BRANDING PITFALLS ASSIGNMENT

Brand: Nokia

1. Introduction

Nokia is a Finnish multinational technology company well known for its great past as a leader in the
mobile phone sector. In the 1990s and early 2000s, Nokia was one of the largest mobile phone
companies in terms of volume, sales, market share, and profit.

Figure 1 Mobile phones produced per year for selected hardware providers

Unfortunately, Nokia’s success didn’t last forever. In the late 2000s, the company suffered from poor
management decisions, and its share of the mobile phone market dropped significantly.

In 2007, the first iPhone changed the world of telephony. Nokia then launched the "iPhone Killer," but
failed to match the competition. In just 6 years, the market value of Nokia decreased by 90%, and in
2014, Nokia sold its mobile phone business to Microsoft.
 2. Branding pitfalls

Firstly, Nokia lacked a clear vision to communicate its direction, inspire employees, and help
stakeholders understand its long-term goals. Nokia’s vision: “Connecting people and a very human
technology” doesn’t seem strong and clear enough to help the company either communicate or inspire.

Nokia overrated the importance of brand awareness. Nokia was considered the top brand in the mobile
phone market. It was undeniable that the brand awareness of Nokia was good, even today; however,
“brand awareness does not equal buying.”

In addition, their brand system didn't adapt to a changing environment. While others came up with
new features continuously, Nokia’s Windows phone lacked some basic technology essential to driving
its sales. The reason could be not only their less attractive design but also their lack of a front camera,
and they were not even 3G enabled.

This led to another branding pitfall: they do not own the brand, but the customers do. “The classic
Nokia brick phone – and the Snake game on it – brings back a lot of nostalgia. But that's a problem.
Consumers, especially in developing markets, associate the Nokia name with a different era of
technology. And in today's world, having the newest and shiniest device is what matters. Nokia didn't
market itself as an innovator, and frankly, it hasn't been doing much innovating anyway. At least not
until it entered the Windows Phone space.” (Panigrahi, Ashok, 2020)

Nokia remained stubborn, undervalued its competitors, and continued to design phones with tiny
QWERTY physical keyboards. “Not only was Nokia rather arrogant towards their natural allies, but
they failed to see the relevance of actions with an Internet background.” (Bouwman, Harry, et al.,
2014). “Being overconfident about its capabilities and abilities to manufacture the best smartphone with
different software than iOS and Android. (Panigrahi, Ashok, 2020)

Moreover, the company continued “wearing blinders.” “Customers were waiting for Nokia to launch
their Android smartphones. Eventually, Nokia decided to shake hands with Microsoft’s Windows. This
turned out to be a disaster. The Lumia series was rejected by the market. The customers realized
Android and iOS were more user-friendly than Windows.” (Panigrahi, Ashok, 2020)

Nokia also failed to implement the right umbrella branding strategy. “Nokia understood the relevance
of building an eco-system around their products but miserably failed.” (Bouwman, Harry, et al.,2014)

The company was perceived as being slow to adapt, lacking innovation, and falling behind competitors.
This loss of reputation made it challenging for Nokia to regain consumer trust and loyalty.

3. Evaluation of the alternatives

A better vision

“The vision provides direction and purpose for the whole organization. It is firstly the statement about
an intended future state and the firm’s role in it.” (Richard Jones, 2010) With a clearer vision, all of
Nokia's stakeholders could have understood more thoroughly the direction of its products and brand.
Doing market research

Understanding the market is the most important thing for Nokia to stay innovative.

Nokia should have "made a 360-degree analysis of its own” (Bouwman, Harry, et al., 2014). Nokia and
its management were defined as “arrogant”. Nokia, the undisputed market leader, watched these new
devices called smartphones and almost mocked them without ever questioning their technological
baggage or their market choices.

“One of the important solutions for Nokia is to convert customers' feedback into value, i.e., if customers
are not satisfied with anything, listen to their problems and try to solve them.” (Bhalodiya, 2018) If
Nokia had listened to its customers and adopted the Android operating system, it could have survived
like other mobile phone brands like Xiaomi, Oppo, etc.

Make use of the existing brand awareness and image

Nokia has a strong base of brand awareness; therefore, it can make use of it by increasing its brand
promotion and reinforcing the brand in the customers' minds. Nokia can use a brand-building process to
promote its brand in the direction of the Nostalgia phone, for example, to retain its brand image and
evolve at the same time.

Increase product innovation

“If Nokia wants to recover its market and position, it requires increasing innovation activities.”
(Bhalodiya, 2018) Nokia should have developed its products with more innovative features while also
following its competitors. Besides adopting the technology from Android software and including
updated features available on the market, Nokia should have also developed new features to highlight
its strengths.

Implement the right umbrella brand strategy

Nokia had different products under its brand name. However, they did not properly adjust their products
for the umbrella brand. “Samsung and Apple were quick to realize this concept. As a result of this,
Apple continued to launch its products under the brand iPhone, and Samsung started launching its
high-end smartphones under the Galaxy S series. Nokia didn’t have any such brand by that time.”
(Panigrahi, Ashok, 2020)

Differentiation strategy

Today, various mobile companies like Xiaomi, Vivo, Oppo, and other smartphone manufacturers
provide unique and different products than others to defeat rivals. Nokia could also have adopted a
strategy to reach a competitive advantage through differentiation, creating a single value for determined
purchasers, or regarding determined needs. They could produce mobiles that are unique in features and
attractive in design, as per different types of customers, like camera lovers or music lovers.
 REFERENCES:

1. Bouwman, Harry, et al. (2014): How Nokia failed to nail the Smartphone market, 25th European
Regional Conference of the International Telecommunications Society (ITS): "Disruptive
Innovation in the ICT Industries: Challenges for European Policy and Business", Brussels,
Belgium, 22nd-25th June 2014, International Telecommunications Society (ITS), Calgary

2. Panigrahi, Ashok, Failure of Nokia – Lessons from Losers (August 3, 2020). Published in the book
'Emerging Issues in Business Management' Published By: National Press Associates, New Delhi,
ISBN No: 978-81-944303-9-1 (2020), Available at SSRN: https://ssrn.com/abstract=3665875

3. Bhalodiya. (2018, March). REASONS BEHIND THE FAILURE OF NOKIA: A CASE STUDY
OF TELECOM SECTOR. International Journal of Management and Humanities, 05 (2349–7289).

4. Richard Jones (2010). Corporate Branding: the role of vision in implementing the corporate brand.
Innovative Marketing , 6(1)