Pest Analysis of Nokia and Motorola

There is no doubt, that with the invention of the telephone, telecommunication has become one of the essential innovations of human being since the 19th century, and at the present time, companies which support worldwide dialogue as premier leaders are the celluler phone manufacturers. I vividly remember the first time a mobile phone, the legendary Nokia 8110, had been welcomed in our family through my father.

Although it was Motorola Incorporation that launched the first mobile in 1973 into the market by Martin Cooper, who was working as an engineer for the company at that time, Nokia had managed to astonish people in my country, Turkey, by the 8110. It had all the attention, for a specific period of time, in Turkey. This product, the 8110, was launched in 1996, and is one of the most significant things that remains in my mind since my childhood. Over time, since the first mobile invented by Martin Cooper, there have been a thousandfold evolving new technologies created by companies pertaining to the phone industry. 0 percent of the world has mobile phones today. With this percentage, beyond dispute, the celluler phone sector addresseses an immense market reality all over the world.

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Therefore, I’ve found the mobile phone and handset manufacturering industry worth researching. Among these companies, Nokia ( Finland ), seems to be the market leader, is ahead of its American competitor Motorola by far. In addition to those two, there are Samsung ( S. Korea ), LG ( S.

Korea ), Siemens ( Germany ), and Sony Ericsson ( Japan/Sweden ) as their hard rivals to share the market.

I chose Nokia and Motorola to analyse as they alternate taking the top seat of the market. 2. HISTORY OF THE TWO ( Nokia and Motorola) 2. 1 Motorola : When Motorola started in the market, the first product it produced was a battery eliminator.

Paul and Joseph Galvin, the masterminds of the firm, suggested Motorola as the company name when it started generating car radios in 1930; the name is a combination of “motor” and “victola” (http://en. wikipedia. org/viki/Motorola ). The word Motorola has been used as a brandmark since then. 2. 2 Nokia : Compare with its competitor Motorola, Nokia started its business with a quite different subject.

In 1865, when engineer Fredrick Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland, starting manufacturing paper (http://en. wikipedia. org/viki/Nokia ). In 1871, the company was renamed by him as the Nokia Company, as its current name today. 3. ABSTRACT : In this study, I will mention about marketing mix strategies of both the Nokia Company and Motorola Inc.

and make distinctions between the two. I am going to touch on macro environments, PEST analysis, which rule their market shares as the external factors.

Then, I am going to conclude and finish my assignment with a last part that includes forecasts for the companies and my personal recommendation about what they should do for the near future. 4. THE MARKETING MIX : With its abreviation 4P’s, the marketing mix assumptions help a business to identify what their controllable variables are and how the business can use them in the most suitable way they need. All can be summarised under the titles belove: Product strategies : How will you design, package and add value to the product? Pricing strategies : What pricing strategy is appropriate to use? Place strategies : Where will the firm locate?

Promotion strategies : How will the firm promote its product? 4.

1 THE MARKETING MIX OF NOKIA AND MOTOROLA 4. 1. 1 Product Strategies : The premier strategy to win in the market is to have a good product, compared with their rivals, if it is possible to make it! Companies, which are known as masters of their market, run in such an ever-lasting race to be first on launching the latest technology with the latest fashion to their consumers. They have got various kind of ways for the race to follow, such as quality factor, style, service life and likewise..

. Among these, the way Motorola chose is the quality influence on customers.

What Motorola Inc. beleives as a company is to obtain the best quality product. Motorola stresses that ‘ Quality has to do something for the customer.

.. Our definition of defeat is “if customer does not like it, it is a defeat”‘ ( Kotler,1999) . Motorola’s customer-centered definition for quality indicates that, it is total quality when a company exceeds expactations of the consumers by its products. Motorola is a well-known company especially with its mobile phone products as they are practical to use and nicely designed, together with the functions what customers wish to see in their mobiles.

The customer can utilize video and music player facilities, plus pictures they can take and save by the Motorola-branded mobiles and the products also have got the ability to serve up an internet access to the users. As its premier competitor, Nokia. mobile series also tend to provide all the latest technology trying not to stay behind of the stage. It has developed itself considerably from being manufacturer of big and bulky phones to producing mobiles with very tiny and stylish outlook and specialities like text messaging, games like snake, one of the most famous games that it represented, etc.

Today, both companies produce highly elegant and modish designs of mobile series, flourishing them with different sorts of accessories to attract the consumer-race. Motorola is also known as a company which uses benchmarking as a standard tool for its products.

As for benchmarking, it aims to imitate or, better still, to improve upon the best practises of other companies (Kotler, 1999) . 4. 1. 2 Pricing Strategies : Nokia Company prefers to sell its products at a high price. If it launches a high-tech mobile phone to the market, the market entry price can be 200 pounds or over it.

However, the high prices for the beginning are reduced after a period of time (approximately in 2 months). Nokia knows how to step wisely at pricing. It monitors the prices that are put on the market by its competitors and depending on those prices, Nokia try to determine on lower prices for its own products, lower but the closest price to its rivals’. The company affirms that their customers will not mind paying a bit more for the highest technology they are served by Nokia. It is also important for Motorola to get the right price for their customers in the way that they can make profit as well.

The pricing strategy of Motorola is essentially based on the same logic Nokia has. At an early stage, Motorola will sell its mobile phones by a high price and when sales increase, the cost of the products lessen. Therefore the prices can fall off. 4. 1. 3 Place Strategies : Motorola Inc.

has got several means of distributing its goods to buyers, such as using online service for selling, dialling with network professionals like Three and O2. Another way is retailors that are independent like Phones 4U. Detecting ‘place’ can be depended on product occasionally.

For example, basically 3G network providers affect to sales of Motorola 3G mobiles. When it comes to Nokia Company, it usually sells the products at mobile phone suppliers (Carphone Warehouse, The Link etc.

). In fact, Nokia apply to sell the product at electrical retailers first and then (after a period of time the phones introduced to the market), it lets the phone dealerships sell the mobiles. This strategy leads to a limited edition of the products and makes the youngsters buy them. 4. 1. 4 Promotion Strategies : There are two means possible to promote the products existance.

The most strong and effective tool is media (TV and press).

As using media is such an impressive method to get attention of the customers, it usually needs to get paid for quite good amount of money for its service. That kind of payment is called ‘above-the-line’. Other way of promoting brings discounts and special offers in. Payments, made by companies for this kind of promotion, are called ‘belove-the-line’.

Nokia Inc. comes up with a great advertising when they launch a new series of mobile phones and instead of being divided by advertising of each single mobile, they intensify on the technology they use to manufacture the handsets, in order to introduce them to the market.

What they do is a smart method which lets company save more money and time! So, they organize a big campaign for their mobile products, indicating to their common and significant nature which is the high-tech they present.