer. With all the possible prices that are evaluated in step two and three which examine market demand and Nokias costs, the fourth step in setting prices will be analyzing competitors costs, prices and offers. Nokia should consider about the competitors pricing and compare the different features and benefits that are offered by the competitors like Apple and Research In Motion (RIM) before deciding whether to charge more, less or even prices which can compete with its competitors. When Nokia release its new or existing pricing for its mobile phone, they are able to get responses and feedbacks from consumers, which in turn help them to evaluate whether the pricing set can attract consumers loyalty. Moreover, Nokia must be prepared to counter back and understand its competitors reactions when price is being known to the public, which is a complicated process. By analyzing competitors objective and research on competitors financial situation, recent sales and customer loyalty helps Nokias to react and plan accordingly if there is any movement or action from competitors side. In step five, Nokia has to select a pricing method based on the information they have obtain from steps two to four, which are the demand curve, cost function and competitors prices. Each of these considerations makes up the pricing range for Nokia; the costs set the minimum level or floor of the price, competitors prices act as points of references within the pricing range and the demand curve (or customers assessment of the Smartphone unique features) sets the maximum level or price ceiling. Based on Nokias respectable reputation for quality products, the best method would be for Nokia to use the perceived-value pricing method. This method requires Nokia to provide consumers with quality products that meet customers perceived value. The advantage of this method is that Nokia can use their advertising and sales force to enhance the smart phones perceived value in the consumers minds. Perceived value consists of several factors, which includes buyers image
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of the product performance, channel deliverables, warranty quality, customer support and intangible qualities like Nokias reputation, trustworthiness and esteem. As individual customers place different weights on these elements, they can classify into three categories: price, value or loyal buyers. Each of these three groups demands different strategies to attract customers. Price buyers are concerned with the basic functions of the Smartphone and do not pay too much attention for services. Value buyers tend to focus on new value and Nokia has to reaffirm their value aggressively to these buyers. Loyal buyers place great importance on relationships and Nokia must invest in building relationships with them and maintaining customer intimacy. In pursuing perceived-value pricing, Nokia must strive to provide more value than their competitors do and it has to demonstrate this to potential customers. The perceived value is not solely concentrated on the Smartphones prices but also the capability, reliability and customer service provided. The customers decision-making process must be analyzed so that Nokia can provide the necessary value-added services to them. Nokia can judge the value of its offerings through several initiatives such as managerial judgment within the company, value of similar products and conducting surveys and experiments, to name a few. Finally, the last step is to select the final price for its new range of Smartphone. In order to select the final pricing, Nokia have to take into considering additional factors that includes the impact of other marketing activities, company pricing policies, gain-and-risk sharing pricing and the impact of price on other parties. The impact of other marketing activities comprises of Nokias quality and advertising in response to competition faced. Nokia must make known their products to the market through advertisement and the quality of the Smartphone must be beneficial to the consumers in order to attract users in the market. The pricing set must be consistent according to the company pricing policies. Nokia pricing should be set reasonably to attract consumers that help to maximize Nokias profits. Consumers may not buy Nokias Smartphone if they are unsure of the quality and reliability of their products. Nokia can offer warranties to mitigate these risks. Nokias management should think about the emotional aspects of other parties which included distributors, sales, competitors, suppliers and government to the contemplated price that is set. By anticipating about the reactions of other parties, it provides a win-win situation for the market. In conclusion, the above 6 steps in setting prices helps Nokia to make a decision on how to select a suitable pricing for their Smartphone to be introduced to the market.

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Question 2 (b) Pricing is an important factor of the marketing mix management and Nokia must be able to make the correct strategic option on how to price their products in order to compete with their competitors and accomplish their business targets. Pricing strategy is a critical element that Nokia can utilize to win back consumers who have switched over to other competitors like Apple and Research In Motion (RIM). The first pricing strategy that Nokia adopt is by using Product Bundling Pricing. Product bundling pricing is combining several products and features in the same package. Hence, Nokia implement to work in collaboration with telecommunication companies like the three major mobile service providers, which are M1, SingTel and Starhub as a bundle to their smart phone. They come up with attractive offers and competitive prices to attract consumers. When consumers purchase Nokia phones, they can choose the different data plans that are suitable for their usage. For instance, when the professional buy the product bundle, they will usually pay little money or even get the smart phone free if their mobile plans require high usage of data plan and talk time. This in turn helps to benefit Nokia by building relationships with the users when they register their phone, which may leads to customer loyalty. With this fantastic deal, consumers will be attracted to purchase Nokia smart phone and enjoy the benefits that are provided at a more affordable price. The second pricing strategy used by Nokia is Product-Line Pricing. Product-Line Pricing is a pricing strategy that is used by Nokia to cater to consumers on the different pricing of Nokia phones based on the features or benefits that it offers. Nokia came up with different model of phones to support different demand and income of consumers. For instance, to make Nokia mobile phones affordable, Nokia came out with a cheaper version of mobile phone, which can enable consumers to have the minimum requirement of having a phone, which includes Short Message System (SMS), and call function. With the advancement in technology to meet the average demand for consumers, Nokia phones included entertainment like music and games to meet customer expectations. Moreover, for the high-end demand, Nokia mobile phones enable consumers to surf internet from their phone and

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enjoy multifunctional features. With the additional features that Nokia offered, consumers will have to pay more to enjoy the benefits and hence helps to maximize profits. Lastly, Nokia implements Captive-Product Pricing as their pricing strategy. CaptiveProduct Pricing applies when products have external parts for the products or complements. Nokia make use of these pricing strategies to charge an affordable price for the mobile phones when the consumers commit to sign up a two years contract in collaboration with service providers. Moreover, Nokia charges a higher price for its external battery and charger in order to earn additional margins from the sales they made.

Question 3 (a) Strategic marketing decisions needs to be taken by companies in order to face the many challenges in today rapidly changing markets. Well-considered decisions with clearly defined strategies are essential for companies to remain competitive in the market to meet its goals and objectives efficiently and effectively. Nokia, being a well-known Finnish manufacturer for mobile phones have to ensure that they are equipped with the latest technology so to be on par with other rising retailers such as Apple, Blackberry et cetera. With the purpose of evaluating a Nokia concept store for this assignment, we have chosen the outlet situated at Ion Orchard. Our discussion and evaluation will be focused on the following three marketing decisions; product assortment, services mix and store atmosphere. Product Assortment is a success when a firm is able to match target consumers shopping expectations. This is a decision made based on the product breadth and depth. Productassortment breadth refers to the variety of product lines offered (About.com, 2010, Para 1) whereas product-assortment depth refers to the number of each item or particular style of a product (About.com, 2010, Para 1). We observed that Nokia practices a broad and wide assortment. There are different categories or series of mobile phones that they offer. There are the E-series, N-series or X-series for instance. Each series plays the most basic role that is for communication purposes. However, each device is unique in terms of their model numbers, key features, advanced features, designs and sizes. In addition, each set of devices are targeted to a unique group of audiences thus, different tactics are adopted. From this, we observed that Nokia practices a good understanding of each consumers demands as the wide varieties will be able to cater to an each consumer uniquely. An approachable product
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selection could be better achieved by ensuring that the new devices created are able to cater to the intended target market needs and they are introduced to the masses at the right time. An example is the current introduction of the X-series at times where craze for smart phones is on the rise. Furthermore, this action is implemented in order to close the gap with Apple Incs product. Services Mix is the unique function where services offered in a particular store are different from another Nokia store that offers pre-purchase services and post-purchase services. We categorized mobile phones as tangible goods with accompanying services offered. Pre-purchase service: Nokia provides awareness to their customers on their new products via advertisements as well as window and interior display. Advertisement done through the various types of media such as the newspaper, television and Internet with colourful and attractive images enables Nokia to promote their products widely to a larger base of consumers regardless of their age groups and whereabouts. In addition, the ability for consumers to have a feel of tangible goods like mobile phones further enhances ones confidence to purchase a product. Post-purchase service: This is where services are render out to consumers still even though they have already purchase a device. Every purchase of a Nokias product comes with a warranty of two years. This is where customers need not pay for repairs on certain damages such as malfunction of the keypads, fault in reception et cetera. An important factor is customer service provided by Nokia. This service is in the form of face-toface, phone lines and the respective countries websites too. On a personal experience at Ion Orchard outlet on a weekend, Nokias face-to-face customer service was quite disappointing. There were only two staffs on duty whereas customers were far too many for them to handle. Weekends are times of the week where most consumers prefer to relieve stress by going to the shopping malls so a substantial number of employees are needed to tend to the requirements of all consumers. On the other hand, their services via phone were adequately acceptable although it took quite long for the phone to be answered. Store Atmosphere plays a crucial role in attracting potential consumers. Consumers patronize the store with the intention to purchase such they will expect a form of assurance that they are treated with importance. Ion Orchard outlet is decorated with vibrant lightings as well as a big mirror walls to enhance its interior size. Its ample aisle allows us to move around freely making it a breeze to browse through whilst its eye-leveled product placement allows us to browse through each phones easily. Each product is accompanied with a short yet detailed description of each devices feature enabling consumers to differentiate each device from another. Lastly, their simple design suits the taste of all age groups.
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Marketing decisions are the root of each marketing strategies. Decisions have to be prepared with precise analysis of the internal and external market forces so right choices are made. Such, Nokia has to ensure that their respective departments are able to predict and study consumers behavior thoroughly so they are able to accommodate each consumers needs, wants and demands.

Question 3 (b) Nokia has proved to be one of the leading mobile phone providers before the existence of Apple causing their brand value to fluctuate. This has greatly affects Nokia reputation and shares in the global market. In order to stay competence, Nokia has to review and improve their current marketing approaches as well as creating new ones. Such, we will be concentrating on three marketing recommendations namely in the products, price and services in Singapore. Products are the key elements in satisfying the needs and wants of consumers in the various market offerings. The present Singapore context comprises of customers whom varies in terms of their needs, desires, interests, age groups, preferences et cetera. We will examine each issue via the Customer Value Hierarchy. A customer expects mobile phones to have the fundamental ability i.e. assisting them in communicating with other people and is accompanied with other basics such as SMSes, MMSes. In addition, they are expected to function well despite of unfavourable conditions such as bad reception signals. In making it an augmented product, Nokia could equip each phone with the latest megapixel cameras, photo editorial functions alike to a DSLR camera. This would probably attract those who prefer to have a two-in-one DSLR camera phone. Applications such as games, entertainments and references should be incorporated along. Tangible goods too enables a customer to feel the service that are delivered to them, such Nokia could come up with limited edition designs so to further attract those whose has interest in collecting rare products. In comparison to Apple where it only produce one type of mobile phone i.e. iPhone, Nokia has an array of mobile phone with various unique functions. Nokia should continue to invest in this product differentiation strategy. Consumers perceive mobile phones differently so some would only want its basic facilities while some would prefer non-camera phones. Price is the one element that generates revenue for Nokia. Nokia has to execute pricing based on the target group that they are targeting. Almost everyone in Singapore today possesses a mobile phone regardless of their professions students, businesspersons, teachers, general
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workers et cetera. Thus, Nokia has to evaluate the pricing of their phone again on the respective target market. As much as each business would want to reap profits, careful pricing strategy needs to be strategized so to ensure that consumers of different backgrounds are able to afford their phone. For instance, non-camera phone are usually utilized by the national service men thus the price set on such phones are of their affordability. Not only that, road shows where prices on mobile phones are reduced could be conducted occasionally. This could also attract non-Nokia users to start using Nokia mobile phones. Service is of utmost importance to consumers especially in Singapore where excellent customer service is constantly promoted. Consumers make judgments on products based on the service that they receive from a certain organization. Nokia therefore has to emphasize on improving their customer service line be it face-to-face, phone lines or the Internet. Continuous customer service training has to be implemented for all employees especially in the service department. In the instance whereby a mobile phone is sent for repair, the staff should be make the initiative to update the user on its status instead of the users calling back every now and then worrying on their mobile phone. Complaints and feedbacks needs to be tackled on the soonest basis so the respective contributors would be assured that their concerns are heard. Front line employees should, at all time, greets their customers with a smile and gestures. The same goes with over-the-phone employees where their voice tone has to be cheerful. Being helpful and ready for their customers is the policy that should be highly adopted by Nokia employees. Nokia website now has a good service where a survey is pop-up each time we visits. However, Nokia has to ensure that the information and privacy of each one are kept confidential. With such implementation, customers would feel much appreciated and would not hesitate to show their loyalty no matter how the situation will be in the end. Marketing recommendations should be made with the intentions of accommodating to issues or problems arising from a certain situations. Deeper analysis on the root of a problem of a certain situation is indispensable so such problems could be avoided in the future.

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REFERENCES
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http://www.ehow.com/facts_6003881_product-line-pricing-strategy_.html
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http://retail.about.com/od/glossary/g/breadth.htm
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http://www.nokia.com.sg/ 7. Marketing Management, An Asian Perspective (2009), Philip Kotler, Kevin Lane Keller, Swee Hoon Ang, Siew Meng Leong, Chin Tiong Tan, Pearson Education South Asia Pte Ltd, 23/ 25 Lok Yang Road, Jurong Singapore 629733

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