Brand Nokia

What is Brand?

American Marketing Association defines Brand as "Name, term, symbol, sign, or design or a combination of them, intended to identify a seller or a group of sellers and to differentiate them from those of competitors". Thus a brand identifies the seller or maker.

A brand is a complex symbol that can convey up to six levels of meaning viz. Attributes, Benefits, Values, Culture, personality and User. Scott Davis suggests visualizing a Brand Pyramid in constructing the image of brand. At the low level are brand attributes, at the next level are the brand's benefits, and at the top are beliefs and values as shown below.

Brand pyramid

Brand building:

It is one of the most important activities to be performed for the lifecycle of any brand. Some of the various tools used by Nokia include:

• Public relations and press releases
• Sponsorships
• Events marketing
• High value for money

Brand Value:

It is the job of estimating the total financial value of the brand. The brand valuation is done on yearly basis for all ht global brands that have value greater than $ 1 billion.
Nokia is one of the top 10 brands in the world for past several years here is the brand value of Nokia in past 5 years:

Year Position Brand Value
In $ millions % change w.r.t. previous year
2001 35,035
2002 6 29,970 -14%
2003 6 29,440 -1.2%
2004 8 24,041 -2%
2005 6 26,452 10%

Good chunk of the brand value comes from the marketing budgets, and different business models require different marketing approaches. It is interesting to note that in the top valued brands 6 out of 10 are technology companies
A strong correlation exists between the brand value and the innovation factor, which means their innovative efforts were correctly communicated and, moreover, there is a strong consistency between what the company judge as operational efficiency and delivers as a consequence and what the market accordingly perceives.
It is interested to note that, Nokia is the Only Cell phone Maker in Top 10.
Current scenario for the year 2005:
Nokia and Motorola manufactured about half of all cell phones sold worldwide during the second quarter of 2005, according to statistics published by the research institute Gartner.
From April to June, 190.5 million handsets were sold globally, a 21.6% increase compared to the same period of 2004.
Both companies increased their market share, with leader Nokia accounting for 31.9% of all sales and Motorola in second place with 17.9%.
Sales of Nokia were boosted by demand in North America and Latin America, where the Finnish company reclaimed the number one spot. US-based Motorola has made significant inroads in the western European market and is now the second biggest manufacturer of phones, a leap from fifth place a year ago, Gartner said.

For the world market, Korean phone makers Samsung and LG increased their market share to 12.8% and 6.5% at the expense of Sony Ericsson and Siemens, which saw their market share fall.
Sony Ericsson had a 6.2% share, while Siemens had 4.7%

Nokia in India:
In April 2005, Nokia India, a subsidiary of Finland-based Nokia, announced that it was setting up a manufacturing facility for mobile devices in Chennai, the state capital of Tamil Nadu in southern India. Nokia planned to invest US$ 100-150 million in the facility, where the production was expected to begin in the first half of 2006 according to Nokia's President "Establishing a new factory in India is an important step in the continuous development of our global manufacturing network."
India was ideal for Nokia's new production facility. Each mobile handset has more than 400 parts and the average production capacity of each manufacturing unit of Nokia is around 20 million units. This level of manufacturing involves a total of 8 billion components per annum, requiring strong logistical support. Nokia's manufacturing facility needed to be located close to a major international airport or sea port for quick supply of components. India met all these requirements, and also enjoyed cheap manpower costs and proximity to the rapidly growing Asia Pacific markets.

Besides, Nokia was the market leader in mobile communication devices in India. The company has been carrying out sales & marketing, customer care and research & development activities in the country. Nokia considers India to be one of its most important markets. The company's Code Division Multiple Access (CDMA) facility is located in Mumbai and provides software and technical support to CDMA consumers in India and other Asia Pacific countries.

In 2004, Nokia was chosen as 'the most respected consumer durables company' by Business world. The magazine wrote, "This Finnish Company's debut at the top of the heap says two things. One, that its strategies - including ones like developing a phone specifically for India - are respected. But, more importantly, Nokia's win is also an endorsement of the importance of the ubiquitous cell phone as a durable in today's world. After all, unlike its competitors, most of which offer a slew of durables, Nokia is mostly a cell phone company."
According to the latest figures, the Indian mobile handset market reached 63 million this August 2005.
Nokia: The CII Brand of the Year 2005 Award
Nokia was chosen from 10 finalists comprising Eveready, Titan, Dabur, Indane, Fair and Lovely, Lux, Ponds, Rin and Ponds Body Lotion after a selection process where they were tested in the market and rated by consumers. Representatives of the short listed brands had to make presentations in front of a five-member jury that made the final selection

Phone Brand Preferences:
The first national study of mobile phone users has found 97% of mobile phone users accessed SMS and over half used pictures, music and sounds on their mobile phone.
According to the Australian Mobile Phone Lifestyle Index conducted by The Mobile Content Industry Development Group, of 2,400 consumers surveyed, text messaging was used by most people to communicate with close friends, friends and family.
However, over 50 per cent used it to communicate with work colleagues and over 20 per cent to communicate with business contacts. Females used SMS more than males. With regard to age, 19-25 year olds used SMS more than average and those over 36 years used it less.
When it comes to the brand of mobile phone consumers' desire, Nokia is still the dominant player in the market with 59 per cent of respondents currently owning one of its phones. This was followed by Sony Ericsson (10 per cent) and Motorola (10 per cent). The study also highlighted that age and sex was an important factor in the brand of phone purchased. Females are more likely to opt for a Samsung whilst males prefer a Sony Ericsson. Younger consumers are also being drawn to the Samsung brand whilst people aged 36 years and over preferNokia.
According to one of the sponsors of the report the Australian Interactive Media Industry Association, mobile phones are being used in a variety of ways. "The report has highlighted that consumers are no longer simply using mobiles to make phone calls," said chief executive, John Butterworth. "Today they are being used as a more integrated communication device, with high usage of devices such as cameras, SMS and MMS."

BRAND PROMOTION STRATEGIES

Brand promotion strategy is aimed at influencing people's perception of a brand in such a way that they are persuaded to act in a certain manner, e.g. buy and use the products and services offered by the brand, purchase these at higher price points, donate to a cause. In addition, most brand strategies aim to persuade people to buy, use, and donate again by offering them some form of gratifying experience. As branding is typically an activity that is undertaken in a competitive environment, the aim is also to persuade people to prefer the brand to competition.
In mobile handset market where there are number of players extensive promotion strategies are required to maintain the brand position and tap the market potential. For consumers mobile phones are not only the telephonic device but now it has become a symbol and showcase of his choice, preference and taste. In public places, meetings ,gatherings mobile handset of the person shows his liking and tastes. With so many brands in the market providing almost similar facilities & same technology the only way a brand can differentiate itself is by making its product different from its competitors through its features and promotion strategies.Nokia's position as the market leader, has long been a trend-setter of the mobile phone industry. It has originally revolutionized the mobile communication tool into a fashion accessory. Unlike the other players, Nokia is not a market follower. Instead, it dictates and sets fashion trends with its own product designs and innovative marketing strategies. Despite of the increasing competition in the sector still, Nokia is expected to remain the market leader in the near-term, primarily due to its dominance in the lower-end segment to upper end segment and its advantage over the other players in terms of economies of scale.There is still a large market for first-time buyers such as Bangladesh, Pakistan,India, Africa and China for Nokia to tap on.However to manage the brand and to fight with the competition in the market nokia is adopting extensive promotional strategies.

Strategies:

Different outlets for different purposes of customers:

Nokia has different categories of the retail outlets namely,
• Nokia Priority Dealer (NPD)
• Nokia Care Center (NCC)
• Nokia Professional (NP)
• Combination of above.
The Nokia Priority Dealer is authorized dealer for Nokia sales, Nokia Priority Dealer and Care Center (NPDC) is Dealer as well as lower level repair center, Nokia Care Center (NCC) is lower and somewhat higher level Nokia repair center while Nokia Professional is the highest level repair center for Nokia.

Tie-ups with Giants like Reliance and Airtel:

Nokia has tie-ups with Airtel in GSM technology and with Reliance Infocom in CDMA technology mobiles. The two mobile service providers in India, with largest subscriber base in their technology are market leaders for past few years. The tie ups between them and Nokia enable customers to have variety of choices to choose from. Customers are provided with variety of "combo pack" offers.

PROMOTION STRATEGIES

The Nokia promotion Strategy continues to focus on three activities to expand mobile communications in terms of volume and value:

 Expand mobile voice
 Drive consumer multimedia
 Bring extended mobility to enterprises

Expand mobile voice: Nokia can further develop the mobile voice market -- both in markets where mobile telephony is just taking off as well as in more mature markets. Nokia estimates the total global mobile subscriber base to reach two billion by the end of 2005 and hit three billion subscriptions by 2010. Nokia's position in mobile voice is strong because of their key assets and excellent logistics capabilities. In country like India, mobile phones are still not very popular in villages which provide nokia huge market to tap on. Also even in middle and upper middle class still there is huge potential in the market for growth.

Drive consumer multimedia: Nokia is playing a key role in shaping this emerging complex market by focusing on the fastest growth areas: imaging, music, and games, to name a few.With its fast pace innovation not only in technology but also in terms of adding new features in phones nokia undoubtedly remains the major player in the market. Nokia used to have a policy of not being the first to market new aspects of technology. This was in order to save on wasted research and development by not entering the market until it was clear that there was a good market for a new feature. It took this approach with GPRS, MMS, color screens, video, 3G etc. However, it has now realized that this approach is incompatible with it being the market leader and with trying to be a cool brand. This year it has said that it is being more aggressive in introducing new technology features.

Bring extended mobility to enterprises: Nokia will provide a range of competitive, specifically targeted handsets, platforms, and connectivity solutions so enterprises can boost productivity through the power of mobility. Nokia usually adopts a mass-market strategy, whereby it targets all segments of the market. This is unlike Samsung and Motorola, which are concentrated only in the mid- to high-end segments. Nokia's strategy to capture the entry-level market has proven to be fruitful over the years. Targeting first-time buyers makes perfect business sense as the handset manufacturer attempts to familiarize users and accustom them to its inbuilt functions/operating system, thus, increasing switching costs for users. Furthermore, given its economies of scale,Nokia has the cost advantage to market its handsets at lower prices. The market for first time buyers is still large. However, Nokia is likely to continue with this strategy in the medium-term.

Nokia has built up its brand on the pillars of QUALITY and INNOVATION. It believes that the quality and innovation should be managed in a balanced way so as to sustain competitiveness and maintain the leading position.

"Quality and innovation is at the heart of everything we do at Nokia - it is the essence of our products, our brand, and our business. It plays a crucial role in maintaining our competitive edge. It is key to pride, productivity and profitability. It doesn't matter how you say it - quality has to be expressed in every possible way and through every possible action."

So the "three dimensions of quality and innovation" followed by nokia are:

• Quality & innovation in process
• Quality & innovation in product
• Quality & innovation in management

Brand building tools of Nokia:

Nokia is the brand leader in the Indian mobile phone handset market. Bua it is facing several challenges, with local brands aggressively building shares through advantages in distribution and price, and players like Samsung, LG, & Sony Eriksson gaining market share in premium segment. To face the challenges posed by the competition in the market nokia is adopting several brand building tools such as:

Advertisements through TV, internet, printed media like newspapers, magazines, hoardings etc to reach to masses.

Sponsorships are another tool used by nokia for brand building. It sponsor number of events such as matches, races, fashion shows etc.

Trade shows provide a great opportunity to market leader like nokia to build brand awareness,knowledge and interests among customers.

Nokia's collaboration with major mobile service providing companies like reliance & airtel serve as a good tool for building brand and penetration into the market.

All range tailor made mobile handsets provide nokia edge over its competitors and also creates positive word of mouth publicity.

Nokia basically believes in promoting its product through its quality and innovativeness. By adding more and more new features it makes product unique and provides more value for the customer's money.That is why the marketing head of nokia India elaborates about campaign for one of the nokia products that

"The campaign will not feature any celbebrity. We really didn't feel the need to use celebrities in the campaign. The phone has such unique features that we decided to entirely focus on it. We never thought of using Shah Rukh or anybody because it could dilute the campaign."

SWOT ANALYSIS

Nokia is the world's largest mobile phone manufacturer and one of the top suppliers of network infrastructure products. Along with mobile telephones, the company's other global operations include TV set-top boxes and Internet software and services Furthermore, it is engaged in home networking and mobile displays for the global market.

STRENGTHS WEAKNESS

 New and innovative product development.
 Market leadership
 Strong brand
 Low cost production

 Nokia networks

 Weak enterprise sector & nokia ventures

 Falling profits
OPPORTUNITIES THREATS

 Potential markets in china & asia-pacific region.

 Mobile device market

 New technologies

 Enterprise market

 Strong competition

 Market saturation in some parts of the world

 Microsoft

 Virus

BRAND STRATEGY DECISION

Nokia is a well developed brand which is mainly known for the mobile handset but nokia is not only market leader in mobile phone handset market but it has other products also under the umbrella of its brand name.Nokia adopts two type of brand strategy Brand extension and Line extension.

BRAND EXTENSION STRATEGY

LINE-
EXTENSION
STRATEGY
Nokia mobile Nokia Nokia Nokia
Phone handset accessories customer games & networks support NOKIA 3315

AUDIO
NOKIA 2300 HEADSET CUSTOMER CARE TONES PRODUCT CARE NOKIA 2600 DATA CABLES & MEMORY CARD GAMES

NOKIA7250i

DIGITAL
NOKIA7260 PEN

Brand extension strategy: when a company use its existing brand name to launch new products in other categories it is known as brand extension strategy. Nokia launch other products like mobile accessories, customer support centre, games etc under its own brand name thus following brand extension strategy.It provides many advantages as it makes consumer assume that the new product will be of high quality as the other products of the brand. But it also involves some risk as the new product might disappoint buyers and damage their respect for company's other products. Also, overextension of brand may lose the special positioning of the company in consumer's mind. So,nokia must research before extending the brand that how well the brand associations fit the new product. The best result would occur when the brand name builds the sale of both the new and existing product. An acceptable result would be one in which the new product sells well without affecting the sales of existing product. In case of nokia brand extension strategy is giving acceptable results as though the extended products are not earning profits but they are also not adversely affecting existing handset's sale.

Line extension strategy: It consists of introducing additional items in the same product category under the same brand name such as nokia is introducing so many new models of mobile phones with some different features and with different price under same product category and brand name. Nokia is adopting extensive line extension strategy as it is launching tailor-made products for its different segments of customers with different features. Line extension always involves risk of brand name losing its specific meaning. However it can and often do have a positive side as they have higher chance of survival than brand-new products.

BRAND TOUCHPOINT WHEEL

A brand touch point wheel is defined as all of the different ways that the brand (nokia) interacts with, and makes an impression on, customers, employees, and other stakeholders. It reflects every activity brand undertakes to reach consumers and stakeholders before, during and after the purchase.

Nokia brand touch point wheel shows that how nokia interacts with its customers and stakeholders.

Post purchase experience: Nokia provides post purchase support to the customers through its customer care centre, bill collection centre and time to time consumer survey to find out the satisfaction level of the consumer.

Pre purchase experience: nokia contact through advertising, trade shows, sponsorships etc to its targeted customers to pursue them to buy and re-buy the product.

Purchase experience: nokia's products are available through retailers and special nokia retail outlets also. The financial companies like GE capital finance the cost of mobile handset in collaboration with nokia.

These are the way through which company interacts with its customers.

Nokia interacts to its stakeholders like shareholders, vendors & suppliers, & even to customers through its internal newsletters, annual report etc.
So touch point wheel represents various points where brand touches its customers and stakeholders.

Segmentation:

As nokia has wide range of products catering to the needs of almost all categories of people so, nokia's tailor made products helps it to segment the market on the basis of various attributes. The main factors on which nokia have segmented the market are:

On the basis of income:
• Higher income group
• Middle income group
• Lower Income group

On the basis of age
• Youth
• Middle aged people

On the basis of occupation
• Students
• Business executives

Nokia's Market share:

Nokia has highest market share consistently across the globe as given below:

Source: Strategy Analytics

CONCLUSION

Nokia is undoubtedly a major brand in the market confronting the competition with its quality and innovation driven strategies.
Analysts predict that in the year 2004, nokia was a growing brand along with others with some decline in the market share, however in 2005-2006 nokia is on the path of building strong foundation with the help of partnerships to penetrate in the market, strong manufacturing base and building a strong organization.

In the future.nokia is on the verge of building sustainable relationship by taking higher market share, enjoying economies of scale and on its strong foundation.
Thus,nokia will become the premium NETWORKS brand by 2006-2007.

So nokia is looking forward for the future with the three step strategy of

"Currently most consumers say Nokia is a mobile phone brand, but we want to stretch our brand into the entertainment avenue as well, so that the mobile will become a device where you listen to music, play 3D games, edit short videos and browse through the web," said nokia official.

So brand nokia is perfectly doing its job of "CONNECTING PEOPLE".