Marketing Economics- Nokia India Case
Table of Content
Place the mobile- and smartphones on the PLC curve for the Indian market and assess the attractivity of the market. (10 %)
The Indian mobile and smartphone industry is one of the fastest growing markets in the world.1 The market for mobile handsets, which include feature-phones and smartphones, are expected to grow at a CAGR (compounded annual growth rate) of 15.8% over the years from 2010-14. The establishment of the 3G is a positive impact on the Indian mobile- and smartphone market, as that will expand people’s reasons for purchasing for instance a smartphone. 2 In 2013 India got to be the second largest smartphone market in the world, with only China exceeding Indian as the largest in the world.3
The Indian mobile- and smartphone industry can be argued to be at the growth stage on the PLC curve as it is a still expanding market with fast growing sales. The product is simultaneously gaining more and more market acceptance along with a development of economics of scale for each producer within the market. As the market grows it attracts a lot of new competitors.
Nokia India is on the decline stage on the PLC curve (Product Life Cycle). Within the a year (2005-2006) Nokia India lost 6% of their market share in India, while their competitor Motorola gained 7%.4 Nokia India’s market share is continually decreasing and even within the last quarter of this year it has declined. Nokia India’s market share on the smartphone market is today approximately 5%5. Nokia’s market share is still declining even though Nokia recently launched the new smartphone in cooperation with Microsoft, which was intended to save Nokia on not just the Indian market, but the global market as well. Another factor that has contributed to Nokia India’s declining stage is the popularity of other brands. In the smartphone industry, Samsung and Apple are the leaders in India and in the general phone industry brands such as Motorola and Sony Ericsson are the leading ones. The technical problems and complaints Nokia India has had, could also be a reason for the declining turnover and market share Nokia is experiencing.
So the Indian mobile- and smartphone market, as a whole is much better off than Nokia is on the market. As the market is growing, Nokia still has a chance of succeeding, though the competition on a growing market would be something Nokia would have to deal with in order to improve their position on the Indian market.
The mobile and smartphone industry operate in a monopolistic competition market, as it is a market with both many consumers and producers. Furthermore, there is no single producer who has full control over the market price; however, the producers do have a certain degree of control. The perceived values the consumers have of the products are often non-price determined in the mobile and smartphone market. It is more about the design and the features of the phone. As Nokia doesn’t seem to understand consumers refusal of Nokia’s products in India please devise a research plan including step 1, 2 and 36 according to fig. 4.2 p. 129 in our book. (70 %) Defining the problem
As Nokia India is uncertain of the reasoning behind the declining market share and sales on the Indian market, the research objective to use when determining and defining the problem would be to conduct exploratory research. Another way to determine the problem could be to make assumptions based on the text, http://www.iipm.edu/iipm-editorial-540.html, and thereby conclude on the definition of Nokia India’s problem. In the text it is stated that the Indian customers are constantly complaining about the unreliability of Nokia’s products. Based on that knowledge one might conclude that Nokia’s technology is failing and that is one aspect of the definition of the problem. The text also provides the information that the young generation don’t seem to...
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