Nokia has always outsmarted its competitors by means of extensive distribution system, handsets that matched the taste of Indian customers and superior quality over its competitors thus clearing the distance between the nearest competitors by a huge margin. But things have started moving in a different direction altogether when it started facing competition from both the ends.
Nokia has always been leading the Indian Market since its entry into the Indian market in 1995. They always outsmarted its competitors by means of extensive distribution system, handsets that matched the taste of Indian customers and superior quality over its competitors thus clearing the distance between the nearest competitors by a huge margin. But things have started moving in a different direction altogether when it started facing competition from both the ends. With the entry of RIMM, Apple, Google and others in the high end space, People started perceiving Nokia’s smart phones as “not belonging to the League” as one might put it. On the other end many new entrants at the lower segment have started pricing Nokia out of the market. These cheaper, feature-rich handsets offer an attractive option to the lower end of the market which is not yet fully tapped.
Nokia that once had a lion’s share of the Indian market with almost 70% market share has made some “super mediocre” communication to public of late which is doing them no good. Even the executives at Nokia are running helter skelter in search of ideal strategy as they are getting squeezed in the middle. They are sending out contradicting messages when they said that they are not competing on the Indian Market based on price and at the same time they introduced 3 cheap QWERTY keypad phones last week to counter competition.
Not to be left behind by cheap handsets that offers similar features at a throw away price, the Finnish Giant is relying heavily on innovative distributive and finace to capture the market. Reality of saturation in the Indian Urban market has hit them lately and they are now trying to move into rural areas by tie ups with many micro finance institutions to make easy credit available to its customers and bundling it with loads of VAS customised to individual target segments.
Unlike its competitors, Nokia’s communication strategy is always aimed at the Low end customer who forms a very profitable segment for the handset manufacturers. For example, the Made for India advertisement for the Nokia 1100 is targeted at the entry-level phone user. It showed the mobile phone tied to the fender of the truck as it travels all across India thus positioning it as a phone to be used in rough dusty terrains of this country. They have always emphasised the human angle of technology rather than just trumpeting out the technological feature ensuring a customer connect. As a market leader earlier they have played an educator role when they went hard against grey phone markets and educated the customers of going legit. By means of smart marketing has been perceived as an innovator many a times when they are not. They were not the ones who introduced Hindi text display for messages but its hard sell campaign showing the Hindi text on a display has enabled it to usurp this position in the minds of the general consumer.
But of late due to pressures from both the ends they have made some serious errors in communication strategy followed by them. Pressure is on them to react as soon as possible as their market share is continously getting eroded due to head on attack from all the segments. It’s time the Executives hit the board room again and chalk out ingenious strategies to save the giant from any further losses.
Nokia is the pioneer of mobile communications in India. The first ever GSM call was made on a Nokia 2110 on its own network.Even under a not so conductive environment they have maintained an aggressive strategy and tried to always reach to the lower end of the market by means of its unique communication strategy projecting the human angle of technology. Nokia has been the pioneer of mobile telephony in India, the existence here is from 1994. Powerful Global players had their presance in India like motorola Sony Ericson Siemens etc., but still Nokia Powered its way into the Indian market pocketing a market share of almost 80% in 2007.
But things have taken a strange turn in the last couple of years as now Nokia is struggling to keep up its market leader position with latest figures showing a market share of 54.1%.
Many Smart phone manufacturers such as Apple and RIMM have already made great inroads into the Indian market and somehow nokia with its Symbian OS was being looked at as an outdated brand atleast in terms of smart phone sector. This fact is underlined by iPhones growing popularity and inspite of the popular belief that they are overpriced customers go on a buying spree.
However after Googles Android came in tough times started for nokia as Customers instantly liked the product and soon started shifting which is evident in the decline of symbians market share from 42% down to 38.1%.eventhough iphone offers little threat to nokias middle segment, emergancce of Android has offered a serious challenge and is all set to rule the smartphone market.
Nokia’s Communication Strategy
Nokia has always been targeting on the human angle of technology and they have been constantly innovating. They have taken it a step further to pitch that Mobile phones are not just about the voice telephony anymore. They have started pitching for greater attention for the use of mobile as an advertising platform. This offers a huge opportunity for advertisers tapping huge untapped potential by delivering services through mobile platforms. They have started working on a digital convergance strategy thus turning itself into an internet services firm.
They have always tried to promote the power of brand, which was evident when they came all out against grey market and communicated the advantages of going legit. They are of the view that they have to effectively leverage their strong brand name in all their communications as they say “Rich people buy big brands for vanity and poor people buy it for security.”
They say that the customer spending may be represented by E for entertainment and education, T for transport and C for communication. Realising that it is on ETC that an average customer would be spending the most, they have classified Indian customers into three categories: the premium category who pays more and gets more (50 million), the second the value buyers (150 million) and third the price conscious (50 million). They have targeted their communication towards the mid segment which is value buyers.
The launch of Nokia 1100 in late 2003 was major milestone on Nokia’s road to market leadership in India as they lowered down the price point to such a low level that they started fighting the grey market with a superior product. The Products features were well supported by effective communications by means of Made for India campaign.the messages delivered were contexual and made sense to its target group. Relevant communication have been Nokias core strenght in the lower end of the market as they always tried to project features and giving an image of a value for money product in all its communications which the customers loved.
On the 3G front Nokia is gearing up with a bouquet of new services such as music online and location based services which would be made available in all the new hand sets in the high end segments. They are now trying to come out of the advertising clutter that mobile manufacturers are already into by projecting themselves as devices plus services plus solutions as they feel that revenue from the other segments are going to rise up significantly.
Mobile purchases have not seen any slump even in the wake of recession and trying to break out into the rural markets they are seeking the help of many microfinance institutions such as SKS microfinance which has over 650 branches all over India. If this is communicated properly to the rural markets then it is going to be a sure hit as mobile phone is still an aspiration device to many. Apart from this they have already launced Nokia life tools which offers a complete package of agriculture, education and entertainment services suited for emerging markets
Where are they heading to? This is one major question that needs to be answered. With Micromax already grabbing the third spot in 2 years is all set to move up the tables. Many smaller players like Karbonn, Lemon, Lava mobiles are inflicted damges to Nokias market share here and there. If Nokia’s response in the last one year is anything to go by, Nokia is here to stay and going to reatin the top spot in the years to come eventhough they won’t enjoy an almost monopolist position they were in before.
The first strategy was getting into the smartphone market of the mobile handset by having an enterprise server, providing the beta services for free thus giving head on competition to the Blackberry who have been charging for the same.
The second strategy was having features like Ovi Music, Ovi Apps and Ovi Mail services to support in general business at the same time generate income. This has been done keeping in mind that the number of e mail users in India would reach about 130 miliion from a current 7-8 million in another five years. In order to make customers feel that they are getting more than just a mobile handset, they started giving out freebies like free Ovi Music and Ovi Apps. This is extensively used in all the communication campaigns that they have adopted.
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- Nokia Can Oust – But Not Recover From – Microsoft Mole (techrights.org)
- Nokia’s strategy for America: Target people who’ve never owned a smartphone (intomobile.com)
- Nokia’s Price War Was Surprisingly Effective (forbes.com)
- Infographic: Nokia Advertising… Windows Phone Next (marketingtechblog.com)