Just a few years ago, Nokia was the dominant force and trendsetter in the mobile phone manufacturing industry. However, as of 2013, it had an embarrassingly low 3% of the smartphone market share.
Here’s where it all went south: Nokia’s marketing strategy gave them almost no chance of surviving the smartphone market. They practically jumped into a deep, dark well. Their marketing strategy and value proposition are two shining examples of what costly marketing mistakes can mean for your business.
It does not matter what kind of a business you run – selling LED lights or food – you can learn from Nokia. Here are some of the top business and marketing mistakes Nokia made that you shouldn’t:
Mistake #1: All Hardware No Software
At its core, Nokia was a mobile manufacturing company that needed to be more marketing-savvy. Even though during the early years of the company’s inception, it was acclaimed for its marketing tactics and remembered among users as the company that was excellent at transforming phones into highly fashionable accessories, it eventually fell down in the ranking due to a lack of concentration on software.
Nokia was paying too much attention to hardware and not enough to software – its engineers were real gurus at building highly innovative mobile phone designs but lacked the software known-how to fuel those devices. The software and apps were literally the backbone powering up these phones even back then, and Nokia grossly underestimated the importance of software.
Mistake #2: Lack of Value Proposition
Without a prominent value proposition, users have little reason to buy from your business, let alone pay any attention to you. The iPhone was considered somewhat of an elitist phone which integrated really well with other Apple devices while Samsung’s Android smartphones were seen as highly versatile and user-friendly mobile devices, which they still are by the way.
Nokia’s phones, however, didn’t really have any of the same zeal as their competitors. They tried to play catch up by creating phones with stunning cameras but were a little late to the party. Even if their phones did something better than both iPhones and Android smartphones, they did not seem to have a clue what it was; they lacked a value proposition and were unable to highlight this in their ads.
The Lumia is one such example which was almost a complete failure, even though it was a good phone by mobile and manufacturing standards. Unfortunately, it did nothing special and added no value. It was badly positioned from a marketing standpoint and delivered no clear message except for “here is a smartphone that works and does what every other phone does”. There was no catchy market slogan. The value proposition was sorely missing, and perhaps Nokia was clueless as to what they wanted to achieve with the Lumia line up. The Lumia 920 for instance, did nothing special to outpace its Samsung Galaxy counterparts even though it did have stunning display resolution at the time. This lack of innovation and value proposition proved costly.
Mistake #3: Inconsistent Marketing ‘Voice’
Nokia’s marketing strategy seemed appropriate at the time, though the specific messaging they used was just all over the place. It’s this lack of consistency that drives people away, and that’s precisely what happened: no one could justify how Nokia’s phones were better than others. Apple and Samsung were constantly beating Nokia phones in terms of innovative features, apps and user experience.
In fact, in 2012, Samsung was declared as a leading phone manufacturer, even surpassing Apple in sales. The South Korean electronics manufacturer earned a mind-blowing $3.65 billion in the first quarter of 2012, which was actually 22% more mobile phones than the revenue in the first quarter of 2011. In contrast, Apple’s numbers held up impressively at 35 million units which were going for just over $660 a piece, so over $200 million in sales isn’t bad at all.
At the time, Nokia was experimenting with random messages just to see how it affects the company’s future. TV advertising didn’t work out very well as Nokia’s marketing efforts were unfocused and putting a big drain on budgets. Apple and other major smartphone manufacturers were quick to capitalize on this in a huge way.
By the time the iPhone 5 arrived in late 2012, Apple had an enticing slogan to go along with it: “The biggest thing to happen to iPhone since iPhone”. The 5S model’s slogan was simply “Thinking forward”. The previous year’s iPhone 4 boasted: “The most amazing iPhone yet”. Nokia’s plain “Connecting People” slogan just couldn’t hold up to this.
Mistake #4: Ignoring the Market
Nokia was slow to make phones customized for the US market, and this didn’t exactly sit well with local carriers. In fact, it accelerated its already declining market share.
In 2009, Nokia dominated a good share of the market – the global mobile devices volume stood at 1.14 billion units and Nokia accounted for 432 units while Apple had just 20 million. Even though the iPhone was catching on, its share could hardly stand up to Nokia’s 68m smartphones. At the time, Nokia’s global share stood at 34%. In China, it dominated 35% of the market, in India 54% and in Europe too it was quite impressive to say the least.
Unfortunately, its market share was sinking in the US to less than 10%. Even after a new CEO was appointed in 2010, its global market share stood at 16%. In China, it plummeted to 4% and India, 27%, out of which it was just 7% on account of smartphones. In 2009 Nokia boasted a stock price of $16, which by now had plunged by 75% to under $4.
Other companies were making friends left and right in the US mobile carrier industry, while Nokia was just sitting on its laurels being really comfortable being the “world’s largest mobile phone manufacturer”. And it did have a massive fan base in Africa and a number of European countries; unfortunately, when they decided to jump ship, Nokia saw its multi-billion dollar earnings waning away.
Brands like Samsung, Apple, LG and Blackberry were quick to learn from Nokia’s mistakes and the first two especially started to dominate the market by a sizable chunk, which added more holes to Nokia’s already sinking boat.
Mistake #5: Sticking with Symbian
The Symbian OS is Nokia’s exclusive property and they stuck with it for quite a while. However, as luck would have it, the original iPhone released in 2007 highlighted many of the shortcomings of Nokia’s OS. In fact, it made Symbian look rather dated and Nokia fans all over were quick to open their eyes. All in all, Symbian engineers were reluctant to embrace change and start offering some of the iPhone’s OS features. It was in a constant state of rewrite and its designers simply couldn’t keep up with the iOS which was a complete rehash in terms of mobile OS user-friendliness.
Perhaps, if Nokia had been a bit more humble and “moved along with the tide”, they’d still be in the mobile phone market. Despite several revisions, Symbian was always designed with primarily device vendors in mind and then mobile operators. What the users and developers wanted was always an afterthought, and this was its biggest failure.
Adding more insult to injury was Google’s Android mobile OS, which was cross-platform and gave other manufacturers an OS to work with that had no boundaries. This armed them to go up against the iPhone and Nokia turned a blind eye to it.