IMPROVING NOKIAS MARKETING STRATEGIES FOR SMART PHONES FROM A BRANDING PERSPECTIVE IN FINLAND AND THE UNITED STATES

Mikael Lauharanta International Business Bachelor's thesis Supervisor: Phani Tej Adidam Date of approval: 6 May 2011 Aalto University School of Economics Bachelors Degree Program in International Business Mikkeli CampusAALTO UNIVERSITY SCHOOL OF ECONOMICS Mikkeli Campus ABSTRACT OF BACHELORS THESIS Author: Mikael Lauharanta Title of thesis: Improving Nokias Marketing Strategies for Smart Phones from a Branding Perspective in Finland and the United States Date: 6 May, 2011 Degree: Bachelor of Science in Economics and Business Administration Supervisor: Phani Tej Adidam Objectives There were three main objectives to this study. First, Nokias aspired brand image was resolved by interviewing Nokias Marketing and Brand portfolio Manager. Secondly, peoples brand perceptions about Nokia and its

competitors were researched through conducting a survey in Finland and the United States. Finally, the findings from the interview and survey were compared and assessed from the branding perspective to see if the Nokia brand should be revitalized and furthermore to suggest improvements to Nokias marketing strategies in Finland and the United States. Summary The research unveiled important information on how Nokia is currently perceived by the consumers and how their view differs from the brand identity Nokia is trying to build with its smart phone marketing. The study also indicated how Finnish consumers differ in their opinions when compared to the Americans. The results of the research are helpful not only to Nokia, but also to other firms who need to revitalize their brand in the face of increased competition and declining market share. Conclusions As of late, the Nokia brand has inspired negative brand associations and contributed to the sharp decline of Nokias market share. However, since the core brand association of reliability is still descriptive of the brand, Nokia should respond well to brand revitalization efforts and gain back market share from competitors that have not yet established a permanent position in the minds of the consumers. Keywords: Nokia, cellular phones, brands, marketing strategy, consumers Language: English Grade:2TABLE OF CONTENTS 1. INTRODUCTION 1.1. Background

1.2. Research Problem 1.3. Research Objectives 1.4. Research Questions 2. LITERATURE REVIEW 2.1. Brand Equity 2.1.1. Customer-Based Brand Equity (CBBE) 2.1.2. Building Global Customer-Based Brand Equity 2.2. The Strategic Brand Management Process 2.3. Brand Revitalization 2.4. Designing Marketing Programs from a Branding Perspective 2.4.1. Integrating Marketing Activity 2.4.2. Personalization of Marketing 2.5. The Marketing Environment 2.5.1. Implications for Strategy 2.6. Conclusions on the Literature Review 3. METHODOLOGY 3.1. Data Collection Methods 3.1.1. Interview 3.1.2. Survey 3.2. Data-Analysis 3.3. Limitations 4. FINDINGS 4.1. Interview 4.2. Survey 4.2.1. Overall trends

4.2.2. Peoples Brand Perceptions about Nokia 4.2.3. Brand Loyalty4.2.4. Nokias Marketing Efforts 4.3. Similarities between Nokias Aspired Brand Image and the Brand Perception of Consumers 4.4. Differences between Nokias Aspired Brand Image and the Brand Perception of Consumers 5. DISCUSSION AND ANALYSIS 5.1. Analysis of Interview and Survey Results 5.1.1. Interview 5.1.2. Survey 5.1.3. Key Differences in Opinions between Finnish and US Respondents 5.2. Analysis of Nokias Marketing Environment 5.2.1. Smart Phone Industry Analysis of Finland 5.2.2. Smart Phone Industry Analysis of USA 6. CONCLUSIONS 6.1. Main Findings 6.2. Limitations 6.3. Implications for International Business 6.4. Suggestions for Further Research REFERENCES APPENDICES1 1. INTRODUCTION 1.1 Background Nokia has come a long way to evolve from a paper mill founded in 1865 to a worldrenowned mobile phone manufacturer and one of the most powerful brands in the world. In 1992 Nokia appointed Jorma Ollila as the new CEO and concentrated its focus

on telecommunications. Throughout the 1990s Nokia was known as a relentless innovator and a pioneer that made the worlds first satellite call among many other groundbreaking milestones. In 1998 Nokia became the worlds largest mobile phone manufacturer with a turnover of 31 billion dollars. Nokia is still the most influential company to the Finnish national economy, but Nokias effect is far from what it was in the early years of the 21 st century when Nokia accounted for almost half of the economic growth in Finland and produced as much as five percent of Finlands annual Gross Domestic Product. In 2006, Olli-Pekka Kallasvuo replaced Jorma Ollila as the CEO, but was not able to reverse the decline of Nokias market share especially in the high end segment, where competitors like Apple, Blackberry, HTC, Samsung, and phones using Googles Android operating system captured market share from Nokia at an alarmingly increasing rate. At the end of year 2010 Android was already the most widespread smart phone operating system in the world and Nokias market share in the smart phone segment had declined from 38 to 31 percent in one year (Sokala). In September 2010, the appointment of the Canadian Stephen Elop as the new CEO of Nokia aroused adversarial feelings among people since Elop became Nokias first CEO not to originate from Finland. Elop was hired to change the course of Nokia and to stop the declining trend in Nokias global market share especially in the smart phone segment. The first major decision was to start extensive cooperation with Microsoft in February 2011.2 The title of the thesis is Improving Nokias Marketing Strategies for Smart Phones from a Branding Perspective in Finland and the United States and the objective is to analyze

the dimensions of Nokias smart phone marketing that the customers do not agree upon or simply do not know about and improve them from a brand managing viewpoint. By narrowing the gap between Nokias aspired brand image and the brand perception of the consumers, Nokia should be able to regain its impressive global market share also in the smart phone segment. 1.2 Research Problem The purpose of this Bachelors thesis is to find out if the Nokia brand can and should be revitalized and if the current marketing strategies for Nokias smart phones in Finland and the United States can be improved from the brand building perspective. 1.3 Research Objectives The thesis has three distinct research objectives. First of all I will try to find out what is the aspired brand identity and brand image Nokia is trying to convey with its smart phone marketing. To achieve this I will conduct interviews with people who are responsible for Nokias brand management and marketing. The second research objective of my thesis is to find out what is the consumers brand perception of Nokia at the moment. To answer this question I will conduct a comprehensive smart phone brand perception survey to collect data from Finland and the United States. The last research objective of the thesis is improving Nokias current marketing strategies for its smart phones from a branding perspective in the countries subject to research. By comparing the results of the customer surveys with the company 3 interviews, I can detect where the aspired brand identity of Nokia does not meet the brand perceptions of the consumers. By utilizing the existing knowledge and literature on the topic, I should be able to come up with ways to improve Nokias smart phone marketing in the two distinct geographical regions.

1.4 Research Questions To help address my research objectives, I have invented three research questions, the first one being What is the brand image Nokia is trying to create in the minds of the consumers? The second research question is How do consumers perceive Nokias smart phone brands? To tackle the third research objective, I will be asking How can Nokias marketing strategies be improved from the branding perspective? 45 2. LITERATURE REVIEW The purpose of this literature review is to discuss relevant writings on how to improve marketing strategies from the branding perspective. First, important terms such as brand equity and the concept of consumer-based brand equity are discussed. Secondly, the brand management process is discussed from a strategic viewpoint with the help of terms like brand revitalization and integrated marketing activity. The next part of the literature review concentrates on analyzing the marketing environment. Finally, the last section summarizes important conclusions on how the literature review relates to the company being observed, Nokia. 2.1 Brand Equity According to Kevin Keller, brand equity has been one of the most important marketing concepts to arise in the last few decades. Also Davis regards brand equity as a key marketing asset (2000). Moreover, Falkenberg states that brand equity is achieved when a firm is able to gain favorable associations towards a brand among targeted consumers (1996.) Keller conforms to this as the key to increasing brand equity, in his opinion, is improving brand awareness and the strength, favorability, and uniqueness of existing brand associations (53). Even though the literature on brand equity is rather fragmented, researchers seem to agree that brand equity stands for the added value transferred from the brand to the product (Farquhar 1989). Like Farquhar, Keller uses

the term brand equity to explain the different outcomes of marketing branded products when compared to marketing products that are not branded (37). Aaker, on the other hand, notes that brand equity might also be detrimental to the perceived value of a product by defining brand equity as the set of brand assets and liabilities that are linked to the brand name and add to or subtract from the value provided by a product or a service to the firm (7-8).6 2.1.1 Customer-Based Brand Equity (CBBE) In relevant literature, the complex construct of brand equity has been scrutinized from two major perspectives: the financial and the customer-based perspective (Christodoulides and Chernatony 46). The Customer-Based Brand Equity models help understand consumer behavior and thus provide tools for the marketer to influence it. The basis for these models is the perspective of the consumer, because understanding consumer needs and devising products to satisfy those very needs is the key to successful marketing. Whereas brand equity was defined as the effect of the brand on marketing efforts, CBBE is defined as the differential effect that brand knowledge has on consumer response to the marketing of the brand (Keller 48). Despite mild criticism towards Keller for relying strictly on consumer psychology, most conceptual research on brand equity acknowledges that brand awareness and brand associations are essential components of consumer-based brand equity (Christodoulides and Chernatony 47). Kellers CBBE model relies on four sequential steps in building strong brands. The first step is establishing the brand identity in the mind of the consumer by ensuring identification of the brand and associating it with a specific customer need or product class. The second step involves establishing a brand meaning by linking both tangible and intangible associations to the product using points of parity and points of difference. According to the third step, positive customer responses to the brand identity and the

brand meaning should be encouraged. Last but not least the resulting brand responses have to be converted into an active and loyal relationship between the brand and its customers (Keller 59-60). The Customer-Based Brand Equity Pyramid displays the four-step process with a pyramid consisting of six so called brand building blocks. The six blocks are brand salience, brand performance, brand imagery, brand judgments, brand feelings and brand resonance. Significant brand equity results only when the top of the pyramid is reached (Keller 60). The first block, brand salience, refers to the breadth and depth of awareness. The second stage of the pyramid consists of brand performance and brand 7 imagery, where performance describes how the product or service meets customers functional needs and imagery describes the abstract imagery associations consumers have of user profiles and usage situations. The third stage is formed by brand judgments and brand feelings. Judgments represent the customers personal opinions about the brand and feelings stand for the emotional responses and reactions to the brand. The fourth and final step of the pyramid includes the brand resonance block, which depicts the level of customer identification with the brand (Keller 60-72). Figure 1: The Customer-Based Brand Equity Pyramid 2.1.2 Building Global Customer-Based Brand Equity When brands become global, they will have to be built around needs of a wide range of consumers with different cultural backgrounds (Marketing Week 2006). As there was much debate around the components of brand equity, there has also been a vivid discussion considering the key components of global brand strategies. According to Baker, a strong global branding strategy not only enhances, but also protects a firms market position from competitors (591-594). Another critical issue in global branding is maintaining the accumulated brand equity in the long run (Samli and Fevrier 207).8

1. Understand similarities and differences in the global branding landscape. 2. Dont take shortcuts in brand building. 3. Establish marketing infrastructure. 4. Embrace integrated marketing communications (IMC). 5. Cultivate brand partnerships. 6. Balance standardization and customization. 7. Balance global and local control. 8. Establish operable guidelines. 9. Implement a global brand equity measurement system. 10.Leverage brand elements. Figure 2: The Ten Commandments to Global Branding (Keller 607). In his Strategic Brand Management textbook, Keller suggests that Ten Commandments of global branding, that guarantee global success, can be identified (Figure 2). The logic behind these commandments is that the key to global success is taking advantage of local consumer behavior. Even if customers in different regions have similar preferences, they may have totally opposing reasons for those preferences that reflect cultural, situational, and individual differences (Arnould, Price, and Zinkhan 288). The sources of brand equity and the means of acquiring it may indeed vary between countries, but a sufficient level of brand awareness and enough strong, favorable, and unique associations still have to exist before brand equity can be built further and leveraged (Keller 608-609). Samli and Fevrier, on the other hand, suggest that in an effort to empower global brands, a sequential three-step process consisting of strategic action, brand empowerment, and sustaining brand equity should be applied (208). The two approaches do not differ much from each other since they both emphasize the

importance of strategic preparation, brand empowerment, and creating sustainable global brand equity.9 2.2 The Strategic Brand Management Process Keller divides the process of strategic brand management into four steps: Identifying and Establishing Brand Positioning, Planning and Implementing Brand Marketing Programs, Measuring and Interpreting Brand Performance, and finally Growing and Sustaining Brand Equity (38). At the heart of the process is the understanding of what the brand represents and how it should be positioned against competitors. After all, sustainable and competitive brand positioning is all about creating brand superiority in the minds of consumers. According to Aaker (1996) a brand position can be defined as a value proposition that is actively communicated to the target audience and that clearly demonstrates an advantage in comparison to competing brands (176). Positioning should also clarify the points of difference (PODs) and points of parity (POPs) a company has over its competitors. Furthermore brand positioning should specify the most important core brand associations that characterize the particular brand. Defining a brand mantra or in other words defining the brand promise is also extremely useful in explaining to the consumers what a brand actually stands for (Keller 38). The second step in Kellers Strategic Brand Management Process is Planning and Implementing Brand Marketing Programs. As mentioned earlier, a prerequisite for building brand equity is creating enough awareness to the brand and also linking strong, favorable, and unique associations to the brand (Keller 39). This process for knowledgebuilding is dependent on three factors. First of all it depends on the initial choice of brand identities and elements, where the brand identity includes everything that makes the brand unique and meaningful (Janonis, Dovaliene, and Virvilaite 70). Secondly, the effectiveness of planning and implementation depends on how well the brand is integrated into the marketing activities

and the supporting marketing program. Later, the term Integrated Marketing Communication (IMC) will be discussed in more depth, since it is a critical component of brand equity related strategies (Madhavaram, Badrinarayanan, and McDonald 69). Thirdly, secondary associations indirectly transferred to or leveraged by the brand as a 10 result of linking it to some other entity have a large effect on the outcome of the brand equity building process (Keller 39). This notion has been reinforced by other researchers as well. The clever choice for a partner brand, for example, enables the brand to extend past its traditional competencies (Uggla 105). Measuring and Interpreting Brand Performance is the third step of the Strategic Brand Management Process model used by Keller. Like Keller, Doyle gives significant credit to brand performance in determining the success of an entire business (qtd. in De Chernatony, Harris, and Christodoulides 16). To understand the effect brand marketing programs have on brand equity, extensive marketing research should be applied to assess brand performance (Keller 40). Measuring the effectiveness of a brand strategy is no easy task, however, as Srivastava points out in his article in the Journal of Strategic Marketing (487). Some tools that have been coined to help in measuring brand performance are the brand value chain and the brand equity measurement system. The first one of the two, the brand value chain, is a convenient tool for tracing the value creation process of a brand, because it helps to perceive the financial impact of investments in brand marketing. The brand equity measurement system, on the other hand, supports profitable brand management by providing timely, accurate, and actionable information for marketers to balance their tactics between short-term and long-term profits (Keller 41). The final step in the strategic brand management process is Growing and Sustaining Brand Equity. Managing a brand effectively calls for an intricate mixture of short-term

view accompanied with long-term goals. Short-term marketing actions change brand knowledge and thus affect the success of future marketing actions as well. An emphasis on the long-term view, however, is also important, because it produces proactive strategies that enhance brand equity over time. Another essential consideration is accounting for different types of consumers across geographic and cultural boundariesequity has to be built on specific knowledge about the behavior of the different market segments (Keller 41). Sometimes, however, effective brand equity management calls for active brand management in the form of brand revitalization in 11 addition to the long-term perspective (Keller 1999). The concept of brand revitalization will be discussed in the next section of the literature review. 2.3 Brand Revitalization A brand is most likely to respond well to revitalization efforts if there are clear and relevant brand values that have been ignored lately in the marketing communication and hurt by product related problems or cost reductions. Evidence that the brand values were once contributors to the brands popularity is a good indicator of the future success of the revitalization process. Furthermore the extent to which the core brand associations still correctly position the brand by functioning as points of parity and points of difference is another factor of utmost importance (Keller 562). Aaker (1991) states that the goal of brand revitalization is not only increased sales, but also basing this increase on enhanced brand equity (242). According to Keller, revitalization strategies range from back to basics strategies to the pure reinvention of brands. Another important notion by Keller emphasizes that product failures, in which the brand fundamentally fails to deliver on its customer promise, are far more damaging than failures in marketing, where an insufficient amount of consumers are attracted to the brand (564).

When a company understands the current and desired brand knowledge structures, the customer-based brand equity framework provides guidance on how to best refresh old sources of brand equity or create new ones to achieve the intended positioning (Keller 565). The model consists of two options: expanding the breadth and depth of awareness and improving the strength, favorability, and uniqueness of brand associations that make up the brand image. Increasing the breadth of brand awareness by expanding usage and finding new uses for the brand is a powerful way to increase brand equity (Keller 566). Identifying new 12 usage opportunities and reminding consumers of them through marketing communication increases the frequency of use, which is a lot easier to manipulate than increasing quantity of consumption. According to Aaker, products can also be positioned for more frequent use, the usage can be made easier, additional incentives can be provided, and undesirable consequences of usage can be reduced in order to increase usage. Fundamental changes are sometimes necessary to improve the strength, favorability, and uniqueness of brand associations and thus the entire image of the brand. To accomplish this repositioning, fading positive associations have to be bolstered, negative ones have to be neutralized, and additional positive associations have to be created. Repositioning of the brand comes down to simply introducing more compelling points of difference and establishing points of parity on some key image dimensions. To convey the new meaning to the public, the brand elements may also have to be reconsidered (Keller 568). Figure 3: Brand Revitalization Strategies (Keller 583). BRAND REVITALIZATION

STRATEGIES Refresh old sources of brand equity Expand depth and breadth of awareness and usage of brand Increase quantity of consumption Increase frequency of consumption Identify additional usage opportunities Identify new ways to use the brand Create new sources of brand equity Improve strength, favorability, and uniqueness of associations Bolster fading associations Neutralize negative associations Retain vulnerable customers

Recapture lost customers Identify neglected segments Attract new customers Create new associations13 2.4 Designing Marketing Programs from a Branding Perspective 2.4.1 Integrating Marketing Activity The improved connectivity, growing disintermediation, increased customization, and blurring of industry boundaries among other drivers have provided consumers and companies with unforeseen abilities (Keller 185). For consumers, these abilities include the consumers capability to obtain large quantities of information about practically anything and the capability to conveniently interact with other consumers. For companies the change has meant that they now have an augmented geographic reach and that they are able to customize their offerings more efficiently. Marketers around the world are increasingly waiving so-called mass-market strategies in the face of new approaches. The marketing environment of the 21 st century has altered the way marketing programs are developed. Especially personalization and integration of marketing communication have become essential requisites for building strong brands as activities are built to appear more and more meaningful to specific target markets (Keller 186).

Integrated Marketing Communication is simply the integration of advertising and promotional activities (Luck and Moffatt 311). Despite recently becoming something of a standard for marketing organizations, integrated marketing communication is still prone to cultural divergence and some underlying weaknesses in its current processes can be identified (Kitchen, Ilchul, and Schultz 531). Drobis goes as far as saying that IMC as we know it is dead, because it stands for many things, but nothing in particular (1). Knowing the shortcomings of the traditional Integrated Marketing Communication, Finne and Grnroos offer an interesting concept called relationship communication, where the responsibility of integrating the marketing messages is transferred to the consumer. After all, it is the receiver who decides if the marketing messages are well integrated in the end (193).14 2.4.2 Personalization of Marketing Keller writes that to address the consumer desire for greater personalization of marketing, concepts such as experiential marketing, one-to-one marketing, and permission marketing have been exploited lately (188). Experiential marketing refers to the idea of connecting the product with pleasant experiences and to the idea of enriching a customers life. According to Bernd Schmitt The degree to which a company is able to deliver a desirable customer experience and to use information technology, brands, and integrated marketing communication and entertainment to do sowill largely determine its success in the global marketplace of the new millennium (qtd. in Keller 188). The fundamental reasoning behind one-to-one marketing is that marketers are better able to create customer value if they listen to the information consumers provide to them and use it to generate rewarding experiences. This approach not only creates switching costs, but it also maximizes the utility for consumers, which in turn helps in

building profitable relationships between the firm and its customers (Keller 190). According to Keller, one-to-one marketing is based on simple strategies. First of all consumer databases should be taken advantage of by focusing on individual customers and treating them differently according to their preferences, because customers have different needs. Majority of the marketing efforts should also be steered towards the most valuable customers, because not all customers have the same value to the firm in the long run. Secondly consumer dialogue should be interactive, which is in sync with the goal of increasing brand resonance that occupies the top of the Customer-Based Brand Equity Pyramid. Thirdly products and services offered by the company should be customized to address particular needs and to encourage positive brand associations of uniqueness (Keller 190-191). Permission marketing is the third concept that has been introduced following the growing focus on personalization of marketing. It refers to those marketing efforts that 15 start only after gaining the permission from the consumers. Permission marketing aims at reaching a contact with the customer and crafting customer loyalty. The key to success is respecting the wishes of the consumers. By eliciting consumer cooperation amidst the miscellaneous marketing communication of today, marketers are more likely to develop strong and long-lasting customer relationships, because consumers deliberately express their willingness to become more involved with the brand (Keller 192). Technological advances in areas like software development and database management allow companies to store and efficiently process loads of customer data to come up with personalized and targeted marketing messages to customers. Over time the ultimate goal is to create profits by leveraging the permission given by the consumer (Keller 192-193). Although permission marketing cultivates the idea of improving the dialogue between the consumer and the firm, it is somewhat restrained by the fact that it

assumes that consumers know exactly what they want. Instead of relying totally on the consumers, marketers must instead cooperate with the consumers to come up with innovative solutions on how to best satisfy customer needs (Keller 193-194). 2.5 The Marketing Environment The rivalry resulting from the threat of new entrants, the threat of substitute products, the bargaining power of suppliers, the bargaining power of buyers, and the rivalry among existing competitors illustrates the competitive interaction within an industry. These underlying determinants of profitability are more or less the same regardless of the industry. The competitive structure, manifested in the above mentioned five forces, measures the long term attractiveness of a particular industry by determining how the economic value is divided between the parties involvedthe competitors, the suppliers, and consumers (Porter 78-93)16 2.5.1. Implications for Strategy Careful analysis of the five forces of the competitive environment provides strategists with many opportunities. One important implication is that the relationships between the five forces may reveal positioning opportunities in the industry such as establishing strong links with the most important suppliers. In addition, understanding the principles behind industry profitability helps companies shape the industry structure and standards more to their liking by inventing new ways of competing inside the industry. Whenever sophisticated understanding of the principles exists, all changes in the industry can be considered as opportunities to claim a more profitable strategic position in the competitive landscape (Porter 78-93). When using the five forces model to assess market attractiveness, it is important to remember that the forces are heavily interdependent and cannot be evaluated separately. Furthermore the traditional model is often described as static since it does

not take into account the effect of time and industry cycle on the five forces. When these additional factors are added to the analysis, the resulting perspective is much more dynamic and comprehensive (Grundy 213-229). 2.6. Conclusions on the Literature Review According to the literature discussed, brand equity is without a doubt an important marketing concept that either adds to or subtracts the value of the product or service. According to Interbrand, Nokia was still among the ten most valuable global brands in the world in 2010 with a brand value of nearly 30 billion US dollars, but its brand value had declined 15% in one year whereas Apples brand value had soared up 37% (Best Global Brands Ranking for 2010). The often cited consumer-based brand equity model approaches brand equity from the consumers perspective. It can be described with a pyramid model consisting of different levels of attachment between the brand and the 17 consumer. In Nokias case it is important to determine, which step of the pyramid they are currently occupying in which countries in order to continue forward progress. A prerequisite for building and leveraging accumulated brand equity is creating enough strong, favorable, and unique brand associations in the minds of the consumers. This claim is not dependent on whether the firm is operating domestically or internationally. Another interesting implication of using the customer-based brand equity model is that the way brand associations are created is no longer as relevant in the modern world of marketingwhat matters nowadays is simply the resulting awareness and the strength, favorability, and uniqueness of the brand associations. In other words the impact of marketing on brand equity should be equal between different types of marketing activities as long as the associations created are identical. Hence marketers should concentrate on creating marketing programs that consist of seamlessly integrated solutions and customer experiences that increase awareness, precipitate demand, and

embrace loyalty (Keller 187). This means that Nokia is not restricted to any certain type of marketing communication, as long as they can create awareness and encourage positive brand associations. The first and most important step in the strategic brand management process is brand positioning. If Nokia wants to gain a competitive advantage over other smart phone brands, it has to find a way to differentiate from the others in a meaningful way. As Nokia was once considered as the pioneer in the mobile phone industry, revitalization efforts should yield positive results, if people are willing to agree that the core brand associations are still intact. From a branding perspective, the new approaches to marketing are useful in forming positive brand responses and encouraging brand resonance. Experiential marketing, one-to-one marketing, and permission marketing all strive for getting consumers actively involved with a particular brand. Even though they concentrate on reinforcing different building blocks of the Customer-Based Brand Equity Pyramid, they simultaneously add to brand equity by strengthening the bond between the consumer and the brand.18 Nokias task is to choose the right tools from the pool of new approaches to marketing in order to climb up the brand equity ladder. Finally, the different marketing environments of Nokia both in Finland and the United States have to be carefully analyzed in order to constitute a comprehensive understanding of the principles and forces behind the competitive environments. These insights can then be used to take advantage of the inherent opportunities.19 3. METHODOLOGY This Bachelors Thesis is a case study with a conceptual research design since it consists of a defined research problem, clear research objectives, and exact research questions that lead to conclusions on a real-life phenomenon. The thesis includes

empirical as well as descriptive elements. There are several contexts to the research, because the aim is to improve Nokias existing marketing strategies in different regions based on potentially differing brand perceptions prevalent in these areas. To tackle the research objectives, both qualitative and quantitative methods are utilized. 3.1. Data Collection Methods 3.1.1. Interview Qualitative research and analysis methods were used to assess the depth interview (Appendix 1) conducted on the fourth of February, 2011, with Mr. Pekka Somerto, the Vice President of Nokias Brand and Marketing Portfolio Management. The interview was conducted at Nokias headquarters in Keilaniemi and it lasted for approximately an hour. The interview consisted of thirteen questions and the purpose was to find out about the brand identity Nokia tries to create with their marketing. The questions asked were chosen based on the literature discussed in the literature review, and with the overall goal of improving Nokias marketing strategies for smart phones from the branding perspective. The results of the interview not only helped in reaching the research objective, but they also provided useful ideas and additional questions for the consumer survey.20 3.1.2. Survey To find out consumers brand perceptions of Nokia, quantitative research and analysis methods were utilized. An online consumer survey (Appendix 2) was created with the Qualtrics-software and distributed to approximately 400 people in Finland and the United States through e-mail and social media networks. The survey itself consisted of 23 actual questions and five classification questions. The survey was started 155 times and completed 125 times with a completion percentage of 81%. Thus the respective response rate was 38.25 percent. Of the respondents, 63% were male and 37% female.

Similarly to the gender distribution, approximately 60% of the responses came from Finland and 40% from the United States. A clear majority of the respondents study in a University or have a University background, but some respondents also study in a Polytechnic institute or have at least a masters degree. The average respondent was approximately 25 years old, the youngest being 19 years and the oldest 42 years old. Most respondents earn less than 50.000 US dollars annually and very few exceed annual earnings of 150.000 US dollars. The questions of the survey were based on the literature discussed in the second part of the thesis, the research questions, and the depth interview conducted with the company representative of Nokia. The objective of the survey was to find out if the consumers perceive Nokia similarly to Nokias aspired brand identity. The survey had four distinct parts where the first part concentrated on questions about smart phones in general, the second part on Nokias smart phones and their marketing, the third section on brand loyalty, and finally the fourth part on classification of the respondents.21 3.2. Data Analysis The data analysis of the survey results started with a general analysis of the averages and apparent trends. It was followed by the identification of significant regional differences between the responses with the help of cross tabulations 3.3. Limitations Only one interview was performed to find out Nokias aspired brand image, so the results were heavily dependent on the personal opinions of the interviewee. In addition, the questions were shown to the respondent only half an hour before the interview, so all of the answers might not reflect the exact position of the company since the respondent did not have the chance to go through the answers with anyone else from the company.

The biggest limitation of the survey, on the other hand, was the narrow sample size, where university students were overrepresented when compared to the actual demographic structures of the targeted countries. In addition not all people answered all of the questions, which somewhat diminished the applicability of the rest of their answers.2223 4. FINDINGS This section lists the most important findings from the interview and the customer survey. The aspired brand image of Nokia was deducted from the depth interview with the company representative and the brand perceptions were determined from the answers to the international customer survey. Later on the similarities and differences of the findings between the interview and the survey are highlighted. 4.1. Interview According to the interview with Mr. Pekka Somerto, Nokias Vice President of Brand and Marketing Portfolio Management, Nokias so called brand promise since the 1990s has been connecting people. This idea is clear to all employees at Nokia despite the fact that over the years the meaning of the phrase has evolved to connecting with everything instead of just other people. This is important, because if a brand is to be successful, the brand has to deliver on its promise to the customers and furthermore all the employees have to know what the brand stands for. Throughout their stint in the mobile phone manufacturing industry, Nokia has wanted to be known for producing reliable mobile phones that are easy to use, innovative, and stylish. What was surprising about the interview was that the most important brand associations Nokia strives for, in addition to reliability, are sustainability and environmental responsibility. These two associations are rather vague from a marketing standpoint, since they do not have much in common with the other traits Nokia wants to

be known for and they seem like irrelevant associations to some key influencers of the smart phone market segment. The interviewee believed that the most important smart phone features for users are the amount of applications available, and the possibility to customize the user experience as much as possible. Furthermore he added that the major breakthroughs in the near 24 future would be made in the user interface development of smart phones to enable effortless control of the smart phone device. To generate positive emotional associations, however, the company mainly emphasizes the functional benefits of Nokia phones such as voice quality and battery life. Nokia segments its customers in different destinations based on demographic data and the purchasing power of the people who live there. They target the active participants in the cell phone market and concentrate especially on the first movers in the industry. Nokia would like to appear younger in the eyes of the consumers and they would also benefit from being more agile in reacting to the fluctuating markets. One of the most important findings of the interview was that Nokia wants to emphasize how their products can improve the quality of life in all aspects. The interview also pointed out that Nokia wants to achieve a unified visual approach in its marketing, but at the same time they are applying principles of hyper-locality. Their latest smart phone advertising campaign revolves around the theme of re-defining success, which underlines that Nokia smart phones help individuals determine their own success by allowing them to express themselves freely. 4.2. Survey 4.2.1. Overall Trends According to the survey findings, over 70% of the respondents that live in the US did not mention Nokia among three smart phone brands that compete in their home country.

More alarmingly, approximately one third of the respondents from Finland did not mention Nokia as a competitor either. Apple was clearly the most popular choice as over 85% of the respondents mentioned it as a competitor both in Finland and the United States. 25 Mentioned among competitors Apple Blackberry HTC Nokia Samsung Finland 91,5 % 25,4 % 39,0 % 64,4 % 39,0 % USA 85,7 % 36,8 % 44,7 % 28,9 % 15,8 % Figure 4: Percentage of mentions among the top three smart phone brands Almost half of the respondents (46 percent) said that Apples iPhone is their preferred smart phone brand. Nokia was the second most preferred brand far behind with 18 percent. When asked about which smart phone brands the respondents actually own, however, Apple was only a few percentage points ahead of Nokia. This result indicates that Apples dominant position is not solely based on personal use experience, but rather on brand image and word of mouth appraisal. The most important smart phone feature for the respondents was Internet connection with a mean of 4.60 on a five-point scale. Battery life came in second with a mean of 4.52. Longer battery life was also the most common suggestion for improvement among the respondents. Reliability of functions was number three with a mean of 4.51 closely followed by ease of use (mean 4.44). The most unimportant feature for the respondents was camera (mean 3.68). Interestingly, the results did not vary significantly between the countries subject to research.26 # Question Not at all Important Unimportant Neither Important Nor

Unimportant Important Very Important Responses Mean 1 Applications (Apps) 4 6 27 70 43 150 3.95 2 Battery life 0 1 7 55 87 150 4.52 3 Camera 1 16 41 64 28 150 3.68 4 Design 0 7 16 81 46 150 4.11 5 Ease of use 0 1 14 53 82 150 4.44 6 E-mail 3 13 23 48 62 149 4.03 7 Internet connection 0 3 9 33 105 150 4.60 8 Memory capacity 0 10 28 76 36 150 3.92 9 Reliability of functions 0 1 8 54 87 150 4.51 10 Screen size and resolution 0 4 19 93 34 150 4.05 11 Technical aspects such as voice quality 2 7 23 64 54 150 4.07 12 Additional features such as calendar, navigator, etc. 2 6 33 77 32 150 3.87 13 Other, please specify: 2 1 7 5 18 33 4.09 Figure 5: Smart phone feature appreciation Practically every respondent was familiar with the cell phone brand Nokia (99 percent),

but still only 30 percent indicated they have at some point actually owned a Nokia smart phone. When asked about the level of satisfaction with Nokias smart phones, the majority indicated that they were satisfied with the phone, but the average was only slightly above neutral stance. Moreover, only 8.5% of the respondents indicated that they were very satisfied with their Nokia smart phone. When asked about the perceived quality of Nokias smart phones, 23% of the people did not have an opinion. Of those who had an opinion, 45% responded that they are of good quality. The average score among those who had an opinion was between Neither Good or Bad and Good.27 The respondents were also asked to assess the perceived value of Nokia smart phones. Most of the respondents (32%) thought that the value of Nokias smart phones is Neither Low nor High, but 27% thought they actually offer High value. Only 2% of the answers indicated Very High perceived value, however. The results quite clearly indicate that the reason for the mediocre consumer satisfaction is not caused by problems with the perceived quality or the perceived value of Nokias smart phones. To find out about consumer perceptions on innovativeness, the respondents were asked to name the first smart phone brand that comes to mind when speaking of innovative smart phones. Approximately 65% of the respondents thought of Apple first, while the second most common response was HTC with about 16%. Nokia was mentioned as the most innovative brand by only 3% of the respondents in Finland and quite astonishingly by none in the United States. Furthermore, when asked about trendy smart phone brands, Apple was even more dominant. 77% of the respondents mentioned Apples iPhone as the trendiest smart phone on the market. HTC came in second with 9% of the nominations while Nokia did not receive any consideration. The Most Innovative Smart Phone Brand

Apple HTC Nokia Finland 64,4 % 16,9 % 3,4 % USA 68,4 % 13,2 % 0,0 % Figure 6: Peoples perception of the most innovative smart phone brand on the market 4.2.2. Peoples Brand Perceptions about Nokia To assess consumers brand perceptions on Nokia, the respondents were asked to describe Nokias smart phones with a few words. The most common positive characteristics mentioned were reliability and good quality. However, Nokias products were also frequently described as old-fashioned and outdated. When the respondents 28 were asked to describe Nokia as an organization, the most common adjectives appeared to be big, slow, and unimaginative. Finally, people were asked to describe Nokia if it was an actual person. The clearest consensus between the respondents was that while Nokia is smart and reliable, it is also unexciting and old when thought of as a person. Another interesting notion from the survey was that people could not consistently pinpoint how Nokia differentiates itself positively from the competitors in the smart phone market. Only few people mentioned Nokias superior camera or the complimentary navigation service as points of difference. Moreover many respondents wrote that it is hard to differentiate between smart phones and now that Nokia has abandoned its own Symbian operating system it will be even harder for Nokia to differentiate from competition in the future. 4.2.3. Brand Loyalty The results of the survey indicated that people consider themselves rather loyal to smart phone brands. The largest percentage of the respondents, 28%, chose to agree with the statement: I am loyal to smart phone brands. When asked about brand loyalty towards

specific brands, it turned out that people are the least brand loyal to Nokia and the most loyal to Apple. This finding is also supported by a Finnish mobile analytic and market research firm Zokem, which surveyed over 1,500 smart phone owners in the United States (Barrett). Interestingly, Apple was also the most polarizing brand among the brands surveyed. Most people indicated it would be Very Unlikely for them to switch to another brand if they owned an Apple smart phone, but at the same time the largest number of respondents would also Very Likely switch to another brand if they owned a smart phone by Apple. Although important, availability, discounts, and positive word of mouth recommendations were far less significant when deciding when to switch between smart phone brands compared to the actual usage experience.29 4.2.4. Nokias Marketing Efforts Quite shockingly, the majority of the respondents (57%) could not remember any marketing efforts by Nokia. Most commonly remembered marketing efforts were sporting event sponsorships and the campaign for the N8 phone. Many people could also recall Nokias slogan Connecting people. The effectiveness of Nokias marketing efforts did not receive much praise either. Only 7% of the respondents combined thought Nokias current marketing efforts are either Very Effective or Effective. In contrast, 58% judged Nokias marketing either Ineffective or Very Ineffective. On top of that 17% of the respondents could not even form an opinion on the level of effectiveness based on their rare encounters with Nokias marketing communication. 4.3. Similarities between Nokias Aspired Brand Image and the Brand Perception of Consumers Several similarities between the aspired brand image of Nokia and the brand perceptions of the consumers can be identified by comparing the answers to the interview and the survey. First of all, the image of Nokia as a brand that facilitates

communication with other people is clear for both the organization and the consumers. Furthermore Nokia is usually seen as a reliable brand that does not fail to deliver on its fundamental customer promise. Recently, however, Nokia has had some reliability issues especially when it comes to adhering to pre-determined deadlines. Nokia also agrees with the respondents that the ease of use of smart phones is of particular importance. Unfortunately Nokia has not yet been able to successfully produce smart phones that would substantially stand out with their user friendliness. Another thing Nokia has been trying to emphasize lately is the functional benefits of Nokias smart phones such as battery life. As we saw from the survey results, battery life is also the most important feature for many smart phone users.30 4.4. Differences between Nokias Aspired Brand Image and the Brand Perception of Consumers Despite many similarities, the research also showed numerous issues where Nokias management seemed out of sync with the consumers. To begin with there was a clear contradiction between Nokias aspiration for innovativeness and agility and the opinion of the respondents. In the survey, Nokia was often referred to as a sluggish and oldfashioned company. Another noticeable difference was that Nokia received no credit for its attempts at environmental responsibility although it was clearly stated as one of the top priorities by the management. The interviewee firmly believed that applications are the most important feature for smart phone users alongside an easily customizable interface. The survey results nevertheless implied that applications are nowhere near the top priorities of smart phone users. All the same, probably the biggest surprise was that Nokias marketing efforts are commonly regarded as hard to recall and ineffective.31 5. DISCUSSION AND ANALYSIS In this section the findings from the interview and survey will be analyzed in the light of

the literature discussed in the literature review. 5.1. Analysis of Interview and Survey Results 5.1.1. Interview Brand Equity As the literature review pointed out, improving the strength, favorability, and uniqueness of brand associations is a key factor in building brand equity. Hence by consistently underlining the importance of reliable products, Nokia has been able to successfully strengthen the favorable association of reliability towards its brand name in the minds of the consumers. Furthermore, understanding that easily customizable products are seen as more unique by the consumers, Nokia is trying hard to link associations of uniqueness to its products. Being able to differentiate from competition in the smart phone market is considered to be hard, which makes pursuing uniqueness an even more justifiable goal. Nokias willingness to change and become more customer oriented can clearly be seen from the interview. The effort is understandable, since the customer-based brand equity pyramid shows that the most profitable results are achieved only when an active and loyal relationship between the firm and the customer is established. Moreover, as the section on personalization of marketing indicates, such relationships can be formed through providing the customer with rewarding experiences and understanding his or her special needs.32 Marketing According to the interview, Nokia makes changes to its marketing mix in different countries based on demographic data and the purchasing power of the people. As we learned from the literature review, paying attention to the local consumer is important and the starting point should be the special needs of the local consumer. Furthermore,

when assessing the overall attractiveness of the market, tools such as the five industry forces model by Michael Porter should be utilized as an integral part of the strategic preparation process. Currently Nokia is running a global advertising campaign called success re-defined, in which different people tell how Nokias smart phones enable them to redefine success for themselves and help in expressing it forward. In Finland, snowboarders and models are used to endorse Nokias products in an effort to leverage the equity of the celebrities and to elicit more positive brand associations towards Nokia. Self-expressive benefits are an integral part of marketing for Nokia, but still the consumers are not aware of such benefits. Through more thorough personalization of marketing efforts, however, Nokia should be able to remind consumers more effectively about the small improvements to the quality of life that Nokia believes can be made with their smart phones. All Nokias marketing aims for a unified visual approach with the blue color being the common factor. Integrating all marketing communication at least from a visual standpoint is justifiable, if only the needs of consumers with different cultural and economical backgrounds can be taken into account sufficiently at the same time. In that case it is up to the receiver of the messages to decide if the brand is communicated in a meaningful way and that the communication is enough integrated to reinforce similar associations between different media. Analysis of the company interview revealed that the positioning of Nokia in regard to the competitors in the market is not totally clear even to the employees. In the future Nokias positioning should be more clearly communicated inside the company as well 33 as to the public. In addition only the most relevant points of parity differentiation should be emphasized in all marketing efforts. As it was discussed in the literature review, these efforts should be directed at Nokias most valuable customers instead of the key

influencers among smart phone users, since the key influencers are not a homogenous group and engineering compelling marketing messages for these people is much harder. Brand Revitalization Brand revitalization is all about refreshing former sources of brand equity or alternatively creating new ones to achieve an intended positioning in relation to the competition. In Nokias case, the reasoning behind the revitalization efforts is the intention to regain the fading associations of innovativeness, agility, and transparency and to negate the negative associations of sluggishness and obsoleteness. According to the literature review, Nokia should respond positively to the revitalization endeavors since the positive values being bolstered were actually once the determinants of success for Nokia and the recent struggles have not been caused by fundamental product failures. 5.1.2. Survey Positioning The survey indicated that Apple has been able to establish superiority particularly in the minds of the consumers since many people prefer Apples smart phones even when they have never owned them. At the moment, most of the brand associations associated with Nokia are actually detrimental to the brand and it faces a tough battle trying to revitalize the brand and position it in a way that attracts customers that are currently using competitors products. The key here is to differentiate Nokias products in a meaningful way to the target market and to consistently deliver on the brand promise and the new positioning.34 Brand Equity Another finding highlighted by the survey was that in Finland Nokia is stuck on the second step of the Consumer-based brand equity pyramid since it cannot evoke

unanimously favorable and unique brand associations even though people have broad awareness of its products and the performance of its products is mostly perceived in a positive manner. To get to the upper levels of the pyramid where brand responses and relationships can be fostered, Nokia has to first revitalize the correct brand associations. In USA, Nokias situation is even more worrying, for Nokias identity is not clear to the majority of consumers and there is not much depth to the brand awareness. Pairing up with Microsoft was a good way to increase peoples awareness, but it is another thing to be acknowledged than to create a positive brand image and encourage favorable brand associations. It will be interesting to see if Nokia and Microsoft can leverage each others positive brand equity and rise up to the challenge of the currently dominant players in the highly competitive US smart phone market. A worrying finding from the survey was that Nokia does not seem to be a part of the smart phone consumers consideration set. This is in clear conflict with Nokias object of appearing attractive to the key influencers of the target market. The results are a clear indication that Nokia is often not even seen as worthy of consideration when thinking of purchasing a smart phone. This is also apparent when comparing Nokias take on the most important features of a smart phone with the opinion of the consumers. Lately Nokia has been concentrating on differentiating with a superior camera, while the consumers think that it is one of the most irrelevant features in a smart phone. If Nokia does not start listening to the consumers more, it will not be able to turn around and stop its decline in the smart phone industry.35 Marketing Nokias marketing efforts were not found to be very effective. Many people could not specify even a single marketing effort by Nokia. The perceived marketing was not necessarily ineffective because the marketing was of low quality, but because it was not

quoted by the receiver in the first place. What was promising about the survey results probing the effectiveness of Nokias marketing was that people could easily recall Nokias brand promise Connecting people, which is a sign that the consumers agree with the promise. Another positive indicator was that people remembered Nokia sponsoring the recent snowboarding world championships. Establishing a successful presence in an event full of young smart phone users is a good way to appear more youthful in the eyes of the public. Furthermore the combination of using snowboarders in their advertisements and being visibly present in the snowboarding scene is a perfect example of integrating marketing activity in a meaningful way. 5.1.3. Key Differences in Opinions between Finnish and US Respondents According to the survey, the key differences between the opinions of the Finnish and US respondents have to do with the organizational associations of Nokia. People from Finland and the United States seem to agree that Nokias products are reliable and of good quality, but their images of Nokia as an organization are more distant. In Finland, most people at least regard Nokia as an important player in the smart phone industry, whereas in the US most people think that Nokia is downright irrelevant and uninteresting. Furthermore Nokias brand personality in Finland is thought of as modest, but in the United States people think that Nokia is shy as it has not reached out for them aggressively enough.36 5.2. Analysis of Nokias Marketing Environment 5.2.1. Smart Phone Industry Analysis of Finland Rivalry among Existing Firms In Finland, the rivalry among existing smart phone brands is significant since there are several strong competitors in the market such as Nokia, Samsung, Apple, ZTE, and HTC. Furthermore the relative size of the competitors is evening out as the old

powerhouses are losing market share to the newcomers thus creating a balanced and less concentrated market. Additional proof of the intensity of rivalry can be seen in the recent and sharp decline of market share of previously strong competitors such as Motorola and Sony Ericsson. The smart phone industry as a whole is growing fast, which increases the strategic stakes of competitors in the market. In addition not many brands have been able to substantially differentiate from competition thus keeping the switching costs between brands low. Threat of New Entrants The threat of new entrants to the Finnish smart phone market is also considerable, which has been proved true by the late surge of new competitors such as ZTE and many other manufacturers capitalizing on the hugely successful Google Android operating system. All in all it is hard for the existing competitors to protect their market share since the industry is growing rapidly, the products already on the market are not that diverse, and there are not major switching costs for the buyers since the phones are not strictly bound to different operators. There are, however, some substantial barriers to entry as well. First of all entering the smart phone market requires large capital investment and it is hard for the entrants to catch up with the existing economies of scale of the established competitors. In addition some brands have already been able to differentiate in a positive mannerNokia is one of the most popular business phones among companies. Last but not least Finnish people consider themselves rather loyal to 37 smart phone brands according to the survey conducted, which makes it harder for the new entrants to attract new customers away from competitors Bargaining Power of the Buyers In Finland, buyers bargaining power is rather high, because there is a wide range of brands on offer and there are not many buyers relative to the sellers. Thus the sellers

have to compete over the consumers. On the other hand, smart phones are constantly becoming more valuable for the consumers because of their versatility, which decreases buyers bargaining power slightly. Bargaining Power of the Suppliers The bargaining power of suppliers is at a very high level in Finland, because the suppliers are concentrated, and there are not many substitute supplies available for the buyers. There are also considerable switching costs present in switching suppliers and altering the distribution channels. In Finland, the smart phone manufacturers have had to conform to the delivery problems of the suppliers since there is no significant competition between hardware suppliers in the smart phone industry. Threat of Substitute Products Substitute products are an interesting topic when speaking of smart phones, because they act as substitutes for so many products themselves that it is hard to take into account all the products that may in return act as substitutes for smart phones. Some examples are laptops, TVs, and tablets. As the smart phone features become more numerous, the number of possible substitutes becomes larger, but at the same time smart phones become more invaluable as their versatility increases. In Finland the threat of substitute products is on one hand low, because tablets and other newly introduced products are not yet widely popular, but on the other hand, the threat of 38 substitutes is high, because some people still prefer laptops and other more traditional products in daily use. 5.2.2. Smart Phone Industry Analysis of USA Rivalry among Existing Firms Rivalry in the USA is even fiercer than in Finland. There are more noticeable competitors such as Blackberry by RIM and the Windows Phone and the competitors

are also more evenly matched. Furthermore there are larger switching costs to buyers since smart phones in the US have traditionally been closely tied into particular operators. Threat of New Entrants New entrants are always a threat in the US market, but because smart phone companies have a restricted access to the distribution channels due to the small number of operators, the threat is not as big as in the Finnish market. Bargaining Power of the Buyer The buyers bargaining power in the United States is high, but less significant than in Finland, because the ratio between buyers and sellers is larger and there are more inevitable switching costs to the buyers. Bargaining Power of the Suppliers The suppliers in the US have an equally strong position when compared to their counterparts in the Finnish market. Since there are not many suppliers to choose from, the availability of substitute inputs is nonexistent, and the importance of the suppliers 39 input is of utmost importance, buyers do not have much say when negotiating with the suppliers. Furthermore the threat of backward integration by the buyers is very small. Threat of Substitute Products As in Finland, there are a variety of substitute products available, but in USA the situation is even more threatening, because people are more used to the latest technological appliances and are better informed of the latest trends.4041 6. CONCLUSIONS 6.1. Main Findings The key differences between Nokias own brand image and the image shared by the consumers have to do with the perceived agility, innovativeness, and accountability of

Nokia. Even when Nokias products are still commonly regarded as reliable, Nokia as a company is starting to be seen as somewhat undependable, because they have consistently been late with the launches of their smart phones since 2009 (Hardawar). Moreover Nokia has spent a lot of time developing new hardware, especially when compared to competitors like Apple and HTC who have enjoyed the most success as of late. As a result, Nokia is perceived by some as lazy, arrogant, and unwilling to react to competitors by becoming more agile and innovative. Nokia is definitely no longer the forerunner in the mobile phone industry it once was, which is especially true for the smart phone segment. The research on the topic has shown that the positive brand associations people have about Nokia are eroding quickly in the face of negative ones and that Nokia is becoming an increasingly irrelevant player in the smart phone market. However, according to the literature and findings, Nokias future is not necessarily doomed. It has become obvious that the once admired Nokia brand can and should indeed be revitalized. Furthermore Nokia should respond well to the revitalization efforts, if only these efforts focus on meaningful values such as reliability and innovativeness that used to describe Nokia at its prime. The research has demonstrated that there are multiple ways in which Nokia can improve its current smart phone marketing strategies. An important feature of these fresh approaches to marketing such as relationship communication and personalized experience marketing is that they do not ignore the important aspect of brand building. By revising their marketing strategies there is no doubt Nokia will be able to improve its positioning in the smart phone market and conquer at least some market share back from the recently emerged competitors.42 In order to improve Nokias existing smart phone marketing strategies from the branding perspective, quite a few concrete suggestions can be made. First of all Nokia should

continue unifying the visual elements of their marketing communication, which is in accordance with the principles of integrated marketing communication. An example of this integration would be the common blue color theme Nokia is utilizing in different media. Another way to improve the effectiveness of their marketing is to increase the amount of sponsorship agreements and celebrity endorsers. According to the survey conducted, these methods are clearly the most efficient in an effort to increase awareness and appear more youthful and approachable among smart phone consumers. Sponsoring events like the snowboarding world cup is a powerful way to shape Nokias image for the better and also to shake off the reputation as the choice of exclusively the business people. Furthermore, paying close attention to the brand revitalization framework introduced earlier would significantly improve Nokias marketing. According to the framework, to refresh Nokias old sources of brand equity, the usage of the brand has to be increased through identifying and introducing additional usage opportunities. As Nokia is already popular and trusted among companies and business users, launching a tablet device with Microsoft that has the ability to take full advantage of Microsoft Office would be ideal in order to increase the usage of the Nokia brand in a way that is hard for the competitors to match or to retaliate. Entering the tablet device market would also refresh peoples perceptions about Nokias innovativeness and gain them a foothold in a market that is growing steadily and should only gather more momentum in the upcoming years. According to the brand revitalization framework, the strength, favorability, and uniqueness of brand associations have to be improved to create new sources of brand equity for Nokia. This can be done through either bolstering fading associations, neutralizing negative associations, or creating new ones. All these measures contribute to retaining vulnerable customers, recapturing lost ones, attracting previously neglected

segments, and simply accumulating new customers. To bolster the fading association of agility, it is of utmost importance that Nokia launches any kind of product together with 43 Microsoft no later than the end of the present year 2011. This would also contribute to creating positive buzz around the recently announced collaboration agreement between Nokia and Microsoft that was originally not met with much excitement. Nokia cannot risk becoming even more sluggish in the eyes of smart phone consumers by postponing yet another important launch date to the distant future. To negate the unpleasant associations of being old-fashioned, Nokia should engage its consumers more relentlessly in the social media. By giving the consumers a chance to have a say on Nokias future direction Nokia would also create new associations of customer-centricity. So far Nokia is widely considered as an engineer-driven organization that has little interest in what the consumers actually want from smart phones. A good way to generate interest among company followers in the social media is taking advantage of user-generated content by setting up competitions that result in the winners being acknowledged for their work. As Meego and Symbian, Nokias current operating systems in use, are inevitably going to be put down as a result of the cooperation with Microsoft, Nokia could use social media to turn peoples frustration towards the unsuccessful systems into actual solutions they could take advantage of when developing the operating system together with Windows. Another key to Nokias success is discovering how to best leverage Microsoft and other possible brand partners to benefit the most from each others competencies. On top of addressing all the above-mentioned issues of the brand revitalization framework, Nokia should not forget to concentrate on its core competency of producing excellent hardware. At the same time Microsoft should focus on producing stellar software to its products to reach the most desirable outcome from both parties perspective. By

underlining the respective competencies in their marketing, Nokia and Microsoft should be able to start convincing the public of their capability of producing high performance smart phones worthy of comparison to any other competitor on the market. As Nokia currently stands on different steps of the Customer-based brand equity pyramid in Finland and the United States, their marketing efforts should also be 44 concentrated on different goals. In Finland, Nokia needs to fortify the positive brand imagery people have about them so that they can start to encourage more positive feelings and judgments towards the brand. In the United States, they have to concentrate on deepening peoples brand awareness about Nokia so that the consumers in the USA become more interested in the brand and start to consistently form positive opinions about Nokias performance and brand imagery. 6.2. Limitations This bachelors thesis is not absolutely dependable and in all fairness a few notions of its limited applicability have to be made. First of all the sample size used to gather the primary data from consumers was not necessarily large enough to accurately describe the opinions of the public. Secondly the original purpose of the thesis was to assess Nokias performance and possibilities in a developing market as well, but due to the lack of responses to the survey from all of the intended locations, the research concentrated only on Finland and the United States, where an appropriate number of responses to draw conclusions from could be gathered. Furthermore, as personnel from the marketing department of Nokia were not interviewed, a holistic picture of Nokias current marketing efforts around the globe could not be formed. Consequently, the concrete suggestions given to the company were based on a limited amount of information on their marketing strategies in different media.

Finally, the topic chosen was so broad that only a small amount of methods for improving marketing strategies could be comprehensively analyzed. Confining the methods to the brand building perspective, however, helped in choosing only the most relevant approaches to the topic.45 6.3. Implications for International Business The research done during the process has some useful implications for international business. Now that the global economical recession is finally becoming a thing of the past, peoples future expectations are improving hand in hand with their willingness to spend. For marketers this means increased budgets, but also increased competition over the attention of the consumers. Those firms that can meaningfully differentiate in the eyes and minds of the consumers will rise above the competition to form mutually beneficial relationships with customers. If Nokia succeeds in its efforts to revitalize the Nokia brand, it should lead to an increase in its market share and eventually a more balanced competition in the smart phone market. Thus the pressure to lay off designers and other employers of Nokia would also be smaller. In addition, an evenly matched competitive landscape would not only be beneficial for Nokia, since smart phone consumers would benefit from the different brands having to figure out how to differentiate from others by improving their products and enhancing their value propositions. Finally, one of the biggest effects this thesis has on the way in which international business is conducted, is showing that a company-specific brand equity structure is not merely a way to measure the success of marketing activity. It is also a useful tool in deciding how to convincingly position a company against industry competitors and how to improve the effectiveness of marketing strategies without forgetting the principles of building strong brands.

6.4. Suggestions for Further Research As far as Nokia is concerned, possible future research topics could be for example digging deeper into the reasons behind Nokias recently announced partnership with Microsoft. Most experts do not see much light at the end of the tunnel, but according to 46 some, Nokia is on the brink of acquiring a huge competitive advantage if everything goes according to the plan and the next Windows operating system can be transferred as it is to Windows Phonessomething that no other smart phone brand has been has been able to do so far with their operating system (Kuittinen 13). Another interesting research topic would be to examine how the partnership between Nokia and Microsoft is perceived by smart phone consumers. It will be intriguing to see if the parties can shake off the slow start and leverage each others complementary core competencies to differentiate from competition and to start building the foundation for a sustainable competitive advantage. To continue exploring the partnership between Nokia and Microsoft, a model for the most beneficial role for Nokia in the partnership could be formed and utilized to assess other potential future partner brands for Nokia.47 REFERENCES Aaker, David A. Building Strong Brands. New York: The Free Press, 1996. Print. Aaker, David A. Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: The Free Press, 1991. Print. Aaker, David A., and Joachimsthaler Erich. Brand Leadership. New York: The Free Press, 2000. Print. Arnould, Eric, Linda Price, and George Zinkhan. Consumers. 2nd ed. New York: McGraw-Hill/Irwin, 2004. Print. Baker, S. Building Brand Equity. 2005. 591-594. Barrett, Larry. "Palm, Nokia Smartphone Users Most Likely to Switch: Survey." Enterprise Mobile Today. Internet.com, 19 Jan. 2011. Web. 24 Apr. 2011.

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<http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=14282862-40be-49d9-add5-49ff51c7cfdd%40sessionmgr115&vid=2&hid=125>. Grundy, Tony. "Rethinking and reinventing Michael Porter's Five Forces Model." Strategic Change (Aug. 2006): 213-229. EBSCO Business Source Complete. Web. 24 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=5c34973b-1711-4b41-9590-7b2b5d364097%40sessionmgr112&vid=10&hid=125>. Hardawar, Devindra. "Nokia hurdles: speed, accountability, and laziness." Mobilebeat. Venturebeat, 29 Mar. 2011. Web. 10 May 2011. <http://venturebeat.com/2011/03/29/nokia-ceo-hurdles/>. Janonis, Vytautas, Aiste Dovaliene, and Regina Virvilaite. "Relationship of Brand Identity and Image." Engineering Economics 1 (2007): 69-79. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=f76e8f9b-242e-4de9-8614-c9d33bb5b676%40sessionmgr104&vid=2&hid=119>. Keller, Kevin Lane. "Managing Brands for the Long Run: Brand Reinforcement and Revitalization Strategies." California Management Review 41.3 (1999): 102-124. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=43201e75-a0ff-4706-8ee3-73dad9c32d1e%40sessionmgr114&vid=2&hid=113>. Keller, Kevin Lane. Strategic Brand Management. 3rd ed. 1998. New Jersey: Pearson Prentice Hall, 2008. Print.49 Kitchen, Philip J., Kim Ilchul, and Don E. Schultz. "Integrated Marketing Communications: Practice Leads Theory." Journal of Advertising Research (Dec. 2008): 531-546. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=7edd13bf-e68a-4916-80f4-b327dc977a01%40sessionmgr115&vid=2&hid=125>. Kuittinen, Teppo. "Nokia Piilottelee Valttikorttejaan." Ekonomi 11 Mar. 2011: 10-15. Print. Luck, Edwina, and Jennifer Moffatt. "IMC: Has anything really changed? A new perspective on an old

definition." Journal of Marketing Communications 15.5 (2009): 311-325. EBSCO Business Source Complete. Web. 15 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=7018b90d-073b-46d6-af0e-c1f23bfe0bde%40sessionmgr110&vid=2&hid=112>. Marketing Week. When engagement is a cover for brand-centric selfishness. Marketing Week. 2006. June 15, 30-33. Madhavaram, Sreedhar, Vishag Badrinarayanan, and Robert E. McDonald. "Integrated Marketing Communication (IMC) and Brand Identity as Critical Components of Brand Equity Strategy." Journal of Advertising 34.4 (2005): 69-80. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=b62cbdf7-aa37-4ec4-9b83-7ebba7e9878e%40sessionmgr115&vid=2&hid=119>. Porter, Michael E. "The Five Competitive Forces that Shape Strategy." Harvard Business Review (Jan. 2008): 78-93. EBSCO Business Source Complete. Web. 24 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=4f88bfed-3f4a-479f-aa4c-8619282ca17d%40sessionmgr115&vid=2&hid=125>. Samli, A. Coskun, and Merici Fevrier. "Achieving and Managing Global Brand Equity: A Critical Analysis." Journal of Global Marketing 21.3 (2008): 207-215. EBSCO Business Source Complete. Web. 13 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=a0b717fc-62d6-4351-b4b3-f0ea59776910%40sessionmgr110&vid=2&hid=107>. Sokala, Hannu. "Elop mynsi isot ongelmat." Taloussanomat. Sanoma News, 27 Jan. 2011. Web. 4 May 2011. <http://www.taloussanomat.fi/informaatioteknologia/2011/01/27/ elop-myonsi-isot-ongelmat/20111288/12>.50 Srivastava, R. K. "Measuring brand strategy: can brand equity and brand score be a tool to measure the effectiveness of strategy?" Journal of Strategic Marketing 17.6 (2009): 487-497. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/ pdfviewer/pdfviewer?sid=95f607ed-11e8-4d3b-a649-

234b4a2ec5f3%40sessionmgr115&vid=2&hid=113>. Uggla, Henrik. "The brand association base: A conceptual model for strategically leveraging partner brand equity." Journal of Brand Management 12.2 (2004): 105-123. EBSCO Business Source Complete. Web. 14 Apr. 2011. <http://web.ebscohost.com.libproxy.hse.fi/ehost/pdfviewer/ pdfviewer?sid=88b8b419-05b0-4e9a-8773-771f46c92698%40sessionmgr112&vid=2&hid=113>.51 APPENDICES Appendix 1: Nokias Brand Image Interview February 4 th 2011 The purpose of this interview is to find out about the aspired brand image Nokia is trying to create in the minds of the consumers. The answers to this survey will be compared to the results of consumer surveys to find out whether there are differences in Nokias aspired brand image and the actual perceptions of the consumers. The findings will be used to analyze Nokias marketing strategies for its smart phones and improve them from a brand building perspective. 1. What are Nokias core brand values? Are these values clear for all the employees? Mr. Pekka Somerto, Nokias Vice President of Brand and Marketing Portfolio Management: Nokias brand promise since the 1990s has been connecting people. That underlying idea is definitely clear to all employees. The meaning of the brand promise, however, has evolved. Nowadays it stands for connecting everybody instead of just connecting houses and people with each other. Along with smart phones the meaning has further evolved to cover also the idea of connecting with everything like music, e-mail, and especially the Internet.

2. What is Nokias customer promise? Mr. Somerto: Connecting people can also be seen as a customer promise, but other than that Nokia has always tried to offer the public cell phones that are trustworthy, reliable, easy to use, innovative, and stylish.52 3. Do you think Nokia has succeeded in delivering on or exceeding its customer promise in the smart phone segment? If not, have the problems been caused by internal or external factors? Mr. Somerto: Recently Nokia has seen some decline in delivering on its promise for reliability, trustworthiness, and ease of use of its products. The problems have mostly been caused by internal factors. Suppliers have sometimes been late with their deliveries, but a bigger issue has been the rapid pace of change that has picked up lately and added a lot of pressure on Nokias weakest links. The increased speed and complexity of the markets has made delivering on the promises harder than before. 4. Do you think there is a difference between Nokias aspired brand image and the brand perception of the consumers? Why does this gap exist and what measures have been taken to tackle this issue? Are there regional differences in the brand perceptions of the consumers? Mr. Somerto: Obviously there are differences between Nokias aspired brand image/identity and consumers brand perceptions. Not surprisingly there are huge regional differences between brand perceptions. In Finland and in emerging markets like China and India Nokia is a very trusted brand. Nokias impressive market share and success in Russia is another noteworthy matter. However, Nokia is unfortunately a rather irrelevant player in the US market at the moment. A concurrent theme is that Nokia is trying to appear younger in the eyes of the consumers all around the world. Mr. Somerto: Interestingly enough one of the strictest critics of Nokia is the company

itself. Nokias internal control is extremely active and it constantly raises the bar for Nokias performance. Despite the negative publicity Nokia has recently received from the press, Nokia has at the same time been delivering well on products like the N8 according to extensive consumer panels.53 5. How are Nokias smart phones positioned against competitors? Mr. Somerto: Nokia offers a larger smart phone portfolio than most of its competitors. Nokia tries to differentiate from competition by emphasizing effective distribution and global availability of its cell phones. 6. What are Nokias points of difference and points of parity when compared to the competition in the smart phone industry? Does Nokia have a sustainable competitive advantage over its competitors? Mr. Somerto: The point of parity between brands in the smart phone market is that smart phones look pretty much the same. They are rectangular in shape and usually employ a large touch screen. The challenge today is to offer the consumer the best possible user interfacesomething that Nokia has not yet been able to consistently deliver. Mr. Somerto: One of Nokias biggest assets and sources of sustainable competitive advantage is its global reach accompanied with a locally tailored presence. It is hard for competitors to enter markets like India where Nokia has already established a strong presence. 7. Do Nokias smart phones offer functional, emotional, and self-expressive benefits to customers? Please give some examples. Mr. Somerto: Nokia has always excelled in offering functional benefits to consumers. Nokias phones are known for great voice quality, well-functioning mechanics, long battery life, reliable connection, and so on. By delivering well on the functional aspects,

Nokia has simultaneously created positive emotional associations like trust towards the brand. In recent years Nokia has appeared more serious than in the past when it emphasized the fun-side of cell phones in its marketing. The self-expressive benefits are the most apparent in developing markets, where Nokia phones are used for many 54 unorthodox purposes like for paying bills and for using the phone as a flashlight. For a consumer in an emerging market a cell phone conveys a clearer message about the user than in the more competitive markets. 8. What are the most important brand associations Nokia aspires to create in the minds of the consumers? (Product, organization, person, symbol) Mr. Somerto: The most important brand associations Nokia looks to create are trust, reliability, sustainability, and environmental responsibility. The underlying idea in all this is that Nokia wants to show the public that it tries to improve the quality of peoples lives and also make the world a better place to live. In addition Nokia would like to be perceived as a more youthful and agile organization. 9. In general, what do you think is important for smart phone users? What are some of the most important features in smart phones? Mr. Somerto: The single most important smart phone feature today is the multitude of applications (APPS), which also reflects the growing consumer-centricity of the smart phone market. Consumers have to be able to decide and choose what is most important for them and use the smart phone as a sort of an all-in-one apparatus. Aside from the APPS traditional features like bandwidth, storage space, and speed of connection are of course also important. 10. Can you think of any customer needs that are currently not met in the smart phone industry? If there are any, is Nokia actively trying to fulfill those needs in the future?

Mr. Somerto: It is hard to pinpoint anything concrete, but the future innovations are most likely going to come from the direction of user interface development. The way of using smart phones can be changed through advanced sensor technology. In the future smart phones will be controlled with much less effort thanks to the rapid advancements in 55 technology. A good comparison would be the innovative automated braking systems and augmented reality windshields of the modern car manufacturers. 11. How is Nokias position communicated? Please identify if there are differences in the marketing communication between Finland, Russia, and the United States. Mr. Somerto: The current theme in Nokias advertising is success redefined meaning that Nokias phones liberate users to dictate and decide what is success for them an enable them to express themselves freely. A modern successful person does not have to go the office every day, because a smart phone enables him or her to do all the necessary work from anywhere. Mr. Somerto: Nokia strives for a unified visual approach in its marketing, but it incorporates local adaptation by choosing the appropriate marketing mix depending on the peculiarities of the different markets. In other words Nokia is applying the principles of hyper-locality. 12. What is Nokias target audience in the smart phone segment? Is the target audience same regardless of the country? Mr. Somerto: Everyone can and is welcome to buy Nokias smart phones, but the marketing efforts are concentrated towards people who have a strong influence on others. Put differently Nokia targets the so called active participant segment of the smart phone market. The active participants are diligent networkers who influence the purchase decisions of others. They are often early adopters or even first movers to a

product category and thus have a say in which products will eventually be successful in the marketplace. Mr. Somerto: When speaking of different countries, the marketing efforts are chosen based on demographic data and the purchasing power of the inhabitants. Due to this 56 the same product is sometimes targeted to a different audience abroad and thus might become popular among a very different market segment. 13. Do you think there is a need for change at Nokia? Is there a trade-off between agility and consistency? Mr. Somerto: There is definitely no trade-off between agility and consistency. At Nokia there is a need to become more agile and more responsive to customers needsNokia has to become a customer-driven organization instead of engineer-driven. Nokias large brand portfolio is advantageous, but the strategy has to be altered from push to pull in all stages of the value chain. This would also further enhance the new customer-centric approach at Nokia.57 Appendix 2: Smart Phone Brand Perception Survey Write the names of three smart phone brands that compete in the country where you live. (Or less if you cannot name three.) What is your preferred smart phone brand, why? If you own a smart phone, which smart phone brand is it? If you own a smart phone, for how long have you had the smart phone? Please indicate how important each of the following smart phone features are for you. Not at all Important Unimportant Neither Important Nor Unimportant Important Very Important

Applications (Apps) Battery life Camera Design Ease of use E-mail Internet connection Memory capacity Reliability of functions Screen size and resolution Technical aspects such as voice quality Additional features such as calendar, navigator, etc. Other, please specify:58 Is there anything you would hope from a smart phone that is currently not offered by any smart phone brand? Next you will be asked questions about Nokia specifically. Some questions might seem repetitive by design if you own a Nokia phone. Are you aware of the cell phone brand Nokia? Yes No Do you have or have you ever had a Nokia smart phone? Yes

No Please indicate the level of satisfaction with your most recent Nokia smart phone. Does Not Apply (I have never had a Nokia smart phone.) Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied How would you describe Nokia's products in a maximum of three (3) words? How would you describe Nokia as an organization with a maximum of three (3) adjectives? If Nokia's smart phone was a person, how would you describe that person with a maximum of three (3) adjectives?59 What is your perceived quality of Nokia's smart phones? Does Not Apply (No Opinion) Very Bad Bad Neither Good nor Bad Good Very Good What is your perceived value of Nokia's smart phones? Does Not Apply (No Opinion) Very Low Low Neither Low Or High

High Very High If you own a Nokia smart phone, do you feel like you can express yourself through using/owning the product? Does Not Apply (I do not own a Nokia smart phone.) Yes No How would you say Nokia differentiates itself from the competitors in the smart phone market? When you think of an innovative smart phone brand, what is the first brand that comes to your mind? When you think of a trendy smart phone brand, what is the first brand that comes to your mind?60 Please indicate your level of agreement with the following statement: "I am loyal to smart phone brands." Does Not Apply (No Opinion) Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree If you owned a smart phone brand mentioned in the list, how likely would it be for you to switch to another smart phone brand? Please choose an option for all the brands. Does Not Apply (No

opinion) Very Unlikely Unlikely Undecided Likely Very Likely Apple Blackberry by RIM HTC Nokia Samsung61 How important are these factors when deciding whether to switch between smart phone brands? Does Not Apply (I don't switch between smart phone brands.) Very Unimportant Unimportant Neither Important Nor Unimportant Important Very Important Availability Discount Use experience Other, please specify: What do you think of the number of smart phone brands offered by Nokia?

Does Not Apply (No Opinion) Too Few Brands Appropriate Number of Brands Too Many Brands Nokia offers Do you remember any marketing efforts by Nokia (such as advertisements, commercials, sponsorships)? Yes, please specify: No How effective is Nokia's smart phone marketing in your opinion? Does Not Apply (No Opinion) Very Ineffective Ineffective Neither Effective nor Ineffective Effective Very Effective62 The following five questions are only going to be used for classification. In which country do you live at the moment? In what year were you born? (YYYY) What is your gender? Female Male What is your educational background? (Choose the one you currently attend or most recently attended.) Elementary school

High school Vocational school Polytechnic University Other, please specify: What is your estimated annual family income in dollars? $9.999 or less $10.000-$49.999 $50.000-$99.999 $100.000-$149.999 $150.000-$199.999 $200.000 or more