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The cellular industry all over the world has been witnessing very high growth rates in
subscriber base in recent years. For developing countries in particular, cellular services
are becoming a very significant proportion of the overall telecom infrastructure.
In this situation many players have entered the market and there is tough competition
among these rival companies in this competitive environment ,companies are striving
hard to be at the top , companies are adopting more refined strategies to effectively
launch their products in the market and capture the attention of the target consumers.
The subject of study of this dissertation topic is “The Positioning strategies of Indian
Mobile Phone Industry”, in this project an effort has been made to analyze that how
successful Mobile companies position their cell phones that they create a strong
association with the consumers and consumers prefer to buy those products , what
factors do they keep in mind to successfully position their products in the minds of
target consumers. What strategies do they adopt which enables consumers to
differentiate between different class of mobile phones.
The project is divided in three main sections the first section discusses about how
companies effectively segment the whole market what strategies they use , then how
do they pick their target market and position their products effectively. The second
section is about the Indian Telecom and Mobile Phone industry who are the major
market players and what are their current market shares. The third and the last section
talks about what different mixes do mobile companies use to effectively position their
products in the minds of their target consumers. A sincere effort has been made to
present the information in a very lucid manner.
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Scope of the project
The market for any product is normally made up of several segments. A ‘market’ after
all is the aggregate of consumers of a given product. And, consumer (the
the end user),
user
who makes a market, are of varying characteristics and buying behavior. There are
different factors contributing for varying mind set of consumers. It is thus natural that
many differing segments occur within a market.
In order to capture this heterogeneous market for any product, marketers usually divide
or disintegrate the market into a number of sub-markets/segments and the process is
known as market segmentation.
segmentation
Thus we can say that market segmentation is the segmentation of markets into
homogenous groups of customers, each of them reacting differently to promotion,
communication, pricing and other variables of the marketing mix. Market segments
should be formed in that way that difference between buyers within each segment is as
small as possible. Thus, every segment can be addressed with an individually targeted
marketing mix.
The importance of market segmentation results from the fact that the buyers of a
product or a service are no homogenous group. Actually, every buyer has individual
needs, preferences, resources and behaviors. Since it is virtually impossible to cater for
every customer’s individual characteristics, marketers group customers to market
segments by variables they have in common. These common characteristics allow
developing a standardized marketing mix for all customers in this segment.
Through segmentation, the marketer can look at the differences among the customer
groups and decide on appropriate strategies/offers for each group. This is precisely why
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some marketing gurus/experts have described segmentation as a strategy of dividing
the markets for conquering them.
When it comes to marketing strategies, most people spontaneously think about the 4P
(Product, Price, Place, Promotion) – maybe extended by three more Ps for marketing
services (People, Processes, Physical Evidence).
Market segmentation and the identification of target markets, however, are an important
element of each marketing strategy. They are the basis for determining any particular
marketing mix. Basic steps in marketing strategy are as follows:-
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ATTRIBUTES OF EFFECTIVE SEGMENTATION:
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Market segmentation is resorted to for achieving certain practical purpose. For
example, it has to be useful in developing and implementing effective and practical
marketing programmes. For this to happen, the segments arrived at must meet certain
criteria such:-
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Segmentation is the basis for developing targeted and effective marketing plans.
Furthermore, analysis of market segments enables decisions about intensity of
marketing activities in particular segments.
Segmentation helps the marketers to distinguish one customer group from another
within a given market and thereby enables him to decide which segment should form
his target market.
Higher Profits: -
It is often difficult to increase prices for the whole market. Nevertheless, it is possible to
develop premium segments in which customers accept a higher price level. Such
segments could be distinguished from the mass market by features like additional
services, exclusive points of sale, product variations and the like. A typical segment-
based price variation is by region. The generally higher price level in big cities is
evidence for this. When differentiating prices by segments, organizations have to take
care that there is no chance for cannibalization between high-priced products with high
margins and budget offers in different segments. This risk is the higher, the less
distinguished the segments are.
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Segmentation also enables the marketer to crystallize the needs of target buyers. It also
helps him to generate an accurate prediction of the likely responses from each segment
of the target buyer. Moreover, when buyers are handled after careful segmentation, the
responses for each segment will be homogeneous. This in turn, will help the marketer
develop marketing offer/programmers that most suited to each groups. He can achieve
specialization that is required in product, distribution, promotion and pricing for
matching the particular customer group and develop offers and appeals for the
segmented group.
Stimulating Innovation: -
An undifferentiated marketing strategy that targets at all customers in the total market
necessarily reduces customers’ preferences to the smallest common basis.
Segmentations provide information about smaller units in the total market that share
particular needs. Only the identification of these needs enables a planned development
of new or improved products that better meet the wishes of these customer groups. If a
product meets and exceeds a customer’s expectations by adding superior value, the
customers normally is willing to pay a higher price for that product. Thus, profit margins
and profitability of the innovating organizations increase.
Segmentation ensures that the marketing effort is concentrated on well defined and
carefully chosen segments. After all, the resources of any firm are limited and no firm
can normally afford to attack and tap the entire market without any delimitation
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whatsoever. It would benefit the firm if the efforts were concentrated on segments that
are more profitable and productive ones.
Segmentation also helps the marketer assess as to what extend existing offer from
competitors match the needs of different customer segments. The marketer can thus
identify the relatively less satisfied segments and succeed by concentrating on them
and satisfying their needs.
Segmentation brings benefits not only to the marketer, but to the customer as well.
When segmentation attains higher levels of sophistication and perfection, customers
and companies can conveniently settle down with each other, as at such a stage, they
can safely rely on each other’s discrimination. The firm can anticipate the wants of the
customers and the customers can anticipate the capabilities of the firm.
Customers change their preferences and patterns of behavior over time. Organizations
that serve different segments along a customer’s life cycle can guide their customers
from stage to stage by always offering them a special solution for their particular needs.
For example, many car manufacturers offer a product range that caters for the needs of
all phases of a customer life cycle: first car for early teens, fun-car for young
professionals, family car for young families, etc. Skin care cosmetics brands often offer
special series for babies, teens, normal skin, and elder skin.
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Targeted communication: -
Markets can be segmented using several relevant bases. There are huge number of
variables which leads to market segmentation. They comprise easy to determine
demographic factors as well as variables on user behavior or customer preferences.
Segmentation is done for consumer market and industrial market.
1. Geographic Segmentation.
2. Demographic Segmentation.
3. Psychographic Segmentation.
4. Behaviouralistic Segmentation.
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Age (dominant factor):-Segmentation
factor is done on the basis of age of person.
Example Titan has segmented its product according to different age group of
person
Many of these variables have standard categories for their values. For
example family lifecycle often is expressed as bachelor, married with
no children, full-nest, and empty-nest or solitary survivor.
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Activities.
Interests.
Opinions.
Attitudes.
Values.
Values
Activities,
Activities, Interests,
Interests and Opinions (AIO) surveys are one tool of measuring
lifestyle.
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User status: - Regular / potential / first time user / irregular
/occasional.
Readiness to buy.
Occasion:
Occasion - Holidays and occasion stimulate customer to purchase
products.
APPROACHES IN SEGMENTATION:
George Day (1980) describes models of segmentation as the top-down approach:
approach
In this approach “firms starts with the total population and divide it into segments”.
He also identified an alternative model which he called the bottom-up approach.
approach In
this approach,” firms starts with a single customer and build on that profile”. This
typically requires the use of customer relationship management software or a
database of some kind. Profiles of existing customers are created and analysed.
Various demographic,
demographic behavioural,
behavioural and psychographic patterns are built up
using techniques such as cluster analysis. This process is sometimes called
database marketing or micro-marketing. Its use is most appropriate in highly
fragmented markets. McKenna (1988) claims that this approach treats every
customer as a "micro majority". Pine (1993) used the bottom-up approach in what he
called "segment of one marketing". Through this process mass customization is
possible
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ADVANTAGES OF MARKET SEGMENTATION:
Helps distinguish one customer group from another within a given market.
Helps crystallize the needs of the target buyers and elicit more predictable
responses from them ; helps develop marketing programmes on a more
predictable base; helps develop market offer that are most suited to each
group.
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Helps spot the less satisfied segments and succeed by satisfying such
segments.
Brings benefits not only to the marketer but also to the customer as well.
Is it sizeable: -
Is it growing: -
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Growth rate and likely future position of the segment will be the next
consideration in the evaluation process. Usually, business firms seek out the
high growth segments. Analysis will readily indicate to the firm that in bath soaps,
the premium segment happens to be the high growth segment. Whereas the
popular segment has been growing at 10 percent per annum, the premium
segment has been growing at over 20 percent annum. When this fact is taken
into consideration, the firm’s choice may tilt toward the premium segment. The tilt
will be particularly pronounced if the firm’s natural disposition is to strive for a
position in the high growth segment of the business.
Is it profitable: -
Is it accessible: -
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The firm has to now consider whether the segments are accessible to it. This
may need further analysis. The market realities will have to be taken into
consideration. The popular segment will be accessible only to the firm with a
cost advantage, since price is a major determinant in this segment. Premium
segment will be accessible only to firms, which enjoy a differentiation
advantage, and which are also marketing savvy. Liril of Hindustan Lever has
a commanding position in this segment. At the upper end of the segment,
HLL’s Pears and Dove are well entrenched. Several other brands of different
companies are competing in the segment. The firm has to take due note of
this reality. At the same time, analysis also reveals that new brands do keep
entering the segment every now and then, and some of them do manage to
stay. So, the firm has no reason to believe that the premium segment is not
accessible to it, unless it is convinced that it is very weak in marketing.
TARGETING:
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There was a time when finding the best customers was like throwing darts in the dark.
Target marketing changed all that...Today's savvy marketers know that finding their
best prospects and customers hinges on well thought out targeted marketing strategies.
Defining a target market requires market segmentation, the process of pulling apart the
entire market as a whole and separating it into manageable, disparate units based on
demographics. Target marketing is a business term meaning the market segment to
which a particular good or service is marketed. It is mainly defined by age, gender,
geography, socio-economic grouping, or any other combination of demographics. It is
generally studied and mapped by an organization through lists and reports containing
demographic information that may have an effect on the marketing of key products or
services.
involves breaking a market into segments and then concentrating your marketing
efforts on one or a few key segments. Target marketing can be the key to a small
business’s success.
The beauty of target marketing is that it makes the promotion, pricing and distribution of
your products and/or services easier and more cost-effective. Target marketing
provides a focus to all of your marketing activities.
Market targeting simply means choosing one’s target market. It needs to be clarified at
the onset that marketing targeting is not synonymous with market segmentation.
Segmentation is actually the prelude to target market selection. One has to carry out
several tasks beside segmentation before choosing the target market.
Through segmentation, a firm divides the market into many segments. But all these
segments need not form its target market. Target market signifies only those segments
that it wants to adopt as its market. A selection is thus involved in it.
In choosing target market, a firm basically carries out an evaluation of the various
segments and selects those segments that are most appropriate to it. As we know that
the segments must be relevant, accessible, sizable and profitable. The evaluation of the
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different segments has to be actually based on these criteria and only on the basis of
such an evaluation should the target segments be selected.
Choosing the target market is related to, but not synonymous with, market
segmentation.
Segmentation is the means or the tool; choosing the target market is the
purpose.
Segmentation can also be viewed as the prelude to target market selection.
Choosing the target market usually follows multi-level segmentation using
different bases.
Choosing the target market involves several other tasks in addition to
segmentation.
Looking at each segment as a distinct marketing opportunity.
Evaluating the worth of each segment (sales/profit potential).
Evaluating whether the segment is:
Distinguishable.
Measurable.
Sizable.
Accessible.
Growing.
Profitable.
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Examining whether it is better to choose the whole market, or the only a few
segment, and deciding which ones should be chosen.
Looking for segments, which are relatively less satisfied by the current offers in
the market from competing brands.
Checking out if the firm has the differential advantage / distinctive capability for
serving the selected segments.
Evaluating the firm’s resources and checking whether it is possible to put in the
marketing programmes required for capturing the spotted segments with those
resources.
Finally selecting those segments that are most appropriate for the firm.
Target marketing tailors a marketing mix for one or more segments identified by market
segmentation. Target marketing contrasts with mass marketing, which offers a single
product to the entire market.
Two important factors to consider when selecting a target market segment are the
attractiveness of the segment and the fit between the segment and the firm's objectives,
resources, and capabilities.
capabilities
The following are some examples of aspects that should be considered when
evaluating the attractiveness of a market segment:
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Required market share to break even.
Sales potential for the firm in the segment.
Expected profit margins in the segment.
Market research and analysis is instrumental in obtaining this information. For example,
buyer intentions, sales force estimates, test marketing, and statistical demand analysis
are useful for determining sales potential. The impact of applicable micro-environmental
and macro-environmental variables on the market segment should be considered.
Note that larger segments are not necessarily the most profitable to target since they
likely will have more competition. It may be more profitable to serve one or more
smaller segments that have little competition. On the other hand, if the firm can develop
a competitive advantage, for example, via patent protection, it may find it profitable to
pursue a larger market segment.
Market segments also should be evaluated according to how they fit the firm's
objectives, resources, and capabilities. Some aspects of fit include:
Whether the firm can offer superior value to the customers in the segment
The impact of serving the segment on the firm's image
Access to distribution channels required to serve the segment
The firm's resources vs. capital investment required to serve the segment
The better the firm's fit to a market segment and the more attractive the market
segment, the greater the profit potential to the firm.
There are several different target-market strategies that may be followed. Targeting
strategies usually can be categorized as one of the following:
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Single-segment strategy - Also known as a concentrated strategy. One
market segment (not the entire market) is served with one marketing mix. A
single-segment approach often is the strategy of choice for smaller companies
with limited resources.
Selective specialization-
specialization This is a multiple-segment strategy, also known as a
differentiated strategy. Different marketing mixes are offered to different
segments. The product itself may or may not be different - in many cases only
the promotional message or distribution channels vary.
Product specialization-
specialization The firm specializes in a particular product and tailors it
to different market segments.
Market specialization-
specialization The firm specializes in serving a particular market
segment and offers that segment an array of different products.
Full market coverage - The firm attempts to serve the entire market. This
coverage can be achieved by means of either a mass market strategy in which a
single undifferentiated marketing mix is offered to the entire market, or by a
differentiated strategy in which a separate marketing mix is offered to each
segment
The following diagrams show examples of the five market selection patterns given
three market segments S1, S2, and S3, and three products P1, P2, and P3.
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S1 S2 S3 S1 S2 S3 S1 S2 S3 S1 S2 S3 S1 S2 S3
P1 P1 P1 P1 P1
P2 P2 P2 P2 P2
P3 P3 P3 P3 P3
A firm that is seeking to enter a market and grow should first target the most attractive
segment that matches its capabilities. Once it gains a foothold, it can expand by
pursuing a product specialization strategy, tailoring the product for different segments,
or by pursuing a market
Choosing the target market is a part of marketing strategy formulation, the other two
parts being positioning and marketing mix formulation. Without right targeting, the firm
cannot formulate an effective strategy. It is through careful segmentation and targeting
that firm pick up right group of consumers. Also, it is through this process that the firm
gain vital knowledge about the need and buying behaviour of the consumer in each
segment and the differences between one segment and the other. And, it is by using
this knowledge that the firm develops marketing programmes that match the specific
requirement of different segments. In other words, segmentation and targeting help the
firm not only the characteristics of each of the segments but also the ‘distinctive
excellence’ that is required for catering to the specific needs of the consumers in each
of them.
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DECISIONS INVOLVED IN TARGETING STRATEGY
INCLUDE:
which segments to targeting.
how many products to offer.
which products to offer in which segments.
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gather worthwhile volumes. As the firm did not target those segments and as they failed
to make product offers that were appropriate for them, the end result was poor. For this
reason firms like Reebok, Ray-ban, and Levi did not showed satisfactory result for quite
sometime in Indian market while they were very successful in the western markets.
Thus the choice of target marketing for a given industry can decide the fate of the
industry in the market. This is because firms differ in their competencies, resources,
objectives, and strategies
pOSITIONING:
Positioning is a concept in marketing which was first popularized by Al Ries and Jack
Trout in their bestseller book “Positioning
Positioning - a battle for your mind".
mind According to them
‘Positioning is what you do to mind of the prospect’. They iterate that any brand is
valued by the perception it carries in the prospect or customer's mind. Each brand has
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thus to be 'Positioned' in a particular class or segment. Example: Mercedes is
positioned for luxury segment, Volvo is positioned for safety.
The position of a product is the sum of those attributes normally ascribed to it by the
consumers – its standing, its quality, the type of people who use it, its strengths, its
weaknesses, any other unusual or memorable characteristics it may possess, its price
and the value it represents.
Although there are different definitions of Positioning, probably the most common is: "A
product's position is how potential buyers see the product", and is expressed relative to
the position of competitors. Positioning is a platform for the brand. It facilitates the brand
to get through to the mind of the target consumer.
The position of the brand has thus to be carefully maintained and managed. Example:
when Malboro cut down its prices, its sales dropped immediately, as it began being
associated with the generic segment. Watches like Rolex are positioned as luxury
segment watches, thus they being one of the most expensive have become a symbol
for accomplishment in life. If Rolex reduces its prices, it loses its perceived image and
hence is in danger of losing its customers. This differs slightly from the context in which
the term was first published in 1969 by Al Ries and Jack Trout in the paper
"Positioning" is a game people play in today’s me-too market place" in the publication
Industrial Marketing, in which the case is made that the typical consumer is
overwhelmed with unwanted advertising, and has a natural tendency to discard all
information that does not immediately find a comfortable (and empty) slot in the
consumers mind. It was then expanded into their ground-breaking first book,
"Positioning:
Positioning: The Battle for Your Mind",
Mind in which they define Positioning as "an
organized system for finding a window in the mind. It is based on the concept that
communication can only take place at the right time and under the right circumstances."
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For a product to exist, it must find a place in a consumer’s perception of the world of
products around him. And this perception is subjective, governed by the individual
consumer’s values, beliefs, experience, needs, and environment.
This is the core rational behind positioning – the idea that each brand occupies a
particular point or space in the individual consumer’s mind a point which is determined
by that consumer’s perception of the brand in question and in its relation to other
brands. Positioning , therefore, starts with our understanding of a prospect consumer’s
mental perceptions of product and thereby is essential for occupying the limited mental
space in the consumers mind.
The mind as a defense against the one of today’s communications, screens and rejects
much of the information offered. Generally, the mind accepts only that which matches
prior knowledge or experience. Millions of rupees have been wasted trying to change
minds with advertising . Once a mind is made up, it’s almost impossible to change.
This is what positioning is all about and why is it so important to set mindsets.
POSITIONING CONCEPTS:
Functional positions
Solve problems.
Provide benefits to customers.
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Get favorable perception by investors (stock profile) and lenders.
Symbolic positions
Self-image enhancement.
Ego identification.
Belongingness and social meaningfulness.
Affective fulfillment.
Experiential positions
Provide sensory stimulation.
Provide cognitive stimulation.
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Positioning in relation to the user/ usage. This can involve positioning the
product according to the occasions when it is used. Horlicks for example have
traditionally been positioned as bed- time drinks, although the launch of Milio
some years ago was an attempt to specific types of users or speific user
lifestyles. Thus, for example, the perfume, Charlie, marked by Region, was
initially positioned to appeal to the independent career woman on its launch in
early 1970’s . It has recently been re-positioned to appeal to the more feminine
and romantic consumer.
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requirements. An example comes from the soft drinks market. The
manufacturers of 7-up could not compete directly with coca – cola and pepsi,
the market leaders, so they positioned 7- up the ‘un- cola’ drink. The product
satisfied consumer requirements, but also offered something different. The
campaign was a success and 7-up become the number 3rd in best selling soft
drink.
Positioning in relation to price and quality. In this type the product of the
company is positioned as a product which is very lowly priced and is best in
quality.
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DIFFERENT POSITIONING PLANKS / BASES:
Different types of positioning planks /bases are used by the marketers are:-
Gender:- Product positioned for a particular segment. Example- Scooty Pep, Titan
Raga.
Raga
Fashion for elite class:- Product positioned for fashionable elite class or member
of the society, who always want to stay ahead in term of fashion and demands
exclusive products only. Example Peter England, Van Heusen, Raymond etc.
etc
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POSITIONING PLANNING :
Positions are described by variables and within parameters that are important to the
customers. Common examples are price, supporting services, quality, reliability, and
value for money. Often, customers position a product in relation to a brand or product
that is especially visible to them. This could be the market leader or any other offer with
a high media exposure and an above average marketing budget. Therefore, it is
advisable to use in-depth market research to determine relevant parameters in order to
understand how customers rate different products and marketing variables.
The number of relevant parameters is normally low. Most often, they can be described
with a two- or three-dimensional matrix. This tool to visually depict customers’
perceptions of a product and its position is called perceptual mapping.
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products? What product name is most closely associated with attributes our target
segment perceives to be desirable?
The basic perceptual map that buyers use maps products in terms of their price and
quality, as illustrated below:
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In our example, product A is positioned unfavourably. It is too expensive for the mass
market and its quality is not good enough for the premium segment. In general, there
are the following strategies for repositioning; however, their feasibility will depend on the
particular situation.
Change the relation of price and quality for the existing brand; e.g. product
relaunch with improved characteristics
Change the relation of price and quality by introducing a new brand; e.g.
introduction of clone under a ‘cheap’ brand or a retailers own brand
Alter believes about the brand; e.g. image campaign, creation of a ‘hype’
Alter believes about competitive brands; e.g. comparing advertisements
Alter customers’ rankings of important factors; e.g. focus on additional
features and characteristics (example: car manufacturers focus on very
different product characteristics in their commercials, for instance security,
fuel consumption, image, luxury interior, fun)
Introduction of new or neglected attributes; e.g. product relaunch with new
features that are new for the whole market segment.
Moreover, it is advisable to keep in mind that customer and their individual preferences
of a price-quality-combination are not distributed equally along the VEL. Neglecting the
distribution of customers could lead to the following problems:
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Positioning in a segment with very few potential customers (e.g. positioning in a
middle-segment in a market where customers prefer either the budget-product or
the premium product)
Positioning in a too low or too high price-value-combination (segments a and b in
our example). This product does not appeal to a large proportion of the market,
since customers either expect a higher quality (a) or are not willing to pay that high
price.
Dibb et al recommend the following steps for determining and implementing the
positioning of a product. Although they focus on new product development, these steps
are applicable to a relaunch with new features or for a repositioning of an existing
product too.
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Inform target customers about the product (promotion).
Product positioning denotes the specific product category / product class in which the
given product is opting to compete. And brand positioning denotes the positioning of the
brand viz-a-viz the competing brands in the chosen product category.
In fact, these are the issues the firm agitates in target market decision selection too.
The linkage is only natural because in product positioning, the firm is actually
bridging the product offer with the right target market.
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ISSUES IN BRAND POSITIONING
Clarity: While positioning its brand the firm must be able to position itself in both
distinct value, proposition, and to its target audience.
Consistency: Consistency in positioning means keeping the positioning
plank/bases intact for longtime. Planks should be carefully chosen while
positioning. But it does not mean that the firm must change its positioning bases
even though its survival is at stake. The firm must be flexible to the changing
environment.
Credibility: The firm must deliver trustworthy and believable value proposition.
There should be perfect match between promise and action.
Competitiveness: For surviving in this competitive and changing environment
innovative resources, talent pool, competitive advantage, strong financial backup
etc are very important.
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POSITIONING AND THE MARKET MIX :
While consumers will obviously position products on the basis of their experience and
information , that positioning can be reinforced, or altered by the marketing campaign.
The marketing mix ( 4 P’s) represent the marketing variables which are directly
controlled by the organization. By developing an appropriate balance between these
elements that the organization can tailor its product offerings in order to meet the needs
of its target market and achieve its own specified objectives. Positioning enables an
organization to match its marketing mix to customer needs, by identifying key customer
requirements, which the firm can deliver better than the competition.
Marketing strategy will aim to identify product positions, whereas the marketing mix will
be concerned with creating and maintaining those positions. To develop an effective
marketing mix require a clear understanding of the chosen product position and of the
way in which consumers are likely to respond to the individual mix elements. Promotion,
and particularly television advertising. For example, may play a key role in the
marketing mix for fast moving consumer goods, but may be almost irrelevant for
specialized industrial goods. Similarly, choice of distribution outlet is frequently are
important determinate in adopting a particular market position ( e.g. Duracell’s
recognition of the potential of supermarkets) this position must be created and
maintained by the appropriate use of marketing mix variables. Furthermore, consumer’s
perception of the product and of competing offerings must be monitored to ensure that
the marketing effort is creating and maintaining the desired product position.
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product. What features are important to customers and what extra features a
company is providing to make its product superior than competitors products.
Place: How the product or service would be made available to the target market.
This includes that how companies make their products available to their
consumers ,how one company provides extra advantage to its consumers in
terms of delivery product reach etc. How well is companie’s distribution network,
how well it reaches all its target consumers.
Price: How much the product or service will cost. How the price would be
perceived by the consumer. Is the price only dominantfactor among target
consumers or they value the product attributes. What pricing strategies the
competitiors have adopted
REPOSITIONING:
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Example of Maruti Omni repositioning can be citied as important case in repositioning
strategy. When Maruti Omni was launched it was positioned as the low priced, spacious
van. But in the market as the time passed, Maruti Omni cannot acquire a dominant
position. The major competing brands are more spacious, though higher priced. Thus
Maruti decided to take the path of repositioning. The features that were after
repositioning are:-
Most cars do not have any fifth door in the car. Maruti Omni had the boot-latch at the
back of the car which can be used both for entering and also for keeping goods.
In the new car there is around 7.5 cubic meter of space. This gives the advantage of
more space for luggage and more people.
For having a pleasant driving experience Maruti Omni the instrument panel is sleek,
the steering columns just positioned just right, seat are adjustable with control lever
and gear shaft at hand-touch distance.
Engine was improved from the previous one. It is more fuel efficient and delivers
higher performance.
Safety features are standard.
A coolant system that eliminates daily chores of filling water in the radiator was
introduced.
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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-to-
network 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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Telecom industry in india:
The Indian telecommunications market has been displaying sustained high growth
rates. Riding on expectations of overall high economic growth and consequent rising
income levels, it offers an unprecedented opportunity for foreign investment. A
combination of factors is driving growth in the telecom market, promising rich returns on
investments.
Over the past 10 years, India has registered the fastest growth among major
democracies, having grown at over 7 per cent in four years during the 1990s. It
represents the fourth largest economy in terms of Purchasing Power Parity. According
to a recent Goldman Sachs report, over the next fifty years, Brazil, Russia, India and
China - the BRIC economies- could become a much larger force in the world economy.
It reports, “India could emerge as the world’s third largest economy and of these four
countries; India has the potential to show the fastest growth over the next 30 to 50
years”. The report also states that, “Rising incomes may also see these economies
move through the ‘sweet spot’ of growth for different kinds of products, as local
spending patterns change. This could be an important determinant of demand and
pricing patterns for a range of commodities”. The share of the services sector as a
percentage of total GDP is also predicted to rise from the current 46 per cent to about
60 per cent by 2020. The boom in the services sector is slated to come from India,
emerging as a chosen destination for software and other IT enabled services, tourism
etc. According to a Nasscom- McKinsey & Co. Study, by 2008, the Indian IT software
and services sector will account for US$ 70-80 billion in revenues; it’ll employ 4 million
people, and account for 7 per cent of India’s GDP and 30 per cent of India’s foreign
exchange inflows.
Population projections from the Planning Commission of India suggest that the share of
the working age population (15-64 years) in total population will grow from the current
59 per cent to about 65 per cent, translating into 882 million by year 2020.According to
the Vision 2020 document for the Planning Commission of India, the country will
witness continued urbanisation. The urban population is expected to rise from 28 per
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cent to 40 per cent of total population by 2020.Future growth is likely to be concentrated
in and around 60 to 70 large cities, each having a population of one million or more.
This profile of concentrated urban population will facilitate customised telecom offerings
from operators. Over the years, spending power has steadily increased in India.
Between 1995 and 2002, nearly 100 million people became part of the consuming and
rich classes. Over the next five years, 180 million people are expected to move into the
consuming and very rich classes. On an average, 30-40 million people are joining the
middle class every year, representing huge consumption spending in terms of the
demand for mobile phones, televisions, scooters, cars, credit goods and a consumption
pattern associated with rising incomes.
The cell phones industry has shown a remarkable growth in the last decade. In 1989
the number of its subscribers was zero in India. India’s love affair with cell phones
started in the mid-1990s, as the mobile revolution took hold and India had just 10 million
mobile and landline connections. Delhi was the first state to launch cell phones in India.
Growth then soared in the last four years due to regulatory change and falling costs of
calls and handsets. India’s wireless market is a test bed for alternative infrastructure,
handsets, billing systems, business models and marketing strategies that will likely
prove applicable to other developing countries.
On a numerical basis, India is the biggest growth market adding about 6 million cell
phones every month. CAGR for mobile phones is 86% in India. It is one of the fastest
growing mobile markets in the world; in April 2006 mobile subscriber base crossed 100
million mark. This has been accomplished by rethinking handsets, network
infrastructure, enhanced services and content. More than two-third of mobile
subscriptions are with GSM operators and rest with CDMA. India has one of the lowest
mobile phone tariffs in the world resulting in low Average Revenue per User (ARPU) of
9.04 USD per year (CDMA 5.74 USD and GSM 8.89 USD).
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Indian land area covered by mobile networks is approx 30%. CAGR of Mobile Market
Value for 2004- 2009 is 36.9%.With 156.31 million cell phones; teledensity in the
country is still low at 17.45%. Fewer than eight in every 100 Indians use mobiles,
compared with China's 30 per cent. In India, about 13 percent of people have cell
phones which has increased from 8% in 2005 and is expected to reach 40 percent
within a few years. A lack of investment in the infrastructure needed to support landline
services means there are only 50 million fixed-line users in the country, leaving the
stage set for mobile operators. India is expected to have the third largest mobile user
base, behind China and the US, by the year end and will become the second largest
market of mobile handsets by 2010. Indian cellular market would account for 11% of the
overall Asia Pacific and Japan market by 2009 and is expected to reach 500 million
subscribers by end of 2010 with CAGR of 33.7% for 2004- 2010. The image below
shows the rising number of mobile users in india over a decade.
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Nokia:
Nokia India started its operations in India in 1995 and has set up its business units in
Mumbai, Bangalore, Ahmedabad, Hyderabad, Kolkata and New Delhi. Nokia has
invented the cellular technology in India and also deployed its network of mobile phones
for the very first time in India.
The units of Nokia India strongly focuses upon handsets and infrastructure facilities
which has its offices along with the R and D units located at Bangalore, Hyderabad and
Mumbai. The manufacturing unit of Nokia India is located in Chennai. Nokia India
possesses a number of skilled professionals who operates in 3 broad business sectors
known as Mobile Phones, Multimedia and Enterprise solutions. The company Nokia
India has grown outstandingly in the past few years. Nokia India started off its business
with manpower of 450 and within few years it increased to 6000 people and this is the
current manpower strength. This is a major growth and proves the company's efficiency
in providing employment options to people. Nokia India has gained the brand status and
it still standing in the number 1 position for its state-of-art mobile devices.
Nokia India possesses the capability of meeting every requirement of its consumers
and works accordingly. Starting from manufacturing extraordinary and high technology-
based products to generating quick service to its consumers, Nokia India has it all. The
efficiency with which Nokia India has worked and still working for every unit, has lead to
such a phenomenal growth in the company not only in the domestic market but also
across the globe. Nokia India has also established a diverse product portfolio to serve
the needs of people. Today's generation demands variety of programs in the mobile
phones staring from gaming options and music players to GPRS connectivity and other
Internet facilities. In response to that, Nokia India invented a new series of mobile
devices with high performance multimedia devices for imaging, music, gaming, and
Internet options.
The Indian market of Nokia ranks among the top three markets of the company across
the globe. The new unit of Nokia India called the 'Concept Stores' has been established
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in a number of cities in India that include Bangalore, Delhi, Jaipur, Hyderabad,
Chandigarh, Ludhiana and Chennai. These units of Nokia India were set up with the
aim to offer empirical experience in mobile devices. The company of Nokia India has
been set up with the objective to enhance its geographical network in various parts of
the country and also provide reasonable and affordable products to the consumers.
The networks of Nokia India include Bharti, BSNL, Hutchison, IDEA and BPL. Nokia
India has ranked 4th in the Most Trusted Brand Survey by Brand Equity for the year
2007 and has been ranked Business World as No.1 Multinational corporation set up in
India. It is also a foremost supplier to the GSM operators. The manufacturing unit of
Nokia India has an investment amount of USD 150 million in its operational services as
has been declared in March 2006. At present, the manufacturing unit of Nokia India has
manpower of more than 4100 people. The new technology that is on the list to be
invented by Nokia India is switched mobile technologies and communication solutions
that will be designed exclusively for the upcoming generation to intensify the corporate
productivity.
Sony Ericsson:
Sony Ericsson India was set up in 2001 and since then the company has been in the
good records of the mobile industry with their inventions and implementations of newer
and innovative technologies in their products succumbing to the consumer
requirements. The unit of Sony Ericsson in India manufactures a range of stylized
products uniquely available for the domestic as well as the global market. The product
range of Sony Ericsson India is highly innovative and unique as it follows the state-of-
art form while manufacturing the products. The main aim of Sony Ericsson India is to
establish itself among the top most brands in the mobile industry.
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The brand not only aims to make it big in the local market but it also targets the
international market by manufacturing mobile handsets of world-class standard. Along
with manufacturing superior quality mobile devices, Sony Ericsson brand in India also
focuses largely upon giving the handsets an outstandingly sleek and modernized
outlook to catch the consumer's attention at the very first sight. Good-looking models of
mobile phones, exquisite features, superb quality, and quick services are the main
offerings of Sony Ericsson India.
The products of Sony Ericsson India comprise of mobile phones, accessories, mobile
computing, and business. Among the mobile phone range of Sony Ericsson India, the
features available includes talk and text phones, camera phones, design phones, music
phones, and web and email phones. The accessories range of Sony Ericsson India
consists of music, imaging, hands-free, connectivity and power, and different cases and
covers. Mobile computing in Sony Ericsson India possesses some most-wanted
benefits needed by all kinds of consumer such as Internet, Intranet, email facilities, and
corporate network. This is also called Mobile Broadband of Sony Ericsson India. Sony
Ericsson India also possesses a press release segment that comprise of press release
archive, recent press releases, and a photo library with images of mobile handsets and
accessory.
Sony Ericsson India also possesses business propositions, which can be highly efficient
for being a part of working life. Some of the major products of the business proposition
of Sony Ericsson India are business software, Email, calendar, contacts, wireless web,
security and device management, navigation, business phones, corporate telephony,
business accessories, and PC cards.
The manufacturing unit of Sony Ericsson India uses the best of technologies in its
products such as 2G and 3G platforms and thereby intensifying its services to enter the
entry level markets. Some of the major areas of concern for Sony Ericsson India are
design and development, distribution and customer services, product research,
manufacturing, and marketing of the products. The global markets covered by Sony
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Ericsson India include UK, USA, France, China, Japan, Netherlands, London, Sweden,
and India. The R & D unit of Sony Ericsson is located in Sweden.
Motorola:
Motorola India largely deals with a range of operations that include Enterprise Mobility
Solutions, Home & Network Mobility and Mobile Devices. Its headquarter is located at
Gurgaon (Haryana) and has its units at Delhi, Mumbai, and Bangalore.
There are 3 business sectors where Motorola India operates. These 3 business units of
the company Motorola India are Enterprise Mobility Solutions, Home & Network Mobility
and Mobile Devices. Motorola India company mainly focuses upon Mobile handsets,
Software Development programs, Managed and Hosted Services, Wireless
Infrastructure facilities, Trunking and Two Way Radios, Broadband Equipment (wired as
well as wireless), Applied Research and Development on Seamless Mobility or
Convergence technologies. Motorola started its career in the name of Galvin
Manufacturing Corporation in 1928. The Galvin Manufacturing Corporation was
renamed in 1947 and adopted the name Motorola which has gained immense
popularity soon after.
The three business units of Motorola India have different set of goals to achieve and
works accordingly. The first business unit, that is Enterprise Mobility Solutions
centralizes around the communication network that involves critical missions. The
Government of India offers such mission-critical communications sectors that generate
safety for the public, and also enterprise mobility business. The main work of Enterprise
Mobility Solutions is to create, produce, install, market and service products such as
analog and two-way digital radio systems, voice calls and data communication systems
and products. Few products that are being delivered by this business unit of Motorola
India comprise of mobile technology, modernized process to capture data, wireless
infrastructure facilities and RFID solutions. These products are not only supplied to the
public sector consumers but also to the global consumers from sectors such as retail,
health care, wholesale distribution, manufacturing, travel and transportation. By
applying modern and innovative technologies, this business unit of Motorola India help
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the consumers integrate, optimize and manage their cell phone networks in anywhere
they go and make life easier at every point.
The second business unit, that is, Home and Networks Mobility provides capitalized
bandwidth-intensive and experience-based services without succumbing to any network
problems. This unit of Motorola India provides incessant access to digital entertainment
information technology and other communication systems with the help of a range of
wired as well as wireless solutions. This unit of Motorola India, manufactures, designs,
services and sells communicative set-top boxes and voice and data modems for digital
subscribers as well as cable networks. Broadband including mobile infrastructure
systems created for the cable and satellite television operators along with wire line and
wireless service providers. This solution as provided by Motorola India avails better and
more convenient network within homes and also helps the consumers keep in touch
with anyone across the globe very easily.
The third business unit of Motorola India is Mobile Devices. Apart from manufacturing,
designing and marketing wireless cellular phones, it also has registration for its big-time
portfolio that it holds in terms of intellectual property. The mobile devices of Motorola
India comprise of highly technology-based software that has blue-tooth facility along
with other communication services, various kinds of mobile entertainments, and data
communications. It has acquired the form of personalized technology nowadays.
Motorola India has the largest research and development center in software. It is gained
immense popularity across the globe for being the pioneer in wireless technology. With
an excellent enhancement in network, Motorola India has almost reached its peak of
success.
Samsung:
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Samsung India has its headquarter in Delhi and is a portion of Samsung's South West
Asia Regional operations. It has around 55 sales and marketing units located all over
India and enjoys a sales turn over of more than USD 1 billion which it achieved in just
few years.
Mr. H.B. Lee is the president and CEO of the South West Asia headquarters of
Samsung and is also involved in monitoring the production units located in Nepal,
Maldives, Bhutan, Bangladesh, and Sri Lanka. He looks after the business units in India
as well. The manufacturing unit of Samsung India is largely involved in manufacturing
color televisions, refrigerators, color monitors, mobile phones and also washing
machines. The manufacturing unit of Samsung India has been set up in Noida, near
Delhi. The products that are exclusively manufactured by the manufacturing unit of
Samsung in India, that is the Noida unit, are exported to the foreign countries especially
in the Middle East and CIS and SAARC countries. Samsung India has another
manufacturing unit located at Sriperumbudur, Tamil Nadu. This unit provides uniquely
modernized manufacturing facilities in its production of Color and LCD televisions.
These are absolutely technology-based products of Samsung India that undergo newer
innovations with every passing year.
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Samsung Electronics is also the world's largest electronics company. Samsung mobiles
is a part of Samsung Electronics whose main areas of concern are Digital media,
semiconductors, telecommunications, and digital LCD appliances. It is also a world
leader in the field of liquid crystal displays. In 2007, the company surpassed $100
million in sales, which was a sizable first time achievement in the company's history.
1. nokia 59.5%
2. sony 8.1%
3. samsung 7%
4. motorola 5.9%
5. others 19.5%
This table show Nokia is the market leader in Indian mobile phone industry followed by
other leading brands.
RESEARCH METHODOLOGY
Research Design:
The research design constitutes the blueprint for the collection and analysis of data. It is
the strategy for a study and the plan by which the strategy is to be carried out.
The research design of the project is descriptive as it describes data and characteristics
associated with the population using mobile phones. Descriptive research is used to obtain
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information concerning the current status of the phenomena to describe "what exists" with
respect to variables in a given situation.
I have based my study on wholly on secondary data available and personal interviews of people
who are in the industry for a very long time.
Secondary data:
Secondary data is the data which is already collected by someone. They are secondary in
nature and are in shape of finished product. Secondary data was collected so as to have
accurate results. Required data was collected from various books, magazines, journals and
internet.
Personal interview was conducted with Mr. Tarun Das Area Manager (Sales) UP and
Uttarakhand. He is managing 50 Hotspot mobile retail outlets in U.P.
The interview lasted for 30 minutes and consisted diversified questions in order to
understand the existing positioning strategy of Nokia and other leading mobile
manufacturers.
Interview was conducted over phone.
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Results and findings
Based on my study of different strategies of positioning and personal interviews I came
to a conclusion that Mobile phone manufacturing companies consider some
independent factors for building up their positioning strategies for different mobile
handsets.
Companies integrate those independent factors in different ways for different products
so that the mobile phones can create a perfect image in the minds of the target
consumers.
The mix of the independent factors depends upon the nature of the mobile phones if the
mobile phone is for mass usage or for middle class then the positioning mix would be
different and if the product if for niche segment or some particular segment then the
positioning mix would be different.
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The independent factors which companies do consider while building up their
positioning strategies are:-
Gender: It has been seen in past that cell phones which are positioned
only for males or females has mostly been a failure in the market
because people fail to associate themselves to a limited class of a
product category, because of this companies put an emphasis on
creating unisex cell phones which goes with both males and females.
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the features which resemble the features of higher class mobile phone ,
so that they can attract mass markets. Price also decides the segment for
which the mobile phone is manufactured ; for example nokia 8800 was
launched at a very high price, but it had features of a normal mobile
phone, it was positioned as a mobile phone which was only made for the
niche segment consumers who have high purchasing power and a
product which has class and is elegant ; it was a success because middle
class people would never buy that phone of that price range with limited
features because at a very less price tag they were getting cell phones
with more updated features. Apart from this Nokia 1100 was a phone
which was low priced and was launched with a feature of torch light , this
phone was also a great success in mass market because of its low price
tag and features which were influential enough for middle segment
people.
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demand for the cell phone in the target market consistent and they price
and position their cell phones in a way that the craze for them remains
same for example the latest model of i-phone is i-phone 3G S which has
better looks and is better in terms of software.
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Association for brand: Mobile phone manufacturing companies apart
from these factors also spend a lot to build a good image in minds of
comsumers. Nokia conducts different marketing activities for example :
Nokia has a partnership in a IPL team Kolkatta Knight Riders and has
Shahrukh Khan as their partner which creates a good image for a brand
in the minds of consumers. Sony Ericsson has hired Hrithik Roshan as
their brand ambassador and advertise him with their walkman series cell
phones so that when consumers buy their cell phones they feel good for
the product and associate that the cell phone is recommended by Hrithik
Roshan. Apart from this all mobile companies keep a ringtone which is
same all over the world and is present in all the models of cell phones
whether it is a niche segment cell phone or a middle income group cell
phone, this activity increases the brand recall process among consumers,
and consumers feel that they are using a product of world class
standards and their products are not different from the products which are
available of same company in different countries. Companies also launch
cell phones which have special associations with other brands like
Samsung had launched a cell phone which has an Armani tag , now this
cell phone is positioned in such a way that who perceive mobile as a
fashion accessory and as status symbol they would definitely buy this cell
phone.
These are the different determinants which mobile companies use and integrate in
different ways for their different range of mobile phones to create a perfect image of the
mobile phone in their target market consumers.
Example : Nokia’s latest cell phone Nokia 5800 xpress music is a cell phone
which has a touch screen interface, is a music phone, has wi-fi facilities and
browsing facilities.Nokia has used a different software which is totally different
from elite class touch screen cell phones, it is a bit uncomfortable and has limited
applications, but has priced it between the range of 8500 to 10000.
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The Ad campaign of this cell phone represents the cell phone as a sporty model
which is meant for the young music lovers.
Through the ad campaign , technology , price and attributes Nokia has
positioned its Nokia 5800 xpress music as a cellphone which is meant for young
college going students, it is fashionable{but not elegant}, has the technology of
touch screen interface{but due to price constraints Nokia has not used the latest
touch screen technology but instead the touch screen is stylus operated} and
other facilities, and is basically a music phone which satisfies the esteem needs ,
basic needs of a phone, and music needs of an individual , and overall it is
priced between Rs 8,500-10,000 which makes it pretty cheap according to its
features so one can easily afford it to buy.
Nokia has positioned this phone not in elegant class because it has targeted
middle income group customers, but it has given the cell phone looks of an
expensive mobile handset.
Bibliography
I have consulted these following internet sites and books to complete my project work:
Internet sites:
www.google.com
www.business.mapsofindia.com
Books:
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Maketing management by : Philip kotler 13th edition.
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