Tuesday, March 25, 2008

Nokia - Made for India!

For Strategist prepared by: Arpit Vishwakarma [pg07arpit_v@mdi.ac.in]

A brief introduction of Nokia India:
· A Finnish multinational corporation - the world’s largest manufacturer of mobile telephones
· Entered the Indian market in the year 1994 amidst very stringent telecom policies
· Current market share of about 79%
· In 2006-2007, had 1,300 outlets in 400 cities in India
· Plans to have 2,000 outlets in 700 cities by 2010
· Chosen as 'the most respected consumer durables company' in India by the weekly magazine Business World in 2004

The reasons for Nokia's stupendous success in India include amazing branding, a focused marketing exercise and distribution strength, among others. If we try to recall a few things about Nokia, the things that come up to the mind are:
· Made for India campaign – with TVCs of Nokia 1100 tied to a truck
· Human Technology campaign – easy to use, association to emotions, curvy
· Har jeb mein rang – inspiring people to have a colour mobile handset
· Hindi text and SMS, talking alarm etc.

All these features reinforce the ‘customer oriented’ aspect of the company. Many of these features are tailor made for the Indian market and have been achieved after in depth research. Better understanding of the Indian consumer has given the company an edge over its competitors like Motorola which focused on cutting edge technology but in turn lost out on user-friendliness.
Focusing on the mobile phone market, establishing crucial distribution partnerships, making early investments in manufacturing and brand-building, and developing innovative product features are the basic reasons for the success of Nokia.

No wonder Nokia jumped into 4th position of Brand Equity’s survey of the most trusted brands in India in 2007:

As part of its distribution strategy, Nokia has ensured that it has a presence in all 2,000 cities and towns that have cellular coverage. Nokia's distribution network of over 30,000 outlets is roughly double that of its rivals, according to industry sources.

In partnership with HCL, Nokia has introduced phones at all price points, right from the mass market entry-level phones to the mid-market colour and camera phones and also the high-end exclusive phones. Nokia has very wide range of models enabling more than one choice of handset for every price point.

Brand building
Among the more recent initiatives taken by the company to build up its brand further are things like using Shah Rukh Khan as brand ambassador. This is the first time something like this has been done for a brand that has all along talked leadership and technology. "He has a pan-India appeal and in smaller markets, a huge connect. We took a calculated shot on SRK helping us explode the rural market for us." as the Nokia management points out. Educating the rural masses about usage of various applications in Nokia handset is being done through Nokia vans. Also a new initiative of using Nokia handsets as substitutes of STD – PCOs in villages is being tried out.
Nokia's media planning tries to ensure that targeted category consumers get to see the ads meant for them, through a selection of different channel clusters. For entry level, they target a Doordarshan sponsorship on one-day cricket. For N95 they target Discovery, English movie channel and news channels.
Beyond advertising, Nokia is trying to create more touch points through its concept stores, already opened across several major metros and cities, and a showcasing of its higher end products via malls and road shows.
On the basis of observed facts and the past record, the SWOT of Nokia can be drawn in general something like:

Source: Datamonitor

Nokia Brand worth – a qualitative attempt
If we try to find out the brand worth of Nokia using the framework of Interbrand Brand Strength Formula, the probable radar of the Nokia as under different attributes comes out to be something like

The allotment of figures is basically qualitative and not absolutely correct. However, the thought behind it is basically based on observations and secondary data and tends more towards a relative scale.
Leadership is basically a brand’s ability to influence its market and be a dominant force with a strong market share such that it can set price points, command distribution and resist competitive invasions. Nokia scores high on most of these although competitive invasions are always possible in a technology and innovation driven industry.
Stability is basically sustainability of a brand based on customer loyalty and past record. Again Nokia scores high on these fronts.
The brand’s trading environment in terms of growth prospects, volatility and barriers to entry basically explains the ‘market’. The growth prospects of Indian mobile handset market are very encouraging and with and barriers to entry are high basically because of many big brands already in the market.
Geographic spread of Nokia is high as observed in outlets and service centers and ‘trend’ which basically explains the brand’s ability to remain contemporary and relevant to customer is also decent. This again is diminished by highly technologically intensive industry.
Support, which is the amount and consistency of marketing and communication activities in case of Nokia, has been very coherent. The TVCs have been very effective and brand equity is very high. The brand also enjoys high ‘protection’ by law for its legal titles.

The basic drivers for success of Nokia in India have been its adaptation backed by strong skills and experience it gained in China. The various campaigns like human technology made for India etc which actually got reflected in the product, promotion and the pricing and together with a sound distribution system have been the reasons for its success. These actually resulted in building up a great brand Nokia which almost every Indian considers to be his trusted and understanding friend.


1 comment:

Parijat said...

In India, Nokia does more than just mobile phones.. for handphone business review, my 2 cents...

More points in favor of Brand Nokia

* good resale value
* compatible with indian environment (survives the heat, sand and storm + my pocket!!)
* keeps working even after falling on a non-carpeted floor
* easier to repair
* high retention of customers due to 'no-problem' phones

Challenges to Brand NOKIA..
* Chinese phone - very similar in features and shape but much cheaper. The company will face a stiff competition in local markets where 1/3rd cost attracts customers.
* iPhone -- in upper segments launch of iPhone is sure to make a big dent
* features in phone have not gone thru innovative changes in last several versions. Color/skin/shape changes will bore out the consumer. To think of bringing higher end features to lower range phones...

Future for Nokia:
* interesting move will be to introduce a buy back of phones
* selling refurbished phones to beat chinese phones
* on buy back lines, consider signing an agreement with customers/families to provide them a new phone after certain period from Nokias range - kind of a rental service rather than a current selling approach
* start renting phones in collabration with service providers in India (specially for roaming customers)