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

Page 1 of 7 MINISTRY OF EDUCATION AND TRAINING UNIVERSITE’ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM Student’s name: BUI THI THANH HA ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL CHANNELS “The case of NOKIA Representative Office in VN ” FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s name: Dr Nguyen Dinh Tho Ho Chi Minh City May 2007 MBMM1 Acknowledgement of commitment I, Bui Thi Thanh Ha, prepared and conducted this business project “ Developing Nokia Key Retail Channels” as final project of our MBMM1 program. With the approval and great advices from the Marketing Director Mr Nguyen Quyet Thang, this project has been accomplished by myself and served my current company as a real case. I trust the legality of all references, information sources and materials using to complete the project. MBMM1 Acknowledgements The author wishes to express her profound indebtedness to the courtesy advisor of Dr. Nguyen Dinh Tho and for his valuable guidance, document offer and encouragement during the course of this work. His helpful suggestions, supervision and comments have greatly improved the quality of this work. I also wish to express his faithful gratitude to Dr. Tran Anh Tuan and Professor Jean Pierre Bayens for kindly consenting to be member of my thesis examination committee. I also convey my sincere thanks to Nokia Vietnam, Marketing and Sales team for providing the information and general support enabling me to undertake of the Master of Marketing and Management program, and warmest thanks to my mentor, Marketing Director, Nguyen Quyet Thang, who offered me valuable ideas for the final project. I hope to send my thanks to my close friends in MBMM1 who gave me lots of practical and moral support. My thanks want to send to Nokia owners 39 Le Duan, 165 Hai Ba Trung, Mobile mart Vien Thong A, Mobile world who gave me great ideas to finish my works. Finally, I wish to express my gratitude to my beloved family. MBMM1 Acknowledgement of commitment Acknowledgement Table of content Comments from advisor Comments from Professors Abbreviations list Appendix list Page Executive summary……………………………………………………… 1 - 2 Part I: INTRODUCTION 3 - 4 Part II: SITUATION ANALYSIS: 5 - 14 1: Overview to Nokia Corporate 5 2: The establishment and development of Nokia Viet Nam 6 3: Nokia 4 Ps and Overview of Nokia’s channels 7 4: Introduction to Nokia’s key retail channels 10 • Nokia store Channel 10 • Mobile mart channel 10 5: Situation analysis of NS in year 2006 11 • Overview Nokia store channel 2006 12 • Nokia store channel- Achievements 2006 12 6: Situation analysis of MM in year 2006 13 • Key Challenges and sales volume 13 Part III: ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL CHANNELS 15- 26 1: Mission and Objectives of Nokia Viet Nam in year 2007 15 2: Objectives and Strategies for Key Retail Channels 17 3: Key Activities for two main channels 18 • Nokia Club program 18 • Key Account Partnership Program 22 4: Directions for implementation 26 • Budget Estimation & Action Plan 26 • Conclusion 26 MBMM1 Abbreviations list Tier 1 HCMC, HN Tier 2 Da nang, Hai Phong, Dong nai, Can tho Tier 3 Binh Duong, Tien giang, Nha trang, Qui Nhon, Quang ninh, Thanh Hoa, An giang, Kien giang, Dong Thap, TPO Total Product Offering TCO Total Channel Offering/Total Customer Offering MM Mobile mart NS Nokia store SiS Shop in Shop GR General retail (small shop) KPI Key Performance Indicator Gfk (Growth from Knowledge) GfK Asia Pte, Ltd FF Field force of Nokia RPP Retail Promotional Planning OOS Out of stock Nokia Care Is the service center to make guaranty for customers Nokia Academy Is responsible for training and people development “Entry” Products = Low End Product with price under 100usd “Hot” Products Product of good selling “Mid” Products = Mid end Product from 100- 300 usd/1unit “ High” Products = High end Product from 301usd/unit up 1 Executive Summary: Nokia is the world’s largest manufacturer of mobile devices and a world leader in mobility, driving the transformation and growth of the converging Internet and communication industries. Nokia offers consumers a wide range of mobile devices and increasingly is providing people with experiences in music, navigation, video, television, imaging, games and business mobility through these devices. Nokia also provides equipment, solutions and service for communication networks such as network operators, service providers and corporations. After ten years Nokia has entered Viet Nam, the market of mobile phones is more and more growing and bigger. The distribution network is also developing and splitting by specific channels such as Nokia stores, Mobile mart, Shop in Shop, Electronic marts and General retail. Nokia has achieved an average of 40% sales growth every year and gained around 54% of market share. In fact, the global market share of Nokia is minimum 60% and this leads that the ambitious goal of Nokia Viet Nam will be 60% of market share in next years (2007-2009). Nokia Viet Nam places “Channel Development” the most important task and clearly defines “Channel” as KEY DRIVEN to contribute not only the growth of sales volume but also building branding. From 2006, Nokia realized that channels have not performed well in term of building branding, delivering TCO experience to consumers, achieving expected market share so Nokia has decided to enhance the effectiveness of Nokia Key Retail Channels, specifically Nokia stores and Mobile marts because Nokia stores and Mobile marts channel are contributing 41% of total sales volume with 76 stores in big cities. With long goals, Nokia Viet Nam has restructured one Retail Channel Manager including 4 subordinates to be in charge for Nokia stores and Mobile marts. 2 Nokia set clear the objectives for two key channels as follows: • Nokia stores’ Objectives: to achieve the benchmark standard Nokia of Service, Look and Feel, and deliver TCO experience to customers • Mobile marts’ Objectives: to contribute sales growth in order to achieve 60% of market share and build up branding by taking the advantages to occupy the best space inside and outside of stores comparing with the competitors. • Scope: in year 2007, focus to enhance the effectiveness of Nokia stores and Mobile marts in HCMC and HN Theory of Marketing Research advises that it needs to understand the real problems through the quantitative research. The research is proposed in the project “to identify the level of the awareness of NS from customers and evaluate Total Customer Offering (TCO) of NS versus Samsung Plaza and Motor House and Mobile marts”. The real problems for Nokia stores and Mobile marts are as follows: • Nokia is loosing the customers gradually because the end-user pricing list prescribed by Nokia is so high • Mobile marts have received many supports from competitors and Nokia will loose the sales volume and space to make branding The recommendation will be “NOKIA CLUB PROGRAM” and “KEY ACCOUNT PARTNERSHIP PROGRAM”: • Nokia Club program: to keep the loyal customers in Nokia store channel • Key Account Partnership program: to develop relationship with Mobile marts’ management 3 PART I: INTRODUCTION With 16 million subscribers, the lower price and a wide range of end products, and the appearance of new services such as free Internet, charge decreased, … providing by operators Mobilephone, Vinaphone, S-fone, Quality should be ensured not only for the network but also for value-added services and the stability of available telephone numbers meet the increasing demand of consumers. Nokia store is the store system selling 100% of Nokia phones (not selling any competitor mobile phone device) and is representative for Nokia to introduce Nokia phones to customers in term of Service, Look and Feel and TCO experience. Until now, Nokia have received the very good feedback from consumers about Nokia stores’ service. However, Nokia stores have to sell to end- users with the prescribed pricing list by Nokia. That price is currently higher than end users’ price in the market about 3-7% and has affected strongly to sales achievement of all Nokia stores and may lead to the collapse of Nokia stores because the store- owners have lost margin to survive. In reality, when the consumers have demand mobile phones, they usually come to Nokia stores to enjoy the service and have experience in using live demo (try real phone) to be displayed and demonstrate by Nokia professional promoters. Then, the consumers’ final decision has depended on the price, so how to keep the consumers and what are the target customers for Nokia stores who can pay higher price with the best service? What is the awareness of the customers to Nokia stores nowadays? What should the loyalty program be applicable in Viet Nam? … By 2006, different from Nokia stores Mobile marts which are big stores in a good location of big cities have many advantages in the fierce competition environment of mobile phones market in term of pricing, promotions, distribution and services. By Nokia, Samsung, Motorola…so the key challenges for Nokia is that how to 4 make a good relationship with Mobile marts’ owners and how Nokia can sell more than the competitors to achieve 60% of market share. How can store staff recommend Nokia to consumers more than the competitors? How can Nokia have more space in stores and build more branding than the others? With the instruction of my mentor as Marketing Director of Nokia, I developed a project. The project will deliver the above questions and confirms: “ The Objective of the project is to keep and to maintain the customers in order to retain Nokia store channel and how to develop a good relationship with Mobile marts’ management” The theory of Customer Relationship Management (CRM) advises the solution for the project will be “NOKIA STORE CLUB” which is key driven in Marketing Plan from 2007-2009 for Nokia stores and “ Key Account Partnership Program” which is very crucial task for Mobile marts to achieve the market share of 60% for Nokia in year 2007. The project comprises three parts: • Part I: INTRODUCTION • Part II: SITUATION ANALYSIS o Introduction Nokia Corporate, Nokia Viet Nam and Marketing mix o Situation analysis Nokia store channel and Mobile mart channel • Part III: ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL CHANNELS o Nokia Club Program o Key Account Partnership Program o Directions for implementation 5 PART II: SITUATION ANALYSIS 1. Overview of Nokia Corporate: During 142 year history (1865-today), Nokia has evolved from its origins in the paper industry to become a world leader in mobile communications. Since 1968 the newly formed Nokia Corporate is ideally positioned for a pioneering role in the early evolution of mobile communications and from 1992-1999 as mobile phone use booms, Nokia makes the sector its core business and Nokia Company is the world leader. Today, approximately 850 million people from virtually every demographic segment of the population use Nokia devices for communications, business and entertainment, and as luxury items. Dale Ford, Vice President of the market intelligence for iSuppli believes that mobile phones have become such an important tool for people to live and thrive that they are becoming a basic human right. In 2006, Nokia’s net sales totaled EUR 41 billion (USD54.3 billion) with about 10% of net profit. At the end of year 2006, Nokia employed 68.483 people of more than 120 nationalities and sales in more than 150 Countries, Nokia had 15 production facilities in nine countries, as estimated 36% share of the global device market (mobile device volume is 347 million units). 2. The establishment and development of Nokia Viet Nam Representative Office, To be established in Vietnam more than ten years, Nokia representative office has achieved the top positioning in consumers’ reference and Nokia is a leader of mobile devices with 54% market share with approximate 16 million people to use mobile phones today. The key milestones in Nokia Viet Nam history are as follows: • In 1996, with the demand of mobile devices was increasing significantly, capturing this great opportunity, Nokia has been entered Viet Nam market via a [...]...6 representative office under signed by Nokia Singapore Pte Ltd Company in the first stage From 1996 – 2002, Dong Nam was dedicated exclusive nationally distributor of Nokia in Viet Nam market The achievements of Nokia Viet Nam: (see appendix in page 30 for detail of the report from GfK) The Vietnamese consumers’ top of mind in mobile devices is Nokia when they have the demand on mobile devices In. .. steps need to follow up in technology strategy as follows: 20 o Collecting the information of customers and invite them to join seminar and record in computerized data o Updating the data of customers frequently and keep in touch with them by phone call or direct mail o Create website Nokia Viet Nam www .nokia. com .vn and then add in folder Nokia store and Nokia club o Fill in the data: sales revenue,... the one side of card with the code customers, the other side is the regulation and the benefit of customers, and photo of member 21 o When the customers receive this card it means they are member of the Nokia Club and they have to show the card in transaction point before joining program, activity o The customers do not allow lending the card unless they recommend new customer to buy the phone to... ( . ENHANCING THE EFFECTIVENESS of NOKIA KEY RETAIL CHANNELS The case of NOKIA Representative Office in VN ” FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT. 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. for detail of the report from GfK) • The Vietnamese consumers’ top of mind in mobile devices is Nokia when they have the demand on mobile devices. In fact, Nokia gained high index of brand