Change in orientation from product to customer: Nokia

CHAPTER I

PROBLEM

1. Problems

Competition among cellphone vendors is increasingly sharpened, this is marked by the struggle for positions made by several vendors as happened between Motorola and Samsung, who were competing for runner-up positions. Motorola on the one hand tried desperately to maintain its position while Samsung did not cease to provide an all-out resistance in order to seize Motorola's position in the world market. In Indonesia, Samsung occupies the second position after successfully shifting the position of Motorola and Siemens, while Nokia still occupies the top position. Data on the position of each mobile phone vendor in the world will be presented in the following table.

PENJUALAN TELEPON SELULER DI PASAR DUNIA

Semester 2 - 2003

Vendor	Sasles	Market Share %
Nokia	34.479.000	35%
Motorola	16.561.000	14,70%
Samsung	11.879.000	10,50%
Siemens	8.585.000	7,60%
Sony Ericsson	5.385.000	4,80%
LG	5.016.000	4,50%
Panasonic	3.870.000	3,40%
NEC	2.947.000	2,60%
Lainnya	18.954.000	16,80%
Total	112.676.000	100%

                ( Reference :Direktori seluler Indonesia 2003 – 2004 )

If seen from the table above it can be seen that Nokia still occupies the first position in cellular phone sales in the world market with a market share of 35%. While Motorola was in second place with a market share of 14.7% and followed by Samsung which came in third with a market rate of 10.5%

 Despite the fact that Nokia continues to lead the market both in the world market and in Indonesia, but the resistance from other competitors is not fading even more racing to catch up. Competition between cellular phone manufacturers not only occurs in terms of communication technology but also in price and in the company's efforts to better understand individual customers. While competition in technology and price tends to be easily imitated. So the competition boils down to competition for competing to understand individual customers.

Concerning efforts to understand and meet individual customer needs can be seen in changes in the company's motto, as was done by Motorola in 1980 when Motorola had the motto "if Motorola made it, they ll buy it". But when Nokia entered the mobile market, the company did not want to follow the concept of "product center" but Nokia actually used the concept of "customer centric" as seen in its motto that reads "Connecting people" which really shows Nokia's efforts to understand its customers individually.

Understanding and fulfilling individual customer needs is realized by Nokia by identifying individual customers, then differentiating their customers based on their individual values ​​and needs, then interacting with customers individually, and customizing the products offered to customers. This strategy is often called one to one marketing.
2. Reasons for choosing the problem1. Why the change from "product centric" to "customer centric".2. What is meant by "one to one marketing". why Nokia can be used to understand its customers.

CHAPTER II

DISCUSSION

In the face of increasingly fierce competition in the marketing world such as today a company is demanded to be more active in increasing "one to one marketing" activities. This is because current customers do not want to be treated en masse as what is embraced by the product centric concept that underlies all marketing activities carried out on the thinking of the producer side only. So companies produce products that are based on the thinking of the manufacturer rather than on the thoughts and needs of the customers. Instead, customers now want to be treated as their own individuals, with their unique needs and desires. That's why companies must move from product centric to customer centric. That must be based on all marketing activities carried out with the desires and needs of individual customers

"One to one marketing" can be simply interpreted as treating different customers differently, that means remembering them individually, interacting with them, and customizing products and services to meet the needs of each individual customer. The mechanism of "one to one marketing" lies in trying to understand the differences from customers and how those differences should affect the way companies treat their customers individually. (Peppers et al., 1999: 1-2)

            There are four key steps in implementing "one to one marketing", where these steps are an illustration of the stages of implementation of the basic principles of "one to one marketing". The first four steps are "identify" that is identifying customers individually, the second "differentiate" that is differentiating customers based on the values ​​and needs of customers individually, third "interacting" that is interacting with customers, the fourth "customize" that is to customize products and services . to meet customer needs individually. (Peppers et al, 1999: 4 - 5)

By implementing "one to one marketing", companies can make products or provide services according to the needs of individual customers. Even though competitors offer interactions and with the same form of "customization", customers will not be tempted to switch to competitors. Because if they turn to competitors they will not get the same level of comfort unless they have to teach competitors again what they have done with the company before. In addition, companies can also make the products they produce have more value for customers, so customers feel they are getting more than what they can buy or get. (Peppers et al, 1999; lamb et al, 1994)

In order for companies to understand and create products in accordance with the wishes and needs of customers, the company must take four steps, which are key steps in implementing one to one marketing as follows.

    
 a. Identify
    Identify customers in more detail. Not only identifying names or addresses, but habits, desires, and needs. (Peppers et al, 1999: 4)

So it can be concluded from the description above that, "identify" is a stage where the company recognizes individual customers more than just the name or address but also includes the habits and needs of these customers. Company Can obtain or dig up information to recognize customers individually,

Companies Can obtain or dig up information to recognize customers individually, by using a series of questions that aim to explore information about customers not only the name and address, but also includes the habits, desires, and needs of customers. A series of questions can be listed in the warranty card that we get when buying a mobile phone and logging in on the www.clubnokia.com site or it can also be through dialogue conducted by Nokia with customers through Nokia priority dealler (NPD) and Nokia professional center (NPC). ( Peppers et al, 1999: 25)

 b. Differentiate
     Differentiate customers. Customers are different in two ways, they show different levels of value (some are so valuable, while others are not very valuable), and they have different needs. The "differentiate" stage is carried out so that the company can prioritize business and profit from "The most valuable customers" and underlie every behavior of the company based on the customer's individual needs. (Peppers et al, 1999: 4)

  Customers differ in two ways namely based on value and based on their needs to the company. The meaning here is the value obtained by the company from the customer, which is obtained from the results of a number of purchases of products made by the customer. From here we can find out which customers are profitable and which are not profitable,

To be able to differentiate customers based on their individual needs, the company must do what is called "learning relationship" with the customer, because in this "learning relationship" between the company and the customer there is a two-way communication, where customers say what they need from the company so that the company can better understand the needs of its customers and can customize products with the aim to meet the needs of these customers. This can happen when the customer actually interacts with Nokia via NPC and NPD or also through the www.clubnokia.com site, www.funkyplaza. com and www.nokia.com And with each interaction Nokia can get closer to its customers so that Nokia can understand the choices of the customers. Based on what the company gets from doing this "learning relationship", it can be used by Nokia to differentiate customers based on their individual needs. (Peppers et al, 1999: 62)

c. Interact
     That at this stage of "interacting" the company is trying to interact with its customers so as to create two-way communication that can make the company understand the needs of individual customers and vice versa, customers can make the company more familiar with its customers. This is called "learning relationship". (Peppers et al, 1999: 93-98)

To realize "learning relationships", companies can do so through what is called a "customer interaction center" (CIC), which is a medium of interaction that interacts between companies and customers interactively. Where in this CIC customers can do whatever they want, they can choose the communication media they want and can be tailored to their individual needs. For example they can choose whether they want to communicate with the company via "telephone", "fax" or via "web site", as has been done by Nokia by establishing NPD and NPC as well as creating a website www.clubnokia.com, www.funkyplaza. com and www.nokia.com. Where on the site the customer can make purchases "on-line", ask for information about new products or can conduct consultations on technical issues of the product. Besides being able to help customers get solutions to the problems they face, CIC is also used by companies to dig up information about customers. So companies can find out what they need, what makes them satisfied, and last what makes them loyal. (Peppers et al, 1999: 282)

Through a series of dialogues carried out in the interaction process not only is intended to make customers feel better, but also to get information that can be used to customize products to suit individual customer needs. And the way companies do "customize" is not possible to be imitated by competitors, because competitors do not have information obtained by the company concerned from interacting with customers. That's why dialogue is called the heart of "learning relationship". (Peppers et al, 1999: 111)

d. Customize
At this stage of "customize" the company underlies or adjusts each of its behavior in treating customers on the basis of the knowledge they get from these customers, so the company can treat different customers differently. "Customize" does not mean that you have to customized every single product or service for the needs of one customer, but "customize" can be done in bulk called "mass customization" or it can be done by customizing things outside the physical product. (Peppers et al, 1999: 124 - 127)

 "Mass customization" is done by making a lot of modules for a product and then based on individual customer needs of the company and then combining the right modules, and produce many possible product configurations, this method is called "modularization". For example, Nokia is able to produce many different cellphone options, which are done by combining features that are usually found on a cellphone such as communication facilities, ranging from SMS, EMS, MMS., Video cameras, photo cameras, ringtones, memory, games , display and internet. (Peppers et al, 1999: 126)

If the company wants to do "customization" that is wider than the physical product itself. In other words the company does not need to change its products, for that the company can do the following things.

a. Bundling

    Selling two or more products together. The products sold can be interconnected products such as those on NPC or NPD Nokia mobile phones offered along with batteries, "chasing", "key pad", top-up and top up vouchers and handpnone straps. (Peppers et al, 1999: 128)

b. Configuration

Without having to physically change the product itself, companies can customize the system configuration of existing products with the aim of meeting individual customer needs, for example the system configuration of each Nokia "handphone" model is adjusted to meet individual customer needs. (Peppers et al, 1999: 128)

c. Packaging

    Companies can make many models and sizes of packaging intended to meet customer needs such as what is done by Procter & amp; Gamble, where the company provides various sizes of shampoo packaging that is tailored to the needs of customers. (Peppers et al, 1999: 128)

d. Delivery

    Customizing product delivery based on the needs of individual customers, for example giving choices about the speed of product delivery as done by Amazon.com. (Peppers et al, 1999: 128)

e. Ancillary service
    Providing after sales services that can be "customized" according to customer needs. For example by providing automatic pickup and delivery services for carpets for cleaning or computer maintenance programs. (Peppers et al, 1999: 129)

f. Service enhancements
    The company provides a "one-stop-shop" for customers. For example, by providing "next-day computer repairs" or "overnight laptop overhauls" services. This service is intended to meet the needs of customers who have limited time to carry out maintenance for their "laptop". (Peppers et al, 1999: 129)

BAB III

CONCLUTION

From the discussion above there are some things we can take as lessons:
1. Current customers do not want to be treated en masse Instead, current customers want to be treated as individuals themselves, with their unique needs and desires. That's why companies must move from product centric to customer centric.

2. Competition between cellular phone manufacturers not only occurs in terms of communication technology but also in price and in the company's efforts to better understand individual customers. While competition in technology and price tends to be easily imitated. So the competition boils down to competition for competing to understand individual customers.

Reference

         Direktori selular Indonesia 2003 – 2004 Penerbit Global Media Jakarta

Peppers, Don, Rogers, Martha, and Dorf, Bob, (1999), One to one Field Book : The Complete Toolkit for Implementing a 1to1 Marketing Program, First Edition, Currency and Doubleday, New York.

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