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IMPROVING NOKIA’S MARKETING STRATEGIES FOR SMART PHONES FROM A BRANDING PERSPECTIVE IN FINLAND AND THE UNITED STATES

Mikael Lauharanta International Business Bachelor's thesis Supervisor: Phani Tej Adidam Date of approval: 6 May 2011 Aalto University School of Economics Bachelor´s Degree Program in International Business Mikkeli CampusAALTO UNIVERSITY SCHOOL OF ECONOMICS Mikkeli Campus ABSTRACT OF BACHELOR’S THESIS Author: Mikael Lauharanta Title of thesis: Improving Nokia’s Marketing Strategies for Smart Phones from a Branding Perspective in Finland and the United States Date: 6 May, 2011 Degree: Bachelor of Science in Economics and Business Administration Supervisor: Phani Tej Adidam Objectives There were three main objectives to this study. First, Nokia’s aspired brand image was resolved by interviewing Nokia’s Marketing and Brand portfolio Manager. Secondly, people’s brand perceptions about Nokia and its

competitors were researched through conducting a survey in Finland and the United States. Finally, the findings from the interview and survey were compared and assessed from the branding perspective to see if the Nokia brand should be revitalized and furthermore to suggest improvements to Nokia’s marketing strategies in Finland and the United States. Summary The research unveiled important information on how Nokia is currently perceived by the consumers and how their view differs from the brand identity Nokia is trying to build with its smart phone marketing. The study also indicated how Finnish consumers differ in their opinions when compared to the Americans. The results of the research are helpful not only to Nokia, but also to other firms who need to revitalize their brand in the face of increased competition and declining market share. Conclusions As of late, the Nokia brand has inspired negative brand associations and contributed to the sharp decline of Nokia’s market share. However, since the core brand association of reliability is still descriptive of the brand, Nokia should respond well to brand revitalization efforts and gain back market share from competitors that have not yet established a permanent position in the minds of the consumers. Keywords: Nokia, cellular phones, brands, marketing strategy, consumers Language: English Grade:2TABLE OF CONTENTS 1. INTRODUCTION 1.1. Background

1.2. Research Problem 1.3. Research Objectives 1.4. Research Questions 2. LITERATURE REVIEW 2.1. Brand Equity 2.1.1. Customer-Based Brand Equity (CBBE) 2.1.2. Building Global Customer-Based Brand Equity 2.2. The Strategic Brand Management Process 2.3. Brand Revitalization 2.4. Designing Marketing Programs from a Branding Perspective 2.4.1. Integrating Marketing Activity 2.4.2. Personalization of Marketing 2.5. The Marketing Environment 2.5.1. Implications for Strategy 2.6. Conclusions on the Literature Review 3. METHODOLOGY 3.1. Data Collection Methods 3.1.1. Interview 3.1.2. Survey 3.2. Data-Analysis 3.3. Limitations 4. FINDINGS 4.1. Interview 4.2. Survey 4.2.1. Overall trends

Nokia’s Marketing Efforts 4.2.3.4. Smart Phone Industry Analysis of Finland 5.3. Main Findings 6. DISCUSSION AND ANALYSIS 5. Analysis of Interview and Survey Results 5. People’s Brand Perceptions about Nokia 4. In 1992 Nokia appointed Jorma Ollila as the new CEO and concentrated its focus .1 Background Nokia has come a long way to evolve from a paper mill founded in 1865 to a worldrenowned mobile phone manufacturer and one of the most powerful brands in the world. Suggestions for Further Research REFERENCES APPENDICES1 1.2. INTRODUCTION 1.2.4.1. Survey 5.2.2. Smart Phone Industry Analysis of USA 6.4.1. Similarities between Nokia’s Aspired Brand Image and the Brand Perception of Consumers 4.1.2.2. Implications for International Business 6.2.3. CONCLUSIONS 6. Interview 5.1.1. Limitations 6. Key Differences in Opinions between Finnish and US Respondents 5.2.1. Brand Loyalty4.3. Differences between Nokia’s Aspired Brand Image and the Brand Perception of Consumers 5.4. Analysis of Nokia’s Marketing Environment 5.1.2.

and phones using Google’s Android operating system captured market share from Nokia at an alarmingly increasing rate.2 The title of the thesis is “Improving Nokia’s Marketing Strategies for Smart Phones from a Branding Perspective in Finland and the United States” and the objective is to analyze .on telecommunications. Samsung. but Nokia’s effect is far from what it was in the early years of the 21 st century when Nokia accounted for almost half of the economic growth in Finland and produced as much as five percent of Finland’s annual Gross Domestic Product. In September 2010. In 2006. the appointment of the Canadian Stephen Elop as the new CEO of Nokia aroused adversarial feelings among people since Elop became Nokia’s first CEO not to originate from Finland. At the end of year 2010 Android was already the most widespread smart phone operating system in the world and Nokia’s market share in the smart phone segment had declined from 38 to 31 percent in one year (Sokala). In 1998 Nokia became the world’s largest mobile phone manufacturer with a turnover of 31 billion dollars. where competitors like Apple. HTC. Olli-Pekka Kallasvuo replaced Jorma Ollila as the CEO. but was not able to reverse the decline of Nokia’s market share especially in the high end segment. Nokia is still the most influential company to the Finnish national economy. The first major decision was to start extensive cooperation with Microsoft in February 2011. Throughout the 1990’s Nokia was known as a relentless innovator and a pioneer that made the world’s first satellite call among many other groundbreaking milestones. Blackberry. Elop was hired to change the course of Nokia and to stop the declining trend in Nokia’s global market share especially in the smart phone segment.

2 Research Problem The purpose of this Bachelor’s thesis is to find out if the Nokia brand can and should be revitalized and if the current marketing strategies for Nokia’s smart phones in Finland and the United States can be improved from the brand building perspective. To achieve this I will conduct interviews with people who are responsible for Nokia’s brand management and marketing. 1. Nokia should be able to regain its impressive global market share also in the smart phone segment. . I should be able to come up with ways to improve Nokia’s smart phone marketing in the two distinct geographical regions. I can detect where the aspired brand identity of Nokia does not meet the brand perceptions of the consumers. By narrowing the gap between Nokia’s aspired brand image and the brand perception of the consumers. To answer this question I will conduct a comprehensive smart phone brand perception survey to collect data from Finland and the United States.the dimensions of Nokia’s smart phone marketing that the customers do not agree upon or simply do not know about and improve them from a brand managing viewpoint. The last research objective of the thesis is improving Nokia’s current marketing strategies for its smart phones from a branding perspective in the countries subject to research.3 Research Objectives The thesis has three distinct research objectives. The second research objective of my thesis is to find out what is the consumers’ brand perception of Nokia at the moment. By utilizing the existing knowledge and literature on the topic. 1. By comparing the results of the customer surveys with the company 3 interviews. First of all I will try to find out what is the aspired brand identity and brand image Nokia is trying to convey with its smart phone marketing.

Moreover. 2. First. Nokia. Secondly. I have invented three research questions. LITERATURE REVIEW The purpose of this literature review is to discuss relevant writings on how to improve marketing strategies from the branding perspective. brand equity has been one of the most important marketing concepts to arise in the last few decades. favorability.4 Research Questions To help address my research objectives. Keller uses . Finally. Even though the literature on brand equity is rather fragmented. in his opinion. important terms such as brand equity and the concept of consumer-based brand equity are discussed.) Keller conforms to this as the key to increasing brand equity. Falkenberg states that brand equity is achieved when a firm is able to gain favorable associations towards a brand among targeted consumers (1996.1 Brand Equity According to Kevin Keller. the brand management process is discussed from a strategic viewpoint with the help of terms like brand revitalization and integrated marketing activity. and uniqueness of existing brand associations (53). I will be asking “How can Nokia’s marketing strategies be improved from the branding perspective?” 45 2. Also Davis regards brand equity as “a key marketing asset” (2000). the last section summarizes important conclusions on how the literature review relates to the company being observed. Like Farquhar. researchers seem to agree that brand equity stands for the added value transferred from the brand to the product (Farquhar 1989). the first one being “What is the brand image Nokia is trying to create in the minds of the consumers?” The second research question is “How do consumers perceive Nokia’s smart phone brands?” To tackle the third research objective. is improving brand awareness and the strength.1. The next part of the literature review concentrates on analyzing the marketing environment.

positive customer responses to the brand identity and the . Whereas brand equity was defined as the effect of the brand on marketing efforts.1 Customer-Based Brand Equity (CBBE) In relevant literature. the complex construct of brand equity has been scrutinized from two major perspectives: the financial and the customer-based perspective (Christodoulides and Chernatony 46). The Customer-Based Brand Equity models help understand consumer behavior and thus provide tools for the marketer to influence it.1.6 2. notes that brand equity might also be detrimental to the perceived value of a product by defining brand equity as the set of brand assets and liabilities that are linked to the brand name and add to or subtract from the value provided by a product or a service to the firm (7-8). on the other hand. According to the third step. because understanding consumer needs and devising products to satisfy those very needs is the key to successful marketing. The first step is establishing the brand identity in the mind of the consumer by ensuring identification of the brand and associating it with a specific customer need or product class. The basis for these models is the perspective of the consumer. Despite mild criticism towards Keller for relying strictly on consumer psychology. CBBE is defined as “the differential effect that brand knowledge has on consumer response to the marketing of the brand” (Keller 48). The second step involves establishing a brand meaning by linking both tangible and intangible associations to the product using points of parity and points of difference. Keller’s CBBE model relies on four sequential steps in building strong brands.the term brand equity to explain the different outcomes of marketing branded products when compared to marketing products that are not branded (37). Aaker. most conceptual research on brand equity acknowledges that brand awareness and brand associations are essential components of consumer-based brand equity (Christodoulides and Chernatony 47).

brand imagery. The third stage is formed by brand judgments and brand feelings. Figure 1: The Customer-Based Brand Equity Pyramid 2. they will have to be built around needs of a wide range of consumers with different cultural backgrounds (Marketing Week 2006). brand performance.8 . Another critical issue in global branding is maintaining the accumulated brand equity in the long run (Samli and Fevrier 207). a strong global branding strategy not only enhances. The Customer-Based Brand Equity Pyramid displays the four-step process with a pyramid consisting of six so called brand building blocks. According to Baker.brand meaning should be encouraged. there has also been a vivid discussion considering the key components of global brand strategies. but also protects a firm’s market position from competitors (591-594). Significant brand equity results only when the top of the pyramid is reached (Keller 60).1. The six blocks are brand salience. Judgments represent the customers’ personal opinions about the brand and feelings stand for the emotional responses and reactions to the brand. Last but not least the resulting brand responses have to be converted into an active and loyal relationship between the brand and its customers (Keller 59-60). The second stage of the pyramid consists of brand performance and brand 7 imagery. which depicts the level of customer identification with the brand (Keller 60-72). As there was much debate around the components of brand equity. where performance describes how the product or service meets customers’ functional needs and imagery describes the abstract imagery associations consumers have of user profiles and usage situations.2 Building Global Customer-Based Brand Equity When brands become global. The first block. brand salience. refers to the breadth and depth of awareness. brand feelings and brand resonance. The fourth and final step of the pyramid includes the brand resonance block. brand judgments.

4. Embrace integrated marketing communications (IMC). Keller suggests that Ten Commandments of global branding. 6. Balance standardization and customization. 9. 7. Understand similarities and differences in the global branding landscape. but a sufficient level of brand awareness and enough strong. that guarantee global success. 10. In his Strategic Brand Management textbook. Even if customers in different regions have similar preferences. and individual differences (Arnould. and sustaining brand equity should be applied (208).Leverage brand elements. suggest that in an effort to empower global brands. 3. Price. they may have totally opposing reasons for those preferences that reflect cultural. situational.1. and unique associations still have to exist before brand equity can be built further and leveraged (Keller 608-609). favorable. Establish operable guidelines. The sources of brand equity and the means of acquiring it may indeed vary between countries. Implement a global brand equity measurement system. 8. Cultivate brand partnerships. Balance global and local control. can be identified (Figure 2). a sequential three-step process consisting of strategic action. The logic behind these commandments is that the key to global success is taking advantage of local consumer behavior. The two approaches do not differ much from each other since they both emphasize the . Samli and Fevrier. Figure 2: The Ten Commandments to Global Branding (Keller 607). 2. Establish marketing infrastructure. Don’t take shortcuts in brand building. on the other hand. brand empowerment. and Zinkhan 288). 5.

Positioning should also clarify the points of difference (PODs) and points of parity (POPs) a company has over its competitors. After all. and unique associations to the brand (Keller 39). First of all it depends on the initial choice of brand identities and elements. favorable. where the brand identity includes everything that makes the brand unique and meaningful (Janonis. and creating sustainable global brand equity. As mentioned earlier.importance of strategic preparation. Furthermore brand positioning should specify the most important core brand associations that characterize the particular brand. Secondly. and finally Growing and Sustaining Brand Equity (38).9 2. sustainable and competitive brand positioning is all about “creating brand superiority in the minds of consumers. At the heart of the process is the understanding of what the brand represents and how it should be positioned against competitors. Planning and Implementing Brand Marketing Programs. The second step in Keller’s Strategic Brand Management Process is Planning and Implementing Brand Marketing Programs.” According to Aaker (1996) a brand position can be defined as a value proposition that is actively communicated to the target audience and that clearly demonstrates an advantage in comparison to competing brands (176). brand empowerment.2 The Strategic Brand Management Process Keller divides the process of strategic brand management into four steps: Identifying and Establishing Brand Positioning. the effectiveness of planning and implementation depends on how well the brand is integrated into the marketing activities . Defining a brand mantra or in other words defining the brand promise is also extremely useful in explaining to the consumers what a brand actually stands for (Keller 38). Dovaliene. a prerequisite for building brand equity is creating enough awareness to the brand and also linking strong. and Virvilaite 70). Measuring and Interpreting Brand Performance. This process for knowledgebuilding is dependent on three factors.

is a convenient tool for tracing the value creation process of a brand. To understand the effect brand marketing programs have on brand equity. Measuring and Interpreting Brand Performance is the third step of the Strategic Brand Management Process model used by Keller. the term Integrated Marketing Communication (IMC) will be discussed in more depth. The clever choice for a partner brand. The brand equity measurement system. Badrinarayanan. This notion has been reinforced by other researchers as well. Like Keller. and McDonald 69). Thirdly. on the other hand. the brand value chain.and the supporting marketing program. The final step in the strategic brand management process is Growing and Sustaining Brand Equity. The first one of the two. in De Chernatony. as Srivastava points out in his article in the Journal of Strategic Marketing (487). secondary associations “indirectly transferred to or leveraged by the brand as a 10 result of linking it to some other entity” have a large effect on the outcome of the brand equity building process (Keller 39). Later. because it helps to perceive the financial impact of investments in brand marketing. however. Some tools that have been coined to help in measuring brand performance are the brand value chain and the brand equity measurement system. since it is a critical component of brand equity related strategies (Madhavaram. extensive marketing research should be applied to assess brand performance (Keller 40). accurate. and Christodoulides 16). Measuring the effectiveness of a brand strategy is no easy task. “enables the brand to extend past its traditional competencies” (Uggla 105). Harris. Doyle gives significant credit to brand performance in determining the success of an entire business (qtd. supports profitable brand management by providing “timely. Managing a brand effectively calls for an intricate mixture of short-term . for example. and actionable information” for marketers to balance their tactics between short-term and long-term profits (Keller 41).

Evidence that the brand values were once contributors to the brand’s popularity is a good indicator of the future success of the revitalization process. is also important. revitalization strategies range from “back to basics” strategies to the pure reinvention of brands. Aaker (1991) states that the goal of brand revitalization is not only increased sales. Short-term marketing actions change brand knowledge and thus affect the success of future marketing actions as well. According to Keller. 2. effective brand equity management calls for active brand management in the form of brand revitalization in 11 addition to the long-term perspective (Keller 1999). The concept of brand revitalization will be discussed in the next section of the literature review. Sometimes. . Furthermore the extent to which the core brand associations still correctly position the brand by functioning as points of parity and points of difference is another factor of utmost importance (Keller 562). however. Another essential consideration is accounting for different types of consumers across geographic and cultural boundaries—equity has to be built on specific knowledge about the behavior of the different market segments (Keller 41). because it produces proactive strategies that enhance brand equity over time.3 Brand Revitalization A brand is most likely to respond well to revitalization efforts if there are clear and relevant brand values that have been ignored lately in the marketing communication and hurt by product related problems or cost reductions. are far more damaging than failures in marketing. Another important notion by Keller emphasizes that product failures. in which the brand fundamentally fails to deliver on its customer promise. where an insufficient amount of consumers are attracted to the brand (564). however. but also basing this increase on enhanced brand equity (242). An emphasis on the long-term view.view accompanied with long-term goals.

products can also be positioned for more frequent use.When a company understands the current and desired brand knowledge structures. which is a lot easier to manipulate than increasing quantity of consumption. and undesirable consequences of usage can be reduced in order to increase usage. the customer-based brand equity framework provides guidance on “how to best refresh old sources of brand equity or create new ones to achieve the intended positioning” (Keller 565). additional incentives can be provided. Repositioning of the brand comes down to simply introducing more compelling points of difference and establishing points of parity on some key image dimensions. Increasing the breadth of brand awareness by expanding usage and finding new uses for the brand is a powerful way to increase brand equity (Keller 566). favorability. and additional positive associations have to be created. the brand elements may also have to be reconsidered (Keller 568). Identifying new 12 usage opportunities and reminding consumers of them through marketing communication increases the frequency of use. and uniqueness of brand associations that make up the brand image. negative ones have to be neutralized. BRAND REVITALIZATION . According to Aaker. fading positive associations have to be bolstered. Figure 3: Brand Revitalization Strategies (Keller 583). To convey the new meaning to the public. To accomplish this repositioning. The model consists of two options: expanding the breadth and depth of awareness and improving the strength. the usage can be made easier. favorability. Fundamental changes are sometimes necessary to improve the strength. and uniqueness of brand associations and thus the entire image of the brand.

STRATEGIES Refresh old sources of brand equity Expand depth and breadth of awareness and usage of brand Increase quantity of consumption Increase frequency of consumption Identify additional usage opportunities Identify new ways to use the brand Create new sources of brand equity Improve strength. favorability. and uniqueness of associations Bolster fading associations Neutralize negative associations Retain vulnerable customers .

1 Integrating Marketing Activity The improved connectivity.Recapture lost customers Identify neglected segments Attract new customers Create new associations13 2. these abilities include the consumer’s capability to obtain large quantities of information about practically anything and the capability to conveniently interact with other consumers. . growing disintermediation.4 Designing Marketing Programs from a Branding Perspective 2. increased customization. The marketing environment of the 21 st century has altered the way marketing programs are developed. Marketers around the world are increasingly waiving so-called mass-market strategies in the face of new approaches. Especially personalization and integration of marketing communication have become essential requisites for building strong brands as activities are built to appear more and more meaningful to specific target markets (Keller 186). and blurring of industry boundaries among other drivers have provided consumers and companies with unforeseen abilities (Keller 185).4. For consumers. For companies the change has meant that they now have an augmented geographic reach and that they are able to customize their offerings more efficiently.

Integrated Marketing Communication is simply “the integration of advertising and promotional activities” (Luck and Moffatt 311). Despite recently becoming something of a standard for marketing organizations, integrated marketing communication is still prone to cultural divergence and some underlying weaknesses in its current processes can be identified (Kitchen, Ilchul, and Schultz 531). Drobis goes as far as saying that IMC as we know it is dead, because it stands for many things, but nothing in particular (1). Knowing the shortcomings of the traditional Integrated Marketing Communication, Finne and Grönroos offer an interesting concept called relationship communication, where the responsibility of integrating the marketing messages is transferred to the consumer. After all, it is the receiver who decides if the marketing messages are well integrated in the end (193).14 2.4.2 Personalization of Marketing Keller writes that to address the consumer desire for greater personalization of marketing, concepts such as experiential marketing, one-to-one marketing, and permission marketing have been exploited lately (188). Experiential marketing refers to the idea of connecting the product with pleasant experiences and to the idea of enriching a customer’s life. According to Bernd Schmitt “The degree to which a company is able to deliver a desirable customer experience— and to use information technology, brands, and integrated marketing communication and entertainment to do so—will largely determine its success in the global marketplace of the new millennium” (qtd. in Keller 188). The fundamental reasoning behind one-to-one marketing is that marketers are better able to create customer value if they listen to the information consumers provide to them and use it to generate rewarding experiences. This approach not only creates switching costs, but it also maximizes the utility for consumers, which in turn helps in

building profitable relationships between the firm and its customers (Keller 190). According to Keller, one-to-one marketing is based on simple strategies. First of all consumer databases should be taken advantage of by focusing on individual customers and treating them differently according to their preferences, because customers have different needs. Majority of the marketing efforts should also be steered towards the most valuable customers, because not all customers have the same value to the firm in the long run. Secondly consumer dialogue should be interactive, which is in sync with the goal of increasing brand resonance that occupies the top of the Customer-Based Brand Equity Pyramid. Thirdly products and services offered by the company should be customized to address particular needs and to encourage positive brand associations of uniqueness (Keller 190-191). Permission marketing is the third concept that has been introduced following the growing focus on personalization of marketing. It refers to those marketing efforts that 15 start only after gaining the permission from the consumers. Permission marketing aims at reaching a contact with the customer and crafting customer loyalty. The key to success is respecting the wishes of the consumers. By eliciting consumer cooperation amidst the miscellaneous marketing communication of today, marketers are more likely to develop strong and long-lasting customer relationships, because consumers deliberately express their willingness to become more involved with the brand (Keller 192). Technological advances in areas like software development and database management allow companies to store and efficiently process loads of customer data to come up with personalized and targeted marketing messages to customers. Over time the ultimate goal is to create profits by leveraging the permission given by the consumer (Keller 192-193). Although permission marketing cultivates the idea of improving the dialogue between the consumer and the firm, it is somewhat restrained by the fact that it

assumes that consumers know exactly what they want. Instead of relying totally on the consumers, marketers must instead cooperate with the consumers to come up with innovative solutions on how to best satisfy customer needs (Keller 193-194). 2.5 The Marketing Environment The rivalry resulting from the threat of new entrants, the threat of substitute products, the bargaining power of suppliers, the bargaining power of buyers, and the rivalry among existing competitors illustrates the competitive interaction within an industry. These underlying determinants of profitability are more or less the same regardless of the industry. The competitive structure, manifested in the above mentioned five forces, measures the long term attractiveness of a particular industry by determining how the economic value is divided between the parties involved—the competitors, the suppliers, and consumers (Porter 78-93)16 2.5.1. Implications for Strategy Careful analysis of the five forces of the competitive environment provides strategists with many opportunities. One important implication is that the relationships between the five forces may reveal positioning opportunities in the industry such as establishing strong links with the most important suppliers. In addition, understanding the principles behind industry profitability helps companies shape the industry structure and standards more to their liking by inventing new ways of competing inside the industry. Whenever sophisticated understanding of the principles exists, all changes in the industry can be considered as opportunities to claim a more profitable strategic position in the competitive landscape (Porter 78-93). When using the five forces model to assess market attractiveness, it is important to remember that the forces are heavily interdependent and cannot be evaluated separately. Furthermore the traditional model is often described as static since it does

According to Interbrand. The often cited consumer-based brand equity model approaches brand equity from the consumer’s perspective. In other words the impact of marketing on brand equity should be equal between different types of marketing activities as long as the associations created are identical. Another interesting implication of using the customer-based brand equity model is that the way brand associations are created is no longer as relevant in the modern world of marketing—what matters nowadays is simply the resulting awareness and the strength. It can be described with a pyramid model consisting of different levels of attachment between the brand and the 17 consumer. Conclusions on the Literature Review According to the literature discussed. and uniqueness of the brand associations. the resulting perspective is much more dynamic and comprehensive (Grundy 213-229). Hence marketers should concentrate on creating marketing programs that consist of seamlessly integrated solutions and customer experiences that increase awareness. When these additional factors are added to the analysis. Nokia was still among the ten most valuable global brands in the world in 2010 with a brand value of nearly 30 billion US dollars. brand equity is without a doubt an important marketing concept that either adds to or subtracts the value of the product or service. In Nokia’s case it is important to determine. precipitate demand. 2. A prerequisite for building and leveraging accumulated brand equity is creating enough strong. but its brand value had declined 15% in one year whereas Apple’s brand value had soared up 37% (Best Global Brands Ranking for 2010). and unique brand associations in the minds of the consumers. favorability. and .6.not take into account the effect of time and industry cycle on the five forces. which step of the pyramid they are currently occupying in which countries in order to continue forward progress. favorable. This claim is not dependent on whether the firm is operating domestically or internationally.

Even though they concentrate on reinforcing different building blocks of the Customer-Based Brand Equity Pyramid. one-to-one marketing. and exact research questions that lead to conclusions on a real-life phenomenon. clear research objectives. revitalization efforts should yield positive results. the different marketing environments of Nokia both in Finland and the United States have to be carefully analyzed in order to constitute a comprehensive understanding of the principles and forces behind the competitive environments. if people are willing to agree that the core brand associations are still intact. Finally. From a branding perspective. the new approaches to marketing are useful in forming positive brand responses and encouraging brand resonance. as long as they can create awareness and encourage positive brand associations. it has to find a way to differentiate from the others in a meaningful way. they simultaneously add to brand equity by strengthening the bond between the consumer and the brand.18 Nokia’s task is to choose the right tools from the pool of new approaches to marketing in order to climb up the brand equity ladder. METHODOLOGY This Bachelor’s Thesis is a case study with a conceptual research design since it consists of a defined research problem. and permission marketing all strive for getting consumers actively involved with a particular brand. If Nokia wants to gain a competitive advantage over other smart phone brands.embrace loyalty (Keller 187). As Nokia was once considered as the pioneer in the mobile phone industry. This means that Nokia is not restricted to any certain type of marketing communication.19 3. The thesis includes . These insights can then be used to take advantage of the inherent opportunities. The first and most important step in the strategic brand management process is brand positioning. Experiential marketing.

2011. Thus the respective response rate was 38. The survey was started 155 times and completed 125 times with a completion percentage of 81%. Interview Qualitative research and analysis methods were used to assess the depth interview (Appendix 1) conducted on the fourth of February.1. The survey itself consisted of 23 actual questions and five classification questions. because the aim is to improve Nokia’s existing marketing strategies in different regions based on potentially differing brand perceptions prevalent in these areas. The interview was conducted at Nokia’s headquarters in Keilaniemi and it lasted for approximately an hour. with Mr. Data Collection Methods 3.1.empirical as well as descriptive elements. An online consumer survey (Appendix 2) was created with the Qualtrics-software and distributed to approximately 400 people in Finland and the United States through e-mail and social media networks. Survey To find out consumers’ brand perceptions of Nokia. both qualitative and quantitative methods are utilized. the Vice President of Nokia’s Brand and Marketing Portfolio Management. 3.2. but they also provided useful ideas and additional questions for the consumer survey. quantitative research and analysis methods were utilized. There are several contexts to the research. Pekka Somerto. The questions asked were chosen based on the literature discussed in the literature review. To tackle the research objectives. The results of the interview not only helped in reaching the research objective. .20 3. and with the overall goal of improving Nokia’s marketing strategies for smart phones from the branding perspective. Of the respondents. The interview consisted of thirteen questions and the purpose was to find out about the brand identity Nokia tries to create with their marketing.25 percent.1.1. 63% were male and 37% female.

2. the third section on brand loyalty.3. It was followed by the identification of significant regional differences between the responses with the help of cross tabulations 3. and the depth interview conducted with the company representative of Nokia. but some respondents also study in a Polytechnic institute or have at least a master’s degree. so the results were heavily dependent on the personal opinions of the interviewee. The questions of the survey were based on the literature discussed in the second part of the thesis.Similarly to the gender distribution. Most respondents earn less than 50. A clear majority of the respondents study in a University or have a University background. Limitations Only one interview was performed to find out Nokia’s aspired brand image. In addition. the questions were shown to the respondent only half an hour before the interview. Data Analysis The data analysis of the survey results started with a general analysis of the averages and apparent trends. approximately 60% of the responses came from Finland and 40% from the United States.000 US dollars.000 US dollars annually and very few exceed annual earnings of 150. so all of the answers might not reflect the exact position of the company since the respondent did not have the chance to go through the answers with anyone else from the company. The objective of the survey was to find out if the consumers perceive Nokia similarly to Nokia’s aspired brand identity. the research questions. . The average respondent was approximately 25 years old. the second part on Nokia’s smart phones and their marketing. The survey had four distinct parts where the first part concentrated on questions about smart phones in general. the youngest being 19 years and the oldest 42 years old.21 3. and finally the fourth part on classification of the respondents.

These two associations are rather vague from a marketing standpoint. and stylish. Nokia has wanted to be known for producing reliable mobile phones that are easy to use.1. are sustainability and environmental responsibility. because if a brand is to be successful. since they do not have much in common with the other traits Nokia wants to . which somewhat diminished the applicability of the rest of their answers. Pekka Somerto. the brand has to deliver on its promise to the customers and furthermore all the employees have to know what the brand stands for. innovative. The aspired brand image of Nokia was deducted from the depth interview with the company representative and the brand perceptions were determined from the answers to the international customer survey. in addition to reliability. was the narrow sample size. Later on the similarities and differences of the findings between the interview and the survey are highlighted. This is important. What was surprising about the interview was that the most important brand associations Nokia strives for. Interview According to the interview with Mr. Throughout their stint in the mobile phone manufacturing industry. on the other hand.” This idea is clear to all employees at Nokia despite the fact that over the years the meaning of the phrase has evolved to connecting with everything instead of just other people. 4. Nokia’s Vice President of Brand and Marketing Portfolio Management.2223 4.The biggest limitation of the survey. FINDINGS This section lists the most important findings from the interview and the customer survey. where university students were overrepresented when compared to the actual demographic structures of the targeted countries. Nokia’s so called brand promise since the 1990’s has been “connecting people. In addition not all people answered all of the questions.

Survey 4. One of the most important findings of the interview was that Nokia wants to emphasize how their products can improve the quality of life in all aspects. over 70% of the respondents that live in the US did not mention Nokia among three smart phone brands that compete in their home country. Overall Trends According to the survey findings. Their latest smart phone advertising campaign revolves around the theme of re-defining success. the company mainly emphasizes the functional benefits of Nokia phones such as voice quality and battery life. which underlines that Nokia smart phones help individuals determine their own success by allowing them to express themselves freely. but at the same time they are applying principles of hyper-locality.be known for and they seem like irrelevant associations to some key influencers of the smart phone market segment. however. Nokia would like to appear younger in the eyes of the consumers and they would also benefit from being more agile in reacting to the fluctuating markets.2.2. To generate positive emotional associations. They target the active participants in the cell phone market and concentrate especially on the first movers in the industry. 4. Nokia segments its customers in different destinations based on demographic data and the purchasing power of the people who live there. The interview also pointed out that Nokia wants to achieve a unified visual approach in its marketing.1. and the possibility to customize the user experience as much as possible. The interviewee believed that the most important smart phone features for users are the amount of applications available. Furthermore he added that the major breakthroughs in the near 24 future would be made in the user interface development of smart phones to enable effortless control of the smart phone device. .

26 # Question Not at all Important Unimportant Neither Important Nor . 25 Mentioned among competitors Apple Blackberry HTC Nokia Samsung Finland 91.8 % Figure 4: Percentage of mentions among the top three smart phone brands Almost half of the respondents (46 percent) said that Apple’s iPhone is their preferred smart phone brand. Nokia was the second most preferred brand far behind with 18 percent.68). the results did not vary significantly between the countries subject to research.7 % 28.44). Apple was only a few percentage points ahead of Nokia.51 closely followed by ease of use (mean 4.60 on a five-point scale. This result indicates that Apple’s dominant position is not solely based on personal use experience. The most important smart phone feature for the respondents was Internet connection with a mean of 4.9 % 15.5 % 25.8 % 44. Longer battery life was also the most common suggestion for improvement among the respondents.4 % 39. Apple was clearly the most popular choice as over 85% of the respondents mentioned it as a competitor both in Finland and the United States.0 % 64. however.52. Battery life came in second with a mean of 4.More alarmingly. The most unimportant feature for the respondents was camera (mean 3. When asked about which smart phone brands the respondents actually own.4 % 39. approximately one third of the respondents from Finland did not mention Nokia as a competitor either. Reliability of functions was number three with a mean of 4. but rather on brand image and word of mouth appraisal. Interestingly.7 % 36.0 % USA 85.

etc.07 12 Additional features such as calendar.68 4 Design 0 7 16 81 46 150 4.09 Figure 5: Smart phone feature appreciation Practically every respondent was familiar with the cell phone brand Nokia (99 percent).52 3 Camera 1 16 41 64 28 150 3.51 10 Screen size and resolution 0 4 19 93 34 150 4. . navigator.44 6 E-mail 3 13 23 48 62 149 4. please specify: 2 1 7 5 18 33 4.05 11 Technical aspects such as voice quality 2 7 23 64 54 150 4.03 7 Internet connection 0 3 9 33 105 150 4.95 2 Battery life 0 1 7 55 87 150 4. 2 6 33 77 32 150 3.92 9 Reliability of functions 0 1 8 54 87 150 4.11 5 Ease of use 0 1 14 53 82 150 4.60 8 Memory capacity 0 10 28 76 36 150 3.Unimportant Important Very Important Responses Mean 1 Applications (Apps) 4 6 27 70 43 150 3.87 13 Other.

but the average was only slightly above neutral stance. the respondents were asked to name the first smart phone brand that comes to mind when speaking of innovative smart phones. Nokia was mentioned as the most innovative brand by only 3% of the respondents in Finland and quite astonishingly by none in the United States. Furthermore. When asked about the level of satisfaction with Nokia’s smart phones. only 8. 77% of the respondents mentioned Apple’s iPhone as the trendiest smart phone on the market.but still only 30 percent indicated they have at some point actually owned a Nokia smart phone. the majority indicated that they were satisfied with the phone. Moreover. The average score among those who had an opinion was between “Neither Good or Bad” and “Good”.5% of the respondents indicated that they were very satisfied with their Nokia smart phone. when asked about trendy smart phone brands. 45% responded that they are of good quality. while the second most common response was HTC with about 16%. 23% of the people did not have an opinion. When asked about the perceived quality of Nokia’s smart phones.27 The respondents were also asked to assess the perceived value of Nokia smart phones. The Most Innovative Smart Phone Brand . The results quite clearly indicate that the reason for the mediocre consumer satisfaction is not caused by problems with the perceived quality or the perceived value of Nokia’s smart phones. Approximately 65% of the respondents thought of Apple first. Apple was even more dominant. Only 2% of the answers indicated “Very High” perceived value. To find out about consumer perceptions on innovativeness. HTC came in second with 9% of the nominations while Nokia did not receive any consideration. Of those who had an opinion. Most of the respondents (32%) thought that the value of Nokia’s smart phones is “Neither Low nor High. however. but 27% thought they actually offer “High” value.

9 % 3. people were asked to describe Nokia if it was an actual person. Only few people mentioned Nokia’s superior camera or the complimentary navigation service as points of difference. chose to agree with the statement: “I am loyal to smart phone brands. the most common adjectives appeared to be big. The clearest consensus between the respondents was that while Nokia is smart and reliable. 28%. The most common positive characteristics mentioned were reliability and good quality.2. The largest percentage of the respondents.2. it is also unexciting and old when thought of as a person.4 % USA 68.0 % Figure 6: People’s perception of the most innovative smart phone brand on the market 4. slow.2 % 0.3. People’s Brand Perceptions about Nokia To assess consumers’ brand perceptions on Nokia. Moreover many respondents wrote that it is hard to differentiate between smart phones and now that Nokia has abandoned its own Symbian operating system it will be even harder for Nokia to differentiate from competition in the future. and unimaginative. Another interesting notion from the survey was that people could not consistently pinpoint how Nokia differentiates itself positively from the competitors in the smart phone market.4 % 13. 4. Brand Loyalty The results of the survey indicated that people consider themselves rather loyal to smart phone brands. When the respondents 28 were asked to describe Nokia as an organization. However.4 % 16.2.Apple HTC Nokia Finland 64. Nokia’s products were also frequently described as old-fashioned and outdated. Finally.” When asked about brand loyalty towards . the respondents were asked to describe Nokia’s smart phones with a few words.

In contrast. 4.4. Interestingly. and positive word of mouth recommendations were far less significant when deciding when to switch between smart phone brands compared to the actual usage experience.3. Similarities between Nokia’s Aspired Brand Image and the Brand Perception of Consumers Several similarities between the aspired brand image of Nokia and the brand perceptions of the consumers can be identified by comparing the answers to the interview and the survey. the image of Nokia as a brand that facilitates . First of all. the majority of the respondents (57%) could not remember any marketing efforts by Nokia. discounts. On top of that 17% of the respondents could not even form an opinion on the level of effectiveness based on their rare encounters with Nokia’s marketing communication. Nokia’s Marketing Efforts Quite shockingly. availability. Most commonly remembered marketing efforts were sporting event sponsorships and the campaign for the N8 phone. it turned out that people are the least brand loyal to Nokia and the most loyal to Apple. Most people indicated it would be “Very Unlikely” for them to switch to another brand if they owned an Apple smart phone.2. Apple was also the most polarizing brand among the brands surveyed.” The effectiveness of Nokia’s marketing efforts did not receive much praise either. which surveyed over 1. Many people could also recall Nokia’s slogan “Connecting people. This finding is also supported by a Finnish mobile analytic and market research firm Zokem.500 smart phone owners in the United States (Barrett). Although important. Only 7% of the respondents combined thought Nokia’s current marketing efforts are either “Very Effective” or “Effective”. but at the same time the largest number of respondents would also “Very Likely” switch to another brand if they owned a smart phone by Apple.specific brands. 58% judged Nokia’s marketing either “Ineffective” or “Very Ineffective”.29 4.

To begin with there was a clear contradiction between Nokia’s aspiration for innovativeness and agility and the opinion of the respondents.30 4. Nokia also agrees with the respondents that the ease of use of smart phones is of particular importance. The survey results nevertheless implied that applications are nowhere near the top priorities of smart phone users. All the same. however. DISCUSSION AND ANALYSIS In this section the findings from the interview and survey will be analyzed in the light of . As we saw from the survey results. Differences between Nokia’s Aspired Brand Image and the Brand Perception of Consumers Despite many similarities. Furthermore Nokia is usually seen as a reliable brand that does not fail to deliver on its fundamental customer promise. Recently. Unfortunately Nokia has not yet been able to successfully produce smart phones that would substantially stand out with their user friendliness.31 5. battery life is also the most important feature for many smart phone users. Another noticeable difference was that Nokia received no credit for its attempts at environmental responsibility although it was clearly stated as one of the top priorities by the management.4. the research also showed numerous issues where Nokia’s management seemed out of sync with the consumers. probably the biggest surprise was that Nokia’s marketing efforts are commonly regarded as hard to recall and ineffective. Nokia has had some reliability issues especially when it comes to adhering to pre-determined deadlines. The interviewee firmly believed that applications are the most important feature for smart phone users alongside an easily customizable interface. Nokia was often referred to as a sluggish and oldfashioned company. In the survey.communication with other people is clear for both the organization and the consumers. Another thing Nokia has been trying to emphasize lately is the functional benefits of Nokia’s smart phones such as battery life.

since the customer-based brand equity pyramid shows that the most profitable results are achieved only when an active and loyal relationship between the firm and the customer is established. .1. Furthermore. such relationships can be formed through providing the customer with rewarding experiences and understanding his or her special needs. 5. improving the strength. favorability. Analysis of Interview and Survey Results 5. The effort is understandable. Moreover. as the section on personalization of marketing indicates. As we learned from the literature review.32 Marketing According to the interview. Being able to differentiate from competition in the smart phone market is considered to be hard. Nokia is trying hard to link associations of uniqueness to its products.1. understanding that easily customizable products are seen as more unique by the consumers. Interview Brand Equity As the literature review pointed out.the literature discussed in the literature review. Hence by consistently underlining the importance of reliable products. paying attention to the local consumer is important and the starting point should be the special needs of the local consumer. and uniqueness of brand associations is a key factor in building brand equity. which makes pursuing uniqueness an even more justifiable goal. Furthermore. Nokia makes changes to its marketing mix in different countries based on demographic data and the purchasing power of the people. Nokia’s willingness to change and become more customer oriented can clearly be seen from the interview.1. Nokia has been able to successfully strengthen the favorable association of reliability towards its brand name in the minds of the consumers.

As it was discussed in the literature review.when assessing the overall attractiveness of the market. but still the consumers are not aware of such benefits. these efforts should be directed at Nokia’s most valuable customers instead of the key . Through more thorough personalization of marketing efforts. Currently Nokia is running a global advertising campaign called success re-defined. In Finland. in which different people tell how Nokia’s smart phones enable them to redefine success for themselves and help in expressing it forward. Nokia should be able to remind consumers more effectively about the small improvements to the quality of life that Nokia believes can be made with their smart phones. Analysis of the company interview revealed that the positioning of Nokia in regard to the competitors in the market is not totally clear even to the employees. however. In the future Nokia’s positioning should be more clearly communicated inside the company as well 33 as to the public. All Nokia’s marketing aims for a unified visual approach with the blue color being the common factor. Integrating all marketing communication at least from a visual standpoint is justifiable. Self-expressive benefits are an integral part of marketing for Nokia. In that case it is up to the receiver of the messages to decide if the brand is communicated in a meaningful way and that the communication is enough integrated to reinforce similar associations between different media. tools such as the five industry forces model by Michael Porter should be utilized as an integral part of the strategic preparation process. if only the needs of consumers with different cultural and economical backgrounds can be taken into account sufficiently at the same time. In addition only the most relevant points of parity differentiation should be emphasized in all marketing efforts. snowboarders and models are used to endorse Nokia’s products in an effort to leverage the equity of the celebrities and to elicit more positive brand associations towards Nokia.

and transparency and to negate the negative associations of sluggishness and obsoleteness.34 Brand Equity Another finding highlighted by the survey was that in Finland Nokia is stuck on the second step of the Consumer-based brand equity pyramid since it cannot evoke . most of the brand associations associated with Nokia are actually detrimental to the brand and it faces a tough battle trying to revitalize the brand and position it in a way that attracts customers that are currently using competitors’ products. since the key influencers are not a homogenous group and engineering compelling marketing messages for these people is much harder. Survey Positioning The survey indicated that Apple has been able to establish superiority particularly in the minds of the consumers since many people prefer Apple’s smart phones even when they have never owned them. 5. agility. the reasoning behind the revitalization efforts is the intention to regain the fading associations of innovativeness.1.2. According to the literature review.influencers among smart phone users. Nokia should respond positively to the revitalization endeavors since the positive values being bolstered were actually once the determinants of success for Nokia and the recent struggles have not been caused by fundamental product failures. At the moment. In Nokia’s case. The key here is to differentiate Nokia’s products in a meaningful way to the target market and to consistently deliver on the brand promise and the new positioning. Brand Revitalization Brand revitalization is all about refreshing former sources of brand equity or alternatively creating new ones to achieve an intended positioning in relation to the competition.

A worrying finding from the survey was that Nokia does not seem to be a part of the smart phone consumers’ consideration set. but because it was not . It will be interesting to see if Nokia and Microsoft can leverage each other’s positive brand equity and rise up to the challenge of the currently dominant players in the highly competitive US smart phone market. it will not be able to turn around and stop its decline in the smart phone industry. If Nokia does not start listening to the consumers more. but it is another thing to be acknowledged than to create a positive brand image and encourage favorable brand associations.35 Marketing Nokia’s marketing efforts were not found to be very effective. This is also apparent when comparing Nokia’s take on the most important features of a smart phone with the opinion of the consumers. while the consumers think that it is one of the most irrelevant features in a smart phone. for Nokia’s identity is not clear to the majority of consumers and there is not much depth to the brand awareness. To get to the upper levels of the pyramid where brand responses and relationships can be fostered. In USA. Pairing up with Microsoft was a good way to increase people’s awareness.unanimously favorable and unique brand associations even though people have broad awareness of its products and the performance of its products is mostly perceived in a positive manner. This is in clear conflict with Nokia’s object of appearing attractive to the key influencers of the target market. Nokia’s situation is even more worrying. The perceived marketing was not necessarily ineffective because the marketing was of low quality. Lately Nokia has been concentrating on differentiating with a superior camera. Nokia has to first revitalize the correct brand associations. Many people could not specify even a single marketing effort by Nokia. The results are a clear indication that Nokia is often not even seen as worthy of consideration when thinking of purchasing a smart phone.

Samsung. the rivalry among existing smart phone brands is significant since there are several strong competitors in the market such as Nokia. People from Finland and the United States seem to agree that Nokia’s products are reliable and of good quality. Furthermore the combination of using snowboarders in their advertisements and being visibly present in the snowboarding scene is a perfect example of integrating marketing activity in a meaningful way. Key Differences in Opinions between Finnish and US Respondents According to the survey.1. but their images of Nokia as an organization are more distant. Furthermore Nokia’s brand personality in Finland is thought of as modest. the key differences between the opinions of the Finnish and US respondents have to do with the organizational associations of Nokia. which is a sign that the consumers agree with the promise. Smart Phone Industry Analysis of Finland Rivalry among Existing Firms In Finland.2. What was promising about the survey results probing the effectiveness of Nokia’s marketing was that people could easily recall Nokia’s brand promise “Connecting people”. whereas in the US most people think that Nokia is downright irrelevant and uninteresting. Another positive indicator was that people remembered Nokia sponsoring the recent snowboarding world championships. ZTE.2.quoted by the receiver in the first place.1. but in the United States people think that Nokia is shy as it has not reached out for them aggressively enough. Furthermore the relative size of the competitors is evening out as the old .36 5. Establishing a successful presence in an event full of young smart phone users is a good way to appear more youthful in the eyes of the public. Analysis of Nokia’s Marketing Environment 5. 5. Apple.3. most people at least regard Nokia as an important player in the smart phone industry. and HTC. In Finland.

however. which makes it harder for the new entrants to attract new customers away from competitors Bargaining Power of the Buyers In Finland. Threat of New Entrants The threat of new entrants to the Finnish smart phone market is also considerable. buyers’ bargaining power is rather high. which increases the strategic stakes of competitors in the market. Thus the sellers . All in all it is hard for the existing competitors to protect their market share since the industry is growing rapidly. the products already on the market are not that diverse.powerhouses are losing market share to the newcomers thus creating a balanced and less concentrated market. There are. because there is a wide range of brands on offer and there are not many buyers relative to the sellers. Last but not least Finnish people consider themselves rather loyal to 37 smart phone brands according to the survey conducted. The smart phone industry as a whole is growing fast. and there are not major switching costs for the buyers since the phones are not strictly bound to different operators. some substantial barriers to entry as well. First of all entering the smart phone market requires large capital investment and it is hard for the entrants to catch up with the existing economies of scale of the established competitors. In addition not many brands have been able to substantially differentiate from competition thus keeping the switching costs between brands low. Additional proof of the intensity of rivalry can be seen in the recent and sharp decline of market share of previously strong competitors such as Motorola and Sony Ericsson. which has been proved true by the late surge of new competitors such as ZTE and many other manufacturers capitalizing on the hugely successful Google Android operating system. In addition some brands have already been able to differentiate in a positive manner—Nokia is one of the most popular business phones among companies.

smart phones are constantly becoming more valuable for the consumers because of their versatility. the number of possible substitutes becomes larger. and tablets. Smart Phone Industry Analysis of USA Rivalry among Existing Firms Rivalry in the USA is even fiercer than in Finland. 5. Bargaining Power of the Suppliers The bargaining power of suppliers is at a very high level in Finland. and there are not many substitute supplies available for the buyers. In Finland the threat of substitute products is on one hand low. but at the same time smart phones become more invaluable as their versatility increases. There are more noticeable competitors such as Blackberry by RIM and the Windows Phone and the competitors . There are also considerable switching costs present in switching suppliers and altering the distribution channels. Threat of Substitute Products Substitute products are an interesting topic when speaking of smart phones. Some examples are laptops. which decreases buyers’ bargaining power slightly.2.have to compete over the consumers. In Finland. but on the other hand. because they act as substitutes for so many products themselves that it is hard to take into account all the products that may in return act as substitutes for smart phones.2. because tablets and other newly introduced products are not yet widely popular. because the suppliers are concentrated. On the other hand. As the smart phone features become more numerous. because some people still prefer laptops and other more traditional products in daily use. TVs. the smart phone manufacturers have had to conform to the delivery problems of the suppliers since there is no significant competition between hardware suppliers in the smart phone industry. the threat of 38 substitutes is high.

Since there are not many suppliers to choose from. Bargaining Power of the Buyer The buyers’ bargaining power in the United States is high. the threat is not as big as in the Finnish market. Threat of Substitute Products As in Finland. Main Findings The key differences between Nokia’s own brand image and the image shared by the consumers have to do with the perceived agility. and the importance of the suppliers’ 39 input is of utmost importance. but less significant than in Finland. Furthermore the threat of backward integration by the buyers is very small.4041 6. CONCLUSIONS 6. Threat of New Entrants New entrants are always a threat in the US market.are also more evenly matched. but because smart phone companies have a restricted access to the distribution channels due to the small number of operators. Bargaining Power of the Suppliers The suppliers in the US have an equally strong position when compared to their counterparts in the Finnish market.1. because the ratio between buyers and sellers is larger and there are more inevitable switching costs to the buyers. innovativeness. because people are more used to the latest technological appliances and are better informed of the latest trends. the availability of substitute inputs is nonexistent. buyers do not have much say when negotiating with the suppliers. but in USA the situation is even more threatening. and accountability of . Furthermore there are larger switching costs to buyers since smart phones in the US have traditionally been closely tied into particular operators. there are a variety of substitute products available.

By revising their marketing strategies there is no doubt Nokia will be able to improve its positioning in the smart phone market and conquer at least some market share back from the recently emerged competitors. Nokia is perceived by some as lazy. However. according to the literature and findings. Nokia as a company is starting to be seen as somewhat undependable. It has become obvious that the once admired Nokia brand can and should indeed be revitalized. An important feature of these fresh approaches to marketing such as relationship communication and personalized experience marketing is that they do not ignore the important aspect of brand building. which is especially true for the smart phone segment. The research has demonstrated that there are multiple ways in which Nokia can improve its current smart phone marketing strategies.42 In order to improve Nokia’s existing smart phone marketing strategies from the branding perspective. First of all Nokia should . Nokia’s future is not necessarily doomed. quite a few concrete suggestions can be made. because they have consistently been late with the launches of their smart phones since 2009 (Hardawar). The research on the topic has shown that the positive brand associations people have about Nokia are eroding quickly in the face of negative ones and that Nokia is becoming an increasingly irrelevant player in the smart phone market. Even when Nokia’s products are still commonly regarded as reliable. Furthermore Nokia should respond well to the revitalization efforts. especially when compared to competitors like Apple and HTC who have enjoyed the most success as of late. and unwilling to react to competitors by becoming more agile and innovative. Moreover Nokia has spent a lot of time developing new hardware.Nokia. arrogant. Nokia is definitely no longer the forerunner in the mobile phone industry it once was. if only these efforts focus on meaningful values such as reliability and innovativeness that used to describe Nokia at its prime. As a result.

continue unifying the visual elements of their marketing communication. An example of this integration would be the common blue color theme Nokia is utilizing in different media. According to the survey conducted. to refresh Nokia’s old sources of brand equity. or creating new ones. Another way to improve the effectiveness of their marketing is to increase the amount of sponsorship agreements and celebrity endorsers. paying close attention to the brand revitalization framework introduced earlier would significantly improve Nokia’s marketing. attracting previously neglected . As Nokia is already popular and trusted among companies and business users. Furthermore. Sponsoring events like the snowboarding world cup is a powerful way to shape Nokia’s image for the better and also to shake off the reputation as the choice of exclusively the business people. launching a tablet device with Microsoft that has the ability to take full advantage of Microsoft Office would be ideal in order to increase the usage of the Nokia brand in a way that is hard for the competitors to match or to retaliate. recapturing lost ones. All these measures contribute to retaining vulnerable customers. According to the brand revitalization framework. favorability. which is in accordance with the principles of integrated marketing communication. the strength. and uniqueness of brand associations have to be improved to create new sources of brand equity for Nokia. the usage of the brand has to be increased through identifying and introducing additional usage opportunities. neutralizing negative associations. Entering the tablet device market would also refresh people’s perceptions about Nokia’s innovativeness and gain them a foothold in a market that is growing steadily and should only gather more momentum in the upcoming years. these methods are clearly the most efficient in an effort to increase awareness and appear more youthful and approachable among smart phone consumers. This can be done through either bolstering fading associations. According to the framework.

To negate the unpleasant associations of being old-fashioned. This would also contribute to creating positive buzz around the recently announced collaboration agreement between Nokia and Microsoft that was originally not met with much excitement.segments. it is of utmost importance that Nokia launches any kind of product together with 43 Microsoft no later than the end of the present year 2011. and simply accumulating new customers. Nokia should engage its consumers more relentlessly in the social media. are inevitably going to be put down as a result of the cooperation with Microsoft. Nokia’s current operating systems in use. As Meego and Symbian. On top of addressing all the above-mentioned issues of the brand revitalization framework. A good way to generate interest among company followers in the social media is taking advantage of user-generated content by setting up competitions that result in the winners being acknowledged for their work. So far Nokia is widely considered as an engineer-driven organization that has little interest in what the consumers actually want from smart phones. Nokia could use social media to turn people’s frustration towards the unsuccessful systems into actual solutions they could take advantage of when developing the operating system together with Windows. Nokia cannot risk becoming even more sluggish in the eyes of smart phone consumers by postponing yet another important launch date to the distant future. By giving the consumers a chance to have a say on Nokia’s future direction Nokia would also create new associations of customer-centricity. At the same time Microsoft should focus on producing stellar software to its products to reach the most desirable outcome from both parties’ perspective. By . To bolster the fading association of agility. Nokia should not forget to concentrate on its core competency of producing excellent hardware. Another key to Nokia’s success is discovering how to best leverage Microsoft and other possible brand partners to benefit the most from each other’s competencies.

as personnel from the marketing department of Nokia were not interviewed.2. Furthermore. Consequently. Nokia needs to fortify the positive brand imagery people have about them so that they can start to encourage more positive feelings and judgments towards the brand. their marketing efforts should also be 44 concentrated on different goals. the concrete suggestions given to the company were based on a limited amount of information on their marketing strategies in different media. Nokia and Microsoft should be able to start convincing the public of their capability of producing high performance smart phones worthy of comparison to any other competitor on the market. the research concentrated only on Finland and the United States. 6.underlining the respective competencies in their marketing. Secondly the original purpose of the thesis was to assess Nokia’s performance and possibilities in a developing market as well. Limitations This bachelor’s thesis is not absolutely dependable and in all fairness a few notions of its limited applicability have to be made. In Finland. a holistic picture of Nokia’s current marketing efforts around the globe could not be formed. In the United States. they have to concentrate on deepening people’s brand awareness about Nokia so that the consumers in the USA become more interested in the brand and start to consistently form positive opinions about Nokia’s performance and brand imagery. . As Nokia currently stands on different steps of the Customer-based brand equity pyramid in Finland and the United States. where an appropriate number of responses to draw conclusions from could be gathered. First of all the sample size used to gather the primary data from consumers was not necessarily large enough to accurately describe the opinions of the public. but due to the lack of responses to the survey from all of the intended locations.

the topic chosen was so broad that only a small amount of methods for improving marketing strategies could be comprehensively analyzed. an evenly matched competitive landscape would not only be beneficial for Nokia. Now that the global economical recession is finally becoming a thing of the past. Those firms that can meaningfully differentiate in the eyes and minds of the consumers will rise above the competition to form mutually beneficial relationships with customers. is showing that a company-specific brand equity structure is not merely a way to measure the success of marketing activity. since smart phone consumers would benefit from the different brands having to figure out how to differentiate from others by improving their products and enhancing their value propositions.45 6. it should lead to an increase in its market share and eventually a more balanced competition in the smart phone market. helped in choosing only the most relevant approaches to the topic.Finally. Thus the pressure to lay off designers and other employers of Nokia would also be smaller. Confining the methods to the brand building perspective. . Finally. For marketers this means increased budgets.3. but also increased competition over the attention of the consumers. however. If Nokia succeeds in its efforts to revitalize the Nokia brand. In addition. It is also a useful tool in deciding how to convincingly position a company against industry competitors and how to improve the effectiveness of marketing strategies without forgetting the principles of building strong brands. people’s future expectations are improving hand in hand with their willingness to spend. one of the biggest effects this thesis has on the way in which international business is conducted. Implications for International Business The research done during the process has some useful implications for international business.

and Joachimsthaler Erich. David A. Linda Price. 1991. Suggestions for Further Research As far as Nokia is concerned. Building Brand Equity. David A." Enterprise Mobile Today.com. 591-594. 2000. Most experts do not see much light at the end of the tunnel. New York: The Free Press. Larry. 19 Jan. New York: The Free Press. Print. Aaker. New York: McGraw-Hill/Irwin. Barrett. 1996. Managing Brand Equity: Capitalizing on the Value of a Brand Name. Web. Another interesting research topic would be to examine how the partnership between Nokia and Microsoft is perceived by smart phone consumers. Eric. 2005. Arnould. "Palm. 24 Apr. Building Strong Brands. Brand Leadership. It will be intriguing to see if the parties can shake off the slow start and leverage each other’s complementary core competencies to differentiate from competition and to start building the foundation for a sustainable competitive advantage. S.4. 2011. To continue exploring the partnership between Nokia and Microsoft. a model for the most beneficial role for Nokia in the partnership could be formed and utilized to assess other potential future partner brands for Nokia. Print. Print. Internet. possible future research topics could be for example digging deeper into the reasons behind Nokia’s recently announced partnership with Microsoft. and George Zinkhan.. 2011. Nokia is on the brink of acquiring a huge competitive advantage if everything goes according to the plan and the next Windows operating system can be transferred as it is to Windows Phones—something that no other smart phone brand has been has been able to do so far with their operating system (Kuittinen 13). David A. Baker. but according to 46 some. 2nd ed. Nokia Smartphone Users Most Likely to Switch: Survey. . Print. Consumers. Aaker.6.47 REFERENCES Aaker. 2004. New York: The Free Press.

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ebscohost. . The answers to this survey will be compared to the results of consumer surveys to find out whether there are differences in Nokia’s aspired brand image and the actual perceptions of the consumers.com. <http://web.hse.51 APPENDICES Appendix 1: Nokia’s Brand Image Interview February 4 th 2011 The purpose of this interview is to find out about the aspired brand image Nokia is trying to create in the minds of the consumers. The findings will be used to analyze Nokia’s marketing strategies for its smart phones and improve them from a brand building perspective. EBSCO Business Source Complete. The meaning of the brand promise. That underlying idea is definitely clear to all employees.fi/ehost/pdfviewer/ pdfviewer?sid=88b8b419-05b0-4e9a-8773-771f46c92698%40sessionmgr112&vid=2&hid=113>.234b4a2ec5f3%40sessionmgr115&vid=2&hid=113>. Nokia’s Vice President of Brand and Marketing Portfolio Management: Nokia’s brand promise since the 1990’s has been connecting people.2 (2004): 105-123." Journal of Brand Management 12. Henrik.libproxy. Web. 2011. and especially the Internet. What are Nokia’s core brand values? Are these values clear for all the employees? Mr. Pekka Somerto. Nowadays it stands for connecting everybody instead of just connecting houses and people with each other. Uggla. Along with smart phones the meaning has further evolved to cover also the idea of connecting with everything like music. e-mail. 1. 14 Apr. however. "The brand association base: A conceptual model for strategically leveraging partner brand equity. has evolved.

trustworthiness. What is Nokia’s customer promise? Mr. In Finland and in emerging markets like China and India Nokia is a very trusted brand. Somerto: Interestingly enough one of the strictest critics of Nokia is the company . easy to use. Suppliers have sometimes been late with their deliveries. Nokia is unfortunately a rather irrelevant player in the US market at the moment. The problems have mostly been caused by internal factors. innovative. The increased speed and complexity of the markets has made delivering on the promises harder than before. reliable. Do you think there is a difference between Nokia’s aspired brand image and the brand perception of the consumers? Why does this gap exist and what measures have been taken to tackle this issue? Are there regional differences in the brand perceptions of the consumers? Mr. and stylish. Mr. Somerto: Obviously there are differences between Nokia’s aspired brand image/identity and consumers’ brand perceptions. A concurrent theme is that Nokia is trying to appear younger in the eyes of the consumers all around the world. Nokia’s impressive market share and success in Russia is another noteworthy matter. but a bigger issue has been the rapid pace of change that has picked up lately and added a lot of pressure on Nokia’s weakest links. Somerto: Recently Nokia has seen some decline in delivering on its promise for reliability.2. Do you think Nokia has succeeded in delivering on or exceeding its customer promise in the smart phone segment? If not.52 3. 4. but other than that Nokia has always tried to offer the public cell phones that are trustworthy. have the problems been caused by internal or external factors? Mr. Somerto: “Connecting people” can also be seen as a customer promise. However. Not surprisingly there are huge regional differences between brand perceptions. and ease of use of its products.

Somerto: One of Nokia’s biggest assets and sources of sustainable competitive advantage is its global reach accompanied with a locally tailored presence. emotional. Mr. Nokia has at the same time been delivering well on products like the N8 according to extensive consumer panels. long battery life. What are Nokia’s points of difference and points of parity when compared to the competition in the smart phone industry? Does Nokia have a sustainable competitive advantage over its competitors? Mr. The challenge today is to offer the consumer the best possible user interface—something that Nokia has not yet been able to consistently deliver. By delivering well on the functional aspects.itself. Mr. Nokia’s internal control is extremely active and it constantly raises the bar for Nokia’s performance. and so on. They are rectangular in shape and usually employ a large touch screen. How are Nokia’s smart phones positioned against competitors? Mr. Somerto: Nokia offers a larger smart phone portfolio than most of its competitors. Despite the negative publicity Nokia has recently received from the press.53 5. . well-functioning mechanics. reliable connection. Somerto: Nokia has always excelled in offering functional benefits to consumers. Do Nokia’s smart phones offer functional. It is hard for competitors to enter markets like India where Nokia has already established a strong presence. 7. Nokia’s phones are known for great voice quality. Nokia tries to differentiate from competition by emphasizing effective distribution and global availability of its cell phones. 6. Somerto: The point of parity between brands in the smart phone market is that smart phones look pretty much the same. and self-expressive benefits to customers? Please give some examples.

In general. storage space. reliability. What are the most important brand associations Nokia aspires to create in the minds of the consumers? (Product. 8. and environmental responsibility. The underlying idea in all this is that Nokia wants to show the public that it tries to improve the quality of people’s lives and also make the world a better place to live. where Nokia phones are used for many 54 unorthodox purposes like for paying bills and for using the phone as a flashlight. symbol) Mr. The self-expressive benefits are the most apparent in developing markets. which also reflects the growing consumer-centricity of the smart phone market.Nokia has simultaneously created positive emotional associations like trust towards the brand. is Nokia actively trying to fulfill those needs in the future? . Consumers have to be able to decide and choose what is most important for them and use the smart phone as a sort of an all-in-one apparatus. Somerto: The most important brand associations Nokia looks to create are trust. For a consumer in an emerging market a cell phone conveys a clearer message about the user than in the more competitive markets. 9. sustainability. Aside from the APPS traditional features like bandwidth. In addition Nokia would like to be perceived as a more youthful and agile organization. organization. In recent years Nokia has appeared more serious than in the past when it emphasized the fun-side of cell phones in its marketing. and speed of connection are of course also important. what do you think is important for smart phone users? What are some of the most important features in smart phones? Mr. 10. person. Can you think of any customer needs that are currently not met in the smart phone industry? If there are any. Somerto: The single most important smart phone feature today is the multitude of applications (APPS).

In the future smart phones will be controlled with much less effort thanks to the rapid advancements in 55 technology. but the marketing efforts are concentrated towards people who have a strong influence on others. They are often early adopters or even first movers to a . Russia. What is Nokia’s target audience in the smart phone segment? Is the target audience same regardless of the country? Mr. Somerto: It is hard to pinpoint anything concrete. because a smart phone enables him or her to do all the necessary work from anywhere. How is Nokia’s position communicated? Please identify if there are differences in the marketing communication between Finland. but it incorporates local adaptation by choosing the appropriate marketing mix depending on the peculiarities of the different markets. A modern successful person does not have to go the office every day. Mr. 11. The way of using smart phones can be changed through advanced sensor technology. but the future innovations are most likely going to come from the direction of user interface development. Mr. Somerto: The current theme in Nokia’s advertising is “success redefined” meaning that Nokia’s phones liberate users to dictate and decide what is success for them an enable them to express themselves freely. 12. Put differently Nokia targets the so called “active participant segment” of the smart phone market. Somerto: Nokia strives for a unified visual approach in its marketing.Mr. Somerto: Everyone can and is welcome to buy Nokia’s smart phones. and the United States. In other words Nokia is applying the principles of hyper-locality. The active participants are diligent networkers who influence the purchase decisions of others. A good comparison would be the innovative automated braking systems and augmented reality windshields of the modern car manufacturers.

This would also further enhance the new customer-centric approach at Nokia. Due to this 56 the same product is sometimes targeted to a different audience abroad and thus might become popular among a very different market segment. 13. Somerto: When speaking of different countries. Do you think there is a need for change at Nokia? Is there a trade-off between agility and consistency? Mr. At Nokia there is a need to become more agile and more responsive to customers’ needs—Nokia has to become a customer-driven organization instead of engineer-driven. for how long have you had the smart phone? Please indicate how important each of the following smart phone features are for you. why? If you own a smart phone. the marketing efforts are chosen based on demographic data and the purchasing power of the inhabitants.) What is your preferred smart phone brand. Nokia’s large brand portfolio is advantageous. (Or less if you cannot name three.product category and thus have a say in which products will eventually be successful in the marketplace. Mr. which smart phone brand is it? If you own a smart phone.57 Appendix 2: Smart Phone Brand Perception Survey Write the names of three smart phone brands that compete in the country where you live. but the strategy has to be altered from push to pull in all stages of the value chain. Not at all Important Unimportant Neither Important Nor Unimportant Important Very Important . Somerto: There is definitely no trade-off between agility and consistency.

Other. Some questions might seem repetitive by design if you own a Nokia phone. please specify:58 Is there anything you would hope from a smart phone that is currently not offered by any smart phone brand? Next you will be asked questions about Nokia specifically. etc. Are you aware of the cell phone brand Nokia? Yes No Do you have or have you ever had a Nokia smart phone? Yes . navigator.Applications (Apps) Battery life Camera Design Ease of use E-mail Internet connection Memory capacity Reliability of functions Screen size and resolution Technical aspects such as voice quality Additional features such as calendar.

) Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied How would you describe Nokia's products in a maximum of three (3) words? How would you describe Nokia as an organization with a maximum of three (3) adjectives? If Nokia's smart phone was a person. how would you describe that person with a maximum of three (3) adjectives?59 What is your perceived quality of Nokia's smart phones? Does Not Apply (No Opinion) Very Bad Bad Neither Good nor Bad Good Very Good What is your perceived value of Nokia's smart phones? Does Not Apply (No Opinion) Very Low Low Neither Low Or High . Does Not Apply (I have never had a Nokia smart phone.No Please indicate the level of satisfaction with your most recent Nokia smart phone.

do you feel like you can express yourself through using/owning the product? Does Not Apply (I do not own a Nokia smart phone. what is the first brand that comes to your mind?60 Please indicate your level of agreement with the following statement: "I am loyal to smart phone brands. Does Not Apply (No .High Very High If you own a Nokia smart phone. what is the first brand that comes to your mind? When you think of a trendy smart phone brand.) Yes No How would you say Nokia differentiates itself from the competitors in the smart phone market? When you think of an innovative smart phone brand." Does Not Apply (No Opinion) Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree If you owned a smart phone brand mentioned in the list. how likely would it be for you to switch to another smart phone brand? Please choose an option for all the brands.

please specify: What do you think of the number of smart phone brands offered by Nokia? .opinion) Very Unlikely Unlikely Undecided Likely Very Likely Apple Blackberry by RIM HTC Nokia Samsung61 How important are these factors when deciding whether to switch between smart phone brands? Does Not Apply (I don't switch between smart phone brands.) Very Unimportant Unimportant Neither Important Nor Unimportant Important Very Important Availability Discount Use experience Other.

commercials.) Elementary school .Does Not Apply (No Opinion) Too Few Brands Appropriate Number of Brands Too Many Brands Nokia offers Do you remember any marketing efforts by Nokia (such as advertisements. In which country do you live at the moment? In what year were you born? (YYYY) What is your gender? Female Male What is your educational background? (Choose the one you currently attend or most recently attended. sponsorships)? Yes. please specify: No How effective is Nokia's smart phone marketing in your opinion? Does Not Apply (No Opinion) Very Ineffective Ineffective Neither Effective nor Ineffective Effective Very Effective62 The following five questions are only going to be used for classification.

999 $200.000 or more .000-$49.High school Vocational school Polytechnic University Other. please specify: What is your estimated annual family income in dollars? $9.000-$99.000-$149.999 $50.999 or less $10.000-$199.999 $150.999 $100.