Marketing management

Nokian Tyres
Weighing Up The Past To Improve The Future
Background
Given the constraints on marketing expenditure brought about by a global economic slowdown, you have been asked by the Marketing Director to critically analyse the processes that were applied to a marketing activity which has been fully implemented in the last twelve months. The aim of this review is to evaluate what contributed to the effectiveness, success or failure of the activity. This information will be used to make an assessment of performance management, and supporting systems and procedures, within the marketing department, in order to drive improvements for future marketing activities.
It is recognised that individuals taking this assignment come from a variety of backgrounds. The nature of this assessment, however, allows candidates who do not work directly in a marketing department to review a department either in their own or another organisation, with a view to understanding how it could be made more efficient and effective.
It is acceptable to recognise that marketing may be the role of one person within the organisation, be devolved to parts of the organisation, be partially outsourced or consist of some combination of these approaches. Regardless of what is currently in place, this assignment provides a set of circumstances and constraints that could be applied to any organisation, and on this basis candidates can demonstrate what they would or could do, given the opportunity.

Task Six
identify available options to improve performance management, and propose key recommendations for their introduction, based on your findings.
The main way of improvement is creation of Nokian Tyres retail trade. Proceeding from high efficiency of Nokian Tyres retail trade, it is necessary for Nokian Tyres to increase the given potential by expansion of already available retail trading. Such strategic decision is caused such important, for today, advantage to the Nokian Tyress of the given profile, as timely receipt of available funds at their considerable concentration on the retail channel.
Other main advantage of the Nokian Tyres retail channel of distribution is possibility of reception of additional profit by the trading margin.
The Nokian Tyres, realising production to the wholesale buyer, gets profit at a rate of 13,2 % from the full cost price of the goods whereas at retail the Nokian Tyres provides profit at a rate of the trading margin of 15,9 % from a cost price plus the initial sum of profit, that is in process of increase in taxes there is an increase of final profit that it is necessary to consider also.
Besides, it is necessary to pay attention to the fact of enough low estimation of given service. By results of tracing supervision permissibly to draw a conclusion that as one of a determinant presence of "bottlenecks" in an operating technique of retails, in this case, acts.
Retail shops of the Nokian Tyres concern the Nokian Tyress with sale of the goods through a counter that, first of all is defined by a trading floor lay-out. The buyer who has come to shop meets the affable relation from outside the trading personnel. Thus the favorable impression is left by tidy appearance of workers of shop, an order and cleanliness in a trading floor.
After revealing of intention of the buyer the seller - the adviser shows the corresponding goods. Thus, he pays attention to features of the separate goods, offers instead of absent other homogeneous goods. Duties of the seller include also the offer to the buyer of the acNokian Tyresing goods.
Sale of the goods by calculation with buyers and delivery of purchases comes to the end by it. These operations it is carried out on a workplace of the seller-cashier.
Practically there are no ruptures of expectations of buyers with the system of service presented in shop on following aspects:
Valid enough relation to clients from outside employees of a trading floor, aspiration to pick up the products most suitable and corresponding to tastes is marked;
It is not observed any delay in the course of registration of purchase in the presence of that fact that each visitor is served individually;
Punctuality of workers concerning a shop operating mode.
But thus it is necessary to note a number of the factors reducing an estimation of level of service on which the emphasis of from outside interrogated has been placed.
Inconveniences in connection with a choice of the goods and possibility of close acquaintance take place. Thus, for the reasons of features of a personal warehouse of character not each visitor dares to involve the seller – the adviser till the moment of a definitive choice and decision-making on purchase.
In this connection, I offer to approbation and the subsequent introduction a method of sale on the basis of self-service.
Self-service allows to accelerate operations on sale of the goods, to increase throughput of shops, to expand volume of realisation of the goods. This form provides an easy approach of buyers to the goods laid out in a trading floor, possibility independently to examine and select them without the aid of the seller that allows to distribute more rationally functions between workers of shop. Payment for the selected goods is carried out in the check-outs served by controllers - cashiers. At self-service the technological lay-out of a trading floor and other premises of shop, the liability organisation, and also functions of workers of shop change.
In supermarkets of function of workers of a trading floor are reduced basically to consultation of buyers, the calculation of the goods and the control over their safety, performance of settlement operations.
Sale of the goods by means of self-service is more convenient in comparison with traditional methods as many buyers have possibility simultaneously to familiarise with opened the goods, without distracting thus sellers on performance of the functions connected with display of the goods and the information on their assortment.
Along with traditional channels of distribution now the increasing value gets a trade channel - the Internet and its main service www (world wide web) which any Nokian Tyres in modern conditions should use. The Internet represents the first realisation of the hypermedia environment mediated by computers which possesses unique possibilities for advancement and represents itself as two basic elements:
• First, the Internet — the new communication medium represented by communication model "many-many". Besides, the Internet is hypermedia way of representation of the information, is considerable different from traditional mass media the interactive nature, high flexibility and scalability.
• Secondly, the Internet — the global virtual electronic market which does not have any territorial or temporary restrictions, allowing to make the interactive I will amaze the goods without distribution Nokian Tyress.
Production sale through the Internet (one virtual representation) will allow not to open new shops, that is to cut down expenses on production realisation.
Appendix
Provide a brief background to your organisation, its customer base, position in the market and product/service range (up to a maximum of two sides of A4).
Nokian Tyres is the largest tyre manufacturer in the Nordic countries and one of the most profi table companies in its industry worldwide. The Nokian Tyres develops and manufactures summer and winter tyres for cars and bicycles, and tyres for a range of heavy machinery. The Nokian Tyres is also the largest manufacturer of retreading materials and retreaded tyres in the Nordic countires.
Nokian Tyres runs the Vianor tyre chain, which is the largest and most extensive of its kind in the Nordic countries. The chain comprises approx. 160 of its own retail outlets across Finland, Sweden, Norway, Estonia and Latvia. The Nokian Tyres’ s product development, administration and marketing functions as well as the majority of production are located in the Nokia facility in Finland. Bicycle tyres are also manufactured in Finland, at the Lieksa plant. In addition, the Nokian Tyres has contract manufacturing in Poland, the USA, Russia and Indonesia. Nokian Tyres has its own sales companies in Sweden, Norway, Germany, Switzerland, Russia and the USA.
Nokian Tyres primarily operates in the tyre replacement markets. The Nokian Tyres ’ s key success factors include the continually upgraded product range and innovations that deliver genuine added value to the customer. The focus strategy adopted at Nokian Tyres has enabled the Nokian Tyres to outperform the average annual growth in the tyre industry. Despite the powerful growth, the Nokian Tyres has retained its position among the most profi table tyre companies in the world.
In 2008, Nokian Tyres booked net sales of EUR 479.2 million and employed some 2,585 people.
Nokian Tyres plc was founded in 1988 and it was first listed on the Helsinki Stock Exchange in 1995. The Nokian Tyres ’ s roots go back all the way to 1898, when Suomen Gummitehdas Oy, or the Finnish rubber factory, was established. Bicycle tyre production began in 1925 and passenger car tyre production in 1932. The Nokian Tyres ’ s best-known brand, the Nokian Hakkapeliitta tyre, was launched in 1936.
Focus on Nordic conditions
Nokian Tyres is the only tyre manufacturer in the world to focus on solutions and products that meet the special needs of customers in Nordic conditions. Products are marketed in all countries with Nordic conditions, that is, everywhere where there is snow, forests, and demanding conditions caused by changing seasons.
• Special products designed for Nordic conditions include passenger car winter tyres, winter treads for truck tyres and forestry tyres.
Focus on other narrow product segments
By focusing on products designed for northern conditions, Nokian Tyres has developed special competence that gives added value in other narrow special product segments. • Special products include ultra high performance car summer tyres as well as harbour and mining machinery tyres.
Focus on replacement markets
All Nokian brand passenger car tyres and approximately 60% of heavy tyres are sold to consumers in replacement markets through special tyre stores, car dealers and other companies engaged in tyre trade.
Nokian Tyres’ focus strategy is supported by Investments in product development and production Product development is guided by a philosophy of durable safety, which entails the continued renewal of the product range with the objective of being able to provide customers with value-adding innovations.
• Production concentrates on high margin core products.
• Ongoing improvement of quality and productivity is supported through consistent investment and productivity projects.
Open and participatory corporate culture
A basic factor behind Nokian Tyres’ lasting success is a continuous process of personnel development, which is supported by an open and participatory corporate culture.
• The corporate culture aims to create a highly motivated working community that promotes the success of individuals and the Nokian Tyres.
K E Y S T R A T E G I C O B J E C T I V E S I N T O 2 0 010
Market leader in the home market
The key objective in the home market is to be a market leader as a tyre manufacturer and tyre distributor, as well as to have the best customer services and highest customer loyalty in the tyre business.
Globally strong position in core products
The niche strategy is geared towards building a significant global position in narrow, growing product segments.
Growth through a continuously improved product range
Profitable growth is based on heavy investments in core products and services that give customers genuine added value and enhance the ability to launch innovative products and services.
Increase profits through high productivity and the best customer processes in the industry
Improvements in operational efficiency and profitability are achieved through the ongoing development of logistic processes, total quality and productivity.
Profit growth through skilled, inspired personnel with entrepreneurial spirit
Personnel’s active and entrepreneurial attitude towards the development of personal skills and Nokian Tyres performance supports the selected focusing strategy and Nokian Tyres’s pursuit of an ethical and responsible operating policy.
Strategy 2009, key financial objectives
• To clearly increase the market value
• To double the net sales (EUR 800 million)
• An adequate equity ratio
• A steady increase in earnings per share (EPS)
• Positive, steadily growing cash flow
• Steady improvement in the return on net assets (RONA)
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