Nokia's Pricing Strategy

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Case No.07 – Nokia’s pricing strategy

Nokia is one brand name that inspires all those who are into the mobile culture. Of the entire brand that touches our lives, Nokia stand s out significantly. It has taken mobility a step forward by creating products with continuous innovations in this industry has made it imperative that every player keeps pace with changes. Nokia has been one step ahead in anticipating future market moves and strategizing accordingly. Interestingly the company prices its products so competitively that it not only ensures that its margins are covered but also assures revenue maximization. Let us see how Nokia leveraged it segmentation strategies, appealed to various segments with uniquely designed messages and differentiated between its products at every level to communicate and connect effectively with the intended target audience. When Nokia positions its product to the top end segment, it does it as a classy product. To the middle segment customers it is in the form of the best alternative. To the lower end segment, the carrot is that Nokia gives real value, as a high tech product, at low affordable price. The pricing strategy of Nokia can be better understood when the juxtaposed with the skimming strategy and further interposed on Philip Kotler’s nine price/quality strategies model.

(Source: Philip Kotler, marketing management, 11 editions, PHI)

With a vast family of brand that caters to every segment, one can clearly see how Nokia, yielding to the pressure due to the competitive and innovative mobile handset market, slides each brand down the segments, one at a time by reducing its prices carefully and consistently)

Here are some live examples of Nokia’s skimming pricing strategy:

Classic Nokia 8250

Nokia phone model 8250which was available with the vendors during the year 2000 was priced at Rs. 18000. It was without modern features like camera and MMS. The telecommunications infrastructure of the country was in its...
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