Connecting People: What next?

In September 2010, IDC, the global market intelligence firm, published a report stating that Nokia had lost its plot in India and had close to 20 per cent of its share in the Indian market over the past one year.

The report was immediately shot down by Nokia and the figure is still unclear. However, the fact remains that Nokia has constantly been troubled by competitors, both large and small, in the Indian market. Micromax, Karbonn, Spice, Videocon, Lava, Lemon, GFive and a large group of Chinese imports have all given the pioneer of mobile revolution in the country a tough fight.

What should Nokia do to break the increasing clutter in the mobile phones market and deal with the competition? Should they just wait and weather the storm, given the eventual consolidation which might take place in the handset industry (reports suggest that there are over 100 players, including domestic ones)? Or should they proactively leverage their existing leadership position to battle the challenge from the large number of small players in the market?

Nokia entered the Indian handset market in 1995. In a nascent industry with few takers, Nokia managed to transform the market by introducing products tailored specifically for the Indian consumer. By initially riding on the ‘Connecting People’ plank and later emphasizing the Indian connection through its ‘Made for India’ campaign, Nokia managed to win the hearts and minds of Indian consumers. Nokia’s core proposition has long been the ability to offer value-for-money to the price sensitive Indian consumer. However, this has now been wrested from them by new entrants who are able to leverage their smaller size to offer consumers cheaper mobiles with more features. The sheer size and scale of Nokia’s operations rule out any chance for the Finnish behemoth to compete on price with smaller players.

Maybe it is now time to expand Brand Nokia’s positioning in the consumer’s mind. Nokia was the first major mobile phone player in the market. Nokia was the first player to bring mobile phones within the reach of every consumer. Nokia was the first and only player to design a mobile phone exclusively suited to Indian conditions. And Nokia has emerged as the Most Trusted Brand in the country for three years in a row. Maybe it’s time for Nokia to firmly establish these attributes in the consumer’s mind.

Authenticity is one of the key qualities that you can ascribe to Brand Nokia in India. By playing on its authenticity and originality, Nokia can effectively combat the challenge posed by smaller entrants in the market. By positioning itself as ‘the original’ mobile phone company in India, Nokia can benefit from its inherent strength in being the first mover and the leader in the market. This would help draw the consumer’s attention from cheap temporary-fix handsets to Nokia’s value-for-money offerings.

Nokia still commands the consumer’s respect when it comes to quality and performance. Re-emphasizing these attributes and positioning themselves as the first and the original mobile phone brand in the country would effectively re-position newer entrants as companies attempting to mimic the original Nokia story.

This would help divert the consumer’s attention from the price advantage offered by these players to the authenticity and originality offered by Nokia. Consumers would eventually begin to see the value derived from Nokia’s offerings and would not be dissuaded by cheaper handsets from competitors, thus robbing these players of this sole competitive advantage.

(The writer is a PGDCM student at IIM Calcutta)