Marketing Problem Nokia Marketing problem: Lack of product innovation

Current marketing environment of Nokia

Marketing Problem Nokia

Nokia Corporation is a Finnish company that manufactures mobile phones, mobile computers, and networks. The company also provides services such as maps and navigation, music, media and software solutions for mobile phones. From late 1990s to late 2000s, Nokia remained the highest mobile selling company of the world. This however has changed recently and many other companies have effectively reduced the market share of Nokia. There are many causes of this decrease in global mobile sales share of Nokia however; one marketing issue has caused this downward journey more than others. The company reported having negative € 2.3 billion of operating income in FY 2012 whereas net income of the company was also reduced to -€ 3.1 billion in 2012 (Nokia Annual Report, 2012). Although Nokia was the first company to have launched Smartphone Nokia 7710, the company's dominant position has also been significantly compromised in this market segment as well. Currently the company is manufacturing Nokia Smartphone with Microsoft Windows as default operating system (OS). The likes of Apple and Samsung have reduced the appeal of Nokia Smartphone. In traditional mobile phones industry, indigenous Chinese brands have significantly reduced Nokia's market share globally. Net sales, operating profit, net cash from operating activities, Smartphone net...

In section II, detailed description of Nokia's main issue in planning and executing its marketing strategy will be presented. Part III of this paper will analyze current marketing environment of Nokia along with description of current trends, competitors and major stakeholders. SWOT analysis will also be presented in the same section followed by conclusion and recommendations.
II- Marketing problem: Lack of product innovation

Whilst there are many marketing issues that have caused such sharp reduction in Nokia's product sales and profitability, 'lack of product innovation' in single most imminent factor that has compromised market share and leadership position of Nokia. Nokia was the first one to launch Smartphone Nokia 7710 and remained a market leader for long. But with the introduction of Apple's iPhone and Samsung Galaxy, the net sales of Nokia Smartphone and other mobile headsets has decreased manifold. In FY 2012, Nokia reported having got its net sales of Mobile handsets and Smart Devices decreased by 32% and 52% respectively (Gassee, 2012). With lack of any real product innovation, Nokia has got its average selling price (ASP) of its handheld mobile sets decrease by more than 18% in 2012. Huawei and ZTE are two of the cheaper Chinese alternatives of Nokia Smartphone in market. The lack of differentiation in Smartphone category is also indicated by the fact that Nokia relies on Microsoft for providing her with…