Pop Quiz What’s the #1 mobile phone brand in the world?

Jae Kwon, Michael Nudelman,

Nancy Sagar, Andrew Wright

Glocalization Study

#5#

The World’s #1 Mobile Brand

2009 global market share (goal: 40%)

HQ:$$Finland$

countries

2009 global sales (USD)

36.6%$$

150$$

$58.7$B$

units$shipped$2009$440$million$

“The central brand elements are maintained but the execution is regional, if not local.” Anssi Vanjoki, Executive VP, Mobile Phones

But Glocalization Strategy Needs Work

India: Emerging Market 2008 sales: €3.7B 2009 sales: €2.8B

US: Mature Market 2008 sales: €1.9B 2009 sales: €1.7B

20%$ 19%$25%$ 22.3%$

41%#

30%#

17%#

8.7%#4%$

8%$ 11%$

21.4%$

1%$ 5%$10%$

21.7%$

0%$

5%$

10%$

15%$

20%$

25%$

30%$

35%$

40%$

45%$

Jun$02BMay$03$ May$05BJun$06$ May$06BJun$07$ FebB10$

Market#S

hare#

Plunge#from##1#to##4#Motorola$ Nokia$ Samsung$ LG$

#2,713##

#3,684## #3,719##

#2,809##

79%#

48%#56%# 54%#

0%$

10%$

20%$

30%$

40%$

50%$

60%$

70%$

80%$

90%$

$B$$$$

$500$$

$1,000$$

$1,500$$

$2,000$$

$2,500$$

$3,000$$

$3,500$$

$4,000$$

2006$ 2007$ 2008$ 2009$

VolaAle#but#successful#Sales$(EURm)$ Market$Share$

MARKET HIGHLIGHTS: Comparing and contrasting local decision-making

4#3#Ps##

Distribution dominance

50%#

22%#

60%#75%#

2002# 2003# 2004# 2005#

Nokia's$Market$S

hare$$

Original focus: GSM

When$Reliance$launched$CDMA$in$2003,$$Nokia’s$share$plunged.$$

But$they$quickly$responded.#90%#

GSM#dominates#the#GLOBAL#MARKET#

GSM## CDMA$

Odd distribution choices

95%# 20%#

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

US# Asia#

%#of#p

hone

#purchases#

DistribuAon#structure#is#completely#different#

Phone$is$purchased$through$carrier$

Unlocked$phone$is$purchased$first$

AT&T#34%#

#Verizon#31%#

Sprint##21%##

TWMobile#14%#

Major#US#Carriers#W#Share#of#Subscribers#

Green$=$GSM$$(Nokia's$focus)$$Red$=$CDMA$(Nokia's$missing)$$

More blunders

Branding battles with powerful carriers

Failed flagships selling expensive unlocked phones

Price: Success across the range

Price##Range#

Market##Leader#

Market#Leader’s##Share#

<$Rs.$3000$ Motorola$ 96%$

Rs.#3000W4000# NOKIA# 77%#

Rs.#4000W5000# NOKIA# 73%#

Rs.$5000B8000$ Samsung$ 45%$

Rs.#8000W15000# NOKIA# 55%#

>#Rs.#15000# NOKIA# 68%#

65%#of#the#market#

Indian$GSM$Mobile$Handset$Market$(May$2004)$

Very few phones through carriers, and mostly free (with subsidy)

Unlocked, unsubsidized, sky high

$549#for#this#vs#an#iPhone?#

$102.50#$101.80#$83.00$

$61.30$ $54.20#$43.40#

18B24$ 25B34$ 35B44$ 45B54$ 55B64$ 65$or$older$

Avg$retail$price$paid$$

Young,#techWsavvy#consumers#are#willing#to#spend#

Leading through product innovation

Customized products to meet local needs. Flashlight, extreme battery life, non-slip, impervious to heat/dust

Nokia was 1st to provide Hindi user interface, and text messaging in other Indian languages

1100 Series: world’s best-selling consumer electronics device

Largest product range and dominates the top 10

•  62%#buy$because$of#looks#•  Phone$=$“style#icon”$•  Nokia$listens$&$leads$

Products lack appeal for US customers

Factors$in$seleceng$current$phone,$June$2008$$ 18B24$ 25B34$ 35B44$Size,#shape,#and/or#style$ 64# 61# 59#

Free#or#cheap#w/contract$ 36# 37# 36#

Trust$the$brand$ 30# 27# 28#

No top 10s

Like India, style/size/shape is #1 But Nokia missed every US trend

43$38$ 37$

34$31$ 30$27#27$ 25$

21$

1$ 3$ 3$6$

3$ 3$ 7# 6$ 5$ 6$

Stylish$

Behind$the$emes$

Low rank on stylishness

Missing smartphones

#$4,781###$12,005##

#$12,707###$11,499##

0%$

20%$

40%$

60%$

80%$

100%$

2006$ 2008$

%#of#U

S#mob

ile#pho

ne#sa

les#

Smartphone#penetraAon#is#growing#rapidly#in#the#US…#

Standard$phones$

Smartphones#

US$sales,$$M$

Nokia is known as a “low cost product for over-55s.” The new N-Series is hoped to revive it among critical young technophiles. But the N-8 is late and reviews are terrible.

RIM,#42.10%#

Apple,#25.40%#

Microsoi,$15.10%$

Google,$9.00%$ Palm,$

5.40%$

…and#Nokia#is#invisible#Market$share,$smartphone$

category,$Feb.$2010$$

The US media and blogosphere is hard to impress.

Marketing Strategy Recommendations

Product •  Replace N-Series to catch smartphone trend (70% by 2015) •  Better high end CDMA models to plug gap •  Open Ovi store to win consumers / developers

–  Beat Apple: partner with Wholesale Applications Community

•  Use friendly names instead of numbers for models •  Don’t rely on global phones: design to address local tastes Price •  Basic phones are very (too?) competitive; smartphones are

too expensive. Narrow pricing boundaries Promotion •  Product placement (Matrix) for younger demographic Distribution •  Work within established distribution system in mature

markets

Marketing Strategy Recommendations

Product •  Be innovative and anticipate style trends in the US

Price •  Disguise cost of phones through carrier subsidies

Promotion •  Exploit social web to drive discussion and interest;

invest in content, community and brand awareness specifically for US market

Distribution •  Distribution through very powerful carriers is

essential; consider co-branding •  Drop attempts at independent retailing

Marketing Strategy Recommendations

Product •  Maintain broad product range and

customization options to appeal to Indian sense of style

•  Develop more mid-price smartphones to avoid losing market share during transition to smartphone dominance

•  Emphasize ruggedness and quality to differentiate from local manufacturers

Q&A