The Marketing Environment

Case: Nokia Corporation



Overview
Wireless wizard Nokia has cast a spell on the mobile phone market. The company is the world's #1 maker of cell phones (ahead of such rivals as Motorola and Samsung, among others). Nokia is also aiming for the top of the nascent mobile Internet market. The company's products are divided primarily between four divisions: mobile phones (wireless voice and data devices for personal and business uses), multimedia (home satellite systems, and mobile gaming devices), networks (wireless switching and transmission equipment used in carrier networks), and enterprise solutions (wireless systems for businesses). Nokia combined its network equipment business with that of Siemens in 2007.



So let's start by talking about this subject first from the theoretical point of view, then implement it to Nokia corporation.



What is meant by 'the environment'?



The marketing environment consists of those factors outside the immediate control of the firm which influence its relationships with its target customers. Some environmental factors affect many firms and many industries and cannot be preempted or forestalled by the activities of any one organisation: such factors comprise the macro-environment.



Here are some examples:



*Macro-economic environment

*Political environment

*Social and cultural environment

*Demographic environment

*Technological factors



A company can only monitor its developments and prepare for the inevitability of changes.



Micro-environment is comprised of those factors external to a business that directly affect the running of that business and over which it can exert some control. Changes in this sector of the business environment are of major significance to the marketing department and are likely to influence marketing decisions at both the strategic and tactical levels. Five key factors can be indentified:



*Customers --> Those whom an organisation wishes to engage in exchange processes, usually by selling them something.

*Competitors --> Other organisations attempting to sell similar producs to meet similar customer needs.



Nokia case:

Biggest direct competitors of Nokia are Ericsson, Motorola and Samsung, however Nokia's sales and profit is more than all these 3's combined. Which gives Nokia the market share holder title.



*Suppliers --> Those who provide the inputs to enable a business to produce its products and services.



Nokia case:

Nokia's sourcing activities can be divided into two categories:
Direct sourcing takes care of the material supply for Nokia products, such as components, parts, packaging, contract manufacturing, software development, and research and development.
Indirect sourcing covers equipment such as office furniture and computers. It also includes services like catering, IT consultancy, and marketing which purchase for our own consumption.

Nokia has many suppliers all over the world and Nokia sets strict rules and code of conduct to these suppliers in order to accept them as suppliers for Nokia.



*Intermediaries --> Those who make an organisation's products available to their end-users.



Nokia case:
Nokia's mobile phones are virtually at every electronics retailing facility in the world, whether it's in uptown New York, USA or in the street of the middle-east. Nokia has the attention of the consumers, competitors and has a good hold of the market in their own industry.

*Stakeholders --> Individuals or groups who make a vested interest in the activities of the business.



Author: Hezha Sadek Muhammad



Sources:

Marketing, 2:nd edition (Hill & O'Sullivan 1999)



www.tutor2u.net

Describing myself as a consumer

Consumer characteristics

There are some factors that should be taken into consideration when analysing a single consumer or a consumer group, they are the following:
Cultural
Social
Personal
Psychological

I will now go into detail on each one of these concerning myself as a consumer (except cultural).

Social: Social class is also a part of this category, so for me social class factor is important, since i have a certain image that i perceive to people and that's has given me a certain status as a smart, outgoing, social and ambitious person. So i have to live up to the status, if i want to keep it. This mean i have to dress a certain way, talk a certain way, act a certain way. So when i go and purchase a good, most of the time i keep this factor in mind.

Personal & Physchological : I have a certain view about myself and how i want to be seen, even more so nowadays since everything is about image and first impressions, so i plan and think ahead about every move of mine, for example for me, buying a winter coat is not only about keeping warm, it's about getting praise for it and it complementing my physical apperance. So allthough i'm a full-time student, i work hard also to earn enough money to keep up my standard for two reasons;

1. To stand out from the crowd in the best possible way every time, since people who don't standout positively are not gonna succeed in life as much (in my opinion).

2. Making myself feel good and giving myself a sense of good feeling about myself and being able to be proud of myself, by staying up to trend and true to myself, i can show others how i am also inside; not just another Joe on the street.

It is also important in everything for me to convey to people that i'm a athletic person with brains, so it's a hard combination to attain and show, but i keep trying.

So what kind of consumer am I in practice:

To me brand is not that important, in most cases. But there are exceptions, such as in buying a car. But in general i don't care about the brand, since to me it gives no viable information that it's more superior than the competitors products, to me it's more important that i like the features of the products and i feel good about the purchase. It usually takes a long time for me to buy something, for example. i go to the shop to purchase some clothing piece or electronics etc. I compare back and forth many times, back and forth again all the way to the check out counter, where i make the final decision. So when i get home after the purchase, i have no doubts about the purchase i just did, no matter what kind of annoucement comes up with a better similar products. I don't like to look back and regret, that's why i go through the decision process extensively on site . Purchasing a product that is costly (example. over 100 €), i do some research of possible products of my choise at home, through the internet before even going to the shop. Even read reviews of previous consumers and their experience about the product. Price also comes into play, i'm willing to pay extra if it gives an extra benefit to me than the cheaper one.

Let's look at a example by going through the Buying Process step by step:

* Problem Recognition

* Information Search

* Evaluation Alternatives

* Purchase Decision
* Post - Purchase Behaviour

This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages.

The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

Need recognition

I just started my new job as a management consultant in a high profile international company with great starting salary, so i need to have a new car that is up to par with my status and satisfies my need and desires as a consumer.
An “aroused” customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

So our example is gonna be purchasing a new car, the initial candidate is Audi A6.
I would ask friends, go to look at car related websites and also either go to a car retailer or check their website out,i would also look for possible candidates based on my price range for the car and features/attributes i want the car to have. I would also test drive this car, to see how it feels while driving it.

Marketing influence: An important determinant of the extent of evaluation is whether the customer feels “involved” in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice

Evaluation alternatives

Now i want to compare this Audi A6 within it's own class to see how to stands in the competition. I start with selecting my new car candidates, so beside the Audi A6 they would be BMW 5-series or a Mercedes-Benz E-class and compare them amongst each other. I will look for specifications of the car, technical information such as horsepowers, engine size etc. I would look at the design of the car, is it appealing to me or not. Also price comes into play. Very important factor to me is also reading review of professionals from the internet and current owners of these cars, whether or not are they happy with their car and get more detail from people who actually own it.

Marketing influence: In high-involvement decisions, the marketer needs to provide a good deal of information about the positive consequences of buying. The sales force may need to stress the important attributes of the product, the advantages compared with the competition; and maybe even encourage “trial” or “sampling” of the product in the hope of securing the sale.

Purchase Decision

As i have tested these three cars out, i now have to decide which car to buy that meets my needs the best. As this is a high-involvement purchase it requires analysis of many things for now and the future, since i will be driving this car for at least 3-5 years.

Post-Purchase behaviour

After purchasing the car, intially i would feel great joy having a new car and testing it out but also as soon as small problems might occur or even without any problems, i might as a consumer have some regret and start to think, whether or not i made the right purchase or should have i bought one of the other cars, this concept is known as cognitive dissonance.The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time.

Marketing influence: To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

Author: Hezha Sadek Muhammad

Sources:

tutor2u - the world's leading online resource for business, economics, politics and related subjects.http://www.tutor2u.net/

Marketing from my point of view

Theory view

Marketing definitions according to the book of Adcock,Halborg & Ross; Marketing principles and practice book are the following:



'' Marketing involves an exchange process and this is central to one of the simplest accepted definitions of Marketing which is: Marketing is the study of exchange processes especially those associated with the provision of goods and services. However while this is a clearly focused and concise definition, this aspect is better addressed in the definition proposed by the celebrated American author of marketing textbooks, Philip Kotler: Marketing is the human activity directed at satisfying needs and wants through an exchange process. (Kotler, 1980).



Since 1980 Kotler's definition has developed: Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. (Kotler, 1999).



There are many other useful and equally acceptable definitions. The one preferred by the British Chartered Institute of Marketing (CIM) is: Marketing is the management process responsible for identifying, anticipating and satisfying customers' requirements profitably.

Practical view

For me, marketing is very important and visible part of my life. First of all studying in a business school, business students encounter marketing even more frequently than others. But in general every person has to go through several thousands of marketing vehicles per day. Since it's all around us, everybody does it all the time. Including you! :)

In my opinion, marketing and all of it's aspects are great, since it makes life interesting, colourful and through marketing channels you get to find out about so many things that you wouldn't normally never hear about. So in my opinion it can also act as a educating piece of instrument for people. The downsides of it might be the questionability of the marketing methods used. Not everybody says the truth nor is it always recommended. But often times becauseo of this, consumers are at a loss in this market world that is taking us for a rollercoaster ride. You lose track of whats the truth and whats a lie. Overall i love seeing ads, commercial outside, it even makes the environment look more interesting. But i absolutely hate tv commercials, since i don't want to be listening or watching them in the middle of my favourite program or movie. The 21st century is going more interactive everyday with the use of internet. So this new marketing channel; the internet, in my opinion it's a great idea and because you can in many cases control whether or not you watch the pop-ups for example etc.

Development of marketing

Marketing is now entering a new era, the dawning of the 21st century has brought with it a dynamic and exciting new dimension for both consumers and companies alike, a radical change in how companies and their customers interact is possible with the new technology now available. This technological revolution for sourcing information will alter the way in which many companies conduct their business. Marketing will change and develop, as e-commerce becomes increasingly more important.

This gives the following opportunities for e-business:

The opportunities that the improvement in technology provies can help organisations in the following ways:

1. Improved communication and collaboration between employees.

2. More efficient supply chain management.

3. Increased information exchange with suppliers.

4. Superior access to new markets and customers.

Until next time, stay tuned!

Author: Hezha Sadek Muhammad

Sources:

Marketing principles & practice,4th edition (2001 Adcock, Halborg & Ross).