Nancy Sagar, EMBA 2011 Brand Management (MGT 478-5), Exercise 1

BRAND AUDIT FOR NOKIA’S MOBILE DEVICES IN THE US MARKET

I. BRAND INVENTORY

1. Organization’s US brands: Nokia and Symbian, a smartphone operating system that’s

used by many manufacturers including Nokia. (Symbian was acquired by Nokia.)

2. Sub-brands: The company hasn’t traditionally developed sub-brands for its US mobile

phone lines, unlike competitors including Motorola (Droid, RAZR) and HTC (Hero, Desire,

Touch). Instead, Nokia typically offers meaningless lettered numbered names; for example,

their high-end US smartphones are labeled “Nokia E” and “Nokia N” with numbers

afterward. However, they appear to be moving toward a sub-brand strategy for some

products such as the Nokia NGage gaming phone.

3. Branded features, services, and components: Ovi (online app store like iTunes);

Navigator (GPS phones with pre-loaded maps); Comes with Music (unlimited music

download service); XpressMusic (another music service); Mosh (a mobile social network

created specifically for mobile devices).

II. BRAND IMAGE & STRATEGY

1. Brand image, perceived quality, personality: In the late 1990s and early 2000s, Nokia’s

US brand personality was fun, stylish and eclectic. But today, that personality has fizzled,

and Nokia’s brand image and perceived quality in the US market is poor. “Using a Nokia

phone here mostly means I am offbeat and not always in a good way,” says industry

consultant Michael Mace.i Despite Nokia’s luster in markets like India, where Nokia deeply

understands how to create lust-worthy phones for all target segments and price points, the

U.S. brand image today is that of a cheap, dated, simple product for Mom,ii and

perceived quality is very low.

It’s fascinating that Interbrand’s #5 brand can fail so miserably in the US yet still retain

that brand value. After all, Nokia botched its entire US marketing strategy. They tried to sell

around the US carriers who control 90% of product sales; they failed to make CMDA phones

(50% of our market); they attempted to sell unlocked carrier-neutral phones which then

offered no price subsidy, meaning the end consumer pays a significant premium if they really

want a Nokia (and they don’t). As a result, Nokia has been unable to compete in the critical

US smartphone market, although they’re launching a new high-end smartphone line (the N8)

this fall. Unfortunately, reviews from industry analysts are uninspired.

2. Awareness: According to a June 2008 analysis,iii Nokia enjoys 95% brand awareness

among US adults 18+ who own a cell phone and have internet access. The report didn’t

indicate whether this awareness is aided or unaided; I assume aided. Nokia’s competition is

right there, too: Motorola’s brand awareness is 95%, Samsung is at 94% and Apple is 92%.

3. Point of differentiation / current value proposition: Nokia currently offers no clear point

of differentiation or value proposition for US consumers – one of the many reasons the

brand has fallen from #1 with 41% market share in 2003 to #4 with 8.7% (behind Motorola,

LG and Samsung) in 2010. With such weak market share despite the brand’s global strength

and 95% awareness, it’s clear that Nokia doesn’t offer a value proposition that resonates

with US consumers. Nokia executives might argue that the brand’s point of differentiation

(for its high-end phones, anyway) is style, eclecticness and superior technology, but

remember that consumers view Nokia as a dated, unstylish brand. In addition, Nokia’s

carrier-neutral distribution strategy creates very high relative price points and technical

challenges for many customers. The few US customers who are buying their high-end phones

must believe that Nokia’s value proposition is individualistic self-expression, while those

who buy the cheap phones must think the value proposition is reliability and value.

4. Brand heritage: Nokia is a Finnish company that is respected as an innovative mobile phone

and networking powerhouse. Nokia launched many firsts in the mobile industry, and the

Nokia ringtone is one of the most recognized (though somewhat detested thanks to its

ubiquity) melodies in the world. Nokia quickly became the US’s dominant mobile brand in

the late 1990s, and a Nokia phone was prominently featured in the first Matrix film (though

Nokia failed to release that model and capitalize on the publicity).

5. Brand-building activities and advertising themes: Nokia’s US brand-building activities

began with a major splash in the late 90s but have slowed to a whimper in this decade.

• 1998: Nokia ran its first Superbowl ad, a spot featuring comedian Drew Cary in a purple shirt

and with a purple Nokia phone and a tricked-out purple roadster. Nokia unveiled a new

tagline, “Connecting People,” which they continue to use today on a global basis.

• 1999-2000: Nokia continued the big spending with major media campaigns, promotions and

sweepstakes designed to showcase Nokia’s brand personality. One spot featured eccentric

individuals with phones that matched their unique styles and personalities.

• 2000s: Nokia slashed US spending just as Motorola, Samsung and LG began aggressively

attacking Nokia’s dominance. In 2007, Apple spent $91M to launch the iPhone in the US,

while Samsung invested $25.5M and LG spent $17.8M on their mobile lines.iv In contrast,

Nokia’s US budget was only $10M, though the company’s global ad budget was $500M.v

• 2008-present: Nokia has been advertising its upcoming N8 smartphone on tech websites

(TechCrunch, CNET). Ads feature a hero shot of brightly-colored phones. Yet the buzz is

negative, and in the last few days, the Chairman, the CEO and the head of Nokia’s

smartphone business have all announced their resignations on the eve of the Nokia

World developer’s conference. This brand and company is in trouble.

i Priva Ganapati, 7 Reasons Nokia Phones Get No Love in U.S., Wired.com, July 13, 2009. ii Mintel/Itracks/SSI/ Simmons NCS: Winter 2008 Adult Full Year - POP iii Ibid. iv Ibid. v Steve McClellan, Nokia Shifts Media to Carat, Adweek, June 17, 2009.