BACKGROUND At the start of the new millennium, India was pretty much a telecom backwater. In May 1994, the delicensing of the telecom sector took place in India. The country was divided into different cellular circles. Open bidding was allowed. The country got fragmented in terms of different operators with dif. ferent competitors in four cellular circles. In the year 2009, India came a close md in the sale of mobile phones, China led the race of mobile handsets. The sales of handsets in China are the highest in the world, though India has recently achieved a higher growth rate. In India, however, the GSM phones rule over the CDMA handsets, the former commanding more than 80 per cent market share. Leading the eategories are Nokia, Samsung, Sony Ericsson. Industrial Design Centre (IDC) at IIT Bombay, reported that the sale of mobile handsets in India grew by 6.7 per cent, from 94.6 million to |01 million units in 12 months ending June 2009. In terms of units shipped, Nokia had the largest with 56.8 per cent, followed by Samsung with 7.7 per cent share, and LG third with a share of 5.4 per cent in the same period. Figure 1.1 gives a 24% Nokia i Samsung 8% (ez ols 87% New vendors hers 8% Figure 1.1 Market share of handset sellerspictorial representation. For the April-June 2010 quarter, Nokia retained the top spot with a market Share of 55.9 per cent in tetms of units shipped, followed by Samsung with 7.65 per cent. THE MARKET Handset sellers in India are basking in the glory of the ever-increasing number of subseribers— a gargantuan number enrols each month providing handset providers with a huge market According to the Telecom Regulatory Authority of India (TRALD), the subscribers’ list has hit 500 million in 2010. Just fifteen years ago, India was a nascent market for cellular telephony. Consumers were not even aware ofits benefits, They used to call up a place rather than a person. There was a pressing need to edueate the target audience by selling it the generic benefits of the tmobile phone. To begin with, there was the task of differentiating between the brands. The Indian market is nota homogenous mass. The demographic as well as the regional divide in India are a reality, and have to be taken into consid- eration. The diversity of the Indian market can be mapped as in Table 1.1. A BRIEF ON NOKIA’S STRATEGY Nokia has come out as the leader in the initial battle as it not only has the highest market share but, till now, has consistently outperformed its rivals. It has emerged, and sustained itself, as a market Teader. ‘The market was evenly poised when the cell phone majors entered India. Nokia has ad a successful uphill journey. Nokia’s task was to define: a Psychographie profile differentiation—was positioning at all possible? © Different geographical conditions—product characteristics. ©) Nuances of the Indian market—economy-driven. 2 Alternative marketing strategies. ‘The key barrier to growth was the abysmal quality of the physical infrastraetare, and the extremely unreliable telephony system. In this environment, the idea was to give a meaningful alternative to the Table 1.1 The regional divide" South ’ : East Materialistic Cultural Individualistic Laidback Flaunt wealth Uncommunicative Businesslike Frugal Social family-oriented Hardworking Selforiented Status-driven Respectdriven Achievers Comfoitloving Emotional Jingoistic Rational ArtisticIndian market which Nokia's projections showed as being among the future mass markets of the world If Nokia were to build and sustain its market leadership it had to somehow be a performer in a market to which it was alien. MARKET NUANCES Q Perceiving that what works in Europe may not work in India. © Understanding the distribution system and the supply chain in the Indian market. Tweaking the existing product to suit local conditions (multiple use, scarce electricity, humidity, dust and arid conditions). Developing a new channel (hitherto-untried small vendors for an electronic product). The right price (which was not rock bottom). A single campaign in a country which boasts of diversity (Nokia: connecting people’). ‘Value for money (digital convergence: alarm clock, radio, flashligat; products of medium cost). poo Bo o THE STRATEGY Nokia adopted the strategy of creating a customer. It observed the needs of Indian customers, and specifically studied the Indian infrastructural background, to segment the market in unique ways. It used the same approach in China and Nepal to study how people w:h low incomes would use cellular telephones. Based on the research, the company’s developers created an icon-based menu—consisting of pic- tures rather than letters and numbers—that would allow semi-literate villagers to use cell phones. It put new features on handsets which would be relevantto their specific needs. Nokia discovered the theme of demand creation by focusing on simple, easy-to-use handsets that were sleck and stylish. In this process it created an entirely new value chain at price points which gave the company the desired margins. Nokia worked closely with all telecom service providers in India to increase the geographical coverage and to lower the total cost of ownership for consumers. It has one of the largest distribution networks with a presence through 1,30,000 outlets. In addition, the company also has Nokia Prior ity Dealers across the country, and Nokia “Concept Stores’ in Bengalaru, Delhi, Jaipur, Hyderabad, Chandigarh, Ludhiana, Chennai, Indore and Mumbai to provide customers with a complete mobile experience. Some of the steps which were market-centric and helped Nokia in its positioning were its first phone with a Hindi menu (Nokia 3210), and the first made-for-India phone (Nokia 1100). Italso started Saral Mobile Sandesh (Hindi SMS) on a wide fange of NOKIA phones. It set up a manufacturing plant in Chennai and launched the first vernacular news portal. THE PRESENT By now Nokia has entrenched itself deep into the Indian market. However, the market is changing, and there is a mad scramble in the Indian telecom handset market, with more than 25 handset makers battling it out in the estimated Rs. 200 billion (annual) cellular phone market. The market is getting redefined with emerging mobile handset vendors claiming an ever-increasing share of the market, and itis a tough call for Nokia.