Brands in the News

Nokia’s Branding Problem

14 Sep 2010  

Nokia continues to clean house. On Monday Nokia announced that the head of its smartphone division was leaving. This follows a change in CEOs. Rumors are that Nokia’s chairman, Jorma Ollila, will leave later this year.

These moves seem very appropriate given Nokia’s stunning collapse. Several years ago, Nokia was one of the dominant global players in the world of mobile communications. Today, Nokia is being left behind by Apple and Blackberry. The company’s stock price has fallen from a high of about $40 per share to less than $10 per share, reflecting the decline in the business.

One of the reasons Nokia has fallen so fast is that it has a simple branding problem: Nokia isn’t a distinctive brand. It is a brand with positive associations and high awareness, but it isn’t unique.

For many years, Nokia seemed to successfully do what marketing experts say you can’t do: serve all segments in a market. Nokia sold very high-end, technologically advanced phones and simple, inexpensive phones, all under the Nokia brand. The branding structure was very simple: the Nokia brand with a product number, such as N8, the company’s newest smartphone, or E7.

Of course, many branding problems only surface over time. And that is certainly the case for Nokia. By playing in all segments of the market, Nokia watered down its brand, eroding its meaning. What is Nokia, anyway? What would I Nokia smartphone be like? I really don’t know.

Nokia has competitors with very strong brands. Apple has created a remarkably strong brand portfolio with well-defined brands: iPod, iPhone and iPad. Blackberry is a strong brand, too.

The new leadership team at Nokia has a long list of challenges. Developing a more compelling brand portfolio should be one of the top priorities.

6 Responses

  1. Mass Friends says:

    Mass Friends…

    Nokia’s Branding Problem « Building Strong Brands…

  2. Shardevs says:

    Nokia tops the most trusted brands list in India. Considering the growth rate of mobile penetration in India ( esp. rural parts) Nokia made the correct pitch and brought the opportunity for millions of people to own a mobile phone. some of the reasons why Nokia is the no one brand in India are – Early mover advantage, user friendly mobiles, durable battery life, sturdy mobiles, wide price range and intensive distribution. However, the aspiring Indians are looking for the Apples and the Blackberries…

  3. CoryS says:

    One issue is that in smart phones, Nokia decided to go after the techie, tinkering crowd v. Apple for the consumer and BB wih the pro. That market is small and finicky.

    They have the same pieces, but they have failed to assemble them towards either market meaning that they own cheap phones globally and risk being stepped on by higher end players over time.

  4. Ifeolu Babatunde says:

    @ SRA: you’re absolutely right. It was Microsoft and not Nokia that launched the Kin last year, but this doesn’t take away from the point of my argument. Neither Nokia nor Microsoft can win the shiniest-glossiest-toy war. It’s too far from their brand equity. Microsoft should focus on developing an Operating System that supports the usability of their phones and Nokia should focus on offering affordable, functional, and accessible phones.

    @ Tim Calkins: to support my point about Nokia’s strong global brand equity, Interbrand recently released their 2010 Best Global Brands Report. Nokia was in the Top 10 out of 100.

  5. SRA says:

    Nokia was recently selected as one of the most trusted brands in India for the 2nd or 3rd year in a row. In Europe and Asia, Nokia has a strong brand image. The blog would be more accurate to say that Nokia lacks a strong brand image in USA.

    to the commenter above : Kin was from Microsoft not by Nokia.

  6. Ifeolu Babatunde says:

    While the mention of Nokia might draw blank stares to consumers in the US market, it’s important to note that Nokia has much stronger brand awareness by consumers in Europe and Asia and is still the #1 handset maker in the world. Your point is valid that Nokia has attempted to serve all segments of the market (as last year’s failed attempt to compete with Apple by launching the KIN series of social media phones demonstrated). Nokia can’t win the app war or the shiniest-glossiest-toy war. It’s strongest brand traits are in the durability, reliability, and engineering nature of its phones. With the right re-branding campaign Nokia can build on these brand traits to convert themselves into the Toyota of the mobile phone industry – a company that focuses on delivery quality products to its consumers.

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