Nokia Corporation

Reversing the Decline in Brand Value Presented By:Udit M Vyas PGDM 2008-10 Roll no - 0858
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Contents
• • • • • • • • • Mobile Phone Market Porters Framework : Mobile Handset Industry History Of Nokia Few Firsts SWOT Analysis Marketing Mix Nokia’s Competitors Moving Beyond Umbrella Branding Learning/ Take Away

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Mobile Phone Market
• • • • • Initially dominated by few players. Undergone considerable changes. Increased demand for converged – function mobile phones. Advanced Technology. Focus on cost, design, usability and enhanced functionality for success. 2 billion users of mobile phones worldwide.

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Porters Framework : The Mobile Handset Industry

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Porters Framework - Contd
Rivalry and Competition
Bargaining Power of Buyers

• Industry Growth Rate • Concentration and Balance • Informational Complexity • Corporate Stakes

• Buyer Info. • Buyer concentration • Switching Costs • Product Differences

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Contd….
Bargaining Power of Suppliers

Threat Of New Entrants

• Switching Costs • Impact on Differentiation • Threat of Forward Integration

• Brand Identity • Economies of Scale • Capital Requirement • Access to necessary inputs.

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Contd - Threat of New Substitutes
• IP Telephony • Escalating Mobile Costs

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History Of Nokia
• Founded in 1865, by Fredrick Idestam in Finland as a paper manufacturing company. • In 1920, Finnish Rubber works became a part of the company • In 1992, Finnish Cable Works join them • All the 3 companies merged in 1996 to form the Nokia Group

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Contd…
• Joint Venture with Salora Oy in 1979 to create Radio Telephone Company – Mobira Oy. • Created and launched the first phone , Mobira Cityman, in 1981. • Subsidiary Co. called ‘Vertu’ to design luxury mobile phones.

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Few Firsts
• 1999 : First WAP enabled mobile handset. • 2000: First mobile with Hindi menu (Nokia 3210) for India. • 2002: • 2002: • 2004: Phones. First 3G phone in Nokia 6650. First Camera Phone (Nokia 7650) First to enter into High-end Multimedia

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Nokia and It’s SBU’s

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Most Loved Brand & Fastest Growing
(Source: Interbrand)
Rank 1 2 3 4 5 6 7 8 9 10 Sector Beverages Computer Service Computer Software Diversified Consumer Electronics Restaurants Internet Service Automotive Computer Hardware Media
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Focus on 5 Areas
• Create winning devices • Embrace consumer internet services • Deliver enterprise solutions • Build scale in networks • Expand professional services

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Financials

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SWOT Analysis
Strengths Opportunities •Popular Mobile Communication Co. •Increase their presence in CDMA as well as 3G. •Wide Range of Products. •Joint Venture in Technology •Product Warranty worldwide. •Fashionable (Serves new trends).

Weakness •Higher price as compared to competitors. •Numbering system. •No clam-shell mobile.

Threats •Looking mainly at the competition. •Higher import charges. •Government Legislations.

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Marketing Mix
• PRODUCT Wide range of products. Consumer Friendly. Latest technology.

• PRICE Penetration Pricing. Competitor Based Pricing

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Marketing Mix Contd…
• PLACE Mobile phone dealerships. Malls Retail and Electrical Suppliers

• PROMOTION Magazine Ad- Campaigns on Television Outdoor Advertisements
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Competitors

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Samsung – The Korean Warrior
• Strong Branding. • Targeted mainly to youngsters & fashion-conscious people. • Various designs with cutting-edge technology. • Launched touch-screen phone ‘P520’ in 2007 • Emerged #2 player in global market. • Maintained its position in 2nd Quarter of 2007. • Metal Series & Touch Screen phones.
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Samsung SWOT Analysis
Strengths •Strong global presence. •Diversified product line. •Technology. •Strong positioning. Opportunities •Increasing mobile market. •Higher % of younger population. •Strong Demand for innovative products.

Weaknesses •Not much user friendly. •Voice clarity, Value for money. •Incompatible with different software.

Threats •Increasing competition. •Decreasing product margins.

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Nokia: Losing It’s Sheen
• Dip in market share and in brand value. • Younger buyer opted for trendier mobiles. • Marketing low priced phones in developing countries. • Poor positioning compared to Samsung. • Less advertising. • Market share declined to less than 30% in 2004.

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Nokia: Losing It’s Sheen Contd…
• Continued to produce same models. • Failed to gauge the demand for slim phones. • Lost on younger consumers. • Brand Value fell by 18%. • Ranking Slipped to #8.

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Moving Beyond Umbrella Branding
1. 2. 3. 4. N-Series E-Series Ovi Co branding with Yahoo
“What you will see coming from us in the future is not just a numbering system, you are going to start see names that carry a meaning and are important to consumers” Keith Pardy, Global Marketing Head Nokia Corporation, in 2006

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N-Series
• Launched in April 2005. • New Generation ‘Multimedia Computers’. • Each phone specialized with multimedia functionality. • Competed with iPods, Canon. • Positioned as distinct and high end brand. • Strategic Alliances with Carl Zeiss. • Targeted to the high-end segments.

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E- Series
• Launched in October 2005. • Targeted at the Business Executives. • Easy access of corporate e-mail. • Access to organization's intranet through WAP. • Positioned as new age business devices. • Competed directly with RIM and Palm.

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OVI
• Launched in August 2007. • Umbrella brand for all it’s internet services. • Mainly targeted at the young. • On-line Music Store. • Nokia Maps. • Counter Competition to iPod.

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A Brand Comeback?
• Rise in Market Share • Rise In Sales • N – Series, the profit generator • Investment in Innovation • Awards

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Learnings
• If you make less profit, you can survive. But if you fail to innovate, you won’t survive. • Customer Satisfaction is the key to success. • Learn from your past mistakes.

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