The document provides an analysis of Nokia's changing marketing environment and marketing mix. It conducts a PESTLE analysis and Porter's Five Forces analysis to examine Nokia's macro and micro environment. It then evaluates elements of Nokia's marketing mix, including product, price, promotion, and place. The document recommends that Nokia focus on market research, promotion, reducing intermediary dependence, technology development, and competitor monitoring to adapt its marketing mix to the changing environment.

1. UNIVERSITY OF SALFORD
MARKETING MIX OF NOKIA IN
RELATION TO ITS CHANGING
ENVIRONMENT
By:
Kopparaju Siva Theja
@00447134
Submitted to:
DR.Peter Reeves
Lecturer at Salford Business School

2. 1
TABLE OF CONTENTS
QUESTION 1: 2
1.1 BACKGROUND 2
1.2 MARKETING ENVIRONMENT OF NOKIA 2
1.2.1 INTERNAL ENVIRONMENT 3
1.2.2 MICRO ENVIRONMENT 3
1.2.3 MACRO ENVIRONMENT 4
1.3 ANALYSIS OF MARKETING ENVIRONMENT OF NOKIA 5
1.3.1 PORTER’S FIVE FORCE ANALYSIS 5
1.3.2 PESTLE ANALYSIS 7
QUESTION 2 9
2.1 CRITICAL EVALUATION OF MARKETING MIX OF NOKIA 9
2.1.1 PRODUCT 9
2.1.2 PRICE 10
2.1.3 PROMOTION 10
2.1.4 PLACE 11
2.2 RECOMMENDATIONS FOR NOKIA 11
2.2.1 EMPHASIZE ON MARKET RESEARCH AND R&DTO TRACK AND RESPOND TO MARKET DEMANDS 11
2.2.2 FOCUS ON PROMOTION ELEMENT OF MARKETING MIX 12
2.2.3 REDUCE OVER-DEPENDENCY UPON INTERMEDIARIES 12
2.2.4 PLACE SERIOUS CONCERNS OVER TECHNOLOGICAL DEVELOPMENT 12
2.2.5 CLOSELY MONITOR THE COMPETITORS 12
REFERENCES 13

3. 2
QUESTION 1:
1.1 BACKGROUND
The Finland-based company Nokia has been able to define itself as a prominent name in the global
mobile phone industry since last four decades(Aspara et al., 2013). Over all those years, the company
experienced rapid growth as well as massive fall in the market mostly due to its failure to understand the
volatility of the marketing environment. The change in the market structure, customer’s behavior and the
presence of strong competitors has put forward critical challenges for Nokia(Hossain, 2012).
Furthermore, the company has suffered much due to poor management and strategic weakness that has
further led to the failure over the long run. Once a market leader in the global mobile phone company,
Nokia currently is outperformed by competitors like Apple and Samsung(Cord, 2014). Nevertheless, the
company can still rise back to its previous levels only if it can understand the market volatility to prepare
a strategic marketing mix.
1.2 MARKETING ENVIRONMENT OF NOKIA
The marketing environment for a company comprises of forces that have are themarkable impact on the
company’s ability to perform marketing activities(Öztaş, 2015). These forces relevant to marketing
environment possess strong ability to influence the interaction and relationship of the business with its
targeted customers. The marketing environment for Nokia comprises of three levels of environment i.e.
macro environment, microenvironment, and internal environment(Aspara et al., 2013).
Figure 1: Marketing Environment of Nokia
Macro
Environment
Micro
Environment
Internal
Environment

4. 3
1.2.1 INTERNAL ENVIRONMENT
The internal marketing environment refers to the environmental forces within the business that impact the
marketing activities of the company(Marcu and Meghisan, 2015). It includes the functions and scope of
different departments of the company. For Nokia, its internal marketing environment can be characterized
by the functions of different departments such as finance, operations, management, R&D, etc. Each of
these departments has asignificant impact on the marketing activities of Nokia. For instance, the skunk
works as one of the autonomous divisions of Nokia impacts its marketing strategies(Ropot, 2013). These
skunkworks are a group of engineers that the company has formed to innovate groundbreaking ideas. This
department, to a great extent, impacts the product mix of Nokia and is significant in product development
and modification. Similarly, the finance department, on the other hand, offers a greater level of impact
upon the marketing budget for Nokia(Icon Group International, 2010). Thus, the functional departments
of the company are a major component of the internal marketing environment. Apart from those,
organizational culture, goals and values also impact the marketing strategy as internal forces(Connor,
2015). These factors are core for defining the marketing strategies, concepts and ideas for Nokia.
Figure 2: Internal Marketing Environment of Nokia
1.2.2 MICRO ENVIRONMENT
The micro-marketing environment of Nokia comprises of those factors that influence the day to day
operation of the business. The microenvironmental forces of a company include stakeholder as well as the
Internal
Marketing
Environment
Organizational
Departments
Organizational
Policies
Organizational
Strategies
Organizational
Culture

5. 4
parties with whom the company regularly interactswith business operations(Wormer, 2010).For Nokia,
forces relevant to its micro marketing environment may include marketing intermediaries, customer
markets, competitors and public. The marketing intermediaries being a microenvironmentalforce has a
great impact on the company are marketing activities(Hossain, 2012). The market intermediaries for
Nokia include financial intermediaries, physical distribution firms, etc. These intermediaries impact the
distribution mix of the company. Similarly, customers are also the part of Nokia’s microenvironment.
They play a significant role in influencing the promotion mix, price mix and product mix of the company.
For instance, Nokia’s product strategy is based on the customer’s needs and expectations(Büscher,2010).
1.2.3 MACRO ENVIRONMENT
The macro marketing environment consists of those environmental forces that are present in the external
environment of the company and puts forward significant threats and opportunities in the targeted
market(Chen and Hu, 2008). These forces are not in the control of the management and have acrucial
impact on the company’s marketing mix. In the case of Nokia, different forces in the macro environment
such as economic, political-legal, social- cultural, technological and environmental forces impact its
marketing strategies(Ropot, 2013). It is because of the volatility of the macro environment that the
company is facing adverse situations. For instance, the socio-cultural environment is characterized by the
customer’s needs, expectations(Wormer, 2010). In the market for mobile phones, Nokia failed to
understand the changing needs of the customers as a result of which it lost a greater share of its market to
its competitors such as Apple and Samsung.
Macro
Marketing
Environment
Political
Environment
Economic
Environment
Socio Cultural
Environment
Technological
Environment
Environmental
Forces
Legal
Environment

6. 5
Figure 3: Macro Marketing Environment of Nokia
1.3 ANALYSIS OF MARKETING ENVIRONMENT OF NOKIA
1.3.1 PORTER’S FIVE FORCE ANALYSIS
The Porter’s Five Force Analysis is an analytical framework that can be used to analyze the business’s
microenvironment in attempts to identify its competitive position in the industry(Lafley and Martin ,
2013).To analyze Nokia’s competitiveness in the mobile industry, it is essential to understand the factors
or forces that impact its industry performance. This model for analyzing marketing environment takes all
the relevant forces in consideration.
Figure 4:Porter’s Five Force Analysis for Nokia
 Threat of entrants
In the mobile phone industry, the threat of new entrants can be taken as a minor threat mostly because of
the high amount of capital and technological investment required to set up a new business(Fenske, 2012).
The new businesses have atough time penetrating an already mature market with such large number of
customers. Furthermore, the mobile phone industry also put greater entry barriers for new firms regarding
investment, R&D, and technology. At present Nokia possess the third highest market share in the industry
i.e. 12.4% led by Samsung and Apple with a market share of 22.8% and 23.5% respectively(Ropot,
Competitive
Rivalry
Threat of
Entrants
Supplier's
Bargaining
Power
Buyer's
Bargaining
power
Threats from
Substitutes
Competitive
Rivalry

7. 6
2013). For the new companies to enter such competitive market, it takes a long time and significant R&D
efforts.
 Supplier’s Bargaining Power
Currently, Nokia greatly relies upon its hardware and software suppliers for the mobile phone production.
The company’s only supplier of software is Microsoft. It greatly relies upon Microsoft’s software for its
production(Aspara et al., 2013). Despite the presence of “open” OS Android, it requires a great deal of
financial and strategic risks in switching software suppliers. As a result, Microsoft has a greater
bargaining power over Nokia while negotiating for price and share(Whalley, 2012). Apart from that,
Nokia’s hardware suppliers possess comparatively lower bargaining power because of the presence of
other hardware suppliers that Nokia can switch to.
 Buyer’s Bargaining Power
The mobile phone industry, at present, have seen a whopping rise in the customer’s bargaining power
mostly because of the presence of a large number of companies offering different choices(Chen and Hu,
2008). Nokia has a lot of big and small competitors that offer the customers with different value-added
services in their products. As a result to this, the industry is characterized by price sensitiveness.
Customers will choose to buy sets from Nokia’s rivals if they are not satisfied with Nokia’s
products(Cord, 2014).Thus, the customers have lower switching cost leading to greater bargaining power
on their side.
 Threats from Substitutes
Mobile phones at present have been accepted the customers as devices that connect them with each other
through calls and messaging and allows to perform various functions such as clicking photos, email, file
transfer, net surfing,etc(Büscher, 2010). While mobile phones can perform all of these functions, they
also face substitutes such as PDAs, computers, cameras, etc. These substitutes offer the similar
functionalities as offered by cell phones. However, Nokia can provide its customers with all of these
functions in one single phone lowering the threats from substitutes (Icon Group International, 2010).
 Competitive Rivalry
Nokia faces a greater level of competitive rivalry from rival giants such as Apple and Samsung. These
rivals have been able to shift to development and sales of smartphones while Nokia is yet to capture a
greater share of the sales of smartphones(Zhou and Ai, 2014). Moreover, the company’s failure to

8. 7
differentiate its smartphone to that of the competitors has led to increased competitive rivalry. The market
share of Nokia dropped to 12.4% in 2012 as a result of increased competitive rivalry in the market(Cord,
2014).
1.3.2 PESTLE ANALYSIS
The PESTLE analysis for Nokia comprises the analysis of the environmental forces relevant to the
external environment of the company. This analysis provides insight over Nokia’s current market
situation based on the impact of its macro environmental forces.
Forces Analysis about Nokia
Political Forces - Lack of enough support from home country’s government
- Needs to adhere to government’s policies
- Political unrest in China leading to the needs to shift manufacturing
to higher cost locations
Economic Forces - Economic downturns limiting the customer’s buying powers
- Lack of enough economic resources i.e. capital and human resources
as compared to the competitors, leading to limited R&D and
technological advancements
Socio-Cultural Forces - Failure to understand the shift of customer’s demand for phones
with functional advantages to the phone with afocus on experiential
factors like color, screensize,etc.
- Inability to provide the customer with variation in product line
- Inability to address the needs of the young buyers
Technological Forces - Use of less popular Microsoft OS over widely used Android OS lead
to customer’s reluctance in buying Nokia phones
- Software glitches in Lumina 900 brought major impact upon its
sales
- Inability of Nokia to come up with breakthrough technology
Environmental Forces - Issues related to eco- friendly use and disposal of materials and
wastes
- Demand for development of energy saving phones
- Need to consider the environmental influence of the company’s
production plants
- Needs to address the issues related to global warming and pollution
caused by the company’s production plants

9. 8
Legal Forces - Adherence to EU regulations
- Compliance with laws and regulation of countries where
manufacturing and assembling plants are established
Table 1: PESTLE Analysis of Nokia

10. 9
QUESTION 2
2.1 CRITICAL EVALUATION OF MARKETING MIX OF NOKIA
To suggest appropriate marketing strategies for Nokia, it is essential to evaluate its marketing mix.
Marketing mix refers to the combination of factors such as product, place, promotion and price that
determine the offer of a product or a brand(Öztaş, 2015). It is a tool that businesses use to decide about
and form a marketing plan. Thus, marketing mix is closely related to marketing plans and strategies.
Marketing mix can be different for different segments of markets, based on the customer’s needs and
demand in that very market(Ropot, 2013). The marketing mix for Nokia is crucial in a sense that it
differentiate the company forms its rivals.
Figure 5: Marketing Mix of Nokia
2.1.1 PRODUCT
The core product for Nokia is its mobile phones(Chen and Hu, 2008). The company offers a wide variety
of mobile phones in different size, quality, colors and other specifications. To understand the product of
Nokia is it important to gain an understanding of product mix. The product mix is the summation of the
total product line that a company offers to its customers(Ingrams, 2015). Nokia serves different segments
in the market by offering the customers with different phones under different product lines. For instance,
Nokia’s N Series and E Series smartphones were targeted to the multimedia users and business- oriented
users respectively(Aspara et al., 2013). Similarly, the Windows OS based Lumia 900 targets the youth
market by offering greater connectivity and multimedia options. Thus, with its Windows-based
smartphones, Nokia attempts to serve the needs of larger segments of customers(Hsiao and Chen, 2015).
Furthermore, Nokia offers high-quality products to its customers making it one of the biggest players in
the market.
Product Price
Promotion Place
Marketing
Mix of
Nokia

11. 10
The design of Nokia’s mobile phone also varies according to the market trend. The designs vary from
modern touchscreen smartphones to traditional flat sets, flip sets and slide sets(Mathur, Raj and Chouhan,
2013).Despite the availability of a variety of product lines to serve different market segments, the major
lags in Nokia’s product strategy is that the company has failed to address the changing taste and
preference of the customers in the present market(Icon Group International, 2010). Nokia’s product
strategies lack enough market research and R&D considerations.
2.1.2 PRICE
Price is another crucial element of Nokia’s marketing mix. It defines the pricing strategies and methods
used to set the monetary value of the products. As explained earlier, with different types of mobile
phones, Nokia attempts to serve a larger segment of the market. Furthermore, the price of the Nokia’s
mobile phone also varies depending upon its types(Ropot, 2013). Nokia not just offer the market with
economic phones with lower end prices but also sophisticated and expensive smartphones. The company
shows remarkable variability in the price of its cell phones so that they can serve people from different
income class(Aspara et al., 2013). The company makes use of marketing strategies such as price
skimming to stimulate the demand for its mobile phones. Based on the skimming strategy for pricing,
Nokia launches its products at a higher price in the beginning and gradually decreases the price to
increase demand(Ropot, 2013).
Nokia has been able to develop an image of themselves as a company that offers customers with both
economic and expensive phones(Chen and Hu, 2008). However, other rivals in the market such as
Samsung, Sony, etc. provide the customers with phones with better specifications at a lower price. In this
context, Nokia has failed to offer its customers with better products at lower prices(Cord, 2014).
2.1.3 PROMOTION
Another element of the marketing mix that plays a major role in defining the marketing strategies of a
company is a promotion. Promotion is concerned with communication the customers with the information
related to the product so that they are informed, persuaded and reinforced to buy the company’s
product(Hossain, 2012). For Nokia, promotion mix has played a crucial role in stimulating its sales and
creating a brand image. The promotion mix of Nokia comprises of its Advertising, Sales Promotion, and
Public Relations and Personal Selling activities(Ashman, 2013). In the backdrop of promotion mix for
Nokia, the company mostly uses advertisement and public relations as promotional tools. The company
advertises its products over television, radio, billboards, etc. to pass their marketing message to a large
number of customers at a time(Ropot, 2013). Furthermore, Nokia performs public relations activities

12. 11
through different seminars and talk programs to inform the customers about its products and their
specification(Watson, McCarthy and Rowley, 2013).However, Nokia has not been involved much in sales
promotion in past few years. Similarly, personal selling is also used by Nokia on distributor level by
providing its distributors with orientation and training related to the product(Watson, McCarthy and
Rowley, 2013).
2.1.4 PLACE
Place, in the marketing mix, refers to the distribution process and channels of the company. It is
concerned with the use of distribution channels and strategies so as to provide the customers with easy
access to its products(Steinbock, 2010). Unlike its competitors like Apple, Samsung, etc., Nokia lacks
direct stores of the company to sell their mobile phones to the customers. Thus, Nokia relies on the
market intermediaries for distribution of its products in the market. The company floats its products in the
market through distributors. Retailers and mobile operators play a major role in the distribution of the
Nokia’s smartphones and feature phones(Ropot, 2013).
Nokia also showcases its products at the Nokia gallery through which customers to learn about different
models and purchase them(Laanti, Salo and Abrahamsson, 2011). Nevertheless, the lack of direct store
for selling the products has kept Nokia detached from its customers. Moreover, overreliance upon the
distributors and retailers for distribution can also be of greater risk to the company(Palmberg, 2002).
2.2 RECOMMENDATIONS FOR NOKIA
Nokia had been one of the strongest players in the global mobile industry. However, presently, the
company has failed to maintain the market share it earned during its growth phase(Cord, 2014).
Furthermore, Nokia has lost a greater share of its markets to companies like Apple, Samsung, and HTC,
etc. in past decade.
2.2.1 EMPHASIZE ON MARKET RESEARCH AND R&DTO TRACK AND RESPOND TO
MARKET DEMANDS
The major problem of Nokia in past was that it failed to track the customer’s needs and preferences(Cord,
2014). Thus, it needs to give more importance to market research and R&D to meet the needs of the
customers. The company has even formed a group of engineers to innovate new unique ideas that would
beat off the competitors. Nevertheless, it is evident that Nokia needs to adopt a more strategic approach to
understanding and address the needs of the market(Icon Group International, 2010).

13. 12
2.2.2 FOCUS ON PROMOTION ELEMENT OF MARKETING MIX
Nokia has been struggling to come up with a breakthrough product in other to recapture its lost market
share. In this attempt, much focus has been given to the product strategies. However, it is important for
Nokia to realize that promotion can also play a strong role in regaining the market shares(Whalley, 2012).
It should make changes in its promotion mix so as to address changing needs of the volatile mobile phone
market. Greater levels of sales promotion and public relations can be performedto do so(Zhou and Ai,
2014).
2.2.3 REDUCE OVER-DEPENDENCY UPON INTERMEDIARIES
Nokia might face a greater threat in the market due to its overreliance upon its distributors. Thus, the
company should not just solely depend upon its distributors and retailers for sales(Aspara et al., 2013).
Nokia should establish its own stores through which it canbeside its products in the market.
2.2.4 PLACE SERIOUS CONCERNS OVER TECHNOLOGICAL DEVELOPMENT
The recent incident of glitches in Lumia 900 has raised eyebrows of the customer over the brand. Such
technical glitches are costly for the company not just regarding money but also in terms of
reputation(Whalley, 2012). Thus, it is crucial for Nokia to make investments in technological
advancements to get over such technical glitches.
2.2.5 CLOSELY MONITOR THE COMPETITORS
Nokia, in past, had been reluctant to understand the impact of the competitor’s actions over its sales(Cord,
2014). This had been a major reason for the fallout of Nokia. Thus, in future, Nokia is recommended to
keep a close watch over its competitors. It is essential for Nokia to analyze the impact of each and every
move of the competitors over the company’s sales to prepare one for major market shocks(Marcu and
Meghisan, 2015).
Thus, based on the analysis of the marketing environment and evaluation of marketing mix strategies of
Nokia, it is recommended for the company to come up with changes in its overall organizational
strategies as well as the marketing mix strategies to regain its market share in the future(Ropot, 2013).

14. 13
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