Enhancing the effectiveness of Nokia key retail channels The case of Nokia Representative Office in VN

Page 1 of 7
MINISTRY OF EDUCATION AND TRAINING UNIVERSITE’ LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL

MBMM PROGRAM





Student’s name: BUI THI THANH HA








ENHANCING THE EFFECTIVENESS of NOKIA
KEY RETAIL CHANNELS

“The case of NOKIA Representative Office in VN ”

FINAL PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT




Tutor’s name: Dr Nguyen Dinh Tho







Ho Chi Minh City
May 2007




MBMM1

Acknowledgement of commitment

I, Bui Thi Thanh Ha, prepared and conducted this business project “
Developing Nokia Key Retail Channels” as final project of our MBMM1 program.

With the approval and great advices from the Marketing Director Mr Nguyen
Quyet Thang, this project has been accomplished by myself and served my current
company as a real case.

I trust the legality of all references, information sources and materials using
to complete the project.


















MBMM1


Acknowledgements


The author wishes to express her profound indebtedness to the courtesy
advisor of Dr. Nguyen Dinh Tho and for his valuable guidance, document offer
and encouragement during the course of this work. His helpful suggestions,

supervision and comments have greatly improved the quality of this work.
I also wish to express his faithful gratitude to Dr. Tran Anh Tuan and
Professor Jean Pierre Bayens for kindly consenting to be member of my thesis
examination committee.
I also convey my sincere thanks to Nokia Vietnam, Marketing and Sales
team for providing the information and general support enabling me to undertake
of the Master of Marketing and Management program, and warmest thanks to my
mentor, Marketing Director, Nguyen Quyet Thang, who offered me valuable ideas
for the final project.
I hope to send my thanks to my close friends in MBMM1 who gave me lots
of practical and moral support. My thanks want to send to Nokia owners 39 Le
Duan, 165 Hai Ba Trung, Mobile mart Vien Thong A, Mobile world who gave me
great ideas to finish my works.
Finally, I wish to express my gratitude to my beloved family.










MBMM1



Acknowledgement of commitment

Acknowledgement

Table of content

Comments from advisor

Comments from Professors

Abbreviations list

Appendix list



Page
Executive summary………………………………………………………
1 - 2
Part I: INTRODUCTION 3 - 4
Part II: SITUATION ANALYSIS: 5 - 14
1: Overview to Nokia Corporate
5
2: The establishment and development of Nokia Viet Nam
6
3: Nokia 4 Ps and Overview of Nokia’s channels
7
4: Introduction to Nokia’s key retail channels
10
• Nokia store Channel
10
• Mobile mart channel

10
5: Situation analysis of NS in year 2006
11
• Overview Nokia store channel 2006
12
• Nokia store channel- Achievements 2006
12
6: Situation analysis of MM in year 2006
13
• Key Challenges and sales volume
13
Part III: ENHANCING THE EFFECTIVENESS of NOKIA KEY
RETAIL CHANNELS
15- 26
1: Mission and Objectives of Nokia Viet Nam in year 2007
15
2: Objectives and Strategies for Key Retail Channels
17
3: Key Activities for two main channels
18
• Nokia Club program
18
• Key Account Partnership Program
22
4: Directions for implementation
26
• Budget Estimation & Action Plan
26
• Conclusion
26

MBMM1



Abbreviations list




Tier 1 HCMC, HN
Tier 2 Da nang, Hai Phong, Dong nai, Can tho
Tier 3 Binh Duong, Tien giang, Nha trang, Qui Nhon,
Quang ninh, Thanh Hoa, An giang, Kien giang,
Dong Thap,
TPO Total Product Offering
TCO Total Channel Offering/Total Customer Offering
MM Mobile mart
NS Nokia store
SiS Shop in Shop
GR General retail (small shop)
KPI Key Performance Indicator
Gfk (Growth from Knowledge) GfK Asia Pte, Ltd
FF Field force of Nokia
RPP Retail Promotional Planning
OOS Out of stock

Nokia Care Is the service center to make guaranty for
customers
Nokia Academy Is responsible for training and people
development




“Entry” Products = Low End Product with price under 100usd
“Hot” Products Product of good selling
“Mid” Products = Mid end Product from 100- 300 usd/1unit
“ High” Products = High end Product from 301usd/unit up





1

Executive Summary:

Nokia is the world’s largest manufacturer of mobile devices and a world leader in
mobility, driving the transformation and growth of the converging Internet and
communication industries. Nokia offers consumers a wide range of mobile devices
and increasingly is providing people with experiences in music, navigation, video,
television, imaging, games and business mobility through these devices. Nokia
also provides equipment, solutions and service for communication networks such
as network operators, service providers and corporations.

After ten years Nokia has entered Viet Nam, the market of mobile phones is more

and more growing and bigger. The distribution network is also developing and
splitting by specific channels such as Nokia stores, Mobile mart, Shop in Shop,
Electronic marts and General retail. Nokia has achieved an average of 40% sales
growth every year and gained around 54% of market share.

In fact, the global market share of Nokia is minimum 60% and this leads that the
ambitious goal of Nokia Viet Nam will be 60% of market share in next years
(2007-2009). Nokia Viet Nam places “Channel Development” the most important
task and clearly defines “Channel” as KEY DRIVEN to contribute not only the
growth of sales volume but also building branding.

From 2006, Nokia realized that channels have not performed well in term of
building branding, delivering TCO experience to consumers, achieving expected
market share so Nokia has decided to enhance the effectiveness of Nokia Key
Retail Channels, specifically Nokia stores and Mobile marts because Nokia stores
and Mobile marts channel are contributing 41% of total sales volume with 76
stores in big cities. With long goals, Nokia Viet Nam has restructured one Retail
Channel Manager including 4 subordinates to be in charge for Nokia stores and
Mobile marts.
2


Nokia set clear the objectives for two key channels as follows:

• Nokia stores’ Objectives: to achieve the benchmark standard Nokia of
Service, Look and Feel, and deliver TCO experience to customers
• Mobile marts’ Objectives: to contribute sales growth in order to achieve
60% of market share and build up branding by taking the advantages to occupy
the best space inside and outside of stores comparing with the competitors.
• Scope: in year 2007, focus to enhance the effectiveness of Nokia stores

and Mobile marts in HCMC and HN

Theory of Marketing Research advises that it needs to understand the real
problems through the quantitative research. The research is proposed in the project
“to identify the level of the awareness of NS from customers and evaluate Total
Customer Offering (TCO) of NS versus Samsung Plaza and Motor House and
Mobile marts”.

The real problems for Nokia stores and Mobile marts are as follows:
• Nokia is loosing the customers gradually because the end-user pricing list
prescribed by Nokia is so high
• Mobile marts have received many supports from competitors and Nokia
will loose the sales volume and space to make branding

The recommendation will be “NOKIA CLUB PROGRAM” and “KEY
ACCOUNT PARTNERSHIP PROGRAM”:

• Nokia Club program: to keep the loyal customers in Nokia store channel
• Key Account Partnership program: to develop relationship with Mobile
marts’ management

3

PART I: INTRODUCTION

With 16 million subscribers, the lower price and a wide range of end products, and
the appearance of new services such as free Internet, charge decreased, …
providing by operators Mobilephone, Vinaphone, S-fone, Quality should be
ensured not only for the network but also for value-added services and the stability
of available telephone numbers meet the increasing demand of consumers.

Nokia store is the store system selling 100% of Nokia phones (not selling any
competitor mobile phone device) and is representative for Nokia to introduce
Nokia phones to customers in term of Service, Look and Feel and TCO
experience. Until now, Nokia have received the very good feedback from
consumers about Nokia stores’ service. However, Nokia stores have to sell to end-
users with the prescribed pricing list by Nokia. That price is currently higher than
end users’ price in the market about 3-7% and has affected strongly to sales
achievement of all Nokia stores and may lead to the collapse of Nokia stores
because the store- owners have lost margin to survive.

In reality, when the consumers have demand mobile phones, they usually come to
Nokia stores to enjoy the service and have experience in using live demo (try real
phone) to be displayed and demonstrate by Nokia professional promoters. Then,
the consumers’ final decision has depended on the price, so how to keep the
consumers and what are the target customers for Nokia stores who can pay higher
price with the best service? What is the awareness of the customers to Nokia stores
nowadays? What should the loyalty program be applicable in Viet Nam? …

By 2006, different from Nokia stores Mobile marts which are big stores in a good
location of big cities have many advantages in the fierce competition environment
of mobile phones market in term of pricing, promotions, distribution and services.
By Nokia, Samsung, Motorola…so the key challenges for Nokia is that how to
4

make a good relationship with Mobile marts’ owners and how Nokia can sell more
than the competitors to achieve 60% of market share. How can store staff
recommend Nokia to consumers more than the competitors? How can Nokia have
more space in stores and build more branding than the others?

With the instruction of my mentor as Marketing Director of Nokia, I developed a
project. The project will deliver the above questions and confirms:

“ The Objective of the project is to keep and to maintain the customers in order to
retain Nokia store channel and how to develop a good relationship with Mobile
marts’ management”

The theory of Customer Relationship Management (CRM) advises the solution
for the project will be “NOKIA STORE CLUB” which is key driven in
Marketing Plan from 2007-2009 for Nokia stores and “ Key Account
Partnership Program” which is very crucial task for Mobile marts to achieve the
market share of 60% for Nokia in year 2007.

The project comprises three parts:
• Part I: INTRODUCTION
• Part II: SITUATION ANALYSIS
o Introduction Nokia Corporate, Nokia Viet Nam and Marketing mix
o Situation analysis Nokia store channel and Mobile mart channel
• Part III: ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL
CHANNELS
o Nokia Club Program
o Key Account Partnership Program
o Directions for implementation

5

PART II: SITUATION ANALYSIS
1. Overview of Nokia Corporate:
During 142 year history (1865-today), Nokia has evolved from its origins in the
paper industry to become a world leader in mobile communications. Since 1968

the newly formed Nokia Corporate is ideally positioned for a pioneering role in
the early evolution of mobile communications and from 1992-1999 as mobile
phone use booms, Nokia makes the sector its core business and Nokia Company is
the world leader. Today, approximately 850 million people from virtually every
demographic segment of the population use Nokia devices for communications,
business and entertainment, and as luxury items. Dale Ford, Vice President of the
market intelligence for iSuppli believes that mobile phones have become such an
important tool for people to live and thrive that they are becoming a basic human
right.

In 2006, Nokia’s net sales totaled EUR 41 billion (USD54.3 billion) with about
10% of net profit. At the end of year 2006, Nokia employed 68.483 people of
more than 120 nationalities and sales in more than 150 Countries, Nokia had 15
production facilities in nine countries, as estimated 36% share of the global device
market (mobile device volume is 347 million units).

2. The establishment and development of Nokia Viet Nam Representative
Office,
To be established in Vietnam more than ten years, Nokia representative office has
achieved the top positioning in consumers’ reference and Nokia is a leader of
mobile devices with 54% market share with approximate 16 million people to use
mobile phones today.

The key milestones in Nokia Viet Nam history are as follows:
• In 1996, with the demand of mobile devices was increasing significantly,
capturing this great opportunity, Nokia has been entered Viet Nam market via a
6

representative office under signed by Nokia Singapore Pte Ltd Company in the
first stage. From 1996 – 2002, Dong Nam was dedicated exclusive nationally

distributor of Nokia in Viet Nam market.

• The achievements of Nokia Viet Nam: (see appendix in page 30 for detail of
the report from GfK)

• The Vietnamese consumers’ top of mind in mobile devices is Nokia when they
have the demand on mobile devices. In fact, Nokia gained high index of brand
awareness (78%), spontaneous brand awareness (98%), the brand was also well-
perceived of “ a brand of best quality”.

3. Nokia 4Ps and overview of Nokia’s channels:
• By the end of 2006, the results of a qualitative study with 41.500 respondents
across 16 countries was to understand the changing of behavior patterns and to
measure the behavior and the attitude of consumers toward mobile devices,
technologies and related services. Nokia restructured market into 12 segments (see
the definition in appendix page 27-29) Figure 1 – 12 segments
Global Segmentation Refresh
Style Leaders (17.7%)
Style Followers (9.7%)
Family Providers
(15.9%)
Life Jugglers (1.1%)
Pragmatic Leaders (1.8%)
Image Seekers (11.3%)
Simplicity Seekers (2.8%)
Mature Acceptors (0.6%)
LOWER
INVOLVEMEN
T
RATIONA

L
ASPIRATIONA
L
HIGHER
INVOLVEMEN
T
Young Explorers (8.4%)
Technology Stylists (3.5%)
Life Builders (21.3%)
Technology Leaders (5.9%)
7

• In January 2004, Nokia reorganized into four business groups - Mobile Phones,
Multimedia, Enterprise Solution and Networks, to further align the company’s
overall structure with its strategy; to better position each business group to meet
the specific needs of new and increasingly diverse market segments; to increase
Nokia’s operational efficiency; and to maintain economies of scale (see details in
appendix page 31)
o Mobile Phones
: connects people by providing expanding mobile voice
and data capabilities across a wide range of mobile devices.
o Multimedia
: gives people the ability to create, access, experience and
share multimedia in the form of advanced mobile multimedia computers
and application with connectivity over multiple technology standards.
o Enterprise Solution
: offers businesses and institutions a broad range of
products and solutions, including enterprise-grade mobile devices,
underlying security infrastructure, software and services.
o Networks

: provides network infrastructure, communications and
networks service platforms, as well as professional services to operators
and service providers.

• Introduction 4 Ps of Nokia:
X Product Categories and Segments relationship: Nokia have 4 categories
Connect (50%), Live (22%), Achieve( 20%) and Explore(8%). Figure 2
Overlay of Categories on Segments
Young Explorers
Technology Leaders
Technology Stylists
Style Leaders
Style Followers
Family
Providers
Simplicity Seekers
Mature Acceptors
Life Jugglers
Pragmatic
Leaders
Life Builders
Image Seekers
Low Involvement
High Involvement
Rational
Aspirational
Achiev
e
Connect
Explore

Live

Connect: Progressive on simplicity
Live: Inspiring self-expression=
Mobile Phone
Achieve: Democratizing achieving
= Enterprise Solution
Explore: Sharing discovering =
Multimedia ( Nseries )

8

X Distribution of Nokia is below chart:
In year 2003-2004, Nokia terminated business contract with Dong Nam and
has established 3 regional distributors, Lucky and Thuan Phat and a joint
stock company is FPT (The Corporate of Financing and Promoting
technology). Figure 3: distribution chart

X Price: Figure 4 of trade price analysis
Competitive Share
$0-50 $51-100
$101-150
$151-225 $226-300
$301-500
$500+
3%
21% 10%
25%
16% 16%
8%
Price band as % of
Total Market Value
58%
Vietnam Market by Trade Prices
Source: GfK retail audit data for Aug 06 for Vietnam.
Note: Analysis is based on value share
Nokia
Samsung
Sony Ericsson
Motorola
Others
Price Band Value Share
60%
76%
65%
% of band value share $0-$50 $51-$100 $101-$150 $151-$225 $226-$300 $301-$500 >$500
Nokia 24% 58% 32% 48% 60% 76% 65%
Samsung 11% 21% 36% 20% 24% 15% 0%

Sony Ericsson 8% 2% 2% 5% 12% 3% 8%
Motorola 54% 13% 22% 25% 1% 1% 0%
Others 4% 5%8%3%2%5%27%
24%
32%
48%

FPT (85%)
FPT (85%)
Lucky & T.Phat (15%)
NS
(16)

20%
Wholesalers (20)
SiS
(154)
GR
(6,490)
4%
5%
6%
Elec Mart
(10)

1% 1%
52%
33%
MobileMart
(60)

32%
35%
9

o “Mid” products from 151 –225USD/unit and “Low” products under
150USD/unit showed the low percentage share in total pricing bands.
Therefore, Nokia should focus “low end” products and mid end in order to
achieve the sales target, 60% market share by Mobile mart channel.

X Promotion:
o ATL: TVC, print ad, activation (coffee, Buildings ,…)
o Outdoor advertising: billboard, neon sign, sign boards
o Consumer promotion: lucky draw, premium gifts, scratch card…
o Trade promotion run by Nokia’s Field force and distributors: free
products, discount on price/big quantity, merchandising contest, …
o Advertising on promotional items: uniform, raincoat, umbrella, T-shirt,
cap, pen, key chain, notebook, bag

X Overview of Nokia’s channels:
Nokia device phones is distributing to the market through out 5 channels:
Nokia Stores (NS); Shop in shop - Mobilemart (MM); SiS , GR- Electronic
(GR-E) and General Retail (GR) . Figure 5 of Channel chart

NS
SiS- Mobile Mart
(vol. share: 40%, 60
stores)
SiS
(Vol. share: 23%,
154 stores)
GR – Electronic Mart-new channel
(vol. share 1%, 10 Stores)

GR
(vol. share: 35%, 6490 shops)
100% Nokia sales & branding,
full ranges –
6% with 16 stores
> 200m
2
, > 1,000 units/month, all
brands, legitimate only – 35%
with 60 stores
> 50m
2
, >100 units/month, all
brands, legitimate & Grey, priority
> 50m

2,
> 600 units/month, all
brands, legitimate and Grey
< 50m
2,
< 100 units/month, all
brands, legitimate and Grey
10

4. Introduction to Nokia’s key retail channels:
• Nokia store channel

Nokia store channel is the channel to build the GOOD IMAGE of NOKIA to
customers and owned by 3 distributors and 4 private companies. Currently Nokia
supports to the owners 100% budget to invest furniture, branding, merchandising
POSM, marketing activities, Nokia Academy, …but the owners will follow up all
of guidelines from Nokia in term of Marketing and Sales Operations.

Samsung and Motorola have the same stores like Nokia. They are called Samsung
Plaza stores and Motor Houses, but they are loosing the profit because they really
are show room and all owned by distributors.

• Mobile mart channel

Mobile mart channel is the CORE channel and growing everyday in term of the
number of stores (10 stores in 2005 and 60 stores in 2006) so sales volume comes
up accordingly. They owned by 12 private companies and operate these stores
with their different ways. Different from Nokia stores, the end user pricing is very
competitive in this channel and the price war is happening. In 2006, Nokia has
invested 50% of the furniture, live demo and co-promotion.

5. Situation analysis of NS in year 2006
Following the section Introduction, the situation analysis for two channels is very
important. It helps to understand the achievements, the highlights and challenges
of these channels in order to understand the real problems:

• Overview Nokia store channel 2006

As mentioned previously, Nokia store channel is responsible for building up the
benchmark Nokia standard of service, Look & Feel, and deliver TCO experience
to customers. In year 2006, sales strategies for Nokia stores:

11

o Ensure the sales growth 40% comparing with market growth 80%
o Implement the contest “ Nokia of the month ” with clear KPIs setting to
owners of the stores and reward system
o Continue to improve Look & Feel by renewing furniture, POSM,…
o Monthly run in-store activities: road show and promotions

• Nokia store channel- Achievements 2006

Sales growth is 22% comparing with year 2005 and Nokia stores did not achieve
40% of sales growth. Look at below chart, Most of NS increased monthly sales
volume such as store 21 THD, 39 Le Duan, but sales growth index is small.
Moreover, some stores C4 and 165 HBT showed unstable sales.

Figure 6 of sales achievement of Nokia store

Nokia run the contest “ NS of the month” to all stores with the overall objective to
make an assessment on the compliance of stores against the NOKIA Retail
Services Standard (store/staff appearance, selling skills, phone demo set up). The
methodology is the mystery shopping technique that shall be used to get the
customer perceived the values on the basis of answers through personal
observations.

Monthly Sales Volume by Store
0
500
1000
1500
2000
2500
50
DBP
95 HV 163
3/2
165
HBT
39HN C4 GV VT
P1
P2
P3

P4
P5
P6
P7
P8
P9'06
P10
P11
P12
Monthly Sales Volume by Store
0
500
1000
1500
2000
2500
8
TT
1
8

D
B
P
2
0

H
BT
2

1

T
H
D
2
5

T
h
a
n
h

H
oa
3
9

L
D
D
a
nggia
P1
P2
P3
P4
P5
P6

P7
P8
P9'06
P10
P11
P12
12

KPIs for NS is to achieve the contest “NS of the month” minimum 90 scores and
the reward for NS winner is to receive the certificate NS of the Year 2006 by
Director’s signature and Special Gift and PR for the store winner.

Figure 7 is the report of NS’s performance in the contest
In resulted, there are 3 stores closed so the number of Nokia stores is 13 now and
the winner is store 18 Dien Bien Phu, Hanoi.

Regarding to sales activities to support the channel like in-store activity new
product N73 and Launch Party N8800 to attract a lot of customers to come to
Nokia stores. Nokia has completely renewed all stores such as signage outside and
inside stores, installed or re-painted new furniture, …

Year 2006 is the difficult year for Nokia store, although Nokia supported strongly
the budget and the management but the achievement of Nokia store channel is not
so good in term of sales volume. The key challenge is how to enhance the
performance of Nokia stores with the improvement of TCO experience to
consumers.


NOKIA STORES' PERFORMANCE
Monthly Average Score / Store (Maximum: 100 Marks)

Monthly No. of Store with above 85 marks
0
10
20
30
40
50
60
70
80
90
Average Score / Store
59.1 64.5 77.6 79.1 81.4 84.8 84.9
P6 P7 P8 P9 P10 P11 P12
7/13
10/14 9/14 10/14
5/13
11/14 12/14
13

6. Situation analysis of MM in year 2006
When the number of subscribers reaches a certain point, the competition to win the
new subscribers has never been as hard as in recent times. This was also the year
of fierce sales promotions launched by all mobile providers.

By 2006, market share of mobile devices has split specifically by three main
players Nokia (54%), Motorola (22%) and Samsung (20%) and the key channel
“ Mobile mart” is almost big contribution of sales volume for all mobile providers
and is growing day by day in term of number of stores and volume.

The Key Highlights and Key challenges are as follows:
• Mobile marts usually locate in a good place with a big square around 200
m2 up and minimum 2 floors. They are Vien Thong A chain, Mobile world
chain, Hanoi mobile stores…

Table 8 is the trend of Mobile mart and Nokia store:










• The analysis of marketing mix in mobile marts channel:
o Price: Actually, the price war is happening everyday in all mobile mart
stores. In order to attract the customers, mobile marts are taking the best
price to introduce to customers after deducting all promotions and keep the
20 stores,
2% MS
10 stores, =
1% MS
2 stores,
<1% MS
Consumer Electronic
Store
(
CES

)

20 stores,
8%
13–16 stores
5% MS
16 stores
6% MS
Nokia store
100 stores
45% MS
80 stores
40% MS
60 stores,
35% MS
Mobile Mart
6000 6200 6500
Total:

2008 2007 2006
14

minimum margin. The margin of Nokia is from 1% - 5% for low end to
high end whereas margin from competitors is from 5% - 10%. So, Key
challenge is how to set the price in order to increase mobile marts’ margin.

o Promotion: Since fourth quarter of 2006, the war of promotional
activities happened in this channel aggressively and stronger. It makes
mobile marts’ owners to become arrogant and always ask more supports.
Key challenge is how to work with them smoothly. They have to agree the

plan and support Nokia to have more advantages than competitors such as
branding, sharing the information like sales report, …

o Distribution:
Distributors deliver mobile devices directly to mobile marts with the fully
support in the priority like delivery time, “hot” products. With the
potentiality of this channel (80 stores in 2007 and 100 stores in 2008), key
challenge is how to satisfy the good service to this channel to balance with
other channels.

o Product:
Performing a variety of product especially “entry” products to supply to
customers is the top priority strategy in product development of Nokia and
also competitors. Nokia provides the product training to this channel by
distributors’ trainers. Key challenge is how to provide the professional
product trainings and soft skills from Nokia Academy by Nokia trainers
and to produce many “entry” products (<60$/unit)




15

PART III: ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL
CHANNELS

In order to define the objectives and sales strategies for two main channels, it is
necessary to understand the objectives of Nokia Viet Nam:

1. Mission and Objectives of Nokia Viet Nam in year 2007:

• Mission: In a world where everyone can be connected, Nokia take a very
human approach to technology “ Lead in Mobility”

• Objective: Viet Nam will consume nearly 4.7million mobile phones this
year, and roughly 6.3 million units next year (noted as a source local
newspaper Investment Wednesday quoted estimation of a market research firm
as saying). Moreover, Viet Nam is expected to have 36 million mobile phone
subscribers by 2010, up from some 16 million currently, according to the state-
owned Viet Nam Posts and Telecommunication Group and the country with a
population of 83.1 million has set targets of having 32-42 fixed and mobile
phones, 10 personal computers, and 8-12 Internet subscribers for every 100
residents by 2010. Capturing with the great opportunities, Nokia set the
objective:

Achieve Market Share 60% in next 3 years ( 2007 – 2009 )

• Key challenges & Key Success Factors:
o The competitors (Motorola, Samsung) are very strong in new product
launch with price range $50/unit and Chinese brands are coming at 50%
price cheaper with the same specifications. Moreover, the potentiality of
Nokia in next few years the “low” products estimate sales growth from
53% to 65%, whereas Mid range down from 39% to 30% and high range
16

down from 8% to 5%. It leads Nokia to focus “LOW” products, especially
Mobile marts is the MAIN channel to sell a lot of “LOW” products.
Based on the analysis of sales evolution (please see appendix page 31)

o In order to increase sales volume, all competitors are focusing to run
promotions to Mobile mart stores aggressively. The pricing war is

happening everyday and consumers try to get the mobile devices with a
cheapest price. So, it affects the margin of mobile marts especially Nokia
and foresee the harder of competition and there are more players in the
mobile phone market.

o The number of mobile phones has definitely increased and it has
required the better AFTER SALES SERVICE, called “ Nokia Care” so
Nokia care centers are required more professional and satisfy with
consumers’ needs. Actually, the half of NS is installed Nokia care center
together so How many Nokia care centers will open in all Nokia Store and
what the budget is and what plan for Mobile marts?

o With the current status, the training only supported to channels through
FPT and this has not delivered good results. Nokia Academy provides
trainers and focus to train in two main channels (MM&NS).

o The service of distributors is key link between Nokia with retailers but
distributors still have not performed well in delivery and service so it is
important to set KPIs to distributors in term of inventory, orders, time
delivery, credit, price protection.

There are more key challenges when the quantitative research run by advised
following the theory of Marketing Research, it is very crucial to understand the
attitude and the behavior of consumers to NS and MM and TCO before
17

proposing the marketing plan for two main channels. ( please see the appendix
page 32-35)
o End users are aware of NS where they can experience Nokia live demo
before deciding to buy Nokia or other brands. It showed that Nokia Stores

have achieved by providing the best service to end users and push them to
decide to buy Nokia NOT other brands even they will go to buy Nokia
anywhere in the market.

o End users are satisfied the service in Nokia stores such as live demo,
demonstration people, load music, testing phones, good merchandising,
…However, TCO from NS and other channels is not much different so
consumers like to buy Nokia phone in MM where have the cheapest price.

o Most of end users come to Nokia stores to buy High and Middle end.
They are rich, achieved, own car, Intellectual. As for mobile marts, mostly
low end and mid products are sold a lot.

o Especially, end user price in MM is so cheap and lower than 3% - 7%
comparing in NS, even 10% in some products. So, NS will gradually loose
the customers and become showrooms. The owners will loose the profit and
will close the stores.

Detailed to Channel after understanding clearly the objectives and strategic
focus areas so please see below the objective and strategies for NS and MM:

2. Objectives and Strategies for Key Retail Channels

Based on the Key Success Factors and the result of the research, following with
the objective of Nokia Viet Nam 2007 it is clear for sales objectives and strategies
of Nokia channels ( NS & MM ) as follows:
18


It has emphasized that there are two program to run for NS and MM:

o Nokia Club Program: to keep the loyal customers in Nokia stores

o Key Account Partnership: to make relationship with MM’s management




















• Sales Strategies are proposed:
Following with the promising objective, the strategic focus areas to develop
channels are proposed:
o Focus product range
: To focus entry range (low range – category
Connect) by joining marketing funds programs with Operators such as
consumer promotion offering simcard free, premium gift, fee free,…

Nokia Stores: Build up the benchmark Nokia standard of service,
Look & Feel and delivery TCO experience to consumers
Mobile marts: Achieve market share 60%

• Maintain “NS of the
month” program –
set KPIs by
quarterly review
• Monthly promotion
• Build image of
Nokia store by
creating logo Nokia
• Road show
• Mini launch
• Hero corner, Nseries
Focus Area #3
Nokia Store
Club
• Membership card to
customers who buy
phone in NS
• Forum for member
• Monthly meeting
• Activities: provide
free training to

optimize the benefit
from phone
• Discount for member
in some life activities:

sport, shopping…

• Training plan from
Nokia Academy
• Refreshing training
monthly and ad-hoc
to support new staff
and improve selling
skills to push sales
out
• Nokia care set up in
all NS
Focus Area #2
Improve Look &

Feel and Service
to
achieve score
95 in all NSs
Focus Area #1
Nokia Academy
& Nokia Care
Focus Area #4
Key Account
Partnership
Program
• Select top 5
chain
• Sales Plan
• RPP

• Nokia Care
• Nokia
Academy
• Agree in the
meeting
• Monitor/Measu
re KPIs
19

o Build branding: invest BTL budget in Nokia stores and Mobile-marts
about furniture, equipments, live demo, signage, …
o Maintain NS
: run Nokia Club program to keep the loyal of customers
o Volume driven:
focus BTL budget to Mobile marts channel that drive
volume increasing and market share 60% such as apply Key Account
Partnership program, run in-store promotions, road-show …
o Nokia Care
: expand more Nokia care centers in all Nokia stores and
collecting points in Mobile marts
o In store program
: expand live demo via TPO corner at the Nokia stores
and Mobile marts to promote new products ( Explore and Live )
o Nokia Academy:
training plan is to run 100% of all NS and all MM.

3. Key Activities for two main channels
• Nokia Club program:
• Objective: to recruit and retain 500 customers to join Nokia Club in
year 2007. Execute successful and monitor the improvement of program

with aggressing activities.

• People
Nokia club strongly require the support by functional department: ASM (after
sales market- Nokia care), Nokia Academy (training), Marketing, Sales,
Financial controller, IT, HR. Externally, Nokia Club program strongly need the
good collaboration with NS managers and Nokia distributors.
Selection third party: important task for Nokia club in term of providing
promoter girls. Other requirements: work out job description, salary structure
and incentive scheme…

• Technology:
There are some steps need to follow up in technology strategy as follows:
20

o Collecting the information of customers and invite them to join seminar
and record in computerized data
o Updating the data of customers frequently and keep in touch with them
by phone call or direct mail
o Create website Nokia Viet Nam www.nokia.com.vn
and then add in
folder Nokia store and Nokia club
o Fill in the data: sales revenue, sales volume by model, information of
customer, winner in programs, incentive results, how many customers log
in website Nokia store and Nokia Club…so that we can analyze it later

• Marketing plan:


• Membership card regulation:

o Target customer: customers who come to NS buy the phone will receive
one year membership card (below example picture)
o The membership card have the name “Club NOKIA” in the one side of
card with the code customers, the other side is the regulation and the benefit
of customers, and photo of member.
PR: seminar
customers of
NS

Q
1
POSM: banner promotion in NS to hang in good
location;
POSM ( standee poster
)forNSClub
Print ad for new product will add one line the information
of Nokia store. Print ad for NS club introduction
Ma
g
azines 2 weeks/month
Q2
Q
3
Website Nokia store
Create website folder NS VN in web Nokia

www.nokia.com.vn
Launch Party and In store Games contest, Hero
BTL
ATL

Mini Workshop
Plus promotion
Q
4