In The Top Spot
In the highly competitive $3 billion mobile phone market in India, Nokia has managed to make its brand the phone of choice for millions. It currently has a market share of over 70 per cent. Abhijit Joshi tracks the Finnish company's strategy for success.
A DISTRIBUTION NETWORK DOUBLE THAT OF ITS RIVALS: Nokia’s Sanjeev Sharma
hen mobile phones were introduced in India in the mid-90s, US based Motorola, Sweden's Ericsson and Finland's Nokia dominated the handset market in India. Over the years, the old order has changed. Asian players like Samsung and LG, European brands Philips and Siemens now compete with Motorola and Sony-Ericsson. However, Nokia has been able to race ahead of all other players to become the leading mobile handset maker across the world. In India its dominance is even more pronounced with a 70 per cent market share, compared to around 30 per cent globally. Its closest rival in the Indian market, Samsung, comes a poor second with less than 10 per cent market share. Its business strategy, management style and marketing savvy have earned it the respect of its peers. In 2004, Nokia was chosen as 'the most respected consumer durables company' in India by the weekly magazine BusinessWorld. The reasons for Nokia's stupendous success in India include amazing branding, a focussed marketing exercise and distribution strength, among others. Sanjeev Sharma, CEO, Nokia India, says, “An extensive product range, anticipating consumer trends early — we were the first to introduce a phone for the fashion segment, the 8210 — a retail strategy that ensures consumers across the country get a consistent experience and an excellent staff, all put together, clicked for Nokia.” Nokia's commitment to the Indian consumer was underscored when it became the first, and only, handset major to develop a model suited for Indian conditions. The company launched two models, 1100 and 1108, after intensive research on the
Indian customer's specific needs. The phones gave an integrated torch, a sheathcovered keypad for dust protection and a slip-free grip. The phones were also introduced in other markets in Asia and Africa. Nokia's first ‘Made for India’ model, the 1100, is the largest selling model in the Indian GSM handset market. The five largest selling handset models in the market are all Nokia's. Besides, the company today has a substantial share of both ends of the market. It has 77 per cent of the $66-$88 phone market and about 68 per cent of the over $330 phone market. In a marketing first, in March this year Nokia opened a dedicated Concept Store which features the full range of Nokia products including handsets, mobile enhancements, ring tones, graphics, games, software and exclusive Nokia merchandise. The products allow clients to experience the newest applications such as gaming, imaging and e-mail support amongst others.
n its marketing endeavours, Nokia has ensured that its advertising ensures its phones stand out from the clutter of mobile phone advertising. “Our advertising is aimed at making communication relevant to strengthen consumer-connect with the brand,” says Sanjay Behl, head of marketing, Nokia India. Nokia has not used the pricing plank for marketing its phones. However, it did
THE LARGEST RANGE OF CELL PHONES: A Nokia store displays a gamut of accessories
Market Share GSM Mobiles
Nokia 71 Samsung 10 Sony Ericsson 10
All figures represent percentages.
Motorola 3 LG 3 Others 3
Source: ORG GFK
adopt an aggressive pricing strategy to fight the grey market, successfully. Initially the grey market accounted for 80 per cent of the mobile phone sales due to a huge price differential between the legally imported and the grey market phones. Even as the government slashed duties to reduce the scope of arbitrage, Nokia and other handset players too reduced their prices to induce the consumer to buy a phone from the authorised phone shops....