Mobile Project

MARKETING OF SERVICE ASSIGEMENT

(BATCH: 2008-10)

Comparative Analysis of mobile sector on the bases of 7’ps

SUBMITTED TO: -

SUBMITTED BY:-

Mr. VIJAY NAGRNI

NARENDRA GUPTA VINOD SAINI

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ACKNOWLEDGEMENT

.We are thankful to VIJAY NAGRNI, Distinguished professor of Marketing of service, for giving us the opportunity to work on this project .It was a great learning experience for us and we have actually put in practice, the learning acquired in the classroom. Also the project helped us in understanding the perspective of marketing strategies.

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DECLARATION

We, hereby declare that the information presented in this report is correct to the best of our knowledge and has been prepared on the basis of information gained, collected and processed for utilizing our learning in the class of ‘Marketing of service’. The report is an original work and has not been presented anywhere before. We have used secondary data in the report, but have provided proper references at suitable places. We, as a group, undertake the responsibility that in case of any issues relating to plagiarism issue being raised, we would be liable to consequent action by the management.

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TABLE OF CONTENTS S. No. 1

PAGE No.

TOPIC 2

2

Acknowledgement Introduction

3

History of mobile phone

4

About the company

4.1

Nokia

10

4.2

Motorola

11

4.3

Samsung

12

5

Analysis of company(in term of 7’ps)

5.1

product

14

5.2

price

19

5.3

place

22

5.4

promotion

25

5.5

people

28

5.6

Physical evidence

29

5.7

process

32

6

Comparative Swot analysis

33

7

recommendation

37

8

bibliography

38

5 6

4

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INTRODUCTION

1.1 Definition of Cellular/Mobile phone:A mobile phone or mobile (also called cellphone and handphone as well as cell phone, wireless phone, cellular phone, cellular device, cell, cellular telephone, mobile telephone or cell telephone) is a long-range, electronic device used for mobile telecommunications (mobile telephony, text messaging or data transmission) over a cellular network of specialized base stations known as cell sites. Most current mobile phones connect to a cellular network consisting of switching points and base stations (cell sites) owned by a mobile network operator (the exception is satellite phones, which are mobile but not cellular). In addition to the standard voice function, current mobile phones may support many additional services, and accessories, such as SMS for text messaging, email, packet switching for access to the Internet, gaming, Bluetooth, infrared, camera with video recorder and MMS for sending and receiving photos and video, MP3 player, radio and GPS. As opposed to a radio telephone, a mobile phone offers full duplex communication, automates calling to and paging from a public switched telephone network (PSTN), and handoff (American English)/handover (British/European English) during a phone call when the user moves from one cell (base station coverage area) to another. A mobile phone offers wide area service, and should not be confused with a cordless telephone which also is a wireless phone, but only offer telephony service within a limited range, e.g. within a home or an office, through a fixed line and a base station owned by the subscriber. The International Telecommunication Union estimated that mobile cellular subscriptions worldwide would reach approximately 4.1 billion by the end of 2008.[2] Mobile phones have gained increased importance in the sector of Information and communication technologies for development in the 2000s and have effectively started to reach the bottom of the economic pyramid

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History of mobile phones

In Europe, radio telephony was first used on the first-class passenger trains between Berlin and Hamburg in 1926. At the same time, radio telephony was introduced on passenger airplanes for air traffic security. Later radio telephony was introduced on a large scale in German tanks during the Second World War.

First generation

On April 3, 1973, Motorola employee Dr. Martin Cooper placed a call to Dr. Joel S. Engel, head of research at AT&T's Bell Labs, while walking the streets of New York City talking on the first Motorola DynaTAC prototype in front of reporters. Motorola has a long history of making automotive radios, especially two-way radios for taxicabs and police cruisers. Second generation In the 1990s, 'second generation' (2G) mobile phone systems such as GSM, IS-136 ("TDMA"), iDEN and IS-95 ("CDMA") began to be introduced. In 1991 the first GSM network (Radiolinja) opened in Finland. 2G phone systems were characterized by digital circuit switched transmission and the introduction of advanced and fast phone-tonetwork signaling. Third generation The first pre-commercial trial network with 3G was launched by NTT DoCoMo in Japan in the Tokyo region in May 2001. NTT DoCoMo launched the first commercial 3G network on October 1, 2001, using the WCDMA technology By the end of 2007 there were 295 Million subscribers on 3G networks worldwide, which reflected 9% of the total worldwide subscriber base.

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Seven elements of service marketing mix

These seven elements are often referred to as the marketing mix, which a marketer can use to craft a marketing plan. The seven P’s model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions The service marketing mix comprises off the 7’p’s. These include:

Product Price Place Promotion People Process Physical evidence. • Product: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support. Pricing: This refers to the process of setting a price for a product, including discounts. The price need not be monetary - it can simply be what is exchanged for the product or services, e.g. time, energy, psychology or attention. Promotion: This includes advertising, sales promotion, publicity, and personal selling, branding and refers to the various methods of promoting the product, brand, or company.

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Place Refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or services is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc.

People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. Many British organisations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards. Process Refers to the systems used to assist the organization in delivering the service. Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customer’s old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. Physical Evidence Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organization. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down! Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service.

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Nokia About the Company Nokia Corporation (NYSE: NOK) is one of the world's largest telecommunications equipment manufacturers. With headquarters in Keilaniemi of Espoo, Finland, this Finnish telecommunications company is best known today for its leading range of mobile phones. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers.

Nokia provides mobile communication equipment for every major market and protocol, including GSM, CDMA, and WCDMA.

Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of Nokia rapids. Finnish Rubber Works established its factories in the beginning of 20th century nearby and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works acquired Nokia wood mills as well as Finnish Cable Works, a producer of telephone and telegraph cables. All three companies were merged as Nokia Corporation in 1967. The name Nokia originated from the river which flowed through the town of the same name (Nokia).

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MOTOROLA About the company Motorola, Inc. (NYSE: MOT) is an American, multinational, Fortune 100, telecommunications company based in Schaumburg, Illinois. It is a manufacturer of wireless telephone handsets, and also designs and sells wireless network infrastructure equipment such as cellular transmission base stations and signal amplifiers. Motorola's home and broadcast network products include set-top boxes, digital video recorders, and network equipment used to enable video broadcasting, computer telephony, and high-definition television. Its business and government customers consist mainly of wireless voice and broadband systems used to build private networks and public safety communications systems like Astro and Dimetra. Motorola is now working on Google open sourced based platform mobile operating system phone featuring Google Android 2.0 known as "Eclair". Motorola began life as The Galvin Manufacturing Corporation in Chicago in 1928. Its first product was a battery eliminator enabling radios to operate from mains electricity rather than expensive batteries. In the 1930s it produced car radios using the brand name 'Motorola'. The company later adopted Motorola as its name. The company is now known around the world for innovation and leadership in wireless and broad band communications. Motorola's vision is of Seamless Mobility, which the company defines as helping users get and stay connected easily to the people, information, and entertainment that they want and need. The company does this by designing and delivering "must have" products ,"must do" experiences and powerful networks. Applying this vision to mobile phones, Motorola has gone beyond just enabling users to make voice calls or send text messages. Depending on the models chosen, users can: * share music files between the user's PC and their phone * play that music easily on stereo Bluetooth TM headphones * In the car - as well as being able to use the phone with a hands-free car kit, play music through the car stereo * At home, play the music through your stereo system. ○ In 1986, Motorola came in India. In India, Motorola has 2 nd rank in mobile market. The market share of Motorola is near about 18%. The target audience of Motorola is youth of India. In India, Motorola offers world class mobile phones to 12

satisfy the needs of all segments of the market. In India they are offering the smallest and the lightest GSM handset in market.

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SAMSUNG About the company Samsung Telecommunications is one of five business units within Samsung Electronics, belonging to the Samsung Group, and consists of the Mobile Communications Division, Telecommunication Systems Division, Computer Division, MP3 Business Team, Mobile Solution Centre and Telecommunication R&D Centre. Telecommunication Business produces a full spectrum of products from mobiles and other mobile devices such as MP3 players and laptop computers to telecommunication network infrastructure. Headquarters is located in Suwon, South Korea. In 2007 Samsung Telecommunication Business reported over 40% growth and became the second largest mobile device manufacturer in the world. Its market share was 14% in Q4 2007, growing up form 11.3% in Q4 2006.In Q1 2008 Samsung strengthened its second position on the market and achieved 15.6% world handset market share. Stages of Telecommunication Business Initial stage (1977-1993) In 1977 Samsung Electronics launched the Telecommunication Network business, and in 1983 it initiated its mobile telecommunications business with the hope that this would become the company's future growth engine. In 1986, Samsung was able to release its first built-in car phone, the SC-100, but it was a failure due to the poor quality. In spite of unsuccessful result Ki Tae Lee, the then-head of the Wireless Development Team, decided to stay in the mobile business. He asked the company to buy ten Motorola mobile phones for benchmarking. After 2 years of R&D Samsung developed its first mobile phone (or "hand phone" in Korea), the SH-100 in 1988. It was the first mobile phone to be designed and manufactured in Korea. But the perception of mobile devices was very low and although Samsung introduced new models every year, each model sold only one or two thousand units.

Time of changes (1993-1996) In 1993 it was decided that the development team should focus on improving connectivity due to specific mountain topography of Korea. They found the optimal length of a mobile phone antenna and developed a method of using gold to connect the 14

point between the antenna and the communication circuits, thus significantly reducing resistance and enabling steadier wave conductivity. They also developed the wavesearching software that was specially designed for Korea's topography. CDMA Era (1996-1998) Samsung developed its first CDMA mobile phone in March 1996, to coincide with the launch of CDMA service. The first digital handset, the SCH-100, was extra light and slim, and enabled clear voice communication. Before long, Samsung became the leader in the Personal Communications Service (PCS) market. It partnered with KTFreetel and Hansel PCS to provide PCS phones. Its first PCS phone, the SCH-1100, entered the market with innovative features, including a lightweight body, enhanced battery life, and the ability to capture delicate sounds. For the PCS market, the company coined a new slogan, "Strong in small sounds," to emphasize the mobile phone's capability to capture delicate sounds. By the end of 1997, one year after the CDMA service was first launched; Samsung had achieved a 57% market share in the CDMA cellular market and 58% in the PCS market. Also, in April 1997, it achieved sales of one million CDMA phone units. Global market and GSM Era (1998-now) To achieve further growth, Samsung had to penetrate the GSM market. The first GSM model was the SGH-200, which was made for European customers. But it was not as good as the company's CDMA phone. It was difficult to hurdle the high entry barrier, which the then "Big 3" Nokia, Motorola, and Ericsson had built for years. The company's next few models didn't attract Europeans, either. The development team realized that a simple change in the circuit system wouldn't work in the European market. Thus, it decided to look more closely at the customer's point of view. They found that Europeans preferred geometric, balanced, and simple designs. Using this information, Samsung adopted 'simple' as the design concept, then developed

ANALYSIS OF COMPANY (IN TERM OF 7 P’S)

Nokia: Product

Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today's highly competitive markets. Plus there are many laws giving customers the 15

right to send back products that he perceives as bad. Therefore the question on product has become: does the organization create what its intended customers want? Define the characteristics of your product or service that meets the needs of your customers.

Functionality: •

Quality

•

Appearance

•

Packaging

•

Brand

•

Service

•

Support

•

Warranty

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Some of the Products that Nokia offers to Customers are:

Nokia N90

Nokia 9300

Nokia 7710 Nokia 8800

Nokia 7280

Nokia 7270

Nokia 6822

Nokia 6681

Nokia 6680

Nokia 6670

Nokia 6630

Nokia 6260

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Nokia 6230i Nokia 6255

Nokia 6235

Motorola :

Nokia 3230

Product

The first element in the marketing mix is the product itself. If you create products that customers want, the other parts of the mix can be designed to meet customer needs. Motorola is a global leader in wireless and broadband communications technologies and related electronic products. It has significant operations in the UK employing approximately 2,400 people. Motorola have below types of Products:

· Embedded systems · Two-Way radios · Networking Systems · Mobile phones They are also classified in other way:  Cell phones  Laptops  Radio communication devices  Cell phones devices  Camera

Functionality: · Attractive design · Excellent call-quality · Ease of use · Value-added features including music player, games, camera, and video features · High quality, reliable products. 18

19

SAMSUNG: Product

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Nokia: - Price

How much are the intended customers willing to pay? Here we decide on a pricing strategy - do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach.

List Price: •

Discounts

•

Financing

•

Leasing Options

•

Allowances.

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Motorola :- Price It is important to set prices at the correct level if customers are to be persuaded to buy. Prices will be linked to the product life cycle - in the earliest 'launch' phase, prices will be high to account for development costs. Later, as sales are increasing, costs are reduced so prices can come down. Products that are technologically advanced may be sold at premium, high, prices to reflect the initial research and development that has gone into them. Price is the one element of the marketing mix which creates sales revenue - all the others are costs. For companies like Motorola, price is a key element in the marketing mix. It is a critical selling point. 'Getting the price right' is a vital part of building relationships with customers. As with other companies, prices charged by Motorola are linked to the product life cycle. When a new product is launched prices will typically be quite high. This is because a lot of product and marketer search has gone into producing the product. It usually takes time for large numbers of consumers to purchase new products. For example, 3G phones are only just beginning to sell in large quantities. As a product matures and sales increase, it is possible to reduce costs. Economies of scale are important. These come in when a firm is able to produce on a large scale. With high outputs of production, costs of research and development, software engineering and investment in plant (manufacturing machinery and tooling) can be spread. State-of-the art products are sold at premium prices reflecting the high quality of the items and their innovative nature. The costs to the users of Motorola mobile phones are kept down because they are subsidized by the network providers such as Vodafone. Network providers want as many people as possible to subscribe to their network. They therefore like to link with the producers of the best designed phones which feature the most exciting and effective technologies. Phone retailers will often supply free accessories with a mobile phone to make it more useful to phone users and to encourage them to buy.

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SAMSUNG:- PRICE

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Nokia:- Place

Available at the right place, at the right time, in the right quantities? Some of the recent major changes in business have come about by changing Place. Think of the Internet and mobile telephones

Locations: •

Logistics

•

Channel members

•

Channel Motivation

•

Market Coverage

•

Service Levels

•

Internet

•

Accessibility

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Motorola:-Place

This means how the product actually gets to the customer and refers both to the place where it is sold, and how it gets to that place. Distribution is the process of moving goods from manufacturer to retailer or customer. Motorola distributes through independent retailers such as Phones 4 U, network providers such as O2 and Three and online, via the web site. Sometimes 'place' is closely linked to product. 3G phones, for example, are mainly sold through 3G network providers.

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Samsung:-Place Place or the distribution network in case of telecommunication is another very important factor as the mobile service market is very large and especially in India, it varies to small towns and even villages, so the availability of recharge coupons, connections, infrastructure etc are very important at each and every place.

31, MDC Market,outer Delhi circle,Cannaught place,Delhi

MDC Market

BG 20,Motia Khan M< Ganj Pahar>

Opp Paharganj Polic Station

Delhi

4/1, Roop Nagar Delhi Market,Kamla Nagar, Delhi.

Roop Nagar

L1, Mahavir mahvir Delhi Enclave,palam dabri Enclave road,opp shiv vani school. Delhi

B27,Moti Nagar ,Ground Floor ,New Delhi

Near Metro Station

Delhi

Cc-28, Kalkaji,Nehru Enclave,New Delhi

Near Nehru Place Bus Depot

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Nokia:-Promotion

How are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory - advertising, selling, sales promotions, Public Relations, etc. While the other three P's have lost much of their meanings in today's markets, Promotion has become the most important P to focus on.

Advertising: •

Front Line Service

•

Public Relations

•

Message

•

Direct Sales

•

Sales

•

Media

•

Budget

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torola:

Mo -

Promotion Promotion refers to the ways that a business communicates the existence and nature of its products to its market. It includes paid for 'above-the-line' promotion such as media advertising and 'below-the-line' promotion such as special offers and discounts. The type of promotion is linked to product life cycle. For a new product, for example, it is important to inform customers of its features. Other types of promotion such as special offers and discounts are referred to as being 'below the line'. The type of promotion that is used depends on the stage in the product life cycle. For example, when a new product is launched, such as the RAZR, it makes sense to make people aware. Advertising will communicate the desirability, emotional benefits and exclusive features of the product. Motorola works in close partnership to promote its phones with retailers. Promotion costs are shared with retailers. The more retailers sell - the more Motorola is able to help them. Motorola Case Study page 5

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Samsung:-Promotion

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Nokia:-People

All people directly or indirectly involved in the consumption of a service are an important part of the extended marketing mix. Knowledge Workers, Employees, Management and other Consumers often add significant value to the total product or service offering.

Motorola: -People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service that consumers are paying for. Many British organizations aim to apply for the Investors in People accreditation, which tells consumers that staff is taken care of by the company and they are trained to certain standards.

Samsung: - People Samsung campaign, entitled ‘Samsung People’, gained international recognition when it was awarded the FWA ‘Site of the Day’. In six weeks the site clocked up 44,798 visits, with an average time of more than five minutes spent navigating through the site. To get the word out, the company set up banner ads on Cleo, Cosmo, FHM and Zoo’s websites, while ‘Samsung People’ sponsored niche publications Four Thousand, Three Thousand and Two Thousand, Two Threads, Fuzzy and Oyster magazine newsletters. At close of phase one the site competition had received over 4,000 entries.

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Nokia:- Physical evidence

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Motorola:- Physical evidence

33

Samsung:- Physical evidence

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Nokia:-Process

Procedure, mechanisms and flow of activities by which services are consumed (customer management processes) are an essential element of the marketing strategy Nokia has rapidly moved from functionally oriented organization to a business process oriented mode, and our information systems have not followed the change as fast as they should. To fill the gap, IM organization must learn and implement working methods which enable the creation of business process oriented information systems. To satisfy these business needs, Nokia has introduced a new development approach for information

systems

development.

These

processes have

been

created

tested

and

during the SPI. .

Motorola: - process The process itself only takes a few minutes. Then, within 24 hours, we'll send you an email with instructions on how to program your motorola Mobile phone number into your new phone. Check the following: 35

1. 2. 3. 4.

Is your phone programmed correctly? Did you get the welcome text message? Have you allowed 4 hours for your new phone to get set up on our network? Do you have money in your account?

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COMPARATIVE SWOT ANALYSIS Strength

Nokia ➢ Experience – 142 year history ➢ Wide product range

Motorola

➢ Globally

number 2 ➢ Worldwide operation

➢ Distribution channels in developing markets ➢ Economies of scale ➢ Lower logistics costs than competitors. ➢ High margins. ➢ Do it yourself manufacturing

➢ Wide portfolio of products ➢ Having second highest market share ➢ Distribution

– manufactures 75% of its

channels

phones

in developing

➢ Market share ➢ Nokia accounts for half of the

markets

Samsung ➢ New product concept to roll out five month ➢ Catching the pulse of the consumer , offering good design and understanding emotions

➢ Heavy investment in technology , product design and human resource ➢ Focus on innovative product for the high

global smart phone market. ➢ 38% of the global volume.

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Nokia

Motorola

➢ Global standards & global phones. ➢ Tried to apply these phones to all regions.

Samsung

➢ Less Penetration

➢ Not proactive coming out with newer model

➢ Less Resale Value

➢ Lack of product differentiation

➢ Didn’t customize phones based on customers in each region. ➢ Responsiveness/adaptability

➢ Battery backup ➢ Less of

market share

to customers’ needs.

➢ Different model at different price point

➢ Decrease in sales in the

➢ Focus on mass market instead of niche market

United States. ➢ Loss of market share –

dropped from 33% in 2002 to

➢ Not very user friendly design

10% in 2007.1 ➢ Low level of Nokia phones

Weaknesses

1

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Opportunity Nokia ➢ Leverage low logistics costs to

Motorola

➢ Wide and

growing market

Samsung ➢ Distinguish its service from competitor

further decrease prices in volume market & increase

➢ Benefit of wide range of brands

➢ Offer product variation

➢ Enhance its CDMA category

➢ Demand for cell phone driven by the service provider or carrier

profit margin overall. ➢ Provide internet services to capture this growing market. ➢ Improve sales in the

United States.

➢ Tie up with service provider

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Threats Nokia

➢ Growth in handset

models to slow from 21% experienced over the past few years to

Motorola

➢ Nokia and other competitor

➢ Buying ➢ The Google phone will behavior of consumers encourage new entrants

compete with dozens of small firms instead of

➢ Not an accessory and fashion statement

➢ New technology

10% in 2008.2

and Nokia may have to

Samsung

➢ Not keeping track of the new trend in the market

➢ CDMA

technology a new design to suit the tastes of Europeans.

➢ Aggressive competition

four large firms as it currently does. ➢ Dilute brand by expanding into internet services. ➢ Overpaying for web services.

2

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Recommendations Nokia ➢ Expend mobile voice ➢ Drive consumer multimedia ➢ Bring extend mobility to enterprises ➢ Right time of decision ➢ Determination and risk taking ➢ Foreseeing and using rising market opportunity ➢ Creating the future

Samsung ➢ Aggressively hawking fill tops and clamshell with polyphonic ring tones and

colour screen ➢ Nationwide distributor and retail presence in the domestic consumer durable market ➢ Set up handset manufacturing facility in india

Motorola ➢ The Communication Objective of Motorola is to improve brand image and awareness. Also creating brand recall in customers mind through Color, Logo, and its promotional program. So the person enhances to buy the product. For achieving this objective Motorola using some tools of marketing ➢ The target market of Motorola is Urban and Rural area. The target audience of Motorola is Youth. Motorola attract its target audience through

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BIBLIOGRAPHY

1. www.google.com 2. www.pdfcoke.com 3. www.managementparadise.com 4. www.mbaclub .com 5. www.slideshare.com

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