Problem of product positioning:
Nokia!!! Sounds very familiar like Parle, Bajaj, Cadbury’s, Maruti Suzuki. Well the point I want to make is the trust consumer have while buying products of these reputed brands in our country. Couple of years ago, India was a Nokia Country. Like my Dad, many Dads insisted their sons to get a Hero Honda Splendor, reason?? Its simple ‘The Trust Factor’ (Hero Honda even had an ad on TV stating the same) similarly for mobile phone it had to be Nokia. It became a household name. Since Nokia 6600, even I became a fan of Nokia, but the current stats say altogether a different story. Not because of quality. The problem is with its product positioning in low tier and high tier market.
Here are some stats (Lies, Damn Lies and Statistics….)
- Nokia market share dipped from 64% in ‘08-09 to 52.2% in ‘09-10 – and the trend continues despite launching new models every month.
- Samsung gained the market share – 10% to 17.4% in ‘09-10 – Interesting!
- LG’s market share increased marginally from 4.5% to 5.9% – Hmm…ok
- Losers include Sony Ericsson (market share fell from 6% to 3%), Motorola (3.5% to 1%), ZTE (5.6% to 1.9%) – Well let’s not talk about them for now…
- Micromax has been one of the major winners, from nothing to 4.1% – One performer to wait and watch in coming years. Btw beware of Micromax, you never know….’My first Android’ ad campaign is a success story though.
- Karbonn’s market share too increased to 3% – God Bless!
(Stats Reference: IDC India)
So what’s going wrong with Nokia?
In low end market where cost plays a crucial role, Nokia is competing with local players like Micromax, Karbonn, Chinese unnamed manufactures (no IMEI numbers) etc. People don’t purchase a mobile for a lifetime and change it bi-yearly on an average. In fact, the tendency to do so increases when the cost is on lower side.
In this market manufacturers are offering more features and benefits as compared to Nokia for the same price. (I am not talking about quality here, it comes for a price, right?) Nokia’s cost increases due to huge promotions, sponsorships, ad campaigns it does to promote its models.
(No, I am not talking about the hefty amount paid to Piggy Chops though btw did you know that the actual cost of a Levi’s jeans is around 450 rupees only!!! Rest is because of dinosaur size posters of celebrity you see everywhere!! – Source, Levi’s trusted employee)
Coming to the High end market where cost comes secondary to operating system and supporting hardware open doors to new world of possibilities. Nokia is still sticking to Symbian OS (which it had bought couple of years ago with pride, as if no one’s gonna come with alternative OS) Whereas the market is much actively interested & involved between the ongoing tussle between Apple’s iOS and Google’s Andriod (Well, Blackberry boys are on different planet, they are busy loving what they do and doing what they love. So we will not talk about them for now)
Now, despite having one of the best hardware in the market, Nokia is losing sales because of its OS Symbian 3 (Not many smart phone buyers who actually care about the adjective used before their phone are keen on using Symbian OS and prefer Andriod or iOS because of their huge Application base and large glocal community).
‘Dear Nokia, just because you own it, not necessary you should promote it. If you can’t beat the trend, join the trend’ Join the Android camp. You do your best and let the google do the rest’ – Mangoman
For example Nokia’s N8 is a hardware beauty with dull software (Lets not talk about its low frequency processor, Nokia has already defended it by stating that Symbian requires low frequency processors) Despite getting it right in most of the departments, symbian is holding back sales of such an exciting model. (I would prefer Nokia N8 with Andriod any day to the current version at price tag below 25 grand)
So what is the lollipop of the story?
- In low end market, Nokia is losing share to local competitors on feature/price ratio basis
- In Medium/higher end market, Nokia is losing share because of gloss less OS (with due respect to developers of Symbian. Lets judge a software by the end user reviews. Say no to Developer’s Curse)
- Going forward, Nokia has to change its strategy to regain the loss. Again my suggestion would be, if you cant beat them join them…( Is Nokia listening????)
That’s the problem of positioning your product which Nokia is facing at present. Similar is the story with Apple’s iPhone in India, we will discuss it some other time.
Do comment & Lets discuss