Forces In The Mobile Phones Market Nokia example essay topic

Page Number 1 Contents 2 Back ground info / Analysis of Current Situation 3 Social / Economical Trends 4 Political Trends / The Market Customers 5 The Market Customers 6 Competitors Market Analysis 7 Marketing Strategies 8 Marketing Strategies 9 Top Rivals to the T 68 i 10 SWOT Analysis 11 Proposed Marketing Strategy 12 Proposed Marketing Strategy 13 Implementation 14 Strategy Control / Bibliography Background Information The organisation. Company- Sony Ericsson Mobile Communications. Established- 2001 by Ericsson and Sony Corporation. Ownership- Equally owned between Ericsson and Sony.

Turnover- No official annual Reports available as the company only recently founded. Ericsson and Sony's combined mobile phone business annual unit sales of approximately 50 million units and sales of 7.2 billion U.S.D. in 2000... Global Corporate Management- based in London SS 3500 employees working in Germany, Japan, Sweden and the U.S... Products- T 68 i and P 800 (Source- web) Sony Ericsson Mission Statement- to become the market leader in Mobile Telecommunications handset sales. Analysis of The Current Situation External Environment. Technological Trends- the latest mobile phones are expected to have most of the following: SS Text Messaging SS Colour Screens SS Voice Activation SS WAP with Email connections (As well as special features e.g. cameras, record able ring tones etc.) (The two Sony Ericsson phones currently available have all of the above features) The Demand for the Structure of phones is: SS Small SS Light SS Personal, original or replicas. e.g. phones from films etc e.g. Matrix, James Bond.

Social Trends- SS Mobile phones are fashion symbols and everyone form early teens to late twenties is considered out casts if they do not own a mobile phone. (This chart shows how mobile phone ownership has changed in recent years.) Source: Mintel This shows about two thirds of the population owned a mobile in 2001. SS Phones show a persons power and wealth and often they " re social class by the type of phone and brand they own SS These trends have been highlighted commercially with slogans like "Ashamed of your mobile" (Phones 4 U) and the T.V. commercial where a fictional living mobile phone, is forced to live on the streets because it was replaced instead of being upgraded at the Carphone Warehouse by its owner... Economical Trends- SS The company has to adjust its prices to adapt to inflation rates in order to continue to sell the product as well as maintain a profit...

Political Trends- SS Potential legislation could affect the production costs of producing the mobile phones through having to use new technology. The Market Customers. Geographic Market- SS Sony Ericsson aim to sell they " re products in association with street stores who offer the phone with the various networks. This allows the phones to be distributed in high streets all over Britain... Behavioural Market- SS Mobile Users ranking Factor 'most important' when choosing a mobile network % Reception 63 Geographic coverage 44 Overall Cost 41 Customer Service 35 Text Messaging 29 Internet Service 6 Source: - OFTEL / Mintel Retail Intelligence, 2002 Whilst this information may not directly affect Sony Ericsson the key factor does. Customers firstly expect reception and geographic coverage, which the four leading network providers offer 99% coverage of the U. K at the similar rates.

After this the key issue is cost. This shows that the customer wants the cheapest option available and that Sonyericsson could improve its own and the networks that sell the phones sales if it could reduce prices... Demographic Market- (see figure 39) SS (Actual) The most profitable market for mobile phones are: O 15-24 year olds O Particularly the 15-19 year olds who have no need for fixed line equipment, as they are likely to live in their parent's home. O This group's highest penetration is in the D and E social groups. (Mobile buyers high other telecom low) O The most profitable life stage is those pre / no family. The table and the graph show that there is three dominating forces in the Mobile phones market Nokia.

Ericsson and Motorola. It also shows that the market has saturated and since sales have fallen in the major companies. Marketing Strategies. Marketing strategies of the companies are very similar in the fact that Sony Ericsson, Nokia and Motorola all target the same areas... All invest in adverts for fashion magazines for men and women usually targeting teenagers and young business man / woman. ..

Below, is an example of Sonyericsson promotion of the T 68 i found in various magazines. It captures the idea of fun and youthfulness by including football and bright colours and a snappy catch phrase... When looking at the rival companies they have used very similar techniques... Motorola below have used bright colours and used music as its target to attract the young. They too have used a catch phrase... Nokia is not too dissimilar either using surfing for fun and a simple catchphrase.

They have also used humour. All three companies also have billboards with similar images all over Britain and TV. Commercials promoting in a similar way. Motorola also sponsor films on T.V. and the Sony Ericsson T 68 i is the sponsored phone used in the James Bond Film "Die Another Day". . Top Rivals to the T 68 i SS Sony Ericsson T 68 i SS Main features- colour screen, multi media messaging, blue tooth for electronical attachments, camera attachment and e-mail.

SS Price (without contract) lb 350 SS Target- 15-24 yrs, B & Cs SS Motorola 330 SS Main features- colour screen, downloadable games and themes. SS Price- (without contract) lb 200 approx SS Target- 15-21, Cs & Ds. SS Nokia 7650 SS Main features- colour screen, multi media messaging, built in camera and e-mail. SS Price lb 550 SS Target- Employed 18-30, A, B, & Cs Source- Charlie Backwell- Sales Assistant - Link Bournemouth Sony Ericsson SWOT analysis Strengths-. Global reputation for good quality electronics.

Factories throughout Europe easy to distribute products. Two U.K. factories good U.K. productivity. Sony knowledge of electronics industry. Ericsson knowledge of the telecommunications industry. Up to date technology. Customer Loyalty Weaknesses-.

Recent Merge of the factory means currently too few products. Communication problems from the merge. Public view that Sony is too expensive Opportunities-. Only one major alternative to Nokia to compete with. Ability to improve patented technology. 3 G picture and video messaging Threats-.

Competition e.g. Nokia all ready controlling market with a variety of products. Market has saturated and so fewer customers to compete for in a already crowded market. Network companies beginning to produce their own phones e. g... The O 2 xda.

Ageing population- minimal growth in key 15-24 year old population. Interest in mobile phone ownership decreases with age. This will make the market over competitive Proposed Marketing Strategy Target Markets and Competitive Strategy- The most profitable area of the market has proven to be the 15-24 year olds. Therefore the company should aim to attract customers from those age bands.

Also at this age range the opportunity will rise to attract these customers for future products. If the customer believes the product was a good investment than the likelihood of future purchases will increase and hence many years of future custom from the buyer. However the company already shares a substantial part of this particular market. The mobile market could be considered a monopoly as Nokia controls over 25% of the market. However it also has characteristics of being obligoby as Motorola and Sony also stand away from the crowd with high levels of control too. The three companies combine to control 61% of the total market.

With Sony Ericsson selling the middling amount between the two other companies. This leaves the company two possibilities. Firstly to maintain its current position or secondly to try to overtake Nokia. The company can avoid being overtaken by Motorola by continuing to sell its product at similar rates depending on the rivals and selling similar levels of technology. If the company is to surpass Nokia it either needs to adjust prices, exploit a new target market or increase quality at similar prices to the rivals. Sony has such a reputation that it would be able to slash prices without the new price affecting the Sony brand image.

However Nokia's brand image also is exceptional and they too could drop prices with they " re image still intact and all this would cause is a price war. Therefore taking Nokia on head to head is too risky. However a price war would possibly reduce the sales of Motorola who currently attempt to slightly under price or slightly overprice the current mobiles on offer by Nokia with similar levels of technology. The Motorola brand name however does not carry the same quality as Sony Ericsson and Nokia and so at a time of low price wars would find itself struggling to compete with Sony Ericsson and Nokia collecting a new share of the market. Also I do believe that there is a gap in the market. The creation of the blue tooth system has meant that the mobile is capable of being hooked up with other electronical appliances.

This development will allow Sony in the future to build phones capable of performing tasks with personal computers / laptops /printers etc and could become invaluable to the businessman. This would open a whole new target area. For these reasons Sonyericsson should also begin to target the business world (age 25 to 50) classes A, B, & C. With extensive promotion into broadsheet papers, financial and business magazines. If carried out correctly to go with the company car and laptop businessmen could be receiving the company Sony Ericsson mobile as standard.

It is important for the company to maintain a differentiated marketing campaign attacking different price ranges with different qualities of phones. Catering for different segments of the market will allow the company to fall back on other segments should any future phones fail to succeed in its chosen target market. Positioning- Sony as a company others a huge variety of products and services. Now that they are working with Ericsson the combined reputation will allow them to challenge any company including Nokia at any level of the phone industry market. This is why I believe Sony Ericsson should promote they " re phones as the stylish alternative to Nokia mobile phones. Sony already have worldwide recognition with advertisements promoting football and many other sports and events.

These tend to attract the lower classes, this is all very well but this area is already congested and conquered. Whilst not ignoring the lower scale industry of classes D and E, age group 15-24, which is currently, the most profitable segment of the market. The attention should be turned elsewhere trying to attract the businessmen and women who will soon see the mobile phone as a vital piece for the completion of all work. The Sony Ericsson brand should be viewed as the stylish alternative to Nokia, with a wide variety of models available to allow the customer their own individualality. In order for this to work it needs to be viewed as slightly more luxurious and exclusive than Nokia but also marginally more expensive.

Implementation Products. Expand Variety of products to cater for low, middle and luxury ranges. (At present the company offers a very limited amount of products due to the fact the company has only recently been founded. ). Continue to update and introduce models in order to keep up with and surpass rivals technology. Produce products desirable for business personnel Price.

When releasing new products release at high prices to promote quality. Wait for the stability of latest phones in the market then begin to lower prices before releasing newer models. Lower all prices in selected outlets. If considered safe lower all range prices to create price wars with rival companies in order to damage weak rival companies. Gradually raise prices to prior values Place. Supply Network and High Street Chain stores with the phones to distribute to consumers Promotion.

Maintain promotion in magazines and billboards promoting fun and active lifestyle, which appeals to 15-24 year olds of D and E social classes, as these are most profitable... Advertise Cheap quality at time of price war. Once D and E groups are stable customers, change promotion style from sports fun and action to class, sophistication and efficiency, which will attract business investment. Strategy Control.

Place performance indicators into place which over a period of time will be able to supply information on: O Customer Satisfaction O Market Share O Brand awareness O Turnover O Profitability. If the price reduction should go ahead it would be done region-by-region in order to make sure sales are maintained and that it has the desired effect on rivals. Whether it is simply retaliation behaviour or reduced sales. If neither occurs the prices should be returned to normal prices. Thank You for Your Time K.C. Verney

Bibliography

- Morgan M 1996 Marketing for Leisure and Tourism Prentice Hall Dec 2002 For Him Magazine Oct 2002 Loaded Nov 2002 Cosmopolitan Other Sources web web web web Mintel Leisure Intelligence Charlie Backwell- Sales Assistant - The Link.