When Markstrat simulation began Team "O" (i. e. - we) was the second largest player on the market with over 17% market talk about in the Sonite market. The sole team that was just a little ahead of us was Team "I" garnering a market share of a little more than 18%. We had two products in the Sonite market originally, namely - SOLD and SONO directed at HiEarners and Buffs respectively. Since SOLD was personalized for and geared to HiEarners, we were able to command reduced price over other similar products and still maintain the highest market share. Also whenever we checked the market research reviews, it showed that this particular segment will be growing at a considerable pace, so that it makes complete sense to keep targeting this segment and make an effort to take more market.
This made a great deal of sense in the original 2 intervals but there was pressing need to build up products for others and singles category as this section was growing at a rather fast pace and therefore we went forward and began R & D for a product in Sonite market designed for others and singles. This led to the diversification of our collection and our brand presence was available in various segments of market. The product was known as SOMO and was launched in period 2 specially customized for singles while others, this is one of your very successful launches capturing 6. 4% market show in Sonite market in just one period. Our primary goal was to keep up a stronghold in the segments where we already are successful along with joining new market sections and exploit newer market segments and receive the First Mover Edge, and an scope we were successful in doing this.
At the same time we were constantly attempting to deploying a proper and rational sales force across our circulation channels based on various research information and from where our aim for segment purchases our product. We were also increasing the cover advertising research so that whatever is the advertising done should have an effective impact, with adding 10 percent to the advertising cost, we reaped benefits worth far more because at first our advertising had not been properly targeted so the impact was lost scheduled to some reason or the other. We recognized that it is very very important to us to reach customers through advertising just as as they are more comfortable with. We also noticed that there's a whole lot of inventory of Sono, so we reduced its production in the next period. On the other hand we were continually shelling out for R&D and it paid of well.
We moved into the Vodite market starting Void in period 4, in order to get a share in the high progress market. Our strong R & D dept proved once again gaining 35. 9% market in the start time itself. However a couple of companies already inserted the vodite market before we actually does, so in the forex market they appreciated the first mover advantages and greater market show and better brand recall.
At the end of all the intervals, we stood 3rd in the Sonite market with 13. 4% market talk about and 14. 7% market share in the Vodite market. Our stock price index was 2, 168 with market capitalisation of K$ 599, 126, that was again positioned 3rd in the Cheetah Industry.
Some of the main element Mappings that people did for our market segments were -
Characteristics of product desired
Characteristics of customer category
High performance, less convenience
Average degree of performance and convenience
High quality, powerful and convenience
Can afford expensive products, feels higher the purchase price higher is the quality
High performance and convenience
High income, buy expensive products
Cheap, low performance, average convenience
Low penetration, high growth rate
Comprise small percent of total potential
Average price products
Influencers, greater size than innovators, high marketing required
Majority demand comes from them
Relationship between type of customer and their buying behavior -
Type of Customer
Product features sold
Buffs, HiEarners, Pros
Innovators, Early adopters
Large percentage of sonite sales happen here, sells high performance and expensive products
HiEarners, Positives, Singles
Provides low margins to manufacturer
Low price high volume basis, provides cheap low performance products
The romantic relationships that are founded above were true at the initial stage of the simulation, but the markets matured, there was more competition and clutter, changing consumer practices, this romantic relationship was relooked at from time to time.
The area I focussed on was Brand launches and withdrawals corresponding to advertise conditions and customer requirements.
Situation research and launches: Product by product
At the beginning of period 0 this product was having market show of 29. 9% in the HiEarners market, evidently rising as a innovator in the segment, the closest competition being SYCA at 25. 3%. On looking at this, we decided to focus on our product to this portion more. Since HiEarners are people who look for better performance and convenience buy expensive products and also have an extremely high income, therefore we decided to increase our sales force in the speciality stores, where we believed HiEarners visit the most. We thought that since SOLD was coming in at a premium, the brand building exercise and proper targeted advertising will be best for the future of the product. Also, it was made sure that the advertising devote to SOLD was high so the message gets to across to everyone who lies in the target portion. This led to upsurge in advertising research budget, which worked really well for this product. We wanted to generate earnings from SOLD by increasing the marketplace size and brand building rather than by reducing the purchase price (since it was targeted at HiEarners).
SOLD was in the celebrity region of the BCG matrix till period 5. Looking at this, for period 5, we retained the advertising expenses as well the sales team for SOLD at the same level as with period 4 because if the merchandise is based on the celebrity region of the BCG matrix, then spending more on the brand would fetch greater results and would help in converting the brand into a cash cow. But we never expected what the rivals could do, and for that reason it was a significant setback for us in conditions of what "Y" performed. They became market leaders in this very section in period 6.
Also, it was seen that by increasing the sales team in speciality stores, SOLD was keeping a considerable market share in HiEarners section while all together loosing show in singles among others segment. This was because the performance and price of SOLD was identified to be only for HiEarners and expensive whereas the "singles" and "others" portion was moving towards a far more performance oriented and value for money product.
Let us look at the product Life Cycle of SOLD. It can be seen that the sales of SOLD began to decline in period 4. Despite the fact that brand awareness for SOLD was high, the goal to purchase experienced declined noticeably. As a new competitor, SYGU moved into the market with a altered offering that was perfect for HiEarners segment. As a result of this we started losing market share significantly in the category where we were in the past leaders. This decrease continued and the merchandise cannot really deal up with the changing marketplaces and the market share held declining.
The reason SOLD had not been accomplishing well was due to fact that the merchandise characteristics where not matching with the ones that HiEarners wished with changing times and also, rival recognized them better and came up with better offering. Once we started getting rid of market talk about in this segment, we altered our aim and tried increasing stocks in other market segments with an increase of launches and understanding customers.
Since others and singles were an extremely high growing market, we shifted our concentrate to these markets and started out R&D job for a product that specifically suits this portion. Later SOMO, a fresh product was launched, keeping in mind the requirements of singles while others.
At the start of period 0 this product was having a market share of 16. 2% in the Buffs market, clearly growing as a leader in the segment, the closest rival being SIMI and SULI with 13. 3% each. On looking as of this, we made a decision to concentrate on our product to this portion more. Since Buffs are people who look for better performance and are really price hypersensitive, convenience is the very last thing in their thoughts, therefore we decided to increase our sales force in the mass merchandising and departmental stores, where we assumed Buffs visit the most. We thought that since SONO was priced at a competitive price, a proper awareness marketing campaign and properly targeted advertising will be best for the continuing future of the merchandise. Also, it was ensured that the advertising spend on SONO was high so the message grows to across to everyone who is based on the target portion. This led to increase in advertising research budget, which did the trick really well because of this product. We wished to generate earnings from SONO by increasing the marketplace share in an already extending market and also playing just a little with the rates (since it was targeted at Buffs).
SONO is at the star region of the BCG matrix till period 4. Looking as of this, for period 5, we looked after the advertising expenditure as well the sales team for SONO at the same level just as period 4 because if the product is based on the superstar region of the BCG matrix, then spending more on the brand would fetch better results and would assist in converting the brand into a cash cow. But we never expected that you will see cannibalization by our existing product in the Buffs portion, they preferred our product SOLD increasingly more over SONO and the marketplace show of SONO kept falling and finally this product has to be eliminated and we ended its source from period 8 onwards.
The survey showed that "others" is an extremely high development rate market and it offers an extremely different kind of need. Our existing product stock portfolio had not been enough to capture this section, so launching something specific to others needs was the only rational choice. This led to the unveiling of SOMO in another period. The study reports confirmed that "others" preferred cheap product which is often of low performance with about average convenience. They generally purchased from mass merchandising stores and departmental stores. Predicated on these studies the R&D section was presented with a briefing plus they came up with a product that exactly suits "others", it was also very near the needs of "singles". This made a great deal of sense for the business as it captured 6. 4% market in the year of launch itself.
With the finish of 5th period, our company was continually losing market share, especially in the merchandise SONO, that was once the star product inside our portfolio certainly. With our Stock Price Index was also declining. In a very desperate attempt to keep up with the market share, in the 6th period the business launched a fresh product named SONA in the Sonite market, bearing the similar characteristics as required by Buffs. But this task proved to be a major marketing flaw and could capture only 0. 2% of the marketplace. It was not possible for the company to keep its production at this specific rate, so that it was phased out the next period; it offered our company and brand a major dent.
With a view to capture the ever growing singles market and the fact that we didn't have any dedicated product for singles, SOSI premiered in period 8. SOSI didn't capture the market as forecasted, it created a whole lot of problems for the company, it had unwanted inventory, was providing a poor contribution and regardless of being costed too low its sales were dismal. It can be attributed to the incorrect timing to start something for an already cluttered market. Owing to all these facts, SOSI's characteristics were changed in period 10, however even modified SOSI could not help the business to gain market talk about.
Since there is only one player in the Vodite market and was functioning at a monopoly, we made a decision to launch our first product specifically "VOID". Using a lot of general market trends and R&D, the product was mainly targeted at early adopters. The product captured more than 35% market talk about in the start year itself, it could have been better, but credited to a two more launches in the same category at the same by different players made us promote the market, however we surfaced as market innovator. VOID maintained the position of the market innovator till the 8th period due to proper advertising and concentrating on. However from the 9th period onwards market for VOID started to decrease as it acquired reached the maturity stage of its Product Life Cycle.
Since there is huge growing market of the followers, we decided to establish two products consecutively, catering specifically to the supporters. VOLO was wedding caterers to the needs of enthusiasts who actually dint brain paying a little extra for your quality and performance and it was launched in the 6th period. VOLO gained ten percent10 % market share in the unveiling calendar year itself. Its market share kept hovering round the 10% tag till the end of the game. It was then made a decision to phase out this product as it acquired come to the maturity stage of its Product Life Routine.
VOFO was launched in order to fully capture the highest growing fans market and to maximise the contribution. We already experienced a product VOLO focusing on the same section, but we launched the product with less price strap which assumes that more and more profits will be made as the market will grow with a lesser entry point for the supporters. VOFO was launched in the 7th period, but things dint really did the trick just how we expected those to. VOFO was just in a position to garner just a little above 5% of the market talk about and was offering negative contribution and for that reason was decreased out of product stock portfolio in the very next period. It was not feasible for the business to transport on its development and supply. The explanation for the failing of VOFO was that it was placed improperly, we thought it to be always a product for fans, however when perceptual mapping was done, it was far away from the "followers" in the perceptual map.
Facing the failing of VOFO, the business once again attempted to capture the followers market once more by introducing VOFI in period 9. VOFI was clear of drawbacks experienced by VOFO and everything the mistakes that were made in circumstance of VOFO were taken out in VOFI, resulting in 8. 4% market show in the first year, followed by 13. 1% within the next. It had been more credited to proper placement and targeting that this stood out in a cluttered market.
We began on a good take note of, where we were the market leaders for the first three periods, but later we missed some important elements and delayed in taking some strategic decisions. We were more jammed in taking care of Sonite's existing stock portfolio, while completely dismissed the Vodite market for the forst few durations. This gave an opportunity to the competition to take a lead and they did exactly the same, the shifted into unchartered territories and savored the first mover benefit. We believed more in launching services and phasing out old ones, that was our strategy, but if could have up to date the characteristics of existing products depending upon the changing customer requirements, things would have been far better. Deterrence to take a loan was another debatable point in our strategy, we thought it is better to be always a debt free company and hence we did not take any loan, but if we would have decided to have a loan and release in Vodite market just a little earlier, it could have made a huge difference to the financials of the business. Also the withdrawal and kick off of products might have been wiser with proper understanding of Product Life Circuit. We also learned a very important point about advertising, while spending on advertising is one thing, advertising research is another. Advertising research is generally overlooked or is given suprisingly low budget, but it is a very well deserved exercise and makes the advertising a lot more efficient. A certain part of the advertising budget should be reserved to promote research. R&D varieties a very important part of any company, no compromises should be produced in allocating costs for this department. Research should be a continuous exercise and not a seasonal one. The marketplace is very vibrant and if you won't look after you customers needs, another person will.
Strategy Software: Nokia
The heredity of Nokia go back to the entire year 1865 with the establishment of a forest industry enterprise in South-Western Finland by mining engineer Fredrik Idestam. Also, the entire year 1898 witnessed the foundation of Finnish Silicone Works Ltd, and in 1912 Finnish Cable television Works began businesses. As time passes, the ownership of these two companies and Nokia commenced to
shift into hands of simply a few owners. Finally in 1967 the three companies were merged to create Nokia Organization.
At the beginning of the 1980s, Nokia strengthened its position in the telecommunications
and gadgets market segments through the acquisitions of Mobira, Salora, Televa and Luxor of
Sweden. In 1987, Nokia acquired the consumer consumer electronics operations and part of the component
business of the German Standard Elektrik Lorenz, as well as the French gadgets company Oceanic. In 1987, Nokia also purchased the Swiss cable connection equipment company Maillefer. In the late 1980s, Nokia became the major Scandinavian information technology company through the acquisition of Ericsson's data systems division. In 1989, Nokia conducted a substantial growth of its cable industry into Continental European countries by acquiring the Dutch cable television company NKF. Because the beginning of the 1990's, Nokia has concentrated on its key business, telecommunications, by divesting its information technology and basic industry operations. (Quoted from Wikipedia)
2001 and into the Future
Nokia is harnessing its experience in ability to move and networks to create a startling eyesight of the future. Meeting rooms, office buildings and homes will be 'smart' enough to recognize their human visitors and present them whatever they want by listening to their demands. Nokia welcomes change and improvement and can adopt new ideas at great quickness. Such characteristics will never change but, as to the rest, the story has only just begun!
"Our customers continue steadily to our First Goal" Nokia's future success is determined by delivering great
experiences to our customers by creating products and alternatives that work seamlessly and are fascinating.
"In a world where everyone can get in touch, we take very human being method of technology"
Connecting is about helping visitors to feel near what counts. Wherever, whenever, Nokia thinks in communicating, sharing, and in the awesome potential in hooking up the 2 2 billion who do with the 4 billion who don't. If we give attention to people, and use technology to help people feel near what counts, then growth will observe. In a world where everyone can be connected, Nokia takes a very human approach to technology.
Mobile Devices market in India
With a society of more than a billion and a GDP progress of over 9%, India is one of the fastest growing mobile market segments of the world. Nokia still gets the largest share & most trusted brand so far as the mobile phone industry is concerned. But with the increasing competition and a number of local players becoming involved with cheaper handsets, Nokia is burning off its market talk about Year on Yr near 50% which was once again than 74%. Pursuing are the main problems that Nokia is facing -
Nokia market talk about in India fell from 56. 2% share in 2008 to 54. 1% in 2009 2009.
Local players have grabbed 17. 5% market share [from 0. 9%, annually back]
Only 5 local manufacturers in 2008 and the quantity stand at 28 now!
Faced by the challenge of consistently burning off market show Nokia is constantly reviewing its marketing strategy. One of the major decisions that Nokia had taken was to employ a brandname ambassador because of their product which too the priciest one, Shahrukh Khan was the first ever brand ambassador of Nokia, prior to the the business never thought in finding a celebrity brand ambassador. This helped the company to somehow decrease the rate at which it was losing its market show. Initially Nokia acquired a limited volume of models, but with the upsurge in the amount of players in the market and their offering, the pace of which Nokia launches new model has increased to a very large extent. This is another very important strategic decision by the company. However Nokia still provides on the actual fact that it offers high performance product, durable and up to the mark after sales service quality. It has created a different segment for different models. And the price selection of models is situated from Rs 1295 to Rs 40, 000. However we still believe that the business should be more attentive to the introduction of models by others and better still if they're proactive in doing this. Today's consumer needs a change, variety and upgradation. The trust and the brand that Nokia has built for itself in the period of time can be leveraged more in terms of market share and income. The methodology of Nokia from here should be to invest more and more in R&D and turn out with more advanced products for the Buffs and HiEarners, while decrease the price and come out with cheaper phones for the high growing rural market of India. Advertising can do a whole lot of work, as proven by Micromax (gaining 4. 6 % market share in India, mainly attributed to heavy spending in advertising during the IPL 3) yet again, so Nokia cannot find the money for to complacent on that forward. The consumer needs to be reminded of the Brand over and over because of the clutter on the market. The syndication network of Nokia is ideal which is most approachable; the business should take a look at keeping the same. Another strategic advice to Nokia can be to increase the margin for merchants, because they are the immediate contact tips to the customers and researches show that retailer plays a significant role in influencing the decision to buy or selection of brand specially in rural market where we are preparing to target customers from now on.
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