Nokia has unveiled a “youthful” and “revitalised” marketing strategy, using the internal strapline “live adventure everywhere” for the launch of its debut Windows Phone devices in a (desperated?) effort to reconquer its mobile leadership.
What has happened to this company? How is it possible that the leading mobile company is putting all its stakes in one product launch?
It is hard to cover in a blog what has really happened. I still remember where Nokia was six years ago. They were dominating by far the mobile manufacturer industry, they were the most respected and admired mobile brand in the market and invested heavily in all sort of communication campaigns, targeting every existing stakeholder. They were the kings reigning the mobile handset business and no limits were foreseen then for them.
But, as history has shown, whenever an entity is in such a strong position, they risk taking an unreal perception of where they stand, what they are good at and how to evolve themselves. And this is exactly what happened to them: Their top executives started to challenge publicly to the operators (that heavily subsidize and promote their handsets!) the ownership of the customers + tried to develop new businesses breaking the traditional value chain (with initiatives scuh as OVI) + promoted very agreesively the(ir) Symbian operating system. Good news for the investors (that seemed to approve the new strategy) but terrible consequences for Nokia for:
a. They lost out of sight how quickly the market was moving + how competition (call it Apple and Google) were creating their own web or ecosystem
b. The development of new capabilitie made them forgot what really made them strong: Innovation on handsets.
They tried to play it big, to expand in the value chain and reivent the mobile game. And after some years of strategc wandering, they found themselves isolated in the smartphone business, where (if we exclude BlackBerry) they found all the sudden to superb competitors perfecly positioned: Google and Apple.
How to regain the mobile leadership?
If you in a situation like this, you need to play hard. There is no other way. And this was exactly what Nokia did: A new CEO and President, Stephen Elop, stepped in and has actually done very reasonable things.
The first one is to bluntly admit where Nokia was really standing. He admitted that they had lost the smartphone battle and needed to rethink completely their strategy in order to be able to compete.
The result was a new strategy leveraged on four pillars:
- Plans for a broad strategic partnership with Microsoft to jointly build a new winning mobile ecosystem.
- A renewed approach to capture volume and value growth to connect ”the next billion” to the Internet in developing growth markets.
- Focused investments in next-generation disruptive technologies.
- A new leadership team and organizational structure with a clear focus on speed, results and accountability
Being the first one, the partnership with Microsoft, the best-known and probably most critical one.
What has Nokia really got from the Microsoft alliance?
The partnership has been severely criticized by analysts, that basically state that Nokia is taking all the risk and Microsoft is to eventually gather most of the credit if it works.
I somehow agree that Microsoft, that has basically gone through a similar process to the one described for Nokia, is the clear winner: Their initial share of 1,6% in the smartphone operating system is quite reduced and get a unique opportunity to get it relaunched by a key mobile manufacturer.
Whichever the case, few options were left for Nokia (besides being purchased by Microsoft). And the result so far has been impressive: It has only taken six months to Nokia to design and produce two new smartphones based on Windows Mobile, and eight months to launch them.
The new devices are included within a new family brand called Lumia and will be initially launched in Europe, where Nokia is still a strong player in the mobile handset area. Under the strapline “live adventure everywhere” Nokia has unveiled a “youthful” and “revitalised” marketing strategy, in which they are expected to spend more than 120 million €. The campaign will be addressing mainly people between 20 and 30 years old and will bet on social media and digital rather than above the line campaigns.
The key objectives, according to Mr Elop, are to foster the device trial, gain apostles thanks to the uncomparable customer experience the new family provides, attain unbeatable word of mouth and eventually reposition Nokia, as the preferred brand for smartphones.
Will it work?
Sounds cool. They have renewed their strategy, worked on partnerships, have come up with new unbeatable products, have opted for a core a target group and invested heavily in a communication campaign. But, will it work?
To start with they will have to deal with three things:
- The pricing, that seems to be too high, even if compared with the I-phone and top range Android devices (street prices for the devices are higher than € 400).
- The branding and its negative consequences (although most people are not aware of it, Lumia accounts for “prostitute” in spanish).
- The brand positioning. The brand is not today appealing and trendy for the target group they have defined.
And then defend themselves against the reaction coming from Google and Apple if their share drops significantly.
We will see if this is enough or if they have to go one step beyond and keep on on playing even more differently to make it work.
Whichever the case, great to have both Nokia and Microsoft back. This is excellent news for the economy, the industry and of course, for the customer. Really hope they succeed in creating the third ecosystem.
THINK DIFFERENT!!!
Ignacio Gafo
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