Praxis Business School

Assignment on

Brand Tracker for Nokia: Stage 2

A report

Submitted to

Prof. Srinivas Govindrajan

In partial fulfillment of the requirements of the course

Product and Brand Management

On August 27, 2008

By

Arihant Singhi B07009

Richika Sureka B07032

Rohit Bhardwaj B07034

Varun Mittal B07046

Executive Summary 2

Executive Summary

Competitive edge
Consumer understanding + Marketing spending + Creativity

A brand is not a by-product, an ad campaign, a logo, a spokesperson or a slogan. It is a differentiating

identity and the most important reason for employees, investors and customers to come and to do
business with you. In a real sense, it is a firms most important asset, the trust that will the business and
make it increasingly profitable over time.

Nokia's solid and reliable brand has true authenticity and heritage. Nokia has a vision and foresight to
define the brand, develop products with a clear product and design strategy. Nokia is synonymous with
cell phones. Today it has a strong market presence (about 70% in mobile handset market), strong brand
and above all a product that is surely very easy & intuitive to use.

The sticky thing about Nokia is the user-friendly, all familiar menu. An average Nokia entry level phone
possesses the marvellous consumer insights, cool design and everything that builds a "Nokia", and this
makes it popular among the customers. Motorola and Samsung are virtually absent with around 6-7%
market share. However, for the same price, runner-up Sony Ericsson also possesses cool design, nice
menu and plus incredible technology.

According to TAM Media Research, Nokia Corporation leads with 35% share of mobile phone
advertisement in print media, followed by LG (20%) and Samsung (10%), which is also one of the
reasons of knowledge leading to product purchase.

According to the survey conducted, Nokia offers superior products at similar price levels, and their
common operating system on the phone convinces you instantly that you want nothing but just another
Nokia. The recent models launched are quite stylish in the same sense and the combination of high and
friendly technology with fashion at affordable prices offer superior value.

Nokia is being challenged by companies like Sony-Ericsson, Motorola, Samsung, LG, etc. Despite all the
new innovations that other phones bring, it is hard to catch up with the sheer pace of innovations,
designs and styles that Nokia is famous for. With the double digit growth of this market from America
to Pakistan to the UAE, it is inevitable that a few shifts in share will occur, but Nokia inevitably will retain
its place at the top by sheer momentum.

Nokia is as ubiquitous and popular as IBM and Toyota

Brand Tracker : Stage 2 Product and Brand Management

Contents 3

Contents

Nokia Connecting People ........................................................................................................................... 4

India Mobile Sector ....................................................................................................................................... 5
Stage 2 Brand Equity Measurement .......................................................................................................... 6
Introduction .................................................................................................................................................. 7
Power-Premia Grid Model .......................................................................................................................... 10
Recommendation Model ............................................................................................................................ 21
Net Take Away ............................................................................................................................................ 24
References .................................................................................................................................................. 25
Bibliography ................................................................................................................................................ 26
List of Figures and Tables ............................................................................................................................ 26

Brand Tracker : Stage 2 Product and Brand Management

Nokia - Connecting People 4

Nokia - Connecting People

Nokia Connecting People

NOKIA Connecting People

Brand Tracker : Stage 2 Product and Brand Management

India Mobile Sector 5

India Mobile Sector

Growth in the mobile sector comes from enlargement of the subscriber base. The number of phone
users in country rose to 334.84 million (July 2008) from 189.08 million (July 2007) growing at 77 percent
from last year. Monthly mobile subscriber additions averaged between 7 8 million users per month.

A report from market research agency Isuppli projects that India will emerge as the second largest
market in the world after China for mobile handsets in terms of unit sales. Reasons for this could be rise
in per capita income, the arrival of less-expensive phones, declines in tariffs and need being staying
connected.

In developed countries, the growth in Telecom means growth in value added services but in Emerging
economy like India growth in Telecom means growth in Tele-density, as of July 2008 Tele-density in
country is at 29.08%.

The total number of new handset sold in India during 2007 was 87.3 million and Nokia which enjoys a
dominant market share of more than 60% in India (GSM and CDMA) considered having highest brand
affinity and effective marketing-distribution strategy.

Looks and good entertainment features are the key drivers for upgrading to a new handset, as said by a
respondent during an interview. Also the study pointed out that integrated digital camera; music player
and stereo FM radio are the three main features that drive users to upgrade their handsets. These
features are available in mid-range and high-end handsets so far, but the common user is also
demanding these features in more affordable prices as a result the handset makers are reviewing
premiums charged for higher end mobiles

Nokias success is mainly attributed to distribution deals they inked - of the estimated 79,000 retail
outlets in India selling mobile phones, Nokia had a presence in 72,000 of them.

Figure 1: Market Share (July 2008)

Market Share (July 2008)

60% 8% 6% 7% 19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nokia Sony Ericsson Motorola LG / Samsung Others

Brand Tracker : Stage 2 Product and Brand Management

Brand Equity Measurement 6

Brand Equity Measurement

STAGE 2 Brand Equity Measurement

Brand Tracker : Stage 2 Product and Brand Management

Introduction 7

Introduction

Every organization has a brand, whether they have consciously developed it or not. A brand is simply an
expectation or a promise of an experience. Whether that expectation is trusting, authoritative,
innovative, or fun, brands are short-hand for describing the way a business, organization, product,
service, celebrity or other entity relates to its stakeholders (e.g., customers, donors, employees,
investors, volunteers, suppliers, etc.).

A strong brand impacts everything from the ability to recruit top talent and to opportunity to grow the
bottom line. Little wonder that more and more attention is being paid to measuring and managing
brands as assets. The way to build a strong brand is to put customers and their needs at the center of
every decision the organization makes. Over time, customer-centric actions create differentiation in
the marketplace and build emotional connections with customers. This differentiated bond, called
brand equity, is a real and valuable asset with tangible returns in terms of customer loyalty,
profitability, and insulation from negative publicity or competitive action.

Brand Equity

Brand equity is the sum total of learning about the brand by all stakeholders, including consumers,
shareholders and employees. It includes all that people feel and think about the brand as a result of
direct experience, word-of-mouth; moments-of-truth with the brand and the brands marketing
activities. It constitutes a storehouse of future cash flow and profits.

Good measures of brand equity can give indications as to the future profit trends. If brand equity is
falling, this is an indicator of storing up trouble. If brand equity is rising, youre investing in future
performance, even if its not showing through in profits today.

Brand Equity

Brand Perceived Brand

Brand Loyalty
Awareness Quality Association

Brand Tracker : Stage 2 Product and Brand Management

Introduction 8

The goal of the brand leadership paradigm is to create strong brands but what is a stong brand,
anyway?

In Managing Brand Equity, brand equity was defined as the brand assets (or liabilities) linked to a
brands name and symbol that add to (or subtract from) a product or service. These assets can be
grouped into four dimensions: brand awareness, perceived quality, brand associations, and brand
loyalty.

These four dimensions guide brand development, management and measurement.

Brand awareness is an often undervalued asset; however, awareness has been shown to affect
perceptions and even taste. People like the familiar and are prepared to ascribe all sorts of good
attitudes to items that are familiar to them. The Intel Inside campaign has dramatically
transferred awareness into perceptions of technological superiority and market acceptance.
Perceived quality is a special type of association, partly because it influences brand associations
in many contexts and partly because it has been empirically shown to affect profitability (as
measured by both ROI and stock return).
Brand associations can be anything that connects the customer to the brand. It can include user
imagery, product attributes, use situations, organisational associations, brand personality and
symbols. Much of brand management involves determining what associations to develop and
then creating programs that will link the associations to the brand.
Brand loyalty is at the heart of any brands value. The concept is to strengthen the size and
intensity of each loyalty segment. A brand with a small but intensely loyal customer base can
have significant equity.

Brand equity determines a brands health and strength as well as its financial value. Consistent
measures of brand equity can help understand a brands progress towards its goals. Although these
measures need to be adapted to a particular business context and reflect the brands strategic
milestones, Ambler [2000] recommends a mix of the following approaches:

Inputs: The amount of advertising and communication spend as a percentage of sales. For many
industries this is a prime driver of brand equity. This category can also include other internal
measures, such as innovation support and other cultural attributes.
Intermediate measures: These try to uncover the stakeholders awareness and perception of
the brand as well as their attitude towards it, relative to competitors. Uncovering issues, such as
consumer satisfaction or perceived quality, through qualitative research can help the brand
owner understand consumer motivations (or lack thereof) to purchase.
Behaviour: How stakeholders actually behave? Sales is a key metric here, along-with market
share, customer retention, loyalty and frequency of purchase.

Brand Tracker : Stage 2 Product and Brand Management

Introduction 9

Evaluating the brands equity is essential to defining efficient and effective:

Consumer strategies Which markets provide most potential?

Marketing strategies Which aspect of the marketing mix needs more focus?
Budget allocation How much to invest and in what?
Performances tracking How are we performing over time and in relation to competitors?

By understanding the strength of the consumer relationship with the brand, one can start to gauge how
vulnerable the brand is to new entrants or to short-term promotions, as well as how much can be
changed without alienating loyal customers. [Hart and Murphy, 1997]

Brand equity consists of elements such as the brand associations, market fundamentals and marketing
assets that distinguish one brand from another and that influence a customers perceptions of or
knowledge about a brand. When brand elements are favourable in a customers mind, brand equity is
considered to be positive. When they are not favourable, the brand equity is negative.

Positive associations of a brand in a customers mind are generally stronger and more sustainable than
those of a product, assuming that sufficient investments are being made in appropriate brand
management. Brands with positive equity will consistently generate, maximize and grow cash flows.
They achieve this by commanding a price premium, allowing for brand extensions and licensing, creating
barriers of entry, attracting and retaining more valuable customers, and reducing the costs of customer
acquisition.

Positive brand equity drives customer value, which in turn drives shareholder value. To leverage positive
brand equity, marketers must take a measured approach to identifying, developing and managing brand
elements relevant to the corporation and its products.

Benefits of brand equity

What are the benefits of strong brand equity? Well, strong brand equity leads to, inter alia, strong
market share, customer loyalty, more favorable response to price increases, less vulnerability to
competitor activity, brand extension opportunities, and communication messages which reach the
consumer. In attaining these benefits, strong brand equity will ensure that a product is of an enduring
nature. Ultimately, strong brand equity will improve profitability.

To build a winning brand, therefore, is to understand the relationship between brand equity and market
share, and to leverage both to their full potential. In so doing, a brand will be successful and sustainable
in the long term. It must be kept in mind that increasing market share does not increase brand equity,
whereas increasing brand equity invariably leads to increased market share.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid Model 10

Power-Premia Grid Model

Power-Premia Grid Model

Survey Report

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid Model 11

Power-Premia Grid Model

Objective

To measure the Brand Equity of Nokia by studying the belief and behavior of mobile customers

Limitations

The survey was carried out among the students/faculty of Praxis Business School, Kolkata due to limited
resources. The findings of the survey could be skewed towards the brands available in this part of the
world and may not match with the original Brand Equity measures.

Data Collection

Of the 30 respondents, 4 were girls and 26 were boys. The respondents were in the age group of 21-28
years and were the users of mobile handsets.

Gender Age
Male Female 21 years 22 years 23 years
24 years 25 years 28 years

13% 3%

17% 13%

34%
87% 30%

Linkage with Brand Image (1st stage)

The model which we are taking in the assessment of the Brand Equity requires a 4*4 matrix in which the
2 most important parameters are taken which has major effects in the assessment of the brand loyalty
and affects the buying behavior of a customer.

From the laddering method conducted in the 1st stage we could see that the attributes which leads to
the values for a customer are the features which are in a handset and thus features plays a pivotal role
in the purchasing of a handset. Moreover, price was another vital factor which we could deduce from
the laddering method which has a remarkable effect in the decision making of the purchase of a
handset.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Analysis 12

Power-Premia Grid: Analysis

Methodology & Rationale for choosing

A sample of 30 mobile users was taken for the evaluation purpose. The respondents were asked to fill a
4*4 matrix (Table 1) with price & features as the parameters for 4 different brands. The parameters
were to be ranked by choosing a particular grid which would represent the options given in Table 2.

Once the respondent has filled the first matrix, than he was asked for his preferred brand and also if he
is willing to go for a repeat purchase i.e. will he purchase the same brand (and not the same handset)
when he goes for another/change in his mobile handset.

He was also asked to fill another 4*4 matrix which has price premium and brand image as its parameters
and is meant for the particular brand he has preferred. The options for these parameters are mentioned
in Table 3.

In Table 4, options 3 and 4 for brand image are not applicable as we have asked the respondents to fill
Table 5 for their preferred brand and thus acceptable and low as a brand image cannot be an option
when a respondent has a preference over that brand.

Table 6: Belief Grid Example Table 7: Preference Grid Example

Brand Your Preferred Brand

Features Brand Image

1 2 3 4
1 2 3 4
Price premium

1
1
Price

2
2
3
3
4 4

Table 8: Parameters

Price barrier Features Price premium Brand Image

1 Not Best High Best

2 Minor Good Medium Good

3 Major Acceptable Low Acceptable (NA)

4 Absolute Poor No Low (NA)

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Analysis 13

The construction of 4x4 matrixes is done for evaluating brand resilience and brand leveragability. The
Top Box, meaning these customers believes the brand is superior and price is not a barrier. These
customers could be behaviorally classified as Brand Loyal.

The model gives us the beliefs and behaviors of the customer about the brand. Both belief and behavior
are required to describe loyalty. Many times a customer have a belief that the while buying a brand
price is not a barrier and the features of the brand is the best but his buying behavior represents that he
has not opted for the brand in which he believes. So the brand loyalty in this case for the brand is not
good enough.

The first matrix parameters are price and features. Here we check whether the customer has price
as a barrier if the features are high or vice-versa. Through this a brand can segment the market and they
can cater to the needs of the target audience. Through this exercise we can check the price sensitivities
in the market. Some customers would find the product to be too expensive because of the lack of funds
even though the buyer may believe completely that the product is a superior quality vis--vis
competition.

There are customers on the other end of the price sensitivity spectrum for whom the price is never a
barrier once they decide to purchase in this category, they would buy the product which has the best
quality and in our case it would be the features instead of quality.

Strong brands do not have pressures as they already have a Strong Legacy. So they retain customers as
they have an advantage but of course they need to work on satisfying them better to get new customers
through them

The pressure on the middle brands by the brands in the more extreme subcategories, typically emerging
from price/ quality segmentation, requires them to fight a dual front warimage/quality on one front
and price on another.

After completing the first grid we come to know when given a choice, which brand would the customer
go for? So in the next matrix we check whether the brand he is going for is purely for the perceived
value/ image of the brand and if the customers are ready to pay a price premium even if the same
parameters are offered by the competition at a lesser price. So here we can track the brand loyalty of
the customers. The parameters like acceptable and low is not applicable in the matrix as if the brand
image is acceptable or low, the customer would not be willing to pay a price premium for the concerned
brand, the customers might as well buy a brand which does not charge a price premium and satisfies the
same needs and wants.

Repeat purchases of the customers would give us a picture of the future trend of the brand. Future
trends provide a diagnostic tool for forecasting likely shifts in the purchasing behavior of the customers.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 14

Power-Premia Grid: Survey Report

Belief Grid

The belief grid gives us the belief of the customer about the brand. The beliefs that drive behaviour
across most categories are price and quality. Because of the price sensitivity in the market, there
would be consumers who could the products price to be a major barrier but believes that the quality of
the product is superior. The consumer takes a decision on price/quality trade-offs. However, there are
customers for whom price would be no barrier once they have decided to buy the product.

Table 9: Belief Grid

Nokia Sony Ericsson Motorola Samsung / LG

Features Features Features Features
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1 4 6 0 0 1 1 2 1 0 1 1 1 3 0 1 0 0 2 2
Price

Price

Price

Price
2 4 16 0 0 2 6 10 0 0 2 1 4 7 1 2 1 1 8 3
3 0 0 0 0 3 2 5 3 0 3 0 3 8 0 3 1 0 5 5
4 0 0 0 0 4 0 0 0 0 4 0 0 1 0 4 0 1 1 0

Nokia

The Top Box meaning these customers believes the features of the brand is best and price is not a
barrier. For Nokia, 14% of the respondents believe that it is the best in terms of quality in the mobile
phone category. These customers could be categorised as loyal customers in this classification.

The Second Box [(P1Q2), (P2Q2), (P2Q1)] means that these customers believe the feature of the
brand is best and price is a minor barrier. For Nokia, 20% of the respondents believe that it is best in
terms of quality but price is a minor barrier for them. 52% of the respondents said that Nokia is a
good brand in terms of features and price could be a minor barrier.

These customers could be categorised as less loyal customers because it could be that they are happy
with the existing handsets they own. They have a perception that mobile phone is not a utility, so to
become mobile-savvy; the customers might have to spend more. Therefore, price becomes a minor
barrier for the customers.

It is also worth noting that all the respondents belief about Nokia lies in the 2x2 matrix in the upper left
hand corner of the grid. For all respondents, the belief about Nokia is thats it is the best or good in
terms of features. Price is not a barrier or a minor barrier for the customers. Nokias positioning is
superior in the minds of the consumers.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 15

The customers who find price not a barrier and base their decisions on product features alone
contribute disproportionately to category volume. Nokias driver for revenue is not price. The image of
the brand is such that all segments in the market can afford to buy the brand.

Sony Ericsson

For Sony Ericsson, 3% of the respondents feel that the brand is best in the features provided and price
is not a barrier. The brand loyalty for Sony Ericsson is low when compared with Nokia. The driver for
this could be positioning of both the brands and the Legacy. Nokia has been in the mobile phone
market of India for more than a decade. The customers are more loyal towards Nokia. Stronger the
loyalty better would be the equity. Strong brand equity will ensure that a product is of an enduring
nature. Ultimately, strong brand equity will improve profitability.

52% of the respondents perceive that Sony Ericsson is a good brand in terms of features and price
could be a minor barrier.

33% of the respondents perceive that price can be a major barrier when they want to purchase a Sony
Ericsson mobile phone. Sony Ericsson is perceived to be priced high vis--vis competition. The views of
the respondents show that the features of the brand are comparable. Respondents do not exhibit
similar views. Quality is more difficult to fix than price. Sony Ericsson cannot tinker around with the
product features but the can work on their pricing as the price perception cumulate to suggest that price
is a barrier for the respondents.

Motorola

For Motorola, 3% of the respondents feel that the brand is best in the features provided and price is
not a barrier. The brand loyalty for Motorola is low when compared with Nokia and is at par with Sony
Ericsson. 3% of the respondents perceive that price of Motorola is an absolute barrier and the features
of the product are acceptable. In general 67% of the customers perceive that the features of the
product are acceptable. The perceptions of the respondents are scattered for Motorola everywhere in
the grid.

The message communicated by Motorola is not clear amongst the population. It is trying to concentrate
on both the parameters namely features and price.

Samsung and LG

33% of the respondents perceive that the features of both the brands are poor. This could be because
of the standards and trends set in the mobile phone segment. The competition is constantly coming
with new inventions.

Both the brands have not been able to generate loyal customers. The Top Box of their matrix is empty as
the consumer will have so many other brands to choose as Samsung and LG have not been able to
create differentiation. The matrix is scattered everywhere because customer do relate the brands prices
to its other business.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 16

Behavior Grid

Behavior grid explains out of the total respondents using a handset what is my customers take as to
how much do Price affects their affinity towards that brand and how well do they rate its features. The
behavior grid is a true measure of the value proposition attached by customers towards the brand they
use.

Table 10: Behavior Grid

Nokia Sony Ericsson Motorola Samsung / LG

Features Features Features Features
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
75 67 50
1 0 0 1 0% 0% 0 1 0 0% 0 0 1 0 0 0 0
% % %
75 63 50 20 25
Price

Price

Price

Price
2 0 0 2 0 0 2 0 0 0 2 0 0 0 0
% % % % %
20 33 33
3 0 0 0 0 3 0% 0 3 0 0 0 3 0 0 0 0
% % %
4 0 0 0 0 4 0 0 0 0 4 0 0 0 0 4 0 0 0 0

Nokia

Nokia exhibits a positive belief grid and has been dominant in top left cordon of matrix that represents
Nokia has been efficient and strong in their product offering. Consumers of Nokia handset believe the
brand is any time superior than competitors and price is either a minor barrier or not a barrier. For a
customer who doesnt see price to be a barrier they would aspire best of features in that brand and also
in this category Nokia consumers feels features are superior and are liked by them. Nokia one would
expect high brand loyal customers

Sony Ericsson

The next grid enlists consumer take on price sensitivity and features for Sony Ericsson here the grid is
scattered and price is slightly more important in this category relative to product superiority
perceptions. There have been discrepancies among the respondents viewpoint when features were
considered because of the less percentage actual consumers using the handset falling all over the
matrix. Here probably people feel that brand is good with nice features but maybe because the brand is
picking up in market it will take some time to establish itself.

Motorola

For Motorola, the consumers find the price to be a minor or major barrier because the respondents do
not find the features to be to be the best. They perceive that in a similar price bandwidth they would get
better product offerings from competition.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 17

Total Market
Table 11: Total Market Grids

Belief Grid Behavior Grid Preference Grid

Features Features Brand Image

1 2 3 4 1 2 3 4 1 2 3 4

Price premium
1 6 9 6 2 1 50% 56% 0 0 1 5 0 0 0

Price
Price

2 12 31 15 4 2 50% 42% 0 0 2 10 10 0 0
3 3 8 16 5 3 0% 25% 6% 0 3 2 2 0 0
4 0 1 2 0 4 0 0 4 0 1 0 0

Belief Grid

The belief grid represents overall perception of handset users measured relatively on price sensitivity
and features. Around 25 percent of respondent feel price is minor barrier and features are thought of as
good. Row 2 that is price is considered as a minor barrier when one goes to buy a mobile handset brands
which stands good in offering features can leverage this opportunity. Column 1 shows us respondents
who considers their handset with best features and their willingness to spend is high as on a higher scale
they doesnt feel price as a major barrier while purchasing a mobile handset and getting associated with
a particular brand

Behavior Grid

The responses of the total market are mentioned above. 50% of the customers of Top Box from belief
grid are ones who look or will purchase a brand which is the best in features and price is not a barrier
for them. The majority of the population lies in the 2x2 matrix which is price is no barrier or a minor
barrier and the features should be best or good. The behavior grid generalizes the percentage of
respondents who stick to their parameter and goes ahead to buy that brand. Here almost the
percentage of respondents is high in quadrant where they feel their brand ensures the thing they look
out in that brand which is not contrasting when compared in the matrix.

Preference Grid

67% of the customers feel that they would be pay a price premium but it has to be a brand to which
they can relate.17% of the entire population of the market responded that they are ready to pay a price
premium. For example, a customer is using a Nokia Phone. Now in the market if all the brands come up
with a phone with identical phones with same features and looks. All have kept their price to be same,
but Nokia have a high price and the user still goes ahead and purchases a Nokia. So he has paid a price
higher than other brands because he can relate and trust Nokia. The matrix shows whether the
customer is ready to repeat purchase when the brand is charging a price premium.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 18

Market Summary

Table 12: Market Summary

Nokia Sony Ericsson Motorola Samsung / LG Total

Sales 20 8 2 0 30
Market Share 67% 27% 7% 0% 100%
Loyal Customers 17 5 1 0 23
%age of Loyal
85% 63% 50% 0% 77%
Customers
Brand Equity
Index
Market Share as a measure of Brand Loyalty

Table 7 shows the market summary in which we have considered our survey as the entire market i.e. our
30 respondents consists of the entire universe. The last column shows the Brand equity Index which is
basically the total number of loyal customers in the market. From our survey, we could see that out of
30, 23 respondents are loyal towards their respective brand which turns out to be 77% of the total
market.

Out of the 30 respondents, 20 has gone ahead to purchase Nokia thus making its market share to 67%.
Now if we see the actual market share of Nokia, it stands out to be more than 60% which is quite near to
our universe. Considering Sony Ericsson, its actual market share is around 8%-9% but our survey shows a
market share of 27%. This could be justified as Sony Ericssons new marketing strategy of launching itself
a music cell phone has made it capture the youth market and even our survey is skewed towards the
youth. In case of Motorola the market share of 7% is quite near to its original market share of 5.9%. As
our universe comprise of a very small sample, there were no buyers of Samsung/LG thus making its
market share to be zero whereas its original market share is around 7% each.

Market share is also considered to be a measure of Brand Equity. Thus we can see that Nokia has a high
Brand equity as compared to its competitors. It has been seen in last 1-2 years that Nokia is losing its
market share as it has come down from 70% to early 60s. This could be due to the new marketing
strategy adopted by its competitors. For example Sony Ericsson has launched itself as music cell which
has gathered the attention of the youth and thus has lead Nokia losing its market share.

Talking about the loyal customers, Nokia has the highest loyalty of 17 customers which turns out to be
85%. Any brand having a loyalty percentage of more than 80% is considered to be in the safety zone.
Here loyal customers are the one who have agreed that they want to go for a repeat purchase. Sony
Ericsson and Motorola are far behind from the safety zone which means they have to tinker with either
their pricing strategy or the product category to i.e. feature to enhance the loyalty in their customers
and thus reach the safety zone.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 19

Loyal Customers Belief Grid

Table 13: Loyal Customer's Belief Grid

Nokia Sony Ericsson Motorola Samsung / LG

Features Features Features Features
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1 3 4 0 0 1 0 1 0 0 1 0 0 0 0 1 0 0 0 0
Price

Price

Price

Price
2 3 7 0 0 2 2 1 0 0 2 0 1 0 0 2 0 0 0 0
3 0 0 0 0 3 0 0 1 0 3 0 0 0 0 3 0 0 0 0
4 0 0 0 0 4 0 0 0 0 4 0 0 0 0 4 0 0 0 0

The table above shows the Loyal Customers Belief Grid. The loyal Customers are those who want the
same brand when they go for a repurchase of the product i.e. repeat purchase.

Nokia

In case of Nokia out of all the respondents, 20 are Nokia users and out of them 17 would like to go for a
repeat purchase which means 85% of the market share of Nokia (67%) is considered as Loyal Customers.
Now, if we see their rating in the price/feature matrix we can see that out of 17, 3 lie in the top box who
are the perfect loyal customers and in any circumstances they would remain with Nokia. Another set of
4 respondents lie in the F2P1 matrix which says that they have price as no barrier but would like to have
better features in the brand. Thus, Nokia can convert these potential respondents into perfect loyal
customers by tinkering with the features no doubt that it is more difficult to fix the quality than price.
So, Nokia can also convert the P2Q1 respondents i.e. 3 loyal customers into perfect loyalty as here price
plays a major role. But a major chunk of the loyal customers lay in Q2P2 i.e. 7 respondents. Converting
these loyal customers into perfect loyalty would be a cumbersome task for Nokia as for these customers
both price and features play a minor role.

Sony Ericsson

Sony Ericsson doesnt have any perfect loyal customers who lie in the top box as the new strategies Sony
Ericsson would take some time to gain the trust of their customers and turn them into perfect loyalty.
But it can be seen that around 63% of the market share of Sony Ericsson lie in the loyal customer zone
which is 2nd highest after Nokia.

Motorola/Samsung/LG

The Appropriate inferences cannot be drawn for these brands because of the limitation of small sample
size and moreover the respondents are skewed towards Nokia and Sony Ericsson.

Brand Tracker : Stage 2 Product and Brand Management

Power-Premia Grid: Survey Report 20

Loyal Customers Preference Grid

Table 14: Loyal Customer's Preference Grid

Nokia Sony Ericsson Motorola

Brand Image Brand Image Brand Image
1 2 3 4 1 2 3 4 1 2 3 4
Price premium

Price premium

Price premium
1 4 0 0 0 1 0 0 0 0 1 0 0 0 0
2 7 4 0 0 2 3 1 0 0 2 0 1 0 0
3 1 0 0 0 3 0 1 0 0 3 0 0 0 0
4 0 1 0 0 4 0 0 0 0 4 0 0 0 0

Product superiority and price sensitivity are in reality causally-related variables that can be plotted
independently. Loyal customers think their brand is superior for some reason, and this superiority has
the effect of minimizing their price sensitivity. Thus, the Loyal Customers Preference Grid in which the
Price premium is plotted against the Brand Image (or Perceived Quality) can be seen as follows:

Nokia

There are 17 loyal customers i.e. who have agreed for a repeat purchase and out of them 4 have agreed
to pay a high price premium and also consider Nokias brand image as the best. Now, Nokia can convert
their loyal customers into perfect loyalty by tinkering with the features as 12 customers out of 17
i.e.70.58% are ready to pay a price premium in some range or the other. Therefore, those 7 respondents
who lay in Q2P2 in the Loyal Customers Belief Grid can be converted into Q1P1 by tinkering with the
features as for them price is a less barrier than the features because they are ready to pay an extra
premium.

Sony Ericsson

Since Sony Ericsson has recently changed its marketing strategy and has portrayed itself as a music
phone, we can see that though 5 customers have agreed to go for a repeat purchase, none have ranked
Sony Ericsson as a high brand image/ high premium product. Therefore, Sony Ericsson will need some
time to command a price premium from its customers as till than it need to come up with continuous
innovative handsets to continue grabbing the market.

Motorola

The inference for this brand cannot be drawn appropriately because of the limitation of small sample
size and moreover the respondents are skewed towards Nokia and Sony Ericsson.

Brand Tracker : Stage 2 Product and Brand Management

Recommendation Model 21

Recommendation Model

Methodology

In the Recommendation analysis, the same respondents i.e. 30 respondents were asked few questions
to derive at certain conclusions w.r.t. the brand loyalty and the trust the respondent has on the brand.
The following are the questions asked with their justifications and the relevant outcome:

Which brand of handset are you using?

Justification: Itll not give us the market share of Nokia, but would give us an idea about the
percentage of people using Nokia mobile handsets vis--vis other handsets.

Will you recommend your current brand to your friends/relative?

Justification: When he is recommending the brand he is prepared to stake his personal / professional
reputation behind the brand. Thus, the above question will help us in determining:
The brand loyalty of the customer
The faith / trust towards the brand

Which brand you recommend and why?

Justification: The respondents also mention the reason as to why they would recommend the brand.
So the company could actually go ahead and concentrate on the parameter which the
respondents feel can make a differentiation. The number of people recommending the
brand shows the customer satisfaction associated with the brand which in turn shows
the brand loyalty.

Positive brand equity results in customer behavior that benefits the brand through purchase frequency,
brand loyalty, price insensitivity, willingness to recommend, and more.

Outcome

We would be in a position to recommend as to what the brands should do in order to increase brand
loyalty and widen the cake by serving the existing the customers.

From the parameters, we would be able to comment on the differentiating factor of a brand and as to
how it is positioned in the minds of the consumer. The parameters are:

Availability ( Place)
Features ( Product)
Price ( Price)
Ease of use ( Product)
Others ( Any one of the 4Ps)

Brand Tracker : Stage 2 Product and Brand Management

Recommendation Model 22

If the customer is dissatisfied with the existing product provider it would in turn lead to losing a number
of customers. It is a High Level of Involvement product, word of mouth and advice from family members,
friends and relatives play a vital role in the decision making process. So if the brand experience has been
dissatisfactory, the brand has to work well in the future to improve the experience of the customers so
that they can retain existing customers as well as get new customers from existing users.

The brand will be able to more accurately assess and diagnose brand health. Most importantly, they will
be better prepared to prescribe strategic approaches to improving ROI-M and brand health through
future marketing actions.

Survey: Findings and Conclusion

The graph below shows the respective users of different mobile phone brands of the respondents. The
majority of the respondents used Nokia (60%) followed by Sony Ericsson, Motorola and LG / Samsung.
The market share of the mobile phone users was different from the actual findings (Power-Premia
Model) so the answers could be skewed towards the other mobile handset brands.

Figure 2: Respondents Mobile handsets

60% 23% 10% 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nokia Sony Ericsson Motorola LG / Samsung

If the customer is satisfied with his brand of mobile, he is in a position to recommend to his friends /
relatives. The recommendation indirectly tests the loyalty of the customer, because he is putting in
stake his reputation in the society. Before judging a phone, a customer measures some parameters on
which he can built a trust for the brand.

The survey revealed that 100% of the Nokia and Sony Ericsson customers were satisfied with their
current handsets and were willing to recommend that brand to their friends/relatives.

This figure was only 50 % in case of LG mobile users and 33% for Motorola users which indicates us
about the customer satisfaction for the mobile phone, which in turn can tell us about how loyal a
customer is, because when he is not recommending, he is not making people buy the brand.

Brand Tracker : Stage 2 Product and Brand Management

Recommendation Model 23

According to the survey, 83% of the customers look for Features when going in for buying /
recommending. It was followed by the Ease of Use (60%) i.e. how user friendly a phone is and Price
(53%) of the handset. Availability i.e. the distribution reach for mobile phones was judged as an
important parameter of buying by only a third of the respondents.

All Mobile Users Nokia Users

100% 100%
90% 83% 90%
78%
80% 80%
67%
70% 60% 70% 61%
60% 53% 60%
50% 50%
40% 30% 30% 40% 33%
28%
30% 30%
20% 20%
10% 10%
0% 0%

When asked from the Nokia customers specifically, it was found out that Price along-with the
Features available in the mobile phone was the driving force for people going in for
buying/recommending Nokia.

Features was chosen by 78% of the respondents while two-third of the respondents chose Price as
the main driving force behind recommending the Nokia mobile phone. This is because Nokia constantly
innovates and comes up with the user-centric phones catering to the differentiated needs of the
customers and thus, a leader in the low-end mobile handset market which.

Brand Tracker : Stage 2 Product and Brand Management

Net Take Away 24

Net Take Away

Findings

The survey results show that the Brand Equity Index is 77 percent in the mobile phone companies in
India. The sample size of 30 gave us an idea as to what could be the market share of individual
companies operating in India. The survey findings are that Nokia enjoys market leadership with a
dominant market share of 67 percent. To support our findings we had come across an article which
stated Nokias market share to be around 70 percent. (Source: Economic Times, 25th August 2008).

Nokia enjoys 85 percent brand loyalty which is very high vis--vis competition. The higher the loyalty,
better the market share in a sense that the existing users who are satisfied would stick to Nokia because
they feel to buy a Nokia is a minor barrier and the features of the product offering are good.

Nokia has positioned itself as a brand catering to the needs of all segments especially Socio-Economic
Class B and C. Majority of the customers feel that they look for features in a mobile phone and with
Nokia; price is a minor barrier because customers have a perception that Nokia is not over- priced. Thus,
Nokia could tinker around with the price but not quality as it is their USP to deliver quality handsets.

Loyal customers think their brand is superior for some reason, and this superiority has the effect of
minimizing their price sensitivity. Non-loyal or occasional users have differing quality perceptions that
result in greater price sensitivity.

Recommendations

Nokia Hail Chief! They are market leaders and they should look at increasing loyalty further
which could give them the liberty to charge premium. Nokia need to provide more
customized options for their consumer in terms of overall packaging otherwise they
could be likened to being stale and boring - the alternatives win here.

Sony Ericsson Emerging Brand! It needs to convert the less loyal customers to the Top Box of the
Belief matrix in order to increase the Brand Equity which will lead to an increase in the
market share.

Motorola Emerging Brand! Motorola must try to position itself as a trade-off between features
and price. It has to position itself clearly in the minds of the consumers.

Samsung / LG Next! The companies have a similar business profile of electronic appliances. They
have stepped into the mobile market seeing an opportunity to grow as the industry is
lucrative but people perceive their pricing and quality similar to what they do in case of
electrical appliances. So concentrate on your core competency.

Brand Tracker : Stage 2 Product and Brand Management

References 25

References

REFERENCES

Brand Tracker : Stage 2 Product and Brand Management

Bibliography 26

Bibliography

Primary
Power-Premia Grid Model The survey was carried was carried out on a sample of 30 mobile users
among the students/faculty of Praxis Business School, Kolkata.

Secondary
www.nokia.com/

http://www.brandamplitude.com/images/Branding%20from%20the%20Inside%20Out.pdf

http://www.pluggd.in/2008/06/mobile-handset-market-share-india-nokia-leads-while-samsung-beats-
motorola

http://epaper.timesofindia.com/Default/Client.asp?Daily=ETKM&login=default&Enter=true&Skin=ET&G
Z=T&AW=1219653861250

List of Figures and Tables

List of Figures
Figure 1: Market Share (July 2008) ............................................................................................................... 5
Figure 2: Respondents Mobile handsets.................................................................................................... 22

List of Tables
Table 1: Belief Grid Example ....................................................................................................................... 12
Table 2: Preference Grid Example .............................................................................................................. 12
Table 3: Parameters .................................................................................................................................... 12
Table 4: Belief Grid...................................................................................................................................... 14
Table 5: Behavior Grid................................................................................................................................. 16
Table 6: Total Market Grids ........................................................................................................................ 17
Table 7: Market Summary........................................................................................................................... 18
Table 8: Loyal Customer's Belief Grid ......................................................................................................... 19
Table 9: Loyal Customer's Preference Grid ................................................................................................. 20

Brand Tracker : Stage 2 Product and Brand Management