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Situation Analysis

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To survive in the competitive business environment, it is essential for a company to conduct extensive market research and develop a strong brand image. When an effective marketing strategy is developed it ensures success in the global competitive market where major player such as Apple, Samsung and Google have a significant impact upon Nokia’s strategies. Nokia held the pole position as the premier mobile vendor for well over a decade, but that grasp on the mobile market has been slipping very fast and has threatened its very survival by market leaders such as Samsung and Apple. Many industry experts had predicted this shift in power since the advent of smartphones’ a few years back.

Nokia was ponderously slow at adapting to the market even though it had been a pioneer in the smartphone market, literally introducing consumers to the smartphone with its initial Symbian Series 60 devices in 2002. For the next five years, Symbian phones had little trouble maintaining a leadership position in the smartphone pack. But in 2007, Apple leapfrogged the Nokia through the technical advances of its iPhone. With full touchscreen and app-based operating system, the iPhone changed the very definition of what a smartphone should be. It reinforced the fact that the smartphone market was hyper-competitive and success can be fleeting if companies do not focus on innovation and changing customer needs. The consumer transition from traditional mobile phones to smartphones was dramatic, and caught Nokia off-guard as the business had become too product-led rather than customer-led which was considered by many as a missed opportunity. However Nokia has recognized this trend and through a partnership with Microsoft finally arrived with vigor to the smartphone party. Nokia released new models through its Lumia series in 2012 and launched an aggressive marketing campaign to regain its market position which has started showing signs of revival. Despite the lessons being learnt and progress being made with the Lumia range, many Nokia loyalists still find it difficult to enthuse about their latest flagship products as we look at the reasons for their skepticism and avenues for Nokia’s improvement. Background Nokia Corporation is a Finnish multinational communications and information technology corporation headquartered in Keilaniemi, Espoo, Finland. Its principal products are mobile telephones and portable IT devices.

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Nokia and Microsoft would also combine services assets to drive innovation and gain market share in the world mobile OS market. It continued to build on its success and gained market dominance between 2002 through 2012 through its range of mobile products. Nokia 3.5%. Nokia is estimated to have sold 810k units of Lumia 900 series in the North American market. January 24. With Windows Phone as its primary smartphone platform. the Finnish conglomerate had turned itself into the world’s leading mobile phone company in the 1990s . Research In Motion Others Source: IDC Worldwide Mobile Phone Tracker. US markets alone account for 40% of the all smartphone sales worldwide and is considered as the bellwether of the smartphone industry. sales in more than 150 countries and annual revenues of around €38 billion. Apple 4. Apple 3. not only did Samsung break Nokia’s 14-year record of being the world’s largest handset maker by overtaking it in terms of unit shipments in the January-March quarter. software customization. HTC 5.Nokia has around 122. Samsung 2. ZTE 5. with a global market share of 22. Nokia 4. It has already toppled Nokia in the emerging smartphone segment. Nokia through its launch of the additional products in its Lumia series is positioning itself to make inroads in this market. Samsung 2. Hence it is a crucial battleground for Nokia dominated by Apple and Samsung to regain the lost ground in this important market. Smartphone Market size:The smartphone market has entered a maturity phase where the market growth has been stabilizing. Nokia had pioneered the first mobile phone in 1984 through its Mobira talkman. Huawei Others 1. language support and scale. Q4 2012 Mobile Phones Market Share Q4 2012 Smartphone Market Share 1. As of Q4.000 employees across 120 countries. This led to the launch of the Nokia Lumia series in 2012 through the Lumia 900 and 800 series in the US market. it is also threatening to upstage Nokia in the overall mobile phone market. according to a report in April 2012 by research firm Strategy Analytics. The US Smartphone revenues is estimated to cross the 300 Million units mark with estimated revenue to exceed $190 Billion in 2012. 2013 Nokia formed a strategic partnership with Microsoft in 2010 to build a global mobile ecosystem based on highly complementary assets.2012 it is the world's second-largest mobile phone maker by unit sales (after Samsung). Nokia would help drive the future of the platform by leveraging its expertise on hardware optimization. Nokia Segmentation Strategy: 2 . Since launch. Last year.

Nokia has understood that to be successful in the US markets they needed to have a differentiated offering for the everyday consumers and business.The key driver for Nokia to 3 . Recently a few snaps from the president’s office of Thailand showed that the president used a white Nokia Lumia 920. Social contact: The second segment for Nokia is the upwardly mobile. Today's young women and affluent housewives constitute two major chunks of the segment and Nokia has targeted them by launching a pink smartphone – Lumia 820. As can be seen from the top purchase consideration the critical success factors in the US smartphone segment was:1) 2) 3) 4) Diffusion rate of the smartphone operating system Availability of range of applications on the phone Performance of the smartphone Cost of the phone.820 series and mature users through the innovative Lumia 920 series. Segmenting and targeting by purchase behavior: Target Market for the Nokia Lumia phones is between 20-50 years. high-profile celebrities. industrialists and other high "net worth" individuals. As the smartphone penetration has already reached 60% Nokia has differentiated its offering to the first time smartphone buyer through Lumia 620. Nokia’s Strategic Marketing Objective for Lumia series: . In having these different options they would be able to appeal to the demographics who would be most likely to switch to the Lumia phones. Assured: The last segment as defined by Nokia comprises of CEOs. The fact that the segment cannot do without a mobile phone makes it the 'assured' segment. socially-conscious segment that uses a mobile to stay in touch.

technology and location-based services for the broader market.5 inch display and powerful 1. 2) Competitiveness and Profitability: . Lumia 820 still offers some great specification but is geared for a more mid-range market and therefore is a good option for people not wanting to spend premium money on the 920 4 .launch the Lumia series is 1) Regain the market share lost to Apple and Samsung in the smartphone industry to make it relevant again.5 GHz dual core processor are teamed with a range of great features to enable this model to compete well against leading devices currently available. pricing and branding strategy. music and multimedia capabilities. Pricing: . These together would give a quantitative measurement of the success for the Nokia smartphone. The key metrics for ensuring that Nokia has been successful with its marketing strategy would be to review the market share for the new Lumia series and the Units shipment of the Lumia smartphone.820 and Nokia Lumia 620.Nokia has leveraged this strategy through models such as the Nokia Lumia 920. 3) Increase the awareness amongst customers about Nokia’s smartphone devices so that it will drive sales up and create customer brand loyalty. Nokia has adopted a market penetration pricing to capture this market from Apple. the top end model in the range.Nokia is aimed at further developing the capabilities of the Lumia smartphone by providing better browsing. The model that has grabbed the attention of consumers on an international scale is the Lumia 920. A 4. Nokia Lumia’s marketing and positioning strategy: The key pillars of Nokia’s marketing strategy has revolved around its product. Nokia has broadened the price range of Lumia series to differentiate the Windows Phone platform.

handset. Such moves have positioned Nokia to compete with Research In Motion Ltd. They has been reinforced through product placement in music 5 .The Strategic Positioning of Nokia is based on Personality. TV and digital campaigns. Nokia has successfully leveraged the segmented pricing strategy against Samsung and HTC. recently commented that they prefer a “less is more” approach when it comes to selecting network providers for their range of phones including the Nokia Lumia 920. It has leveraged its AT&T partnership to market the Lumia phones in North America. Self-Expressive benefits and quality product. This was one of the key adjustments Nokia made from the launch of Lumia 800 –across multiple carriers. Nokia had previously eschewed this approach which limited its penetration in the region. Elop. However it has used the “Push” strategy to spur demand for its Lumia products. fun.. This has allowed Nokia to place a greater emphasis on collaborating with its partners such as Microsoft and AT&T to develop an integrated marketing plan. Lumia 620 is below these two models in the range and be a great first smartphone while the attractive price point will also see the model strike a chord with a teenage market. and youthful. whose Blackberry phones are popular among corporate users. The Integrated advertising budget for the Lumia promotion is given below which has helped it to create an integrated marketing plan:- 1) Nokia Budget: $50 million 2) Microsoft Budget:$50 million 3) AT&T Budget :$150 million Secondly. Instead of relying solely on the traditional marketing channels like advertising it has shifted towards advertisements through social media. Branding & Marketing:In order to do this. Nokia has used the value pricing model to increase the adoption among the first time smartphone buyers switching over from the feature phones. This entails that the company opt to release premium models on a limited number of networks rather than flood the market by using every provider available. “One of the things we had learned with the first launch was being very narrow would yield better results for us” said Mr. This can be seen through the “smoked by windows” campaign launched by Microsoft in which Ben Rudolf convinces a reality star to swap her Samsung for Nokia Lumia 920. The CEO of Nokia. Positioning: . Nokia launched the device only through its AT&T partnership rather than launching with multiple carriers. offering value-added services in a play for the enterprise sector. Nokia has moved away from its traditional marketing strategy in launching the Lumia series. By carefully selecting network providers this also allows Nokia to encourage the selected companies to promote the handset in question as flagship phones and gain the company even more carefully selecting valuable marketing. It is leveraging Microsoft’s business/enterprise sales channels to appeal to corporate customers in the region. Nokia has pushed this further through experiential marketing using celebrities such as Gwen Stephanie and Jessica Alba to promote the brand as bold. Stephen Elop.

better charging. Better camera. selling two million of the series in the last three months of Q2 2012. This number brings the cumulative total to 14 million since the Lumia line was launched a year earlier which is much below The forecast figure of 15 Million units. The value proposition offered by Nokia Lumia based on value pricing does not match with the expectation of the target group and thus leading to mismatch between the value proposition provided by Nokia and the customer expectations. 2. compared with the IPhone and top range Android devices due to the price cuts by the vendors. better screen. The pricing: The pricing for Nokia Lumia seems to be high. Nokia still expects Q1 2013 to be a bit bumpy. This market position is key for Nokia as it battles against Apple and Samsung in the smartphone market. On the upside. This positioning is critical for Lumia due to its late entry in the smartphone market as the “good enough” position has been held by Android overall while the “better” position has been held by iPhone. This begs a question as to whether Nokia will be able to sustain this momentum given the heavy competition faced in the smartphone market. sales of the Lumia handsets were still growing. forecasting that the operating margin of its Devices & Services arm to be around negative two percent. 6 . As a result Lumia has been struggling to differentiate itself in the smartphone industry dominated by lifestyle brands like Apple and Samsung. Despite its strong performance Q4 2012. Features of Nokia Lumia: Nokia and Windows 8 aims to provide exceptional user experience with the feature rich product offering such as high resolution camera and Web browsing capabilities.4 million Lumia smartphones were shipped. At launch Nokia has tried to promote the brand as something “better”. etc. The Launch of 4 additional Lumia products on Windows 8 platform gave an additional boost in Q4 as Nokia announced 4. The key challenges being faced by Nokia based on its market performance and competition can be summarized below :- 1. better maps. and promoted it through the Twitter #switchtolumia hashtag.videos alongside celebrities such as Nicki Minaj and Gwen Stefani as well as youth icons such as Jessica Alba. Hence to differentiate itself Lumia has positioned itself as a better product with good price to gain the market share from both Apple and Samsung. These features are not however considered “disruptive” technologies to leapfrog the technical features offered by the competing Apple and Samsung devices. Critical Analysis of Nokia Lumia’s Marketing Strategy: The initial market response to the introduction of Lumia series gave a bump to the sales of Nokia smartphones in the North American markets. .

Branding: . While Nokia has made progress with its shift from feature phones based on its Symbian OS to smartphone using Microsoft OS. when you are the challenger has any chance of succeeding. The discontinued support for Windows 7 phone and release of Windows 8 OS already has lighted the risks for Nokia.When it comes to a product launch. not scarcity. It is been hard to dissect the value proposition for the Nokia Lumia phones based on its advertisements. The strategy to model is the Google Phone strategy.” This is no time for a Lumia 900 marketing strategy based on. it still is in danger of missing the trend of the convergence of smartphones and tablet devices. if a) you are the incumbent leader. and therefore in greatest demand. The early interest in the launch of Lumia 720 and partnerships with AT&T and T-Mobile bodes well for Nokia and set it up for a long term future in the US markets. or appearing to be based on scarcity. Scarcity is a good thing. it will be vital for Nokia to release a windows tablet device which is an extension of its Lumia flagship and continue the road to recovery.3. 4. Distribution: . You must flood the market with availability. As the computing landscape changes in the next couple of years. This has been compounded by Nokia’s marketing myopia and inability to produce products to meet the market demands. In the latter case. 7 . Nokia has also moved towards profitability during this period and is slowly stabilizing. 5. This raises a concern that Nokia needs to look at alternate strategies for expanding its growth through the development of its own OS or developing an Android based phone. however Microsoft has partnered with Huawei for producing windows phone for the African market which will compete directly with Nokia. an ultimate user experience. Way forward for Nokia Lumia: Despite having made some marketing mistakes with the Nokia Lumia launch.Nokia has chosen the Microsoft Windows platform exclusively for developing its smartphone devices. Ecosystem: . you must market on your differentiation. where you flood the market with products and attached services that work. it has managed to garner a 90% share of the windows OS market. This is a huge miss for the marketing team to think that replicating the Apples strategy. and blanket every channel. and b) you are not the competitor starting from near-zero traction (in the smartphone market) attempting to drive a displacement strategy.The Nokia brand is identified more as a feature phone and low end smartphone provider needs to rebuild its brand in the premier smartphone segment. making it an easy decision “try the Lumia out.

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