MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITE’ LIBRE DE BRUXELLES 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 Page of 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……………………………………………………… Part I: INTRODUCTION Part II: SITUATION ANALYSIS: 1: Overview to Nokia Corporate 2: The establishment and development of Nokia Viet Nam 3: Nokia Ps and Overview of Nokia’s channels 4: Introduction to Nokia’s key retail channels • Nokia store Channel • Mobile mart channel 5: Situation analysis of NS in year 2006 • Overview Nokia store channel 2006 • Nokia store channel- Achievements 2006 6: Situation analysis of MM in year 2006 • Key Challenges and sales volume Part III: ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL CHANNELS 1: Mission and Objectives of Nokia Viet Nam in year 2007 2: Objectives and Strategies for Key Retail Channels 3: Key Activities for two main channels • Nokia Club program • Key Account Partnership Program 4: Directions for implementation • Budget Estimation & Action Plan • Conclusion 1-2 3-4 - 14 10 10 10 11 12 12 13 13 15- 26 15 17 18 18 22 26 26 26 MBMM1 Abbreviations list Tier Tier Tier TPO TCO MM NS SiS GR KPI Gfk (Growth from Knowledge) FF RPP OOS Nokia Care Nokia Academy “Entry” Products = Low End “Hot” Products “Mid” Products = Mid end “ High” Products = High end HCMC, HN Da nang, Hai Phong, Dong nai, Can tho Binh Duong, Tien giang, Nha trang, Qui Nhon, Quang ninh, Thanh Hoa, An giang, Kien giang, Dong Thap, Total Product Offering Total Channel Offering/Total Customer Offering Mobile mart Nokia store Shop in Shop General retail (small shop) Key Performance Indicator GfK Asia Pte, Ltd Field force of Nokia Retail Promotional Planning Out of stock Is the service center to make guaranty for customers Is responsible for training and people development Product with price under 100usd Product of good selling Product from 100- 300 usd/1unit Product from 301usd/unit up 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 subordinates to be in charge for Nokia stores and Mobile marts 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 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 endusers 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 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 PART II: SITUATION ANALYSIS 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) 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 23 Step 1: Nokia FPT nationwide FPT estimates sales volume of MM in year 2007 with ambitious sales plan to achieve 60% market share Step 2: FPT forecasts sales volume of per SKUs based on road map product of Nokia 2007 then send the request of sales forecast to Nokia Step 3: Nokia commits sales plan and FPT commits sales orders and make sure the minimum inventory in order to avoid the OOS Step 4: FPT shares sales plan with key MM to commit them the orders and minimum inventory • Pricing: After analyzing the margin of competitors Motorola and Samsung, it is about from 3% to 8% for low end to high end respectively Price structure: Model – old structure Model – new structure NOKIA 100% NOKIA 100% Discount 4% Distributors 104% Incentive to MM 1-3% Discount 4% Distributors 104% Consumer promo (3%) Retailer MM 107% Retailers ( MM)107% Margin MM 1% - 5% Consumers 105% - 109% Consumers Margin MM 3% - 8% 110% - 115% Due to fierce competition in pricing, the margin of MM is so low even no profit In order to avoid the hard pricing competition, it is proposed to stop the sales incentive and replace the programs to help them sales push to consumers • Product: o Low end (entry product) is key contribution to market share o Live demo: fully support 100% budget for live demo in top of MM 24 o Stock clearance is need the help by pushing sales incentive • Promotion: o Consumer promotion: run quarterly for per chain Kind of promotion: Lucky draw with high value gift o Staff incentive is key to motivate the sales staff to push Nokia o Other program: Hero corner (new key product) and Nseries corner • Nokia care and Nokia Academy: o Plan to have collecting points in top stores of MM o Besides the product and soft skills trainings, the refreshing training should be applied monthly to improve the skills of sales staff and recover new staff • Criteria to choose top of MM: o Square 200m2, variety product selling, variety service o Sale volume: at least 1000 unit/m, ratio sales to consumers o No of current outlets in chain: at least o Potentiality (outlets expansion, customer penetration, history sales to show sales trend is growing) o Capability (finance/people/organization) • Agreement Sales Plan and Retail promotional Planning (RPP): o Retail promotional planning is to apply for MM to make guidelines for merchandising and provide training base on the road map of product • KPIs of MM: o MM’s KPI: sales growth 50%, market share 60%, space share 60% and retailers’ service standard through consumer purchase experience from 74% to 80% and consumer visual experience from 82% to 90% ( see appendix report by Synovate in page 36&37) 25 Directions for implementation: • Budget estimation and Action Plan Content Channel Quarter Quarte r Quart er Quarter Sales Volume MM Sales analysis Agree sales plan Review Sales Measure and action Nokia Club NS 500 customer s Equipme nt/lounge /Corners Start Progra m Follow up and Measur e Follow up/ Measure 200K HCMC and HN Key Account Partnership 60% of MS in MM Agree Sales Plan Follow up/ KPI Follow/ KPI Follow/ KPI =2K x x 12 = 120K Staff incentive Activities MM Agree RPP In store promo Mercha ndising Copromo Training – Nokia Aca NS & MM Soft skills New products Open new Care Refresh ing Soft/ product Soft skills Install Collecti Open new Care Install Collectio n point Nokia Care NS & MM Budget Estimate =50 K x4=200K USD =2 x 12 x = 48K = 50K + 300K • Conclusion: With total budget for NS channel 200K and MM 320K, Nokia Club program and Key Account Partnership are required the follow up plan and monitor closely, measure KPI quarterly and fix action plan immediately This is long term plan so the result may not reach the ambitious objective in the first year and surely it will come good results in the coming years Thanks to Professors for reading and the course MBMM helps me a lot in my job 26 Reference: Vietnamese: Nguy n ình Th (2006), Nguy n th Mai Trang “ Nghiên c u khoa h c Marketing”, NXB I H c Qu c Gia Nguy n ình Th (2007), Nguy n th Mai Trang “ Nguyên Lý Marketing”, NXB I H c Qu c Gia Business Edge (2004), “ Nghiên c u Th Tr ng”, NXB Tr Philip Kotler (2003), “ Qu n tr Marketing”, NXB Th ng kê Newspaper “ Kinh T Sài Gòn” (3/2007) English: ITC Newsletter from GfK, issue 12/2006 & Quarter 1/2007 Newspaper “ Sai gon Times” (3/2007) Michael R.Solomon (2003) “ Consumer Behavior” , International Edition Ogenyi Omar (1999) “ Retail Marketing”, Great Britain 10 Roman G.HIEBING, JR SCOTT W.COOPER (1991) “ The successful Marketing Plan” , NTC Business Books 11 Philip Kotler (2001), “ Principles of Marketing”, Pearson Education 12 Douglas J.Dalrymple, William L.Cron, Thomas E.DeCarlo (2001) “ Sales Management”, Replika Press Pvt Ltd Kundli 27 APPENDIX: SEGMENTS: Two thirds are men, nearly half are under 25 years old Mostly single, with two fifths in a young and carefree life stage Average education level Technology Leaders " Get the latest" More than a quarter with a high economic level Even gender distribution, more than two fifths under 25 years old Mostly single with a third in young and carefree life stage A quarter are students People in executive positions over-represented Technology Stylists A third have a University degree "Make my life better" More than half at higher economic levels Two thirds are men, nearly half are under 25 years old Mostly single, two fifths are young and carefree A third are students, average economic level Young Explorers "Ready for anything" Half live in their parents' home with no children Even gender distribution, nearly half are between 20-34 years old A fifths are parents with babies, average occupation distribution "Make it work for Life Builders me" Average education distribution, Average economic level 28 More under 34 yrs, fashion addict, Handset design and brand key Perfectionist, Takes initiatives, Handset reflects self-image and social status High volume, price, function and value, Style Leaders "Set mobile trends" highest brand and design involvement More 25-49 parents with kids at home, budget conscious trend seeker Stylist and cheap handset, trend seeker, young and active, aspiring to stylish device Asian local segment, family & work monopolize time Looks for novelty and style, social usage of mobile, mid/high on Image "Show where you operator brand and function Very high on design Seekers belong" important More 25-49 parents with kids at home, handset status symbol Design conscious but price is an issue, emerging country skew Settled, family first, community driven, price is an issue, design conscious Handset as status symbol, Mid/low volume, price Style Followers &value indicators "Show my style" Rather a brand unloyal segment Even age distribution, managerial position, very active with intense profession Highest economic level, self-center looking for Pragmatic "Trust the fulfillment Wants high technology that is a leader performance" pleasure to use High volume, price and value 29 indicators Interested in functions that help their lives, especially connectivity Willing to spend on mobile telephony Home-maker, between 35-49years Characterized by status quo & economic security Focus on home: heavy TV watcher Uninvolved in telephony, uneducated consumer Low user, lowest handset price Low brand & design Family "Want proven involvement Slight function involvement in provider products" message Oldest segment, retired, lowest education Characterized by habits & routine Mature adult reluctant to try new technology, uses phone for communication Ease of use major concern, Mature Acceptors lowest function usage Design preference: ease "Keep in touch" of use More over 35 years, married Work life balance important Family oriented, not overly ambitious Basic usage, high techno equipment not transferred into mobile use Brand uninvolved: Simplicity Seekers " Enjoy life" loyalty to small/local more likely More professional, mobile as a tool with understated elegance, willing to spend on mobile telephony Age from 25 to 45 Western country Life Jugglers " Believe the reality" skew, wants high technology, high income 30 GfK report: GfK Group Retail and Technology MOBI LE PHONE – VI ETNAM ( FEB 2007) 14 May 2007 MARKET SEASONALITY In Units & Value (Mil USD) Feb 07 5,000,000 800 700 4,000,000 500 3,000,000 400 2,000,000 Value in Millio 600 300 874,046 1,000,000 200 705,887 419,911454,135 320,999 339,460 321,824 322,778 306,487 382,433 336,681 325,239 329,804 308,042 305,323 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 100 Feb 07 YTD 06 YTD 07 © Copyright of GfK Asia Marketing Services Tot al Units GfK Group Retail and Technology USD Value MOBI LE PHONE – VI ETNAM ( FEB 2007) 14 May 2007 RUNNING BRAND SHARE: GSM ONLY In Units Feb 2007 100% 80% 3.8 2 3.4 2 4.1 2 2 4.1 2 4.4 4.1 5.1 6.8 1 1 6.9 19 17.8 16.1 16 17.2 19.3 20.4 19.9 19.4 18.6 18.5 18.5 18.3 1 3.7 19.2 6.9 18.4 OTHERS BENQ- SI EMENS SONY ERI CSSON 60% SI EMENS SAMSUNG 52.7 50.6 52.6 53.4 54.8 PANTECH 53.7 54.7 54.3 53.9 54.4 54.8 54.1 54.5 53.5 54.3 40% PANASONI C NOKI A MOTOROLA LG 20% 18.3 0% 22.2 21.8 20.6 18.5 18.3 16.4 17.4 18.1 16.8 16.2 16.4 15.8 Feb- Mar- Apr- May- 06 Jun- 06 © Copyright of GfK Asia Marketing Services 17.2 16.1 Jul- 06 Aug- 06 Sep- Oct - Nov - 06 Dec- 06 Jan- Feb- 07 YTD 06 YTD 31 Nokia Organizational Structure: o Mobile Phones: connects people by providing expanding mobile voice and data capabilities across a wide range of mobile devices Nokia primarily target high-volume sales of mainstream mobile devices where Nokia believe that design, brand, ease of use and price are customers’ most important considerations 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 In 2006, Nokia continued to build the Nokia Nseries sub-brand and multimedia computer category by bringing new products and applications to the market Nokia Nseries multimedia computers offer consumers the ability to record video and still pictures, rpint quality images, watch TV, listen to music, access the web and e-mail, and make phone calls 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 Enterprise Solution collaborates with a range of companies to provide fixed Internet Protocol (IP) network security, mobilize corporate e-mail and other IT systems, and extend to corporate telephone systems to Nokia’s mobile devices o Networks: in June, 2006 Nokia and Siemens announced plans to combine Nokia’s networks business and Siemens’ carrier -related operations for fixed and mobile networks to form a new company called Nokia Siemens Networks, owned by Nokia and Siemens and 32 consolidated by Nokia The new company is expected to begin operations around the end of March 2007 Networks provides network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers Market Trends in Vietnam Nokia MS in Y.06 Segment size in volume Y.06-07 Retail Price usd > 300 65% 8% => 5% High Range 100 –300 50% 39% => 30% Mid Range 53% => 65% < 100 55% Entry Range Research: Research requirement and results: Before developing the sales strategies for year 2007 Applying marketing research to ensure good information to analyze is most important task Nokia store channel research study: 33 Kind of research: Quantitative and target customers: NS channel; Samsung Plaza stores & Motor House stores and SiS-MM and GR: run in Q4’06 in HCMC and HN o Rationale: nowadays the competition become stronger and stronger between NS channel with other channels in term of end user price and service so there is no differentiation between NS and other channels Nokia stores seems to be same raking with other channels under the eye of customers Customers are confused That’s reason NS channel get more and more difficult to survive and the owners bear big loss o Objective: to understand the real situation of NS channel in term of the awareness of NS and evaluate TCO of NS versus Samsung plaza & Motor House and MM, GR o Methodology: 200 respondents in HCMC and HN to be in the interview o Results: As store selling only Nokia Aw areness of Nokia stores Not aw are Products As so-called NS Aw are of both concepts Visited Aw ar 93 11 Evaluate TCO ( total channel offering) versus other channels Store/staff presentation: (Staff: Standard uniform, clearly visible nametags and Store: no litter on floor, counter, neatly placed displays ) – NS got 100% scores that same score with Samsung & Motor whereas MM = 90% and GR = 80% 34 Customer service: ( welcome greeting within minutes and farewell greeting ) NS = 90% ; Sam & Motor = 90% ; MM = 90% and GR = 70% Selling skills: (Ask questions to determine needs; Cross/Up-selling – to recommend enhancement or a higher end model and close sale ) NS = 90%; Sam & Motor = 80%; MM = 90% and GR = 70% Demonstration and Set up: (Take initiative to provide live phone demonstration and offer to set-up phones ) NS = 100%; Sam & Motor = 100%; SiS- MM = 90%; GR = 50% Product knowledge: (Good understanding of phone features and able to explain NS’s Customer Care Offering ) NS = 90%; Sam & Motor = 90%; MM = 90% and GR = 70% Nokia Academy provide the training for all channels Pricing: (Competitiveness in prices ) Products Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia Nokia 1100 1110i 2610 3220 3230 3250 5500 NEW 6111 6125 6131 6151 NEW 6230i 6233 6270 (512 MB) 6270 (1 GB) 6600 6680 7360 7370 E61 E50 NEW 9300i N72 (128MB) black N72 (128MB) pink N72 (128MB) pink N73 NEW N91-5 N93 NEW NOKIA Store 799,000 799,000 1,550,000 1,950,000 3,840,000 6,100,000 5,700,000 4,220,000 4,400,000 4,300,000 4,200,000 4,240,000 4,800,000 5,740,000 5,940,000 3,430,000 5,550,000 3,450,000 3,990,000 6,950,000 4,900,000 10,600,000 6,800,000 6,800,000 6,800,000 8,900,000 9,700,000 12,900,000 GR 739,000 749,000 1,479,000 1,759,000 3,579,000 5,579,000 5,479,000 3,769,000 3,699,000 4,149,000 3,899,000 3,889,000 5,399,000 5,599,000 2,969,000 5,059,000 2,919,000 3,359,000 6,469,000 4,729,000 10,000,000 5,759,000 5,759,000 5,759,000 8,399,000 8,599,000 12,459,000 SiS-MM 698,000 738,000 1,418,000 1,748,000 3,548,000 5,568,000 5,448,000 3,768,000 3,688,000 4,118,000 3,918,000 3,888,000 4,648,000 5,368,000 5,568,000 2,948,000 5,018,000 2,918,000 3,388,000 6,488,000 4,698,000 9,658,000 5,788,000 6,388,000 5,788,000 8,368,000 9,168,000 12,548,000 Vs GR 8% 7% 5% 11% 7% 9% 4% 12% 19% 4% 8% 9% 6% 6% 16% 10% 18% 19% 7% 4% 6% 18% 18% 18% 6% 13% 4% Vs SiSMM 14% 8% 9% 12% 8% 10% 5% 12% 19% 4% 7% 9% 3% 7% 7% 16% 11% 18% 18% 7% 4% 10% 17% 6% 17% 6% 6% 3% 35 ES price in NS is more expensive than in MM and GR so NS can not increase sales volume The consumers who come to NS to buy the phone is high class and would prefer the add value service than the pricing However, the attitude of most Vietnamese consumers like cheap price so they will come to NS to experience the phone but they come to MM or GR to buy the phone Marketing activities: Due to strong competition between the channels and the competitors, all channels try to offer continuous programs ( discount cash, gift, scratch card, lucky draw…) Even more, MM provide more in-store activities by their own marketing’s budget Furniture ( display product, dummy, POSM, ) It does not show the differentiation between NS and SiS-MM because Nokia provide same furniture to channels Nokia needs to review the strategy about the furniture Nokia Care center ( after market service – managed by Nokia ) Nokia stores have Care center inside the store to provide the service to consumers promptly This is advantage from NS 36 Synovate report: Research Rationale N O K Distributors • Distributors’ support, Order timeliness, order completeness, credit terms, price protection Retailer Satisfaction Study - Direct evaluation on the performance of Field Force, Nokia and distributors I A Field Force Academy • Purchase experience, POS, Furniture, Dummies, Live Demo, TPO, Retail selling skills, Retailer satisfaction • Training, relationship building, product knowledge and selling skills of retailer Retailers customers Mystery Shopping Indirect evaluation - Measures actual service delivery against Nokia’ Nokia’s expectations Overview on the supports for Retailers Company Confidential © 2005 Nokia s:\Nokia\F872\Report\Vietnam\Project RCSS - Q4'06 Vietnam APAC Management Team (Jan 4).ppt Key Performance Index Measured K e y Items with measured in respective KPIs P e r f o r m a n c e TCO FF Effectiveness Operations Nokia Academy Consumer Visual Experience Mystery Shopping Consumer Purchase Experience Retailer Satisfaction Performance of Nokia Field Force Evaluation of Visual Merchandising Support Evaluation of Content & Delivery of Nokia Product & Sales Training Evaluation of Marketing Initiatives and Incentives Evaluation of Above-the-line Advertising Evaluation of Nokia Care Process Performance of Distributors Company Confidential © 2005 Nokia s:\Nokia\F872\Report\Vietnam\Project RCSS - Q4'06 Vietnam APAC Management Team (Jan 4).ppt I n d e x Retailers’ Service Standard Distributors 37 Summary of Key Performance Index • Promising progress is noted for all KPIs with TCO Effectiveness and Distributors enjoying the greatest gain Q2 '06 Q4 '06 Target (Q2 '06 + 2pts) 77 66 77 70 66 66 57 49 52 47 35 29 Overall KPI # TCO Effectiveness FieldForce Operations Nokia Academy Retailer's Servcie Standard Dist ributors # Average of the five key KPIs Company Confidential © 2005 Nokia s:\Nokia\F872\Report\Vietnam\Project RCSS - Q4'06 Vietnam APAC Management Team (Jan 4).ppt Key Performance Index for Retailers’ Service Standard • Both consumer visual experience and purchase experience move up Q2 '06 Q4 '06 Target (Q2 '06 + 2pts) 82 77 76 73 70 59 Ret ailers' Service St andard Consumer Visual Experience Company Confidential © 2005 Nokia s:\Nokia\F872\Report\Vietnam\Project RCSS - Q4'06 Vietnam APAC Management Team (Jan 4).ppt Consumer Purchase Experience