The History of Nokia’s Creation and Becoming an Influential Brand

Introduction

In this assignment we will show some background of Nokia and demonstrate what problem it is facing in a current environment and what it needs to change, we will also develop possible solutions that Nokia might use to solve it. Our assignment will also include the evidence and concerns of cultural literacy. By the end of this assignment we will come up with a design of a research proposal which Nokia could use to solve its problem.

Nokia’s Background

Would you believe that Nokia started its existence in 1865 by making paper – ‘the original communications technology’ (Nokia Corporate) ?

Fredrik Idestam, founder of Nokia, is known for building wood pulp mill on the banks of Nokianvirta river- that’s where Nokia got its name from.

In 1871 the company was known as Nokia Ab.

Throughout the years Nokia Ab was growing fast and started focusing on developing in different spheres of business, e.g. Rubber Works (1898), Cable Works (1912), First Electronics Department (selling and operating computers, 1960) ; and only by 1967 Nokia Corporation was created.

From 1981 the mobile era began and Nokia was one of the major companies that took part in it by developing its first Digital telephone Switch (1982), Mobira Talkman Portable Phone (1984), by 1991 Nokia started to use GSM (Global System for Mobile Communications).

From 1998 Nokia becomes the World leader in mobile phones and nowadays it is still known as the biggest mobile phone maker.

Nokia’s Problem and Current Situation

Nokia started to face a decline in its Brand value from 2008 because it wasn’t responsive enough to 3G era and software applications.

Nokia follows new technologies but it concentrates more on phone designs and quality rather than software innovations. Every time this company launches new products they don’t seem to be sustainable on the market, compared to Apple or any other mobile brand, whose brand values are growing progressively.

Changes Nokia needs to make

Nokia is still making profits but it should start thinking of increasing its Brand Value, and to do so it needs to think of new innovations. Direct communication with the customers and mobile users (i.e. primary research) will help Nokia to find out what people really want and this will lead to new developments in Nokia phones and software it uses. Nokia should focus on customer’s needs and has to stop relying too much on its existing Brand Image. Nokia might need to develop new different products that other mobile brands don’t have or re-design the software it uses, concentrate more on applications that people want and need, maybe use different language keyboards, etc.

Possible Solutions for Nokia’s problem

1. The company needs to concentrate more on what its customers really want
2. Nokia is the most recognisable brand from all of the mobile techs. However, Nokia shouldn’t concentrate on the brand image it created, it should try to develop new strategies to evoke the change and apply new innovations to gain a competitive edge.
3. Get more motivated new staff who will work better than the current one.
4. Think of products that will be different from other brands, e.g. have different/extra functions/applications.
5. Nokia might need to think of the cooperation with high recognisable brands.

Strengths and Weaknesses of Solutions listed above

• To find out what customers want, Nokia will need to do Primary Research which means that it will have a direct connection with the customers which will lead to producing the right products that will be desirable for consumers. However, primary research might be costly and can take a long time to find the right information.
• If Nokia creates a little bit different brand image and succeeds in it then it is more likely to get back to its position of a strong leader in mobile technology. But creating such image might be risky, because if it fails then Nokia’s brand might become more vulnerable and not trusted anymore.
• Recruiting new and younger staff will be beneficial for Nokia because they will bring new/fresh ideas to the business, they will be more innovative and closer to modern world. But there is also a downside for it as new staff usually requires training which might be costly and time consuming.
• Introducing new different products will increase Nokia’s popularity because people will be more interested in it as it will create something that other brands don’t have, this might also lead Nokia to a position of a stronger market leader. However, if Samsung or Blackberry (or any other brand) will start copying Nokia’s products then there will be an increase in competition and Nokia will have to think of decreasing prices or develop new marketing strategies and ideas for its products.
• If Nokia cooperates with another famous/big brand, i.e. become partners and work organised, then they will achieve good results and it will be a new successful stage for Nokia, which will help it to become stronger and powerful brand. It is known that Nokia and Microsoft are working on a new product launch (Microsoft News Center). The disadvantage for this might be the conflict between two companies in decision making as they are likely to have different views and visions, which might slow down their work. Another negative factor is a failure of these two companies if something goes wrong, which can result in the lost of both Nokia and Microsoft brands/images. This solution might sound good if it succeeds BUT it shouldn’t be the First option for Nokia to consider because it is the most risky solution for the company. The solutions listed above look safer for Nokia.

Cultural literacy concerns

Nokia also needs to consider cultural literacy and cultural intelligence, because for example, when Nokia hires new people in different countries it has to remember that all countries have different cultures and attitudes, therefore the company will have to adapt to each country according to their ways (i.e. in some cultures the manager and workers have to keep distance and keep everything official and managers can be strict, whereas, in others it might be offending). Employing international staff will be helpful for Nokia to understand different cultures.

When Nokia operates in some small countries, e.g. Japan or New Zealand it needs to understand that those countries are ecologically clean and work hard on saving their environment; therefore, Nokia should persuade more people to recycle old phones that are not in use anymore- this will help to reduce the wastage and will be harmless to environment. Nokia also did a survey which gave a result that 44% of old phones are not being recycled (Nokia Corporate). ‘Think Environment’ strategy will definitely help to increase Nokia’s Brand Value.

Best Solution for Nokia’s Problem

More of customer orientation will be one of the best solutions for Nokia, as it will help to think and produce mobile phones and products that people really want (when you make what your customers want, you increase your sale and profits). To find out customer’s needs Nokia will have to do Primary Research, which is doing questionnaires, surveys, interviews, e.g. talk to people in mobile phone shops or malls about what kind of phones they want and ask for suggestions for Nokia phones.

Conclusion

Nokia is losing its Brand Value, however, it is still a strong Brand (not as strong as it used to be though) and it is still making profit. To avoid the complete lose in the market, we designed a Research Proposal which Nokia could consider when deciding how to solve its problem.

In the previous section it was discussed how Nokia was not able to capitalize on brand value alone, and even though it is fighting a fierce technological battle with competition like Apple and Blackberry market share in the fast-growing smart phone category remains low particularly in the US (Steinbock).

According to Steinbock, Nokia is established globally especially in the emerging markets of Brazil, India, China and Indonesia. This gives Nokia some safety against the cut-throat competition in smart phone development that it has to face in the advanced countries. However, Nokia market share especially in the highly competitive cell phone market of USA has dropped sharply which shows that cell phone manufacturers in the USA are making products significantly better than Nokia. So Steinbock is right that the real fight is in advanced countries because they are the hubs of innovation and help shape the direction of future developments in emerging markets.

In order to find out where the research problem exists we must be able to find the most important feature of a cell phone, and find Nokia’s position when compared to it. For this we also need to break down the features of a cell phone into distinct categories against which a focused research can be performed.

Market Research Problem

The market research problem for Nokia that needs to be explored is that ‘The aspect or feature of a cell phone that appeals the consumer in advanced countries, especially in the USA, the most and the position of Nokia when compared to it’.

By ‘aspect or feature’ what is meant is a broad category that needs to be handled by a product development division and is already acknowledged as important in the industry. The reason for finding out the most important feature is to bolster efforts in the specific product development division. Since Nokia’s market share in the US is already very low it is assumed that the features appreciated the most by US consumers are either entirely absent or are not of a comparatively acceptable quality in Nokia.

The Market Research Problem defined here is exploratory in nature and is meant to narrow down the research to a single feature. Future research should then take place in describing the details of the feature as required by consumers. However, it is also intended that through the same research a rating of different features can also be obtained and future areas of research can be realized.

List of research protocols

To research against our Marketing Research Problem, we can utilize a number of protocols some of which are listed below

Mainstream Research protocols

• In-depth Interviews: An unstructured and extensive interview in which the interviewer asks many questions and tries to get detailed answers. (Zikmund, 157 – 158)
• Focus groups: An unstructured and free-flowing interview of a small group of people. (Zikmund, 144 – 152)
• Experience survey: A research technique in which people who are knowledgeable about a research problem are interviewed. (Zikmund, 141)
• Survey research: A method in which information is collected by a representative sample of people this usually takes place through paper-based, telephonic or digital mediums. (Zikmund, 218 – 221)
• Test Marketing: A controlled experimental technique that employs an opportunity to measure sales or profit potential for a new product or marketing plan under realistic market conditions. (Zikmund, 342 – 344)

Non-mainstream research protocols

• Neuromarketing: A relatively new method of consumer behavior research which utilizes techniques from neurosciences for a better identification of cerebral mechanisms that take place in the mind of a consumer for a purchase decision. (Veronica)
• Social Media Monitoring: It includes searching the internet and social media like twitter, and finding out customer opinion about your product or service. It is a Sentimental Analysis as customer opinions would tend to be very favorable or extremely unfavorable. (Webster)
• Social Media poll/survey: Use of social media for conducting a survey or one question poll. This is a new and fast-growing area. (Sundar)

Compatibility of the different research methods

In-depth interviews are a very rich method of data collection and since the interviewer is at liberty to ask questions and find detailed answers many hidden aspects of the research problem can be identified in this method. However, it is a very time-consuming method and certain consumers might offer very little insight or even wrong insight for the problem at hand (Boyce and Neale, 3-4).

Focus groups are not as time consuming as interviews, and provide a means of taking a discussion rich with information in a very structured manner. Some aspects of the problem might be overlooked due to structural problems, but focus groups are usually a good dipstick measure to check if the Marketing Research Problem is correctly identified. However, for actually researching about the Marketing Research Problem and coming up with reliable data focus groups can be difficult. This is because focus groups are often dominated by few respondents, and the moderator has to take a lot of responsibility which is often not fulfilled (Zikmund, 144 – 152).

Surveys are a less expensive method of data collection, and they provide focused responses. However, at times survey results have proved to be an unreliable source for decision making as consumers often do not know what or why they are purchasing and associate certain rationale after purchase which is known as post purchase rationalization (Cohen and Goldberg, 315 – 321).

Test marketing would probably provide the most reliable results if it is conducted in a representative area. However, for this research variables need to be narrowed down to a certain feature of a product, and test marketing would only provide some information about whether a product would be successful in the market or not. The most important reason that test marketing cannot be used for this Marketing Research Problem is that there is no cell phone with absolute and singular feature anymore, neither would such a cell phone appeal to the sophisticated market of cell phone users today.

The most sophisticated data can be gathered from Neuromarketing which can enable us to pinpoint certain aspects of the product that if improved significantly would create a sustainable value for the consumer. The reason this method is not feasible is because it is not only too expensive even for corporations, but also because very few people are willing to participate in such research and the research is very time consuming as well (Easter).

Very relevant information can be obtained from Social Media Monitoring because we require areas where Nokia has lacked and competitors have picked up. The sentimental comments of disgruntled or very satisfied customers would give a fair idea of where Nokia stands. However, customers often complain on product quality which is not representative of every person who bought a cell phone. It is understood that the data should be representative for the research to be of value in decision making.

The greatest advantage of a Social Media poll/survey is that it can provide large amounts of data in short time and is also one of the most inexpensive methods. However, according to experts of social media marketing, this research method is also the least reliable unless working with very large sample sizes.

The research method most suited to this Marketing Research problem is an Experience survey of successful cell phone salespeople. It is the job of a salesperson to know the features of a product and to realize why one product is better than the other. It is through this knowledge that a salesperson sells merchandize and the field knowledge of such a person is definitely most suited to the research problem at hand and would be more logical and reliable than that of the consumer. The salespeople will be concrete in their knowledge and will not be easily led into forming conclusions, and might even provide much needed insight into the problem. Furthermore, it is very probable that the responses of the sales people might match and strengthen the importance of a certain aspect, and where such conformity is not present it can be safely assumed that the issue is either peripheral or requires further research in a different group of people.

Description of the Research Protocol of choice

The Research Protocol of choice for this Marketing Research Problem is an Experience Survey of successful cell phone salespeople which would be conducted in two steps. First step would be in-depth interviews of sales people and then a survey would be conducted.

Cell phone salespeople for both consumer and corporate markets are employed by retailers and large cell phone sales franchises. Explosive technological growth in the cell phone industry ensures that even salespeople who were not in touch with the industry for the last three or four years would be a bad choice. Only the best performing salespeople with up to two to three years of sales experience would be qualified enough to help in finding out the most relevant features as per our research problem.

Generally salespeople are very knowledgeable about product features and their appeal to their target markets. Hence, the initial part of experience survey need not be very structured but it should stick to the Marketing Research Problem as the salesperson would naturally want to score a sale in the end and might tend to drift off the topic to achieve that.

So, to achieve the right balance between structure and in-depth insight of the salespeople it would be necessary to form a list of topics and check them as they are covered. Secondary research would also be a very important aspect, as knowledge about different product features would assure the salesperson that the researcher means business and would not be satisfied with superficial answers. The salesperson must be able to see the researcher as a sophisticated buyer and would feel more motivated to present answers if the researcher appears as a challenge customer. However, the researcher should not take the guise of a buyer because it might be unethical as it is obvious that the purpose of the researcher is not to buy the cell phone.

Sampling methods

Mainstream methodology

• Simple Random Sampling: A procedure “that ensures that each element of the population has an equal chance of being included in the sample” (Zikmund, 477).
• Systematic Random Sampling: A procedure in which the beginning point is selected randomly and every nth number on the list is selected. (Zikmund, 478)
• Stratified Random Sampling: A procedure in which the sample is formed from simple random subsamples drawn from a number of stratum that are similar on some characteristic. (Zikmund, 478 – 479)
• Convenience Sampling: A technique in which the most conveniently available people or units are obtained in the sample. (Zikmund, 474)
• Cluster Random Sampling: A technique in which the primary sampling unit is a large cluster of elements, and clusters are selected randomly. (Zikmund, 480 – 481)

Nonmainstream methods

• Judgment Sampling: A method in which an experienced researcher selects a sample based on certain appropriate characteristics. (Zikmund, 475)
• Snowball Sampling: A procedure in which respondents are initially selected through probability methods and additional respondents are gathered from information by the initial respondents. (Zikmund, 476)
• Multi Stage Sampling: A technique which involves a combination of two or more sampling methods. (Zikmund, 481 – 482)

Compatibility of the different sampling methods

For an Experience Survey any of the Probabilistic methods including Simple Random Sampling; Systematic Random Sampling; Stratified Random Sampling; or even Cluster Random Sampling would not be appropriate as they do not consider any criteria and are based on random selection with slight variations. This research requires that the salespeople who are contacted for research are of a certain qualification and random selection within that group of people is possible. However, it is far more possible that the researcher would have to employ Convenience Sampling technique within that group. This might mean that the response rate cannot be calculated for this research but it is also not very relevant to this research.

Judgment Sampling would have been a good option if an industry expert was available, but it also means that the preferences or bias of that expert would become a part of the research.

Respondents can be easily obtained through Snowball Sampling with a slight modification to the technique by not using probability methods to get initial respondents but using convenience sampling instead. This method has the chances of leading the researcher to experts of the industry.

Eventually the sampling must be based on the Multi Stage Sampling with Convenience Sampling in the beginning and Snowball Sampling afterwards.

Description of the Sampling Method of choice

The sampling method of choice is Multi Stage sampling in which the initial respondents would be contacted on a Convenience Sampling basis. This would make the job easier and since the next stage sampling would be based on Snowball Sampling method, so eventually be getting responses would be obtained based on reference. As such response rate would be very high especially in the second stage (Jacko and Sears, 968).

This would help in speedy data collection and since there are chances that competitive salespeople would lead us to competitive salespeople or other experts of the industry so ending up with rich and reliable data is far more possible in using this technique.

Ethical considerations

• Appearing to a salesperson under the guise of a consumer might be effective but is not ethical. It would be better to put up a fixed compensation for respondents.
• Contacting salespeople during their working hours should be avoided as much as possible and interviews should only be conducted after working hours so that the performance and earning of the salesperson is not affected.
• The importance of the respondents’ time should be kept in mind and unnecessary repetition of questions should be avoided.
• Care should be taken not to ask information that can be termed as confidential for the salesperson’s company as it is not only unethical but can also lead to litigation against the salesperson and the researcher.
• It would be challenging to interview salespeople as they can easily drift off topic to make a sales pitch. Hence, the researcher would have to remain disciplined and would also have to keep the salesperson disciplined and on the topic without crossing ethical boundaries.

Research plan

The steps to be followed for the conduction of the research are the following:

1. There is the need to form an outline of research issues. This is necessary in order to give the conversation a direction and help the researcher stick to it.
2. Salespeople shall be contacted based on convenience sampling technique, and would be requested to provide some time after work for research purpose. A small gift or certificate of appreciation shall be promised to those who are willing to participate.
3. The initial sample will have to go through in-depth interviews, and would also participate in the survey. Later on, respondents would be required to participate in survey only.

References

Boyce, Carolyn and Palena Neale. “INTERVIEWS: A Guide for Designing and Conducting In-Depth Interviews for Evaluation Input.” Watertown: Pathfinder International, 2006. 3,4.

Cohen, Joel B. and Marvin E. Goldberg. “The Dissonance Model in Post-Decision Product Evaluation.” Journal of Marketing Research (American Marketing Association). 1970. 315-321.

Easter, Brian. NeuroMarketing: Buzzworthy or Just Hype. 2010. Web.

Jacko, Julie A. and Andrew Sears. The Human Computer Interaction Handbook. Mahwah, New Jersey: Lawrence Erlbaum Associates, Inc., 2003.

Microsoft News Center, 2011. Microsoft, Nokia and Microsoft Announce Plans for a Broad Strategic Partnership to Build a New Global Mobile Ecosystem. Web.

Nokia, Google Images. Web.

Nokia Corporate, 2011. Nokia, Story of Nokia. Web.

Nokia Corporate, 2011. Nokia, Recycling gives your phone a second life. Web.

Steinbock, Dan. “Apple Vs. Nokia: The Smartphone Rivalry By Dan Steinbock”, The Globalist – Goog. 2010.

Sundar, Mario. Facebook Polls | Market Research meets Social Networks? 2007. Web.

Veronica, Boricean. Brief History of Neuromarketing. Conference Report. Bucharest: University of Bucharest, 2009.

Webster, Tom. Social Media Monitoring 201: The Market Research Perspective. 2010.

Zikmund, William G. Exploring Marketing Research. Mason, Ohio: South-Western Thomson Learning, 2000.