Pop Quiz What’s the #1 mobile phone brand in the world? Jae Kwon, Michael Nudelman, Nancy Sagar, Andrew Wright
#5# Glocalization Study
The World’s #1 Mobile Brand HQ:$$Finland$
36.6%$$
$58.7$B$
2009 global market share (goal: 40%)
150$$countries
2009 global sales (USD)
440$million$ units$shipped$2009$
“The central brand elements are maintained but the execution is regional, if not local.” Anssi Vanjoki, Executive VP, Mobile Phones
But Glocalization Strategy Needs Work India: Emerging Market 2008 sales: €3.7B 2009 sales: €2.8B
US: Mature Market 2008 sales: €1.9B 2009 sales: €1.7B
VolaAle#but#successful# $4,000$$ $3,500$$
#3,684##
79%#
56%# 48%#
$2,000$$
#2,809## 60%$ 54%# 50%$ 40%$
$1,500$$
30%$
$1,000$$
20%$
$500$$
10%$
$B$$$$
0%$ 2006$
2007$
2008$
40%$
80%$ 70%$
#2,713##
45%$
90%$
#3,719##
$3,000$$ $2,500$$
Motorola$
Market$Share$
2009$
Nokia$
Samsung$
LG$
41%#
35%$
Market#Share#
Sales$(EURm)$
Plunge#from##1#to##4#
30%#
30%$ 25%$ 20%$
20%$ 19%$
15%$ 10%$ 5%$ 0%$
8%$ 4%$ 1%$
25%$ 17%#
22.3%$ 21.7%$
21.4%$
11%$ 10%$
5%$
Jun$02BMay$03$ May$05BJun$06$ May$06BJun$07$
8.7%# FebB10$
4#3#Ps## MARKET HIGHLIGHTS: Comparing and contrasting local decision-making
Distribution dominance
Original focus: GSM GSM#dominates#the# GLOBAL#MARKET#
When$Reliance$launched$CDMA$in$2003,$$
Nokia’s$share$plunged.$$ But$they$quickly$responded.#
GSM##
CDMA$
Nokia's$Market$Share$$
90%#
60%#
50%#
75%#
22%# 2002#
2003#
2004#
2005#
Odd distribution choices DistribuAon#structure#is# completely#dierent#
Major#US#Carriers#W#Share#of# Subscribers#
TW Mobile# 14%#
Sprint## 21%## #Verizon# 31%#
Green$=$ GSM$$ (Nokia's$ focus)$ $ Red$=$ CDMA$ (Nokia's$ missing)$$
%#of#phone#purchases#
AT&T# 34%#
100%$ 90%$ 80%$ 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$
95%#
20%# Phone$is$ purchased$ through$ carrier$ Unlocked$ phone$is$ purchased$ ďŹ rst$
US#
Asia#
More blunders Branding battles with powerful carriers
Failed flagships selling expensive unlocked phones
Price:
Success across the range Indian$GSM$Mobile$Handset$Market$(May$2004)$ Price## Range#
Market## Leader#
Market#Leader’s## Share#
Motorola$
96%$
Rs.#3000W4000#
NOKIA#
77%#
Rs.#4000W5000#
NOKIA#
73%#
Rs.$5000B8000$
Samsung$
45%$
Rs.#8000W15000#
NOKIA#
55%#
>#Rs.#15000#
NOKIA#
68%#
<$Rs.$3000$ 65%#of# the# market#
Very few phones through carriers,
and mostly free (with subsidy)
Unlocked, unsubsidized, sky high $549#for#this#vs#an#iPhone?#
Avg$retail$price$paid$$
Young,#techWsavvy#consumers#are#willing# to#spend#
$102.50# $101.80#
$83.00$ $61.30$
$54.20#
$43.40#
18B24$
25B34$
35B44$
45B54$
55B64$
65$or$older$
Leading through
product innovation Customized products to meet local needs. Flashlight, extreme battery life, nonslip, impervious to heat/dust
1100 Series: worldâ&#x20AC;&#x2122;s best-selling consumer electronics device
Nokia was 1st to provide Hindi user interface, and text messaging in other Indian languages
Largest product range and
dominates the top 10
• 62%#buy$because$of#looks# • Phone$=$“style#icon”$ • Nokia$listens$&$leads$
Products lack appeal for US customers
No top 10s
Low rank on stylishness 43$
1$
Like India, style/size/shape is #1 Factors$in$seleceng$current$phone,$ June$2008$$
Size,#shape,#and/or#style$
18B24$ 25B34$ 35B44$ 64# 61# 59#
Free#or#cheap#w/contract$
36#
37#
36#
Trust$the$brand$
30#
27#
28#
38$
3$
37$
3$
34$
6$
31$
3$
30$
Stylish$
27#
3$
27$
7#
6$
25$
5$
21$ 6$
Behind$ the$ emes$
But Nokia missed every US trend
%#of#US#mobile#phone#sales#
Missing smartphones Smartphone#penetraAon#is#growing# rapidly#in#the#US…# 100%$ 80%$ 60%$
#$12,707##
#$11,499##
Standard$ phones$
Market$share,$smartphone$ category,$Feb.$2010$$
Google,$ 9.00%$
Smartphones# Microsoi ,$15.10%$
40%$ 20%$
…and#Nokia#is#invisible#
#$4,781##
#$12,005## US$sales,$$M$
0%$ 2006$
2008$
Nokia is known as a “low cost product for over-55s.” The new N-Series is hoped to revive it among critical young technophiles. But the N-8 is late and reviews are terrible.
Apple,# 25.40%#
Palm,$ 5.40%$
RIM,# 42.10%#
The US media and blogosphere is hard to impress.
Marketing Strategy
Recommendations Product • Replace N-Series to catch smartphone trend (70% by 2015) • Better high end CDMA models to plug gap • Open Ovi store to win consumers / developers – Beat Apple: partner with Wholesale Applications Community
• Use friendly names instead of numbers for models • Don’t rely on global phones: design to address local tastes Price • Basic phones are very (too?) competitive; smartphones are too expensive. Narrow pricing boundaries Promotion • Product placement (Matrix) for younger demographic Distribution • Work within established distribution system in mature markets
Marketing Strategy
Recommendations Product • Be innovative and anticipate style trends in the US Price • Disguise cost of phones through carrier subsidies Promotion • Exploit social web to drive discussion and interest; invest in content, community and brand awareness specifically for US market Distribution • Distribution through very powerful carriers is essential; consider co-branding • Drop attempts at independent retailing
Marketing Strategy
Recommendations Product • Maintain broad product range and customization options to appeal to Indian sense of style • Develop more mid-price smartphones to avoid losing market share during transition to smartphone dominance • Emphasize ruggedness and quality to differentiate from local manufacturers
Q&A