Brand Management: Nokia Communication Company - Case Study Example

Brand Management: Nokia Communication Company Contents Contents 2 Introduction 3 Discussion 3 Importance of Branding 3 Role of Branding on Individual and Business Customers 4 Company Background 4 Target Audience of Nokia 5 Brand Identity and Brand Visibility of Nokia 6 Brand Essence and Core Brand Promise of Nokia 7 Branding Strategies adopted by Nokia for Promotion of Products 8 Brand Equity of Nokia 8 Position of Nokia against one of its major competitor (SWOT Analysis) 11 Findings and Conclusion 12 Reference List 14 Introduction Brand Management may be defined as a company’s effort to create interconnection between its products and the targeted set of customers in order to enhance loyalty of the customers towards the product or the company as a whole (Keller, Parameswaran and Jacob, 2011). In this era of globalization, excessive marketing activities practiced by companies engaged into international business, have initiated the scope for aggressive competition among them. As a result, the companies have realised the importance of establishing an emotional relationship with the customers along with the product. In this paper, the brand management strategies of Nokia Communication Company will be analysed in terms of brand essence, brand equity, brand evaluation and positioning of the brand for the purpose of understanding how the company has been successful in maintaining perceived value of the brand in customers’ mind over a long period of time (Temporal, 2011). Discussion Importance of Branding In the present age of fast paced lifestyle, customer recognition of a product is the most important aspect for a company to survive in long run. Even if the company is involved in producing quality products, promoting it through their brand image is important to enhance recognition of the product or the company. Branding is important mainly due to two key purposes: to explore equity of the product in a qualitative manner and to accomplish leverage sales. The main importance of branding can be attributed as its ability to generate and retain customer loyalty. As the society is becoming more and more brand conscious, enhanced level of brand image may lead the customer to pay more for acquiring a branded product as well (Boone and Kurtz, 2008). Role of Branding on Individual and Business Customers Branding plays an important role for individual as well as business customers. Brand helps customers to distinguish among products available in wide range and select the product with a highest perceived value. In other words, brands facilitate demarcation of competitors’ product and enhance the scope of acceptability of a new product launched by the company (Boone and Kurtz, 2008). Figure1: Derivation of Brand Value (Boone and Kurtz, 2008) Companies benefitted from their established brand image as potential threats are reduced as compared to their competitors’ when the market experiences any economic or momentary crisis. Consumers’ willingness to pay higher price in order to obtain a particular brand, boosts up the trust level and confidence for the company about their products and this proves competency of the product in the complex, ever changing market scenario (Boone and Kurtz, 2008). Company Background Nokia is a Finland based telecommunications manufacturing company operating in more than 150 countries in the world. Initially, Nokia was engaged into manufacturing of paper. As a result of a dramatic change in business management in this century, the company has evolved as one of the largest manufacturer of mobile devices in the converging industry of internet and telecommunications (Nokia, 2014a). Eventually, the company emerged as market leader in the field of network infrastructure and advanced technologies. Huge investments on research & development and the company’s inclination towards adopting future technologies have enabled Nokia to expand their business into three segments such as Nokia Network that deals with network infrastructuring, HERE which is involved in location intelligence business and Nokia Technologies which is directed towards technological developments (Nokia, 2014a). Nokia employ more than 90,000 people into their global workforce and in terms of revenue, the company stands 274th in the list of largest company in the globe, according to 2013’s reports from Fortune Global 500. In the mobile telephone industry, Nokia continues to be the largest vendor since the development of GSM standards. With the expansion of smartphone concept, the company kept itself upgraded through assembling with Symbian. However, in order to keep pace of the rising competition with Apple, Samsung and other android devices, Nokia entered into an agreement with Microsoft on April, 2014 to join hands with Windows Smart Phone, in order to maintain their position in the market segment (Nokia, 2014b). Target Audience of Nokia Nokia’s target audience can be broadly divided into two categories- Upscale buyer from the developed nations who are interested in high end multimedia handsets and economic seeker from emerging economies who are happy with the basic features (Kotler and Pfoertsch, 2011). The target market consists of a definite group of customers in the age group between 18 and 55. The objective behind targeting the consumer of 18-30 is to promote their brand through the innovative features they constantly infuse into their products. With the attractive and entertaining features along with the sustainability of the product (Nokia is mainly famous for its extended battery life), if the brand image can be established among the young age group, comparatively older age group will be automatically attracted due to the perceived brand value of Nokia, for generations. In terms of demographics, Nokia involves customers from all genders, religion, income group and social class across nations and their diversified portfolio includes specific products for each and every customer segment available at a wide span of ranges in order to make those products affordable to the target audience (Kotler and Pfoertsch, 2011). Coming to Nokia’s recent collaboration with Microsoft, the agreement has changed the marketing avenue for the company. Introduction of Nokia X by Microsoft and Nokia together is directed towards targeting the Smart Phone users of Windows and the users of Android Tablet (Kotler and Pfoertsch, 2011). Brand Identity and Brand Visibility of Nokia In general, brand is perceived to be a subjective mental picture of a company, assumption on which is similar for a particular group of customers. This theory can be best described through the concept of brand identity, brand visibility and brand image. The notion of Brand identity may be described as the association of functional and psychological considerations which helps consumer to connect or differentiate a company’s product than that of their competitor’s product (Kotler and Pfoertsch, 2011). Figure 2: Evolution of Nokia Brand Image (Chernatony, 2010) Signatory tunes, logo, taglines and patent colour are the key constituents of brand image. Brand image ascertains the presumed qualities of the brand into the customer’s mind and it is the responsibility of the brand manager to develop the brand image over time so that the visibility of the brand may remain steady and customers perception unchanged in the long run. Nokia’s first logo contained of a fish when the company was involved into pulp mill business. Eventually, Nokia has transformed itself from pulp mill to paper manufacturing and finally to mobile phone and telecommunications business. The logo has also evolved depending on the recent trends and changing customers’ perception. Brand visibility of the company is so strong that even a child will be able to identify easily the blue logo of Nokia and the simple tagline “Connecting People” has successfully integrated customers across nations (Chernatony, 2010). Brand Essence and Core Brand Promise of Nokia Brand essence is the expressive, humanitarian, emotional and consistency approaches of the brand. In some of the business operations, the only way to sustain for a company in the defensive and competitive market is its perceived emotional brand value. However, sustainability of an emotional brand largely depends on level off consistency prevailing in the market. Brand Promise is another key aspect of Brand Management which tends to spread a message towards the society associated to the product or company as a whole (Anonym, 2008). A strong brand promise serves the purpose of the company in terms of positioning, product oriented strategy formulation and integration of customers associated to the brand to communicate the inherent message lying in the brand so that customers can differentiate the brand regarding its perceived value. Figure 3: Brand Essence Pyramid (Nokia, 2014a) The brand management team of Nokia strives to establish the most loved and admired brand in the world. The essence of the brand lies in the simple desire of the brand to connect people across the world. The brand also provides a sense of security due to its long standing battery backup. The key to success of Nokia brand managers in incorporating soul into the product is their strategy to observe the customer needs first and then to design the brand and implementing human approach to technology (Nokia, 2014a). For most of the customers, Nokia happens to be the first phone ever used. Hence, such experiences enhance the essence of Nokia as a brand. Recently, Nokia has outlined a more human brand promise in the time of launching Lumia in 2013 (Nokia, 2014a). Brand Promise of Nokia has been developed by keeping pace with ongoing innovations and analysis of trends. However, the core values of the products such as utility, usability, social values and enjoyment remain unchanged in the Brand Promise of Nokia (Nokia, 2014a). Branding Strategies adopted by Nokia for Promotion of Products Nokia plans its promotional activities in such a way that it can enhance the brand value and develop brand visibility of the company further. So, the company takes the strategy to serve two purposes at a time. Promotional activities of Nokia include offering precious gifts such as bikes and cars during festive season of particular nations in order to attract people to purchase Nokia mobiles. Printed advertisements in the form of newspaper, magazines, banners and billboards are also works towards enhancing brand image of the company. However, the company’s tagline “Connecting People” is the best way of to promote their product as all consumers across the globe connects themselves through this tagline and their unique tune used in television advertisement. Because of the positive brand image of the company, the leading actors of film industry are appointed as brand image of Nokia. In this way, more buyers are attracted to the brand and the actors also get an opportunity to enhance their own image in public as a benefit of associating with a positive brand (Hollis, 2008). In occasions, Nokia goes for joint ventures with credit card companies or companies deal with financial products as customers of those products are assumed to be high net worth individuals. Maintaining strong public relation is the main driving factor for Nokia to continue such promotional activities. Hence, from this analysis it is evident that all the promotional activities carried out by Nokia are directed towards widening their brand image. Nokia’s initiative of contributing towards social causes in turn enhances their brand image as well (Gelder and Woodcock, 2003). Brand Equity of Nokia Brand Equity portrays the intrinsic value of the brand. The perceived value which ensures the brand’s aptitude of generating more cash from the target audiences as compared to a less famous brand is known as brand equity. Brand equity ascertains consumers’ belief towards the products of the brand (Grant, 2010). According to the Customer Based Brand Equity Model proposed by Keller, understanding of customer perception is extremely important in order to construct strong brand equity. The experience gained from such understanding should also be incorporated at the time of building and developing brand so that customers can derive certain feelings and opinions from the brand. Strong brand equity leads the customer to buy more of the brand’s product, hence expands the customer base, increases sales and develops customer loyalty (Grant, 2010). Figure 4: Nokia Brand Equity Pyramid (Nokia, 2014b) Keller’s Brand Equity pyramid symbolizes four subconscious customer queries which are further sub divided into six building blocks. To analyze Brand Equity of Nokia following factors should be discussed. Brand Salience Nokia attracts every kind of customers irrespective of their level of income and standard of living. For instance, the way the company attracts customers from Singapore’s strong traditional market; customers from emerging markets of India are attracted in a similar way (Grünewälder, 2014). According to the reports of market survey, consumers recall the brand Nokia by the terms such as Durable, Blue, Connecting People and Strong Battery Life. Brand Performance The brand performance of Nokia successfully accomplishes the company’s mission. Apart from providing durable phone with long lasting battery life, Nokia continuously strives to include innovative ideas and value addition into their products in order to enhance continuous satisfaction among their customers. Features related to music, games, camera and headphones are always upgraded according to customers’ demand and expectations (Grünewälder, 2014). Brand Imagery Nokia depicts a simple but thorough meaningful image that integrates all customers across nations. User friendly, full of trendy features yet simplicity of Nokia phones appears to be most reliable to customers of every segment (Grünewälder, 2014). Brand Resonance A sentiment is attached to Nokia phones especially to the older generation as it happens to be the first phone used by them ever. Brand Judgement A brand of mobile phone is judged by its durability and added features. In terms of robustness and innovation, Nokia is judged to be the best. Brand Feelings Due to its strong battery backup, a universal feeling is associated with the users of Nokia phones is that apart from having a fancy mobile, a Nokia phone must be included in the travel kit as it gives a sense of security to the customers. Position of Nokia against one of its major competitor (SWOT Analysis) With the increasing demand for Smartphone’s around the world, Nokia is experiencing major competition from Samsung, a multinational conglomerate company. Hence, strategy formulation of Nokia in order to encounter competition from Samsung Mobiles should be discussed in terms of SWOT analysis. This will help to understand the internal strengths and weakness as well as external opportunities and threats that Nokia faces in comparison with Samsung (Grünewälder, 2014). Strength The main strength of Nokia is its strong corporate identity, durability and competitiveness whereas Samsung indicates continuous product diversification and coming out with a new range of handsets within five months. Nokia invests a huge amount in research and development to innovate products with high end features and durability. In contrast, Samsung identifies the untapped market and designs their products in such a way that they can provide high end features at an affordable price to the emerging customers of mobile phones who are strong trend followers (Grünewälder, 2014). Weakness The main weakness of Nokia is their inability to satisfy the Smartphone users. Consumers’ expectation is very complex as they anticipate of having a product from Nokia that will fetch them high end technology and latest features combined with Nokia’s specialty of providing durability at a very affordable price. High customers’ expectation along with slow movement of product development constitutes to be weaknesses of Nokia where Samsung’s strategy of mass marketing instead of niche marketing and product development without much differentiation proves to be weaknesses for the company (Grünewälder, 2014). Figure 5: SWOT Analysis of Nokia Opportunities Increasing customer awareness among developed as well as emerging nations will help Nokia to differentiate value of its products as against their competitors. Apart from that, with the increment in standard of living in developing countries, increases the demand for quality products. In case of Samsung, the company will continue to serve the industry with their wide range of cost effective Smartphone’s. (Grünewälder, 2014). Threat The biggest threat for Nokia is the standard set by the company itself. Except Samsung, further entry of mid and low ranged competitive brands such as Motorola, Sony Ericson, and Siemens etc are posed to be potential threats for Nokia and Samsung as well (Grünewälder, 2014). Findings and Conclusion After analyzing the brand management and marketing strategies of Nokia Communication Company, it can be inferred that with the established level of brand value and continuous development in brand image in contemporary consumer’s mind, the company can enjoy benefits derived from its brand equity for decades. However, the company should continue product development and diversification in the area of Smartphone in order to counter huge competition from existing mid ranged brands. Though critiques are on the negative opinion for the partnership of Nokia with Microsoft in order to come up with a new rage of smartphones, it shows the company’s constant attempt to strive towards excellence (Grünewälder, 2014). If Nokia continues to modify its business strategies and brand management according to the current trends, the company will again be able to emerge as the best among all the telecommunications and mobile phone manufacturing companies in upcoming future. Reference List Anonym, 2008. Nokia Case Study: How Can Nokia Maintain Its Market Position in the Mature European Market? München: GRIN Verlag. Boone, L. and Kurtz, D., 2008. Contemporary Marketing. London: Cengage Learning. Chernatony, L., 2010. From Brand Vision to Brand Evaluation. London: Routledge. Gelder, D. and Woodcock, P., 2003. Marketing and Promotional Strategy. London: Nelson Thornes. Grant, R. M., 2010. Contemporary Strategy Analysis and Cases. New York: John Wiley & Sons. Grünewälder, A., 2014. Analysis of Nokia‘s Corporate, Business, and Marketing Strategies: Examination of Nokia’s Strategy Execution in Three Steps. New York: Anchor Academic Publishing. Hollis, N., 2008. The Global Brand: How to Create and Develop Lasting Brand Value in the World Market. London: Macmillan. Keller, K. L., Parameswaran, M. G. and Jacob, I., 2011. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. New Delhi: Pearson Education India. Kotler, P. and Pfoertsch, W., 2011. Being known or being one of many: the need for brand management for business‐to‐business (B2B) companies. Journal of Business & Industrial Marketing, 22(6), pp. 353-377. Nokia, 2014a. User Experience Elements and Brand Promise. [Online] Retrieved from: [Accessed 18 December 2014] Nokia, 2014b. Our company. [Online] Retrieved from: [Accessed 18 December 2014] Temporal, P., 2011. Advanced Brand Management: Managing Brands in a Changing World. New York: John Wiley & Sons. Read More