Defense

Nokia’s Branding Lesson

5 Sep , 2013  

This week Nokia collapsed into the arms of Microsoft, selling its critical handset division to the software giant.

Nokia’s decline was stunning. The stock traded at over $40 per share in 2007. It now trades at about $5. It once had a market share of over 30%. It now has less than 4%.

This is partly a story about technology and defensive strategy; Nokia failed to respond effectively to changing technology and competitive attacks.

It is also a story about branding.

 

Nokia

 

Nokia tried to play in all segments of the market. The company sold cheap, basic cellular phones and advanced high-end smart phones under the same brand. This approach worked well for a while. Eventually, however, the Nokia name lost meaning. What does the Nokia brand stand for? What does the brand mean? It isn’t clear.

In a competitive market brands have to stand for something. Being a nice brand that people like isn’t enough.

Many technology companies fall into the same trap; they use the same brand to serve everyone. This is one reason these firms tend to come and go. Technology changes over time. Brands endure. Firms that rely on technology alone often struggle to hold customers over time.

You need to build a brand that people care about. These are the brands that are unique and have meaning.

*     *     *

This week I am over in Europe teaching a corporate seminar. I get back just in time to take part in a panel discussion on teaching best practices at Kellogg before heading to New York for another program.

The next session of Kellogg on Branding starts on September 29. This is a great program if you are new to brand management or if you want to refresh your skills. We have some terrific faculty in this session including Carter Cast, Greg Carpenter, Lisa Fortini-Campbell and Don Schultz. You can sign up here:  https://www.kellogg.northwestern.edu/execed/programs/brand.aspx


3 Responses

  1. Jyothis says:

    I feel , its after-effect of their resistance to react to new technology trends . They believed that , they are in a comfort zone of low-cost mobile business space , But rapid change in high end mobile space eventual propagated to all levels . Even though they tried a last chance come back with microsoft based phones , but magic did not happened .

  2. Nokia is to phones as Acura is to cars.
    What does the brand stand for?

Leave a Reply

Archives

Conversation Across the Site

  • David Rose { This sounds very very difficult. You put alot of energy into it and obviosly care. I would suggest you focus on the room and let... }
  • M E Lesniak { I think you picked the wrong hill to stand on. You work at one of the most expensive degree factories in the country and I’m... }
  • Stephen Calkins { Forgiveness based on income? What if it is a wealthy family that figured borrowing cheaply was a good deal, but there is massive wealth? What... }
  • Todd Holscher { Transparency in pricing is a very good idea. Students will still susceptible to the influence of marketing and advertising by colleges, but it’s the right... }
  • Emita Hill { Vast sums of money. Alternatively provide more support to state schools so they can lower tuition and maybe to privates strictly for scholarships. }
  • David Rose { Tim, I dont think your views are balanced. You obviously are being paid by these loans. The money has been given to your university and... }
  • Read more Comments »

Collaborate with Tim

Tim helps companies around the world build great brands. To schedule a program or event click here. To learn more about Tim’s books, click here.