Market Research Report Introduction Since China became one of the largest and fastest-growing mobile phone markets in the world, all multinational mobile phone companies hoped to boost their market share there. In the mid 80’s, Nokia was one of the earliest international companies that penetrated the Chinese market. That gave the company a first- move advantage. Also, as a business giant who has the topnotch marketing strategies, Nokia almost dominated every market segment. However, changes come daily and there is no perpetual success. Now, we are seeing that Nokia, in its downturn, is suffering from market share declination in China.
According to the related research, university students, a distinguished and enormous consuming group, is the main consuming force in China’s mobile phone market and have the most direct influence on the success or failure of a company. Research Objective In this report, students of the School of International Study at UIBE are sampled to help to conduct a research on the unique consuming psychology and behaviors of the whole university students in China. This report aims to support Nokia make effective marketing strategies targeting this special group and win their loyalty back from them.
There will be two basic research directions in this report. One will focus on the company, Nokia – how its market share has declined in China’s mobile phone market among university students, while the other will aim to investigate the university students in purchasing mobile phones. The two basic research questions are: 1. What are the main factors that affect university students in China to buy mobile phones? 2. Why Nokia’s market in China failed over the past few years? Research Methodology There are two main types of research methods, which have currently being use in the collection of data.
For this report, it is necessary to have both of them, quantitative and qualitative research, since they provide different perspectives and each of them are valuable and important. Quantitative research focuses on the number of the results and often is referred to as “survey research” and we choose the form of questionnaire. The aim is to get responses from China’s university students and analyze the results. Qualitative research focuses on the quality of the results and usually is referred to as in-depth interviews. For this part of our research, we rely mainly on interviewing some students to get a better understanding towards Nokia.
In this study, both primary and secondary data are collected. The primary data will be gathered through 30 questionnaires that are distributed to Chinese university students and in-depth interviews with several numbers of Chinese students. The secondary data here is collected from scientific articles, company research materials and Internet sources. Analysis 1. What are the main factors that affect university students to buy mobile phones? We find three main factors that affect China’s university student to buy mobile phones. First, Advertising.
Advertising is the most effective way to promote your products to customers. The extraordinary advancement of technology has re-shaped our life, at least in the way we receive information. A few years ago, putting advertisements on television, newspapers and magazines may be a wise way to penetrate the market and win popularity. However, as Internet and mobile technology keep growing rapidly, trend has changed. When it comes to getting information, people, especially younger generations, tend to use laptops and Smart phones more than ever before.
Almost every university students now in China owe at least one laptop and a mobile phone. According to a research, 68% of the investigated university students spend 3-5 hours per day on internet and over 80% of them take their mobile phone with them all day long. Obviously, these two have become the most effective channels to disseminate news among university students. Floating ads on famous social websites, instant messages through mobile phones and other similar methods have been proved to be great success. Second, Convenience.
The majority of the respondents said that their current mobile phones are touch-screened because they are more convenient than keypads. As we all know nowadays people change their cell phones into Smart phones. China’s Smartphone shipments grew over 183 percent from last year to 172 million units in the first nine months this year and smart phones account for over 51 percent of China cell phone market, according to the statistics from the China Academy of Telecommunication Research under the Ministry of Industry and Information Technology. We ask bout if the respondents want to change their mobile phones what would be the factor that affect them to buy, almost 70% of the respondents choose “using more conveniently”. This describes the attitude of young people towards mobile phone nowadays. They want everything to be simple, convenient, and comfortable; and that’s why they prefer Smartphone with just click-by-click usage. Third, Functions. 31% respondents are more likely to have a camera in their mobile phone. It shows that young people are more active, more dynamic, and want to show their special personalities more.
Today, mobile phone is not just a phone; it is a ‘fashion’, a part of their lifestyle. They prefer to have a digital camera because it is the lifestyle of young people now. They like to take photos, share photos, and post them into social media network. It’s the same with other preferred applications like music player, GPRS and internet browser. Calling people, sending messages, receiving emails, sharing pictures and videos, browsing, and tweeting, are now part of everyday life for many and these can all be achieved by just using one tool-a Smartphone.
For university students who are pretty lazy and spend more time outside the dorm, smart phones are the best choices. Fourth, Brand and Price. Comparing psychology still works and even plays an important role in choosing a phone for university students. Our questionnaire shows that more than 90% of the respondents choose worldly famous brands, such as Samsung, iPhone, HTC. Their saying is that brand can show your identity as a good taste person. On the other hand, most of the university students are not economically independent and they get their monthly spending (about 800-2,000 RMB) from their parents.
The acceptable price is 1,000-2,000 RMB for 44% of the respondents and 33% of them choose 2,000-3,000 RMB. In this way, smart phones with famous brands and suitable prices are more attractive for these young folks. 2. Why Nokia failed in gaining or at least maintaining its market share in university students over the past few years? Almost all global mobile phone firms would like to gain a share in China’s university students’ market because China has the most university students and the market is still with great potential. But Nokia still failed.
It’s because, unlike many other firms, Nokia was not able to respond to this unique market demand and changed its strategies in order to adapt to changes. We are analyzing this question with the basic knowledge we learned from “The four Ps of the marketing mix” (see Chapter 4). First, Products. Nokia does not have enough choices for university students. Another major reason that Chinese university students do not choose Nokia is since Nokia’s market has declined in recent years, and new trends show that competition does not come only from other world-famous brands, but also from local players.
It is no doubt that Nokia achieved a huge success in Chinese mobile phone market over the 10 past years. However, when iPhone and other Smartphone have been introduced Nokia’s success comes to an end. Nokia is facing a severe competition now from both market ends of the mobile phone consumption. While Nokia is struggling to develop new, high-tech products and return on the high-end market, a though competition from Chinese local brands, like Lenovo, Amoi, TCL and others manufacturers operating without the proper licenses are seriously threatening the market share of Nokia.
Conclusion In this final part, we conclude several points. If Nokia does not change the way they put the advertisement, they will lose customers since less people are going to see the advertisement and recognize the brand. Nokia should focus more on the Internet advertising and more adaptable to young consumer market. Also, people perception towards Nokia is a cell-phone, not a Smartphone. Although Nokia has also launched Smartphone, for example, Symbian, but when people think of Smartphone they think of I-phone. Nokia does not have the image of Smartphone, thus people leave it.
Therefore, we think that Nokia should position itself clearly which segment to be targeted, either high-end market or low-end market, or Nokia will lose all the market. Moreover, mostly young people want to be mobile anytime and anywhere. For example, we can find that a lot of young people use their Smartphone in the subway; they watch movie, read, chat, listen to music or play online games. It shows that the young generation needs features and applications inside the phones that can support their activities, e. g. last-long battery power, interesting applications, user-generated contents, etc.
