CHAPTER 5. MARKETING IMPLICATIONS
My findings provide several implications for researchers and
marketing managers. Firstly, they demonstrated that global marketing
strategy is not about standardizing the marketing process on a global
basis. Although every element of the marketing process.product design,
product and brand positioning, brand name, packaging, pricing, advertising
strategy and execution, promotion, and distribution.may be a candidate
for standardization, standardization is just one part of a global
marketing strategy (Kotabe & Helson, 2000). Consequently, striking
the right balance between standardization and localization greatly
contribute to mobile phone company’s success.
Based on my findings, Nokia developed a combination of standardization
and localization of marketing programs to match Korean and Thai
market. As a consequence, Nokia has succeeded in Thai market but
has failed in Korean market. The main reason is that Nokia has no
experience in formulating marketing strategy for advanced CDMA market
such as Korea.
In both Korea and Thailand, mobile phone manufacturers could not
standardize their price and distribution strategies due to the characteristics
of mobile phone industry depending on the other functions such as
operators, dealers and the regulations of local government. Hence,
global mobile phone companies should follow those conditions only.
On the other hand, product and promotion should be combined with
standardization and localization to best match the local conditions.
For product strategy, Nokia developed 100 percent localized handsets
in Korea, while 100 percent global standardized handsets in Thailand.
The 100 percent localization in Korean market seems to be “overlocalization”.
The folder-type design of Nokia handsets.8887, 8877 and 8587.has
launched to respond Korean preferences but they could not penetrate
to Korean market yet. Nokia 8277, bar-type handsets launched in
the Korean market behind folder-type phone would witness that Nokia
Korea develops overlocalization if they can attract Korean consumers.
Another reason of Nokia’s failure in Korean market is from the
characteristics of Korean consumer. Korean consumers seem to be
homogenous. Though Korean consumers like folder-type mobile phone
with higher technology and advanced design, they still have much
different life styles. For example, Samsung.the number one domestic
mobile phone producer in Korea.divided Korean markets into 6 lifestyle
segments by consumer’s core needs. They are fashion, business, stylish,
utilitarian, techie, and laggard segment. Accordingly, no market
segmentation in Korean market was misunderstanding marketing program.
Nokia should segment its markets and then offer the right products
for each segment members. In addition, with the shortening of the
phone life cycle, Nokia should provide a variety of products with
various designs and price rages in every several months like Motorola
did in Korean market.
For promotion strategy, Nokia formulated a combination of standardized
and localized approaches in both Korea and Thailand. But the degree
of standardization depended on situations in each country. Nokia
Korea developed slightly standardized promotion strategy, while
Nokia Thailand formulated mostly standardized approach. The success
of Nokia Thailand encouraged that global mobile phone should pursue
mostly global standardized approach for implementing promotion strategy
in foreign markets. Moreover, Kotabe and Helson (2000) mentioned
that a truly global campaign is uniform in message and often also
in execution. However, minor changes might need to be made in the
execution to comply with local regulations or to make the advertising
more appealing.
Secondly, the key success factors of handset manufacturers include
the competitive quality and innovative technologies, information
collecting, brand building, and collaboration with key partners.
The competitive quality and innovative technologies are the prerequisites
for the success in this industry. Quality is strategic differentiator
for products and services. Because of the vital link to customer
satisfaction and quality must ultimately be defined by the customers.
Innovative technologies are crucial to the mobile phone industry.
The cost, size and volume of phones are decreasing each year dramatically.
Accordingly, the global mobile phone producers should advance in
the level of quality and technology through the continuous research
and development activities.
Another important success factor is collecting of foreign market
information in a rapid and correct way. As there are different conditions
in each country, global mobile phone company should find the change
of customers’ preferences, the competition strategy of rival companies,
the change of telecommunication standard and roles of local government
before entering into new foreign market. By this information, companies
can analyze the industry’s current situations, formulate the strategic
direction, and respond to consumers and competitors more effectively.
Brand building is also required in the industry as it has a direct
impact on sales and profits. In the case of Nokia Korea, ordinary
Korean people do not know Nokia at all. They are familiar with domestic
mobile phone’s brand names such as “Anycall” of Samsung and “Cyon”
of LG. Accordingly, Nokia should raise its brand awareness through
the global standardized and localized advertising and aggressive
promotion activities like Nokia Thailand. The campaigns must also
attribute to establish prestigious image of Nokia brand and have
consistency with the global brand image. It is critical point for
Nokia to place itself on which spot of people’s cognitive map.
Another effective approach is collaboration with competent local
partners. As I mentioned in the beginning of chapter 3, there are
three major components in mobile phone industry. They are manufacturers,
the operators or service providers, and the third party agents.
Hence, success of global mobile phone companies relate to these
components. Mobile phone manufacturers have to deal with experienced
local partners to develop its marketing strategies. For example,
Nokia Thailand not only supplies its handsets through big three
operators and leading retailers, but also develops its promotion
campaigns with its operators.
Thirdly, mobile phone manufacturers and operators should stimulate
demand for new mobile phone handsets in two ways. First, they must
find ways to increase revenues from existing users. As the income
for mobile phone business no longer depends on the margin on the
handsets alone, but from non-voice services, this is the strategy
in helping operators and retailers gain more revenue, and will benefit
the end-users at large. Second, they need to offer new service that
require phones with enhanced functionality and color screens. Though
this solution may sound simple, it has been much more difficult
in practice. Operators have been able to raise revenue by offering
newer services to existing users, while manufacturers have found
a difficult task to convince users to upgrade to newer phones with
additional features.
Finally, another implication of my findings for global mobile phone
producers is that they should consider developing experience in
foreign markets that will provide the best basis for entering other
similar markets. By investing in a small country first and learning
about the cultural and any characteristics of its consumers and
business institutions, a global mobile phone company may be more
successful when entering a larger country with similar characteristics.
Therefore, Nokia should pay as much attention to CDMA technology
as it does to GSM technology, in order to expand its market share
in the global mobile market. Nokia should continue its business
in Korean market for learning and practicing CDMA expertise before
entry into other potential markets such as China. Since China is
the largest mobile phone market in Asia with the fastest growth.
Moreover, China had decided on using CDMA technology recently. It
is expected to be the largest CDMA market in the future. Now, Samsung
and LG with CDMA handset have done well practice in China. Accordingly,
Nokia should not ignore the CDMA market to gain long-term growth
worldwide.
In closing, there are some limitations of this study. One stemmed
from the research methodology. Since this study mostly focused on
secondary data collection. Some needed data did not exist. Also,
they might be inaccurate, incomplete, or unreliable. Therefore,
the study should involve some primary data collection. Furthermore,
this study focused only on how global company formulates its marketing
elements (product, price, promotion and distribution) based on the
dilemma of standardization and localization. It did not explain
in the detail how each element of marketing mix should be developed
to match Korean and Thai market. My suggestion for the further research
is comparative study between different mobile phone companies. The
study should be investigated how they develop their marketing strategies
in different countries or different regions.
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