We have covered Nokia in the past and lately, the coverage has not been favorable. Nokia – in spite of being the market leader both in terms of thought and share, has been steadily losing the battle at both ends. In the smart phone segment, BB and to some extent Android have been gaining share in India and on the lower end we have the new entrants – Micromax, Zen Mobile, Lemon mobile, WynnComm have eaten Nokia’s lunch.
So what does Nokia do – how does it adapt to this changing market and be in the game. Here are a few steps I think can enable Nokia to be a significant player in the market today –
1) Change the brand and attack the lower end phones – Why does Nokia have to change the brand? Because the populace associates Nokia with a certain price point (which their sales say is synonymous with quality). The suggestion is not to lose the quality but to lose the price point e.g. Nano by Tata. Name it AIKON or something – but have an offering which hurts Micromax and its elk where it hurts most. Micromax and others arent sleeping – they have already started partnering with the big daddy – Google.
2) Change the distribution model – Have you ever walked into a Nokia store. They usually are the biggest bunch of ignorant snobs I have seen. I think it also kills choice – users think “we will get only Nokia there”. As many of us know Indian users care two hoots for customer service while they buy the product (more on this in a later point).
3) Change the commission to stockists – Because of the snobbish attitude they had because of the market share, the commissions Nokia pays to 3rd party stockists is among the lowest. I went and asked a few small stores and each of them showed me non-Nokia phones at a particular price point. On further questioning it turned out that Nokia phones get them the least margins. No wonder they have lesser incentive to sell. Micromax, Lemon (the two I asked) paid more.
4) Spend correctly on advertising – SRK is great. I am a big fan. Use him wisely – see the type of ads Aamir does for Tata sky. Apart from that, have a different ad budget and targeting for lower end phones. Most of them talk about the deliverables (see videos etc) and the price – thereby associating quality of offering directly with a price point.
5) Target Social networks – Wynncomm advertises Gmail and Facebook. Micromax has a Facebook button. I am sure there is a clientele that can benefit from just saying that “Yes we also have an application for Facebook” and maybe buy a phone for that. I also think the customer engagement on FB is almost non existent – not that the others have it – but you cant always be a follower and win right?
6) Digital marketing – We covered a bit on their release of the N8 and the Nokia India team followed up with a good response too. However I think they can go a long way in addressing the digital marketing bit. I think they have a lot of terms thrown in the response (most of which a common man wont understand – but I do – I worked at MS) and I think all that is to hide the shit that they want to spray the deodorant on.
7) Tie up with Mobile service providers – In a recent interview with the Livemint, the Nokia (India) head mentioned that tie-ups with Mobile service providers won’t work. I think that is denying a very lucrative revenue stream to them. Why cant we explore other models like pay upfront for the phone + and don’t pay for the first year (so that Discounted Cash flow at expected rate of revenue makes up the costs) and give the scheme for low entry costs for users with a great credit history. Dismissing it with a “Never” is not the way to go about it (interview here).
8 ) Sell the application store better – Nokia has an amazing app store. They also do believe that applications will be the future revenue growth drivers – refer post above. But they have not sold it AT ALL. Even crappy app stores from others get better eyeballs than Nokia Ovi (which I think has great stuff there). They could also promote India specific apps – sometimes I think common sense is not that common.
9) Have real support – I can only quote personal experience but Nokia support experience just sucks. My brother bought a Nokia which stopped working a fortnight after the buying date. When he approached the Nokia store, they mentioned that they replace the handset with a refurbished phone and NOT a new phone – in the US this would have set the scene for a nice little lawsuit – unfortunately it doesn’t happen in India. The guys were thick-skinned enough to mention that he has to remain without a phone while they arrange for the refurbished one. They also replaced his phone with ANOTHER N81 after 4 days which gave way after 4 more days. He has since filed a PIL and is waiting for them to revert.
10) Take me to your leader – You heard the leadership speak about the future direction above. I don’t’ think the direction is bad – its missing. Hopefully the change in Finland will have some effect on the market here. Don’t get me wrong – there are some absolutely brilliant people in Nokia in India. However it needs much more than that – especially from the leadership – to save a sinking ship.
Hope Mr Elop brings that in.
[1 addition from Ashish : Get Nokia India teams to spend some time in the market. The company seems to have lost the pulse of Indian market. The more I interact with Nokia teams, the more I feel that it’s another Yahoo in making (ofcourse, they should stop hiring from Yahoo and instead bring in a much more startup culture.)]