Nokia 2004 Annual Report Download - page 36

130 countries. We can, therefore, benefit from the global framework for customer relationship
management developed in 2004 while staying close to our local markets and maintaining local
customer understanding. In 2004, Nokia’s selling and marketing expenditure was EUR 2 552
million, representing 8.7% of net sales.
Most of our mobile device business derives from sales to operators, distributors, independent
retailers and enterprise customers. However, the percentage of the total sales volume from each
channel varies by region. In the Asia-Pacific area, distributors and retailers account for more than
half of the total sales volume. In China, handsets are sold almost solely through the retail channel.
In Europe, Middle East and Africa, the distribution is split approximately half and half between
operators and the other channels. In Latin America and North America, operator sales represent
the major share.
Each of our active operator and distributor customers has a dedicated Nokia account team.
Additionally, we have customer executive teams with Nokia Group Executive Board members as
the customer executives for the largest global operators.
In addition to our activities in Customer and Market Operations, we have established specialized
sales channels for certain business groups in order to reach customers in segments where we are
introducing mobility. Each of these channels is specific to, and managed by, an individual business
group. For example, Enterprise Solutions manages sales of our secure mobile connectivity products
to certain resellers who contribute value, such as consulting services or additional software, before
distribution. Multimedia is responsible for the sales of Nokia N-Gage, N-Gage QD and N-Gage games
titles via dedicated channels.
Continuous strengthening of the Nokia brand is a critical component of our overall corporate
strategy. According to a survey published in July 2004 by Interbrand, the Nokia brand was
recognized as the eighth most valued brand in the world. We have invested in print and
broadcast advertising, as well as sponsorship of a variety of sporting and leisure events, including
the Nokia FIS snowboard world cup tour and the Nokia Sugar Bowl. We also promote our products
by securing product placements in movies so that Nokia phones feature prominently alongside the
lead characters.
In general, our product marketing is carried out partly through our own campaigns and sales
promotions and partly through operator and distributor customer initiatives, for example, linking
Nokia phones with operators’ promotional campaigns. As the popularity of mobile devices
increases worldwide, mobile device manufacturers must address an extremely diverse audience
with their marketing communications. This diversity goes beyond geographic or cultural diversity
and includes differences in other factors relevant to mobile device users, such as the benefits that
users hope to derive from their mobile devices, lifestyles, demographics and psychological profiles.
In line with this, our global marketing team also reflects that professional and cultural diversity.
Networks’ sales and marketing channels mainly comprise dedicated account management teams
for operator customers. The account management teams design solutions and suggest products
based on operator requirements. In addition to the marketing done within customer teams,
Networks uses customer events, exhibitions, brand marketing and an established interactive
electronic channel.
Production
Nokia operated 15 manufacturing facilities in nine countries around the world as of December 31,
2004, for the production of mobile devices and network infrastructure. The Customer and Market
Operations horizontal group is responsible for the production of Nokia mobile devices, while the
Networks business group is responsible for the production of network infrastructure.
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