NOKIA LUMIA

Product Management Report

12/09/2012

Name Roll No
Garvit Garg 11IB-023
Ravi Ranbir 11DM-123
Rohan Johri 11IB-048
Sahil Goel 11DM-131
Shikhar Mishra 11DM-148
Shishir Agarwal 11DM-149
Sravan Kumar Gundapu 11DM-159
Vidhan Biyani 11DM-175
Vishnu Balagopal 11DM-177
Table of Contents

ACKNOWLEDGEMENT ............................................................................................................................. 2
EXECUTIVE SUMMARY ............................................................................................................................ 3
OBJECTIVE OF THE STUDY ....................................................................................................................... 4
ABOUT NOKIA ......................................................................................................................................... 4
CURRENT SCENARIO ............................................................................................................................... 4
SWOT ANALYSIS OF NOKIA ..................................................................................................................... 5
PESTEL ANALYSIS OF NOKIA .................................................................................................................... 5
PORTER'S 5 FORCES MODEL ................................................................................................................... 7
NOKIA’S COMPETITIVE STRATEGY .......................................................................................................... 9
COMPETITOR ANALYSIS ........................................................................................................................ 10
CONSUMER ANALYSIS: .......................................................................................................................... 12
PRODUCT FEATURES & SPECIFICATIONS: ............................................................................................. 14
POSITIONING......................................................................................................................................... 15
PRICING ................................................................................................................................................. 16
PROMOTION AND LAUNCH CAMPAIGNS ............................................................................................. 19
BRANDING ............................................................................................................................................. 23
CHANNELS OF DISTRIBUTION ............................................................................................................... 25
FUTURE ................................................................................................................................................. 29
REFERENCES .......................................................................................................................................... 30

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ACKNOWLEDGEMENT
We would take this opportunity to sincerely thank Dr. C K Sabarwal for taking time off his busy
schedule and mentoring, supporting and guiding us during this academic project. The project has
provided us the understanding about product management strategy employed in Nokia for its product
Lumia and an insight into the process as a whole which would be useful for our careers ahead

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EXECUTIVE SUMMARY
The problem staring at the face of Nokia today is its loss of focus. It failed to innovate with the
technology curve and understand the changing consumer needs. Nokia seemed to successfully do
what marketing experts say you can’t do: serve all segments in a market. Nokia sold very high-end,
technologically advanced phones and simple, inexpensive phones, all under the Nokia brand. The
branding structure was very simple: the Nokia brand with a product number, such as N8, the
company’s newest smartphone, or E7. Of course, many branding problems only surface over time.
And that is certainly the case for Nokia. By playing in all segments of the market, Nokia watered down
its brand, eroding its meaning. The company stands on a double edged sword of surviving and
reviving. Nokia's new Lumia phones are considered to be its last shot at success by analysts, who
believe that if the new devices fail, the company will not be able to rise from the ashes. The Finnish
manufacturer has lost ground to Apple iPhone and Samsung Galaxy phones. In addition to this, Nokia
needs to develop a long term strategy to stay competitive and profitable in the industry.

This study primarily targets the strategy of Nokia behind Lumia and its upcoming products. All the
major sectors of product management are studied. SWOT Analysis & PESTLE Analysis were carried
out and PORTER’s 5 Forces Model was applied on Nokia during this study while doing competitor
analysis at each step. Promotion and Pricing strategy was studied and distribution channels were
analysed to find the best suitable strategy for the future using current resources and competencies.

Nokia has lost its crown and the acceptability in the market especially like India. Following a short
term strategy to increase brand equity is the first and most important task at hand. In due course,
Lumia has to be efficiently promoted and aggressively sold to generate survival resources. Finally,
Nokia needs a long term strategy to sustain the ever increasing competition in the otherwise very
profitable industry.

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OBJECTIVE OF THE STUDY
The main objective of this study is to understand the strategy planning and product management
fundamentals employed by Nokia for its latest premium product Lumia.

ABOUT NOKIA
Nokia Corporation is a Finnish multinational communications and IT corporation headquartered in
Keilaniemi, Espoo, Finland. Its principal products are mobile telephones and portable IT devices. It
also offers Internet services including applications, games, music, maps and media and messaging
through its Ovi platform, and free-of-charge digital map information and navigation services through
its wholly owned subsidiary Navteq. Nokia has a joint venture with Siemens, Nokia Siemens
Networks, which provides telecommunications network equipment and services. Nokia has around
122,000 employees across 120 countries, sales in more than 150 countries and annual revenues of
around €38 billion. As of 2012 it is the world's second-largest mobile phone maker by unit sales (after
Samsung), with a global market share of 22.5% in the first quarter. Nokia is a public limited-liability
company listed on the Helsinki, Frankfurt, and New York stock exchanges. It is the world's 143rd-
largest company measured by 2011 revenues according to the Fortune Global 500.

CURRENT SCENARIO
According to a research study from Strategy Analytics, Nokia Lumia smart-phone family with Microsoft
OS has out-shipped Apple’s iPhone and Samsung’s Android family in the first 3 quarters after their
commercial launches. It is an encouraging start for Nokia and Microsoft. According to the report,
Nokia shipped 6.9 million Lumia smart-phones with the Microsoft Windows Phone OS cumulatively
worldwide during the first 3 quarters after commercial launch, from Q4 2011 to Q2 2012. This
compares with 3.7 million units of the Apple iPhone family in its first three quarters during 2007, and
1.3 million units for the Samsung Android family in its first three quarters during 2009. It was an
encouraging start for Nokia and Microsoft. Also, based on historical shipment benchmarks, the report
said that Nokia’s Lumia portfolio is performing reasonably well. Some of the pessimism surrounding
Nokia and Microsoft’s partnership so far may be misplaced. However, Nokia and Microsoft are clearly
not out of the woods yet. With a new Apple iPhone 5 expected on the horizon, and Samsung’s Galaxy
S3 selling in huge quantities, Nokia will need to pull something impressive out of the bag for the next-
generation Windows Phone 8 launch later this year to sustain its tentative early momentum.

Comparative Analysis: Sales in Volume

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SWOT ANALYSIS OF NOKIA
Strengths of Nokia
 Great phone designing capability and great product quality reputation
 Great price point coverage(Very low to Very High)
 Supply chain and distribution experience
 Two very competitive in-house software platforms in Belle and Meego

Weaknesses of Nokia
 Poor marketing skills (excluding few markets like India)
 Could not use its global presence to create a viable ecosystem.
 Not able to leverage production and software knowledge to diversify into other product
families (Camera and Tablets could have a natural choice)
 Poor competitor and market analysis (Samsung, Micromax, Apple’s iPhone and USA market)

Threats
 Android ecosystem covers all the bases from low to high-end price points and has a booming
ecosystem.
 Samsung smartphone Apple’s iPhone are big threats in high-end market
 Micromax and other small companies taking over market share rapidly
 Very bad press coverage and poor image projection by tech media

Opportunities
 Nokia has a great market disruption with Lumia and it has a great chance of creating a unique
winning product category
 Symbian belle and upcoming versions of the Windows OS. If Nokia keeps the new product
introduction fast paced, chances are that Symbian can make a turnaround.
 QT can help to create a unique app ecosystem for Nokia for Meego, Symbian, Meltemi.
 Windows phone platform has already got all the ingredients for a powerful ecosystem.

PESTEL ANALYSIS OF NOKIA

Introduction
After conducting a Porter's 5 forces model on Nokia, I felt a PESTLE analysis would analyse the
macro environment of Nokia. These are all the external forces that are out of Nokia’s control but have
a significant effect on how the company operates and the strategic decision they make. This model
looks at the Political, Economic, Social, Technological, Legal and Environmental factors relating to
Nokia and the industry they operate in. To understand the macro environment more this article will
study each section in depth.

Political
The Political factors relates to the factors which the government also affects such as government
instability or rules and regulations which the business must follow. Nokia have recently moved one of
its manufacturing facilities to India, and because of this it is important that Nokia follow the rules and
regulations that are set in India, so that they can operate as efficiently as possible. They will have to
be aware of is the minimum wage, the maximum hours a week employees can work and especially
the Health and Safety regulations; this is to avoid any bad press or revolt from employees that will
ultimately damage the reputation of Nokia both short term and long term. As well as foreign
government it is vital that Nokia have a good relationship with their government in Finland, as any

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political instability such as a change in government or coalition may result in new laws being
implemented, which will affect Nokia a lot.

Economic
Nokia are vital to the Economy in Finland as it currently occupies a third of the market on the Helsinki
stock exchange. The organisation is so important to the economy of Finland that the government had
to step in when the business, earlier this year Nokia planned job cuts in Finland and with fears of what
that would do to the economy the Finnish government stated they were prepared to help find jobs for
those who are sacked.

Nokia will also have to be aware of changes in exchange rates, as they operate on a global scale and
drastic changes in rates can have a devastating effect on the financial operations of the company if
the business do not take appropriate steps to ensure the effects are minimum. The threat of recession
on western economy has also had an effect on the interest rates in banks, which means the cost of
borrowing money for business activities has increased and Nokia will need to be aware of the
changes in interest rate.

Social
With Nokia mainly operating in the Western market it is important for them to fully understand the
social factors in these markets and the main factor they need to understand is the culture of the
society; which is to have the latest and most up to date phone, is considered a key fashion icon.
Consumers are always after the most innovative and best looking Smartphone because in today’s
culture people are judge on how fashionable they are by their choice of mobile phone.

The increasing trend in Smartphones means when consumers purchase new mobile phones less and
less consumers are choosing the standard mobiles phones over Smartphones because of the social
trend in today’s society. Nokia is aware of this and spends the majority of their efforts developing a
Smartphone that can compete with their rivals’ products.

Technological
The technological advances in the industry are vital to the success of any new Smartphone in the
market that is continually growing, as the level of competition rises Nokia must ensure that their
Smartphones are at the highest level of innovation. With functions such as camera, internet, social
networking and email all necessities on Smartphones Nokia will have to think of other functions to
help differentiate and stand out from its rivals. As well as function more and more consumers are
looking at the software running all the functions as a key indicator of the success and quality of the
Smartphone, so Nokia’s alliance with Microsoft for their latest Smartphones seems a very good move
as everyone are aware of the technological capabilities of Microsoft and the value they can add to any
technological product.

In the past Nokia were the market leaders in innovation in the mobile phone industry, however in
recent times they have seemed well off the mark and struggle to compete with their rivals. This is why
Nokia must consider their position in the industry and attempt to once again become the market
leader by offering a new innovative capability and get to the market before its rivals.

Legal
Intellectual property is the key to any technological business and must be cared for and protected to
the fullest amount to ensure the business does not lose out to rivals. Nokia operate in an industry
where it is very difficult to have a product that is different to its competitors, when they do release a
product with an innovative capability it is vital to protect the rights to it through patents, copyright,
trademarks or design to ensure they are not “stolen” by their competitors. Not only are competitors a

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threat of intellectual, but Nokia must ensure they do not fall victim to counterfeiters who claim to be a
Nokia products but are cheap knock-offs.

As Nokia have manufacturing plants in a various countries it is extremely important that they abide by
the laws and regulations set by the different countries as the laws will differ depending on the country,
these can be employments laws, Health and Safety or even trade restrictions .

Environmental
In today’s culture it is very important for organisations to be seen as environmentally friendly and
ethical with its manufacturing, because of the global effect it has on global warming so Nokia must
ensure that they operate in an appropriate manner. With mobile phone recycling organisations
becoming more and more popular, this demonstrates how important people are regarding it. The main
issue with mobile recycling is the disposal of the batteries in the phones as these can become
dangerous if not disposed of appropriately.

PORTER'S 5 FORCES MODEL

Introduction
Nokia was founded over 140 years ago in Finland, and since then has become a global organisation
that operates in over 120 countries worldwide. Nokia has also become a market leader in the mobile
telecommunications industry and is most known for their mobile phones and Smartphone’s. Although
recent competition has affected the market share that Nokia has in the telecommunication industry
they still hold a strong 29% (as of Dec 2011) of the market share in a forever changing industry

The micro environment is the internal factors that are affected by the customers, staff, shareholders
and competitors. The best model for evaluating the micro environment of Nokia is Porter’s 5 forces as
this takes into consideration the competitors, customers, suppliers and new entrants.

Threat of new entrants

The mobile phone industry is already a well-established market and the threat of a new entrant is
quite low, as the technology needed to rival the devices already available is quite advance if they
want to differentiate from them. The barriers to entry in the mobile phone industry is high because any
new entrants will need high investments in R&D, technology and marketing in order to compete with
the established organisations. New entrants want to take market share from the larger organisations
but Nokia managed to hold 29% of the market share in the industry till Dec 2011, the highest market
share in the industry.

The threat of new entrants into the mobile phone industry is very unlikely as the start-up cost of
entering into the market at a high level needs a lot of investments and time to be considered a
respectable competitor of the already established organisations. However, smaller companies have
taken over the market from Nokia in recent months and Nokia stands at a double edged sword to
survive.

Power of suppliers
Although Nokia rely on its suppliers to supply equipment for their advanced mobile phones there are
actually a number of large equipment makers, which Nokia could switch to. The software suppliers for
their Smartphones are now Microsoft, who will have a very high bargaining power. As the leading
mobile phone company in the industry they are in a very strong position when bargaining with their
suppliers.

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Nokia are in the position where they can bargain and negotiate with any mobile phone hardware
maker because there is a high number of equipment suppliers that are readily available to them
should their current suppliers attempt to bargain for more money with them. Nokia’s main argument
would be the fact that they are a global organisation that has the highest market share in the industry,
so the suppliers would not want to lose such an illustrious organisation. On the other hand, Nokia
have recently created an alliance with Microsoft for their software which would be considered a major
coup for Nokia more than Microsoft. As a result, Microsoft will have a lot of power when negotiating a
price and share because the deal is more beneficial to Nokia than Microsoft.

In conclusion, there is a moderate threat from the powers of suppliers because although the hardware
suppliers have a very low power, Microsoft’s power over the software is very high because they’re
very few other organisations who have the expertise and skills to rival Microsoft.

Powers of buyers
The power that customers have is rising because of the increasing number of choices in the mobile
telecommunication industry. With a lot of the Nokia competitors all offering similar packages (e.g.
unlimited texts and calls) the industry is very price sensitive with customers seeking out the best value
for money. Many of the consumers will also be tied into long term contracts so switching from one
handset to another will be difficult and expensive for the consumer, as a result they may not want to
change until the contract is finished.

The mobile phone industry is a competitive market where the number of choices is very wide,
resulting in the consumer having a lot of power because they can choose to go to one of Nokia’s
many rivals if they feel Nokia are not good enough. As Nokia do not have a direct store to sell to their
consumers, intermediaries such as Car phone warehouse or network stores such as Orange also
have other handsets readily available for the consumers, which makes it difficult for Nokia to have a
direct impact on the selling of their handsets. As a result this has created a very price sensitive market
because consumers will always be on the lookout for the best deals.

In conclusion, the buyers have a high amount of power because of the other handsets they can
purchase instead of Nokia.

Threats of substitute’s products

Mobile phones are an everyday essential in people’s lives today and people would find it hard to
replace, as customers would not be able to be in constant contact when away from the house. On the
other hand, it could be said that customers would be able to contact people through others types of
media such as social networking websites, email and home telephones. Although staying in constant
contact would be hard in customers’ day to day life. However, smart phones are capable of a lot of
functions so there are many substitutes if the substitute focuses on one of the functions, e.g. digital
camera can take better photos then smart phones, notebooks can surf the web just as effectively and
PDAs can plan a day the same way a smart phone can.

Mobile phones have become an everyday necessity in peoples’ lives because of the important
functions that they can do and are all available in just one handset. No other product has the ability to
make phone calls, send messages, surf the web and many more in one device. The idea of being in
constant communication with someone at anytime and anywhere makes the mobile phone a very
important device to people. On the other hand, a mobile phone can be dissected into the key function
where there are substitutes for the functions, such as the camera function on a mobile phone can be
substituted for a digital camera which can do a better job than the camera in a mobile phone.

In conclusion, the threat of a substitute product is very low due to the fact a mobile phone is no longer
just for making calls but for all the other function as well are expected on all mobile phones. So, the
only real substitute is to buy all the functions of a mobile phone in the individual products which would
not be plausible to carry all around on a person at the same time. Without mobile phones consumers

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would find it very difficult to replace, as it can offer so much to the consumers all in one device, no
matter what the needs of the consumer are. Consumers rely on mobile phones a lot and would not be
able to find a substitute that has all the function of a mobile phone.

Threat of Competitive rivalry

Nokia rivals have moved to smart phones and androids while Nokia have only just recently released
their first smart phones leaving them trailing their rivals such as Samsung, Apple and HTC. There is
also very little differentiation between the competitors which means any new smart phones in the
market, like Nokia Lumia, will find it difficult to tempt existing iPhone and HTC customers to switch.
Intense competition from large companies such as; Apple, HTC, Blackberry, Sony Ericson and LG,
etc.

Nokia operate in an industry where the competition is extremely fierce with high investment in R&B
and marketing to compete with some of the biggest organisations in the world. After Nokia’s slow
move into the Smartphone market it has left them trailing their rivals, and has just released their
Lumia range which will find it difficult to compete and win over consumers from their iPhones.

In conclusion, competitive rivalry is very high and Nokia must be aware of the threat that competitors
have on their business especially with the growing popularity of the Samsung Smartphones, Apple
iPhone and RIM blackberry. The competitive rivalry is the biggest threat to Nokia because in the
Smartphone market they are considerably behind and to increase their market share will take a lot of
work in a market where some of the biggest names in business operate.

NOKIA’S COMPETITIVE STRATEGY

From a dominant position with 40 per cent market share globally four years ago (Q1-2008), it has
plummeted to 20 per cent. India, a place where it has enjoyed undisputed dominance over the phone
market for years, is no longer its impregnable stronghold. Its share in the Indian phone market has
also nosedived, from 72 per cent in 2008 to 38 per cent in 2012 (Q1-2012). One important reason is
that the low-end segment of the market, Nokia’s bread-and-butter category, where it became a
household name, is becoming fiercely competitive. Home-grown players have entered with cheap,
slick products, while Chinese knock-offs have also flooded the market. It is a country, however, that
the Finnish phone maker cannot afford to ignore. Sadly, due to the parallel growth of other smart-
phone players like Samsung & Apple in India, their focus shifted to the smart-phone category and lost
ground to their main segment.

Nokia Lumia smart-phone family adopted the strategy of providing differentiation without any price
premium, which deviates completely from their earlier strategy for low-end segment. This was
considered by Nokia as the main basis of competitive advantage against its major rivals.

This differentiation has provided Nokia the sustaining competitive advantage. With a complete
makeover from the kind of products that Nokia used to shell out of its factory, the Lumia series
created difficulties in imitation by the competitors considering the unique platform created by Nokia
through Windows 7 OS.

Traditionally, Nokia has held the mass-marketing strategy for its entire duration in India but with the
launch of Nokia Lumia smart-phones and its newer versions of smart phones with Windows 8, they
look to move to focus on dedicated support for its smart phones.

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COMPETITOR ANALYSIS
Competitor analysis system model is used to identify the close competitors of any product in the
market and understand their current objectives, current strategies, future strategies and advantages.
Below shown is the basic competitor analysis system consist of different stages

Secondary Data Primary Data

Key Questions to be answered:

- Who are they

- What are the competing
product features?
- What do they want?
- What is their current strategy?

Differential competitor advantage

analysis, i.e., who has the competitive
product advantage

What are they going to do?

Competitor Analysis System

This model is split into two parts, first to identify its competitors through the data sources available
and the later part is the available competitor’s data analysis part. This analysis part basically consists
of identifying the competitor’s product features, current strategy, advantage analysis and their future
strategy. Let us implement this model and find out the competitor analysis for Nokia Lumia

Identify Close Competitors of Nokia Lumia

Through various secondary and primary data sources like Internet sources, newspapers, internal
sources annual reports, etc., we identified 4 major Smartphones that will give competition to Nokia
Lumia. They are:

 Samsung Galaxy S3
 Apple iPhone 4S
 Sony XPeria T
 HTC Desire X

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In addition to these Smart Phones, it is also identified that there are few upcoming phones coming up
later in this year like Apollo (newly designed windows phone by Microsoft) and iPhone 5.

Competitors Product Features Matrix

Feature Samsung Galaxy S3 Apple iPhone 4S Sony XPeria T HTC Desire X
Operating System Android 4.0 iOS Android 4.0 Android 4.1
Display Size 4.8 Inches 4.5 Inches 4.55 Inches 4 Inches
Battery 2100mAh Li-ion 1900mAh Li-ion 1850 mAh, Li-ion 1650 mAh, Li-ion
Camera 8 MP 8 MP 13 MP 5 MP
Processor Exynos 4412, 1.4Ghz Dual Core A5 Dual Core, 1.5 Ghz Dual Core, 1Ghz
Price ~ Rs. 37,800 ~ Rs. 37,900 ~ Rs. 25,000 ~ Rs. 20,000

From, these above specifications it is visible both Samsung Galaxy S3 and Apple iPhone 4S
completely dominates the other two products, however both these products are priced very high and
these products are categorized as mass premium product segment particularly in India.

Competitors Objectives
Samsung Galaxy S3: Current Objectives of Samsung Galaxy S3 is to provide better quality and
comfort product to its customers at a lower cost than its major competitors provide. Also, their main
objective is to capture the market by providing the latest available technology in mobile industry to its
existing and new customers. As promised, some of the latest things embedded in Samsung Galaxy
S3 are bigger screen, thinner and lighter design and more powerful processor which means it is
strong enough to contender to attract market share from its contenders. Apart from these they also
plans to excel in near future with design& build, performance, operating system & software, camera,
connectivity, battery & storage.

Apple iPhone 4S: Current Objective s of Apple iPhone 4S also somewhat similar to that of Samsung
Galaxy S3.However , their motto that differs from rest of its competitors is try to be more innovative
than rest of its competitors in each of its product specifications. Also, it is trying to dominate the
market by introducing new features in its products like iCloud, retina display and etc.

Competitors Strategies
Samsung Galaxy 3S: Samsung, on its part is pursuing aggressive marketing strategies to sustain the
hype around Galaxy S3, which is billed as the official smartphone of the London 2012 Olympics. The
company claims this to be one of its biggest communication drives, with heavy advertising across all
media platforms. There has been a lot of focus on experiential marketing, with consumers getting a
first-hand experience of the power of the phone through different consumer touch points and
activations.

On the company’s active pursuit of digital marketing, 50 per cent of mobile users being netizens,
digital marketing holds significant potential since a lot of the information capture and pre-purchase
decisions are made on the web. The brand recognition and reputation of the Galaxy series and the
marketing hype built around the phone are notable positives for the company, with the greatest
advantage being the presence of the Android operating system.Bang in the Middle applauds the
phone from a device perspective, with its bright screen, camera, and other features but finds it lacking
from an ‘experience’ perspective. “The problem lies with the Android platform. Since the Android
works on a platform where the hardware is not standardised, every phone will give a different
experience.

Apple iPhone 4S: Apple’s goal for their mobile business is not to take a Microsoft-like monopoly of the
industry, but rather to take a sizable portion—twenty-five to thirty per cent or so. Since Apple is
fundamentally about innovation, differentiation, they seek high profit margins, and thus they does not

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need overwhelming market share. Strong profit margins allow them to have a high percentage of the
industry’s profit share without a corresponding market share. It should be asked, then, why they
should seek a market share as high as twenty-five to thirty per cent if they are targeting higher profit
rather than market share. The reason is that some level of market share is necessary to attract
developers, both in quantity and quality, to develop for the platform. Gaining market share, however,
should not be Apple’s primary goal—it is just a means. Market share today does not guarantee
market share tomorrow. Rather, Apple’s goal is to define what these devices are, again and again, so
the competition responds to Apple.

The iPhone’s release in 2007 is a perfect example. Before the iPhone, no smartphones used touch as
a primary means of input. After its release, however, most smartphones use large touch screens and
even resemble the iPhone. In the mobile market, Apple is following a similar path as it did with the
Mac: hardware and software are integrated. With Android OS, however, Google is using Microsoft’s
strategy (with a few differences). In an attempt to grab market share, Google allows any device
manufactures to use Android on their smartphones. By giving away the operating system and taking a
majority of the market, Google can ensure a place for the company in the mobile market, entice
developers to their platform and commoditize their competitor’s main advantage—the operating
system. This is not the proper strategy. Apple’s basic business model is to sell hardware. Everything
else—the operating system, iTunes, the App Store—are used to make their products more valuable
and thus to increase hardware sales. Apple enjoys high profit margins on their products not because
the hardware is better than what others offer (although that is a part of it), but primarily because their
software is better.

If Apple were to license the iPhone OS to other manufactures, this would give away their hardware’s
main advantage and thus significantly cut into their sales. Apple would have to find a different
business model. If Apple merely follows Google’s strategy, but plans just to do it better, they are
playing on Google’s terms, and that is a difficult game to win. Instead, Apple should differentiate the
platform. Because the Android platform is spread over a large number of devices and manufactures, it
is necessarily fragmented. Some devices have 3.5 inch screens while others are 4.3 inches; some
have track balls; some have hardware keyboards while others do not. Worse, because Android
devices are manufactured by different companies with unique versions of the operating system, and
are dependent on them for software upgrades, some Android phones are stuck on older versions of
the operating system that cannot take advantage of new features or applications. This is confusing for
users and makes it difficult for developers to build applications that can run on the entire platform.
Android may have twenty-eight percent of the market in the last quarter, but developers can only build
applications for a portion of those devices. This is terrible for users and developers.

CONSUMER ANALYSIS:
Few things that any company should know about their current and potential customers, they are as
follows:

 Who buys and uses the product

 What customers buy and how they us it
 Where customers buy
 When customers buy
 How customers choose
 Why they prefer a product
 How they respond to marketing programs
 Will they buy it again

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Let us try to gather some related to these questions for our product Nokia Lumia

Who buys and uses the product: In order to identify who buys and uses Nokia Lumia 800 we must
study demographic, socioeconomic, personality and psychographics.

 Demographic: Particular people who are in the age group of 18-35 yrs. uses smartphones
more often hence we can target people in the age range. Both male and female who are
professionals, students, managers and etc. and who earns an income of up to Rs. 10 Lakhs
per annum can be targeted as buyers and users of Nokia Lumia 800.

 Psychographic: People from different social class like upper middle class, lower upper and
upper classes can buy and uses Nokia Lumia 800. Coming to personality among Nokia Lumia
800 users we find most them are ambitious.

 Behavioural: It again depends on the behaviour of the customers to decide their stand to any
product. According to a study is revealed that Nokia Lumia 800 buyers are more of occasion
orientated, cares for the quality, regular user and loyal towards Nokia products.

What customers buy and how they use it: It is simple to explain what customers buy is benefits of the
product; however they need to know to enhance those benefits in order to yield positive results. Say
for example consider operating system of Nokia Lumia 800 which is windows 8, however it is difficult
for an android user to use it more comfortably. This kind of description appeals to both the features
and hungry customer and to the customer who needs the features translated into terms of he or she
can understand.

 Purchase Pattern of the customers need to understood to identify the customers of Nokia
Lumia 800. This can be identified by the approach called RFM (Recency, Frequency &
Monetary value). This describes how recently customer buy a mobile product and how
frequently he purchases different products like mobile, pc , electronic house hold goods etc.
and value of the his/her purchases in terms of profits.

 Product Pattern is another useful pattern to that is related to “what” question. It involves
number of different brands purchased by the customers in the smartphones segments.

Where customers buy: For a product like Nokia Lumia 800 it is very important to decide where
customer is going to buy the product. This purchase decision has a critical input into the channels of
distribution. Many product managers think of channels as being fixed and traditional, but customers
migrate to other channels as their information needs and other market conditions change. Hence,
Nokia maintains wide range of retail outlets in which its latest inclusion of Lumia 800, Lumia 710, &
Lumia 610 are available

When customers buy: It emphasis on the timing when a customer buys a product like time of year,
time of month and even time of day. For Nokia Lumia the sales are related to snow blower sales to
the end users which are most likely to be highest during winter or in late fall. However, majority of
sales comes in an uneven fashion which depends on season or occasion.

How Customers Choose: The model followed in choosing any Lumia product is The Multiattribute
Model, in which decision is composed of 4 parts. In case of Nokia Lumia 800, customers choose
various parameters like attributes, perceptions, importance weights and hurdles. In these parameters
customers tries to gather sufficient information and combines all the information and compares with its

Page 13 of 30
competitor products and then finalises his/her decision. In this process in fact acts as problem solver.
It is found that Lumia customers particularly follows this process where collecting all related
information and comparing with its competitors.

Why they prefer a product: This question primarily relates to this is customer value and answer why
they prefer a product. While coming to the customer value with Lumia product it always depends on
the facts that benefits offered and the costs involved. These customer values depend on various
sources for a Lumia 800 product. Sources are like economic, functional, and psychological. Customer
value of Lumia 800 is evident from its price, price sensitivity, complaints and compliments and
marginal sales.

How they respond to Marketing Programs: In addition to product itself, company must know the
response of the customer to their marketing programs to avoid future hurdles in market coverage. In a
survey it came to know that customers of Lumia 800 are great judge mentors for its marketing
programs. Similarly Nokia used sensitivity analysis containing expert judgement, customer based
survey-based methods, experiments and analysis of past data are used to identify the response of the
customers to their marketing programs.

Will they buy it (again): In case of Lumia 800, the decision of customers to buy their products in
future heavily depends on their satisfaction with the current product purchased. Satisfaction is a
function of expectations of performance / quality of the product, perceived performance / quality of the
product and the gap between expectations and performance

If Nokia is able answer all these questions about their product Lumia 800 and then one can say that
the company Nokia has better understood its customers and their behaviours towards the product
Lumia 800. These analyses always helps the company to build the innovation up the ladder and come
out with new products with new features which are technically good enough and satisfies its current
and potential customers.

PRODUCT FEATURES & SPECIFICATIONS:

Currently Nokia launched 3 products into the market under the category of LUMIA, namely Lumia
610, Lumia 710, Lumia 800. All these 3 products designed by targeting certain specific audience,
hence the features and specifications of each are different as shown below. Below are some major
features of the Lumia 610, Lumia 710 and Lumia 800. Also, soon Nokia is planning to launch
exclusively for higher premium segments Lumia 820 & Lumia 920 with high end features.

Product Feature Lumia 610 Lumia 710 Lumia 800

Display Size 3.7 Inches 3.7 Inches 3.7 Inches
Dual Sim No No No
Battery Model BP-3L BP-3L BV-5JW
Battery Capacity 1300mAh 1300mAh 1450mAh
Operating System Windows Phone OS Windows Phone OS Windows Phone OS
Camera 5MP 5MP 8MP
Memory 256 MB / 8 GB 512 MB / 8 GB 512 MB / 16 GB
Price ~ Rs. 13,000 ~ Rs. 15,500 ~ Rs. 25,000

Page 14 of 30
POSITIONING
Nokia as a brand has the focus on customer relationships, the Nokia personality is like a trusted
friend. Building friendship and trust is at the heart of the Nokia brand and the human dimension
created by the brand personality carries over into the positioning strategy for the brand. When Nokia
positions its brand in the crowded mobile phone marketplace, its message must clearly bring together
the technology and human side of its offer in a powerful way. The specific message that is conveyed
to consumers in every advertisement and market communication (though not necessarily in these
words) is "Only Nokia Human Technolgy enables you to get more out of life"

In many cases, this is represented by the tag line, "We call this human technology". This gives
consumers a sense of trust and consideration by the company, as though to say that Nokia
understand what they want in life, and how it can help. And it knows that technology is really only an
enabler so that you-the customer-can enjoy a better life. Nokia thus uses a combination of
aspirational, benefit-based, emotional features, and competition-driven positioning strategies.

Current Scenario
Nokia no longer is the unchallenged market leader in the country. The Blackberrys, Samsungs, i-
Phones etc are fast eating into its market share. According to the latest 2010 (January-September)
report by IDC, a provider of market intelligence, Nokia's market share was 56.2% in 2008 and 32.9%
in 2010. The brand has lost its X factor.The major problem that Nokia faced was its inertia to change
according to customer’s evolving value perceptions and its lack of leadership and internal
collaboration leading to lack of cutting edge innovations. Be it the dual sim or the android
smartphones they were never the initiators of change but always played a catching up game from the
fore-front.

Positioning Strategy of Competitors

The Finnish giant soon realized that its fatal to shy away from the smartphone market and they came
up with Lumia 800 and Lumia 710. This is the most high end fruit of Nokia’s assosiation with
microsoft.With this Nokia has targeted the value tier segment (610) and the high end smart phone
segment (810). Further Nokia has launched the Lumia 900 which is positioned a notch above 800 and
is expected to launch Lumia 610 very soon.With the launch of Lumia, Nokia hopes to take over the
smart phone market.

Major Competitors & their positioning strategies

 Samsung Galaxy S II and S III:

It is aimed at the sporty businessman and the flashy teenager. It combines dazzling looks with
all the necessary features of a most desirable smart phone. The tagline “For the humans”,
brings in the human element and the emotional co efficient attached to it, which has for long
been the strategy for Nokia. Recently in retaliation to the claims by Apple on violation of
copyright, Samsung has come up with a brand new pitching strategy where the position S III
to be an i-Phone coming at a lower price and with a lot more features.

 Sony Xperia Arc S:

Style and durability are the key features and is positioned to be the next generation smart
phone where the customer can experience anything and everything in high definition. Even in
this phone Sony uses the lively element of humanism by portraying the device to be your
perfect companion while the ups and downs in life as its rigid enough to take it.

 iPhone 4S:

Page 15 of 30
 Innovation is the key word behind the success of every apple product and i-hones are no
different. The latest i-Phone 4S comes up with a positioning as the single multipurpose
handheld device for the individual who needs to communicate, manage their info and be
entertained all on the go. It provide the Apple store with the largest collection of applications
for all purposes. Its unmatched ultra-friendly and intuitive user interface provides a definite
competitive advantage when compared to its peers.

 Blackberry Bold:

Blackberry positions its products as the perfect mobile solution to the busy mobile
professional who always needs to be in the loop. Blackberry is a wireless connectivity solution
that allows you to stay connected to people and resources while on the go more easily and
reliably than any of the other competing technologies. Blackberry used to enjoy the maximum
aspirational brand value in the segment but its comming down recently with the advent of
more user friendly smart phones.

Nokia Lumia’s Positioning against its competitors

Lumia is Nokia’s venture into the smart phone market and is aimed at being the market leader in the
segment. Hence its positioning has to be right in the gap that is existing in the perceptual map of the
target audience. Positioning of Lumia has to be in line with the brand elements of Nokia which is
towards connecting people and opening the doors to a perfect tomorrow. Hence Lumia comes up with
the tagline

”Experience the amazing everyday”

This lively tag that puts Lumia right in the pivot of new generation smart phones and is aimed at
driving home to the customers how a normal day could be made amazing through Lumia. Its
positioned as the phone that is designed for you, more faster and funnier and will amaze you every
single day. Beat the Lumia challenge is an event that they have successfully carried out globally
where in they would pit their Lumia phone against any other phones on competing platforms and
hence underlining their positioning statements “More than a smart phone”.

PRICING
Pricing Techniques are the methods adopted by a firm to set its selling price. It usually depends on
the firm's average costs, and on the customer's perceived value of the product in comparison to his or
her perceived value of the competing products. Different pricing methods place varying degree of
emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market
situation. It takes into view factors such as a firm's overall marketing objectives, consumer demand,
product attributes, competitors' pricing, and market and economic trends.

Nokia, in India, has been able to cater to a almost whole population, in every segment, by keeping its
pricing strategy very competitive. It has kept its price constantly low for lower end phones, weeding
out even local competition, substantially. And for the premium or high end phones, it has always been
expensive, when compared to competition, to retain the brand equity.

Pricing strategy, Nokia used to follow.

Nokia followed different types of pricing strategies for different product lines. As stated, Nokia used to
have a dominant market share in every segment, and was able to maintain that for a substantial
amount of time. Following practices were followed by Nokia for various segments and various
products.

Page 16 of 30
Market Skimming
The practice of ‘price skimming’ involves charging a relatively high price for a short time where a new,
innovative, or much-improved product is launched onto a market. The objective with skimming is to
“skim” off customers who are willing to pay more to have the product sooner; prices are lowered later
when demand from the “early adopters” falls. The main objective of employing a price-skimming
strategy is, therefore, to benefit from high short-term profits (due to the newness of the product) and
from effective market segmentation.

Nokia used this for the new products, and this was to recover the high R&D costs for developing the
products. For e.g Nokia 9500 Communicator, which started at Rs. 42000 went down to Rs. 26000,
before it was withdrawn from the market.

Penetration Pricing
Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large,
if not dominant market share. This strategy is most often used businesses wishing to enter a new
market or build on a relatively small market share. A successful penetration pricing strategy may lead
to large sales volumes/market shares and therefore lower costs per unit. The effects of economies of
both scale and experience lead to lower production costs, which justify the use of penetration pricing
strategies to gain market share.

Nokia followed this with the products like Nokia 1100 and other basic phone models. Though there
price were slashed later on, but the price cuts were either not so huge or not very rapid as in the case
of high end models. This helped it in reaching deep into the Indian market and getting a stable and
loyal customer base.

Value Pricing
This is pricing strategy in which a company wins loyal customers by charging a fairly low price for a
high quality offering or the product which has high perceived value.

Looking Forward, Next Step

Nokia has adopted all these pricing strategy and has been successful, without losing the brand equity.
But looking further, Nokia is no position to dominate the market and hence has to go like a
conventional new comer, having a better product, emphasising on its better features and being very
price sensitive.

The company again is trying to do the same thing using a couple of brands which will follow different
pricing strategy. Nokia Asha, which has a series of conventional offerings in the market, is targeted at
lower income segment, with a product literally in every Rs. 100 range, from Rs.3500 to Rs. 7000.

On the other hand Nokia’s much touted premium offering Lumia, which is being promoted as Nokia’s
comeback agent, is priced similar to its competitors. It has three products in market, viz. Lumia 610,
Lumia 710 and Lumia 800, and another three with even better features announced, viz. Lumia 820,
Lumia 900 and Lumia 920. Let’s have a look at their pricing and that of their competition individually.

Page 17 of 30
Nokia Lumia 610
Nokia Lumia, lone competitor to Samsung Ace brand, is kept at Rs. 12999, but is available for Rs.
11299 in market. This price is towards the lower end of the segment, enticing the customer to go for
the phone and set up a customer base to begin with. There is a price gap from Nokia between Asha
and Lumia series. From around 7500 to 11299, there is no phone in the range from Nokia’s stable.
Nokia might be keeping this gap to be later filled in by Lumia 610, as there is a trend in the market for
the prices to fall, once the device sets foot in the market. It can be forecasted that Nokia is going to
reduce the price of this device in order to get back to the position, where it has a phone dominating in
every price range.

Lumia 610
20000

15000
Nokia Lumia 610
10000 Samsung Ace S5830

5000 Apple Iphone 3G

HTC Desire c
0
Nokia Samsung Apple HTC Sony Sony Xperia
Lumia Ace Iphone Desire c Xperia
610 S5830 3G

Nokia Lumia 710

With a MRP of 15499 and ASP of 13999, Lumia 710 is brought in to compete with Samsung’s Wave,
Apple’s iPhone 4, HTC’s Legend and Sony’s X10, with similar features. Here also, Nokia’s price is
lower than the competition to give an incentive to customers for trying the phone. Running on
windows platform, the phone could leverage on high Windows PC base, but that has not been the
case till now.

Lumia 710
35000
30000
25000 Nokia Lumia 710
20000
15000 Samsung Wave II S8530
10000 Apple iPhone 4
5000
0 HTC Legend A6363
Nokia Samsung Apple HTC Sony X10 Sony X10 Mini
Lumia Wave II iPhone 4 Legend Mini
710 S8530 A6363

Nokia Lumia 800

Lumia 800 is at present the best phone in Lumia series. It has distinctive features, and a premium
pricing. Nokia has tried to keep it with the competition and is available in same range as Samsung
galaxy SII, which is one the most sold phone on the world. With MRP of Rs. 24999 and ASP of Rs.

Page 18 of 30
21999, the phone is expected to give a tough competition to HTC sensation and Sony Xperia along
with SII.

Lumia 800
40000

30000 Nokia Lumia 800

20000 Samsung Galaxy SII
10000 Apple iPhone 4S

0 HTC Sensation XE
Nokia Samsung Apple HTC Sony Sony Xperia P
Lumia 800 Galaxy SII iPhone 4S Sensation Xperia P
XE

Lumia 820,900,920
These three products are announced from Nokia to be launched in selected markets across the world,
including India, in coming months. The features have been disclosed but the prices are still not
announced. The reason most probably, seems that Nokia is going to price these phones aggressively
at lower costs than the competition, and does not want to give competitors any chance to make a
move. Also, the prices of existing Lumia phones could be dropped when these phones will be
launched so that the upgrade will look more valuable. There could be ample other reasons, but one
thing for sure, a lot for Nokia depends on success of these three products, which in turn depends on
their pricing.

PROMOTION AND LAUNCH CAMPAIGNS

Release dates
The Nokia Lumia is a series of smartphones first introduced in 2011. The series consists of Nokia's
Windows Phone devices. The name Lumia is the plural form of the word Lumi, which means snow in
the Finnish language.

The line of product under Lumia series currently consists of the following:

 Nokia Lumia 610, an entry-level phone released in April 2012

 Nokia Lumia 710, another entry-level phone released November 2011
 Nokia Lumia 800, a midrange phone released in November 2011
 Nokia Lumia 900, a high-end phone released on April 8, 2012
 Nokia Lumia 820, a high-end phone announced in September 2012
 Nokia Lumia 920, a high-end phone announced in September 2012

Indian Scenario
Nokia has unleashed its biggest-ever marketing campaign in India for the launch of its Windows-
based Smartphone Lumia on Friday (16th Dec, 2011), so as to keep itself relevant in a market being
swarmed by Google Android phones such as Samsung Galaxy range.

Built around the creative concept, ‘Amazing Everyday’, the campaign aims to highlight the three key
components of Nokia’s smartphones – communication; internet and applications, which help the
target audience to constantly sync their physical and digital worlds. The campaign is hence aimed at
reminding people that even everyday routine can be amazing and there are little adventures waiting
for us around every corner.

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The campaign includes impromptu dance performance by a foreign troupe in Mumbai; a luxury
helicopter ride for consumers in Bangalore, Hyderabad and Chennai; exclusive premiere for pre-
bookers with tennis star Sania Mirza at Ambience Mall in Gurgaon late on Thursday; a mega musical
event in Delhi on Friday, and toll exemption for more than 15,000 cars at DND Freeway connecting
Delhi and Noida on Friday, among several others including aggressive advertisement across different
media platforms, to connect with the young consumers across top cities.

Anticipated to be Nokia’s most visible campaign so far, the marketing blitz kick-started with pre-launch
activation in metros and mini metros in which ‘amazing on-ground experiences’ been have been
created for consumers: flash dance mobs in Delhi, Bangalore, Mumbai and Hyderabad; an impromptu
dance performance by an international dance troupe, dressed in neon outfits in Nokia Lumia Colours
at Blue Frog, Mumbai; Lumia Taxis in various cities; and Flash Cricket – where a celebrity cricketer
springs a surprise in a field created in a mall and plays a short version of cricket with consumers.
Experience zones in malls across key cities with giant live devices and monster headsets have also
been set up.

In line with the launch of the upcoming Nokia Lumia family of smartphones, over 5000 of Nokia’s top
retail stores, as well as Nokia Care Experience Centres, across the country will sport a new identity
including 3D and 2D in-store branding and a luminescent range of white furniture.

The television campaign comprises five short films, the first of which, hit the screens last week. The
TVC, that showcases some extraordinary moments in every-day situations, is a part of the global
campaign that has been adapted for India. The agency for all “Amazing” – on-ground activation --
activities is Encompass, the digital agency is Wunderman and the social/blogosphere bit is being
handled by Nokia’s social agency, Blogger’s Mind.

As part of the digital initiatives, Facebook has been used to amplify the ‘Amazing Everyday’
campaign. “Consumers have been invited to visit the Nokia Facebook page
http://www.facebook.com/NokiaIndia and submit short stories, videos and photos on how they have
been able to turn their everyday routine life into an ‘amazing day’. The best storytellers stood a
chance to win five Nokia Lumia handsets and other exciting prizes,

There is nothing so exciting in the product that is way beyond or different from other smartphones and
Experts are particularly critical of Nokia's decision to use only Symbian and Windows platforms for its
phones, and leave the world's most popular Android OS out.

This is the first product under the Nokia-Microsoft partnership and the stakes are high for Nokia and
Nokia may get the knockout punch if Lumia fails to inspire consumer imagination.

 “Blown Away by Nokia Lumia”

On April 2012 Nokia had launched the “Blown Away by Nokia Lumia” campaign in India. The
campaign aimed to challenge rival Smartphone brands into a competition of updating Facebook
profile. Participants who are using Smartphone brands other than the Nokia Lumia were asked to do
task such as “take a picture and upload to Facebook” or “post status update on Facebook”. It was a
competition of speed to see who will complete the specific task faster. Nokia India Marketing Director
Viral Oza said “The Lumia 800 emerged as a clear winner by winning 94% of the total 104 challenges
timed by Nielsen." It was said that Nielsen, the marketing and advertising company, validated the
campaign.

Page 20 of 30
 Nokia Lumia Promotion Activities

Global Scenario
 Australia's largest augmented reality stunt:

On March, 2012 Nokia Lumia was launched in Australia, supported by a new brand strategy and
digital-led marketing campaign to promote the Nokia Lumia 800 and Nokia Lumia 710, the company's
first smartphones with Windows Phone.

Nokia Australia's head of marketing, Jolaine Boyd said: "This new brand proposition and campaign
signals a new Nokia - a company that is thinking and doing things differently. Our aim is to
fundamentally shift consumer perceptions and educate them about Nokia's new smartphone range.
We want to put Nokia firmly in the consideration set and make the brand relevant again."

The campaign brings to life Nokia's global brand position around the 'Amazing Everyday', which is
about generating a bit of excitement in those humdrum daily routines.

The campaign is also about creating awareness around the new smartphone range, as well as
educating consumers. The campaign focuses on three core elements: out-of-home, TV and digital -
with an equal investment split across all three.

Boyd added: "Our strategy is well thought through and considered. We agreed early on that digital
would play a key role in the campaign, as it's a great way to engage in conversation with consumers.
The digital components have a strong interactive element to ensure that people get to experience the
phones."

Page 21 of 30
One of the digital activations was the Augmented Reality (AR) stunt that took place in Sydney's Martin
Place today.

The event, Lumia Live, is Australia's largest-ever interactive AR installation which saw Sydneysiders
projected onto a giant, 12 sqm screen and challenged to a virtual dance-off with Aussie music star
Timomatic.

Developed by Nokia's Australian PR agency, Fuel Communications in collaboration with digital

agency VML, the AR stunt gave consumers a hands-on experience with the Nokia Lumia's Windows
Phone interface. Further Lumia Live events took place in Brisbane and Melbourne.

The wider marketing campaign also includes a nationwide TV ad, plus several marketing industry
firsts:

 Takeover of Hills bus route from the 1st April.

 Buyout of interactive touch screens across five locations in Sydney. This is one of the most
complex installations ever carried out by JCDecaux.
 Sydney Airport buyout starting this week.
 'Little Amazing' videos, shot by everyday people on the Nokia Lumia 800, will be posted to
Nokia Australia Facebook page every day for the month of March. Each video is about
seeing the 'amazing' in day-to-day life.
 A social media campaign, which gives people on Nokia Australia's Facebook page an
opportunity to trial the Nokia Lumia.

Boyd concluded: "There is a lot of latent love for Nokia and for many, Nokia was their first mobile
phone. Our research shows that Australian consumers want the Nokia brand to succeed, so the
campaign puts us on the right path to turning this desire into a reality. But it's not just about reaching
our existing customer base, this campaign aims to touch a new audience that may never have
experienced Nokia before Lumia."

Other agencies involved in creating and executing the Nokia Lumia marketing activity include JWT
(creative), Wunderman (digital) and Carat (media).

 “The Amazing Calls” :

It may not be too popular of a brand in the U.S., but across Europe, Nokia still has a significant, albeit
dropping, number of followers. And in effort to push the sales of its newly-introduced Nokia Lumia 800
smartphone, powered by Windows Phone Mango, the manufacturer has come up with a pretty
interesting promotional campaign.

Appropriately named “The Amazing Calls”, the marketing stunt that Nokia is currently running in
France gives you the chance of receiving a call from a celebrity and even meeting them in person. All
it takes is from you to sign up at the campaign's web page. If you do not happen to be among the
lucky winners, however, you are still given the thrill of being called by another random subscriber,
which depending on your luck might be also an exciting experience.

Page 22 of 30
BRANDING
Brand Equity

1. 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. Nokia Lumia is a new entrant to the market. Right now the
situation in the segment is as such that the entire smartphone segement is highly cluttered with
players like Apple, Samsung, Sony, HTC etc. So, to generate awareness for the brand has proven to
be a challenge for Nokia Lumia.

2. 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. Although
Nokia is perceived as a high quality product but in the smartphone category it has not been able to
make its presence felt. This has led to a low perceived quality in the segment in which Lumia wants to
enter.

3. Brand association can be anything that connects the customer to the brand. It can include user
imagery, product attributes, use situations, organizational 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. Lumia brand is associated with the
parent brand Nokia and thus has a high credibility in terms of quality and brand value. But the
personality of the brand needs to be clearly defined and should not be influenced by the association
with Nokia as an umbrella brand. The users need to be associated with the brand in a way that they
find it absolutely worthy for them to be associated with such a brand.

4. Brand Loyalty is at the heart of any brand’s 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 loyalty in Nokia Lumia’s case is associated with a high loyalty for Nokia brand
and will develop trust for the brand. This gives a high initial push for the brand and could prove to be
beneficial.

New strategy for brand building is based on these five pillars:

 Plans for a broad strategic partnership with Microsoft to jointly build a new winning mobile
ecosystem.
 A renewed approach to capture volume and value growth to connect “the next billion” to the
Internet in developing growth markets.
 Focused investments in next-generation disruptive technologies.
 A new leadership team and organizational structure with a clear focus on speed, results and
accountability
 Being the first one, the partnership with Microsoft, the best-known and probably most critical
one.

About Nokia Lumia and its target segment:

The new devices are included within a new family brand called Lumia and was initially launched in
Europe, where Nokia is still a strong player in the mobile handset area. Under the strapline “live
adventure everywhere” Nokia has unveiled a “youthful” and “revitalized” marketing strategy, in which
they are expected to spend more than 120 million €. The campaign was addressed mainly to people
between 20 and 30 years old and was set on social media and digital rather than above the line
campaigns.

Page 23 of 30
Brand attributes
To start with they will have to deal with three things:

1. The pricing: The pricing for Nokia Lumia that seems to be too high, even if compared with the I-
phone and top range Android devices. This sets a high risk for the brand and has greatly affected the
sales. The valued proposition that Nokia Lumia was based on could not match with the perception of
the target group and thus there is a high mismatch between the perception of target group and the
value proposition provided by Nokia.

2. The brand positioning: The brand is not today appealing and trendy for the target group they
have defined. Youth segment that Nokia focused on, perceived it as not matching the standards of the
competitors in that segment. This perception was mainly based on the fact that Nokia brand itself was
perceived as catering to low and medium segment of the market and couldnot have a product in this
high end segment.

3. Value proposition of Nokia Lumia: Nokia and Windows aims to provide an unequaled user
experience with their latest offering. They are seemingly trying to capitalize upon the high speed
attribute of the device. Nokia Lumia makes use of the LTE network, which enables it to render the
most complex of processes at lightning fast speed. The speed of Lumia is touted to be “much faster
than the iPhone’s speed capabilities.”

In a smartphone industry dominated by lifestyle brands like Apple, Nokia lost its connection with its
brand purpose, “Connecting People,” and ultimately the customer, by failing to recognize that brand is
not marketing – it’s more about defining “who” you are.

That requires (re)building the four cornerstones of successful brands.

1. Nokia needs to power up the brand strategy, “Connecting People,” that’s perfect for the lower-
end smartphones market. It can also act as a lens helping Nokia see choices through the smoke, be
able to review business options, including partnerships, and act as a decision-making tool, for
example, in innovation, a key area where Nokia struggled to produce the right goods at the right time.
This has been compounded by Nokia’s marketing myopia and inability to handle multiple tactics from
a single brand strategy, for example, retail.

2. Nokia needs the leadership to demonstrate and not assert, that it can turn the hard into the
possible. Given the chronic debilitation of brand value, Nokia’s leadership is perceived as groveling in
a frivolous pit laden with debt. So, Nokia has a great challenge to allay people’s fears, especially
partners and employees, while pursuing opportunities to fund growth by cutting costs to focus on
lower-end smartphones and a Windows ecosystem.

3. This new focus requires senior management at Nokia to rally not just with cost reduction, but to
align themselves and all partners and agencies around the strategy – leaving their egos and business
cards at the door. This third cornerstone is exceptionally difficult when you have a brand deracinated
by a business in free fall, eagerly watched by media in a frenzy that smells blood and a customer
base that doesn’t “emotionally” hold your brand in high esteem when considering what phone to buy.
Nokia urgently needs a cheap killer product – the upmarket Lumia phones won some good reviews,
but not many customers.

4. Nokia knows word of mouth is the No. 1 influencer of purchase. To get customers engaged
Nokia needs to inspire an authentic community who like Nokia and rapidly mobilize a colossal
resurgence of its customer base.

5. Nokia can be fashionable again. A reputation for solid manufacturing infrastructure and excellent
risk management and supply-chain principles worked in the past to increase customer satisfaction

Page 24 of 30
and revenues, but they need the power of brand to save them now. “Connecting People” is one of the
best brand ideas you can get. For it to succeed Nokia needs a new, more revolutionary idea to whip
up support from the media, inspire their customer base and spur growth. Many people retain a soft
spot for Nokia and “shareability” is the new ROI – “Connecting People” would be the optimum place to
start.

CHANNELS OF DISTRIBUTION
A channel of distribution or trade channel is defined as the path or route along which goods move
from producers or manufacturers to ultimate consumers or industrial users. In other words, it is a
distribution network through which producer puts his products in the market and passes it to the
actual users. This channel consists of producers, consumers or users and the various middlemen like
wholesalers, selling agents and retailers (dealers) who intervene between the producers and
consumers. Therefore, the channel serves to bridge the gap between the point of production and the
point of consumption thereby creating time, place and possession utilities.

A channel of distribution consists of three types of flows:-

 Downward flow of goods from producers to consumers

 Upward flow of cash payments for goods from consumers to producers

 Flow of marketing information in both downward and upward direction i.e. Flow of information
on new products, new uses of existing products, etc. from producers to consumers. And flow
of information in the form of feedback on the wants, suggestions, complaints, etc. from
consumers/users to producers.

An entrepreneur has a number of alternative channels available to him for distributing his products.
These channels vary in the number and types of middlemen involved. Some channels are short and
directly link producers with customers. Whereas other channels are long and indirectly link the two
through one or more middlemen.

These channels of distribution are broadly divided into four types:-

 Producer-Customer - This is the simplest and shortest channel in which no middlemen is

involved and producers directly sell their products to the consumers. It is fast and economical
channel of distribution. Under it, the producer or entrepreneur performs all the marketing
activities himself and has full control over distribution. A producer may sell directly to
consumers through door-to-door salesmen, direct mail or through his own retail stores.
 Producer-Retailer-Customer - This channel of distribution involves only one middlemen called
'retailer'. Under it, the producer sells his product to big retailers (or retailers who buy goods in
large quantities) who in turn sell to the ultimate consumers. This channel relieves the
manufacturer from burden of selling the goods himself and at the same time gives him control
over the process of distribution. This is often suited for distribution of consumer durables and
products of high value.
 Producer-Wholesaler-Retailer-Customer- This is the most common and traditional channel of
distribution. Under it, two middlemen i.e. wholesalers and retailers are involved. Here, the
producer sells his product to wholesalers, who in turn sell it to retailers. And retailers finally
sell the product to the ultimate consumers. This channel is suitable for the producers having
limited finance, narrow product line and who needed expert services and promotional support
of wholesalers. This is mostly used for the products with widely scattered market.
 Producer-Agent-Wholesaler-Retailer-Customer- This is the longest channel of distribution in
which three middlemen are involved. This is used when the producer wants to be fully
relieved of the problem of distribution and thus hands over his entire output to the selling

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 agents. The agents distribute the product among a few wholesalers. Each wholesaler
distributes the product among a number of retailers who finally sell it to the ultimate
consumers. This channel is suitable for wider distribution of various industrial products.

An entrepreneur has to choose a suitable channel of distribution for his product such that the channel
chosen is flexible, effective and consistent with the declared marketing policies and programmes of
the firm. While selecting a distribution channel, the entrepreneur should compare the costs, sales
volume and profits expected from alternative channels of distribution and take into account the
following factors:-

Product Consideration:- The type and the nature of products manufactured is one of the important
elements in choosing the distribution channel. The major product related factors are:-

 Products of low unit value and of common use are generally sold through middlemen.
Whereas, expensive consumer goods and industrial products are sold directly by the
producer himself.
 Perishable products; products subjected to frequent changes in fashion or style as
well as heavy and bulky products follow relatively shorter routes and are generally
distributed directly to minimise costs.
 Industrial products requiring demonstration, installation and aftersales service are
often sold directly to the consumers. While the consumer products of technical nature
are generally sold through retailers.
 An entrepreneur producing a wide range of products may find it economical to set up
his own retail outlets and sell directly to the consumers. On the other hand, firms
producing a narrow range of products may their products distribute through
wholesalers and retailers.
 A new product needs greater promotional efforts in the initial stages and hence few
middlemen may be required.

Market Consideration:- Another important factor influencing the choice of distribution channel is the
nature of the target market. Some of the important features in this respect are:-

 If the market for the product is meant for industrial users, the channel of distribution will not
need any middlemen because they buy the product in large quantities. While in the case of
the goods meant for domestic consumers, middlemen may have to be involved.
 If the number of prospective customers is small or the market for the product is geographically
located in a limited area, direct selling is more suitable. While in case of a large number of
potential customers, use of middlemen becomes necessary.
 If the customers place order for the product in big lots, direct selling is preferred. But, if the
product is sold in small quantities, middlemen are used to distribute such products.

Other Considerations:- There are several other factors that an entrepreneur must take into account
while choosing a distribution channel. Some of these are as follows:-

 A new business firm may need to involve one or more middlemen in order to promote its
product, while a well-established firm with a good market standing may sell its product directly
to the consumers.
 A small firm which cannot invest in setting up its own distribution network has to depend on
middlemen for selling its product. On the other hand, a large firm can establish its own retail
outlets.
 The distribution cost of each channel is also an important factor because it affects the price of
the final product. Generally, a less expensive channel is preferred. But sometimes, a channel
which is more convenient to the customers is preferred even if it is more expensive.
 If the demand for the product is high, more number of channels may be used to profitably
distribute the product to maximum number of customers. But, if the demand is low only a few
channels would be sufficient.

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  The nature and the type of the middlemen required by the firm and its availability also affect
the choice of the distribution channel. A company prefers a middleman who can maximise the
volume of sales of their product and also offers other services like storage, promotion as well
as aftersales services. When the desired types of middlemen are not available, the
manufacturer will have to establish their own distribution network.

All these factors or considerations affecting the choice of a distribution channel are inter-related and
interdependent. Hence, an entrepreneur must choose the most efficient and cost effective channel of
distribution by taking into account all these factors as a whole in the light of the prevailing economic
conditions. Such a decision is very important for a business to sustain long term profitability.

Nokia Lumia Distribution Strategy

Nokia had also established a formidable distribution network that reached over 25,000 dealers, a
network that was about three times the size of Samsung's, six times that of Sony-Ericsson's and
one-fourth of Hindustan Lever’s (India’s largest fast moving consumer goods company). Nokia
had preferred to work with distributors associated with dealers of fast moving consumer goods
(FMCGs) and consumer durables. Many of Nokia’s regional distributors were former FMCG
middlemen who found the margins in the mobile phones business more attractive.

Nokia will start selling its new smartphone LUMIA 920, potentially its last chance to break into the
most profitable part of mobile phone market and secure its future, in November this year.

To cash on the hype created by the company over the new smartphone, Nokia would like to cash on
the existing extensive distribution network it possesses. The widespread distribution possessed, as
earlier stated, still holds strong. The conventional distribution model might not work as well as it did
earlier because of the change in the product offering and the target segment of its latest release
LUMIA Series. A distribution channel which would focus on a more niche segment of the society and
has the requisite reach would be required.

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IT Channel
Nokia needs to work in two directions. It needs to help its existing partners to maximise revenue from
handset sales, including helping to sell mobile services and accessories.

But it also needs to know that for certain products there are some channels and certain device types
emerging which will go into channels other than mobile operators, and they cannot miss that
opportunity.

IT distributors are likely to become more important in the distribution of connected devices as
smartphones become small computers rather than large phones. Likewise, Nokia’s involvement with
Windows Phone means it will be more welcome in the IT channel and will have an easier route
through that channel. Microsoft are probably keen to see that as well.

With Microsoft having a key position in the enterprise space it looks as if Nokia is moving to leverage
that. Nokia is strong in the consumer and corporate space with some presence in the b2b space, so it
makes sense to expand that via its connection with Microsoft.

Telecom Partnerships
As seen with iPhone in India, and many other high end phones all across the world, tying up with
major telecom operators and bundling the phone on a contract basis along with a telecom deal seems
to be the trend catching up everywhere. It makes the most expensive of models much more
affordable to the general public and also reduces the hassles of contacting another SIM card operator
to get at the service separately.

This model has been already successfully implemented by Apple and Blackberry in India. The
‘Contract’ allows the customer to pay the cost of the instrument over monthly instalments along with
the bills of the service provider. This would bring even the most expensive of mobile phone models
within the reach of the common people and could prove to be a major platform to the now struggling
Nokia.

Also tie ups with any of the major telecom providers would also give it an advertising boost. People
would again start associating Nokia as a reliable and high performance mobile phone manufacturer,
an image which it seems to have lost.

Though Nokia seem to face two difficulties in regards such a scheme:

1. The obvious complexities like entering a joint venture with a telecom industry for promotion of its
phone. The revenue sharing model might just not prove enough for Nokia to revive itself.

2. The fickle nature of Indian Consumers. The people nowadays rarely wish to keep a mobile handset
for a period longer than an year, sometimes even less. Thus a contract system, where in the
customer might be required to be tied up for close to 2 years might not sound a particularly good way .
An escape clause which would allow the customer to sell the handset along with remaining contract
could be an attractive solution for this problem.

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FUTURE
Nokia is running through tough times but following a bold and firm strategy can revive its business to
what it was once. Nokia has a strategically developed distribution network. Best in class product,
efficient supply chain coupled with inspiring and appealing promotion strategy may get Nokia the
king’s crown back. However, Nokia is running low on finances. Its cash cows (lower end phones) are
not milking and the star product (Lumia) is not shining enough. Right now, Nokia has invested all its
money and entire future in Lumia. With the entry of many players in the market, Nokia has lost its
resonance with cell phones. Also, its brand equity has decreased significantly. Now, market is
dominated by different companies in different segments. Micromax rules the low end while Samsung
rules the high end mobile phone market.

Nokia, therefore, needs to revive its brand equity quickly over a span of few years. That is the first
thing at hand. Nokia needs a short term strategy to revive its name and fame in the market. Once
stabilized, it can execute its long term strategy, which needs to be redesigned now, to stay competent
and profitable in the industry over a long period of time. Meanwhile, Lumia needs to be strongly
pushed and aggressively sold for revenue generation and sustainability in the near future.

Success of Lumia remains the only hope of Nokia to come out of self-created ‘Lumisade’
(Snowfall) and ride the sunshine of prosperity.

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REFERENCES
Product Management by Donald R. Rehmann & Russell S. Winer, TMH Publishing Co. Ltd.

Exploring Corporate Strategy by Gerry Johnson & Kevan Scholes, Pearson Education

Crossing the Chasm: Marketing and Selling Technology Products to Mainstream Consumers by
Geoffrey Moore, Harper Business Essentials

Information:

 http://www.nokia.com/in-en/
 http://en.wikipedia.org/wiki/Nokia_Lumia
 http://en.wikipedia.org/wiki/Nokia

Strategy:

 http://finance.yahoo.com/news/strategy-analytics-nokia-lumia-smartphone-185400278.html
 http://wmpoweruser.com/strategy-analytics-defends-nokias-lumia-range-notes-faster-growth-
than-the-iphone-and-samsung/
 http://scattershotmarketing.blogspot.com/2012/01/understanding-nokia-brand-strategy.html

Branding:

 http://www.forbes.com/sites/deancrutchfield/2012/06/20/nokia-four-steps-to-brand-revival/
 http://www.brandingasia.com/cases/nokia.htm
 http://www.scribd.com/doc/51986570/consumer-based-brand-equity-model
 http://thinking-brands.blogspot.in/2009/10/customer-based-brand-equity-model-cbbe.html

Other Data:

 http://www.business-standard.com/india/news/can-lumia-revive-nokias-fortunes/481244/
 http://nokiarules.wordpress.com/2012/07/23/nokia-looks-to-revamp-marketing-strategy/
 http://www.scribd.com/doc/22645241/Nokia-Brand-Equity
 http://strongbrands.wordpress.com/2010/09/14/nokias-branding-problem/
 http://mediapanther.co.in/branding/nokia-in-a-new-dressing/

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