Nokia Brand Equity Analysis

Nokia Brand Equity Analysis
Table of Contents
Executive Summary
1. Issues and objectives of the project
2. Methodology
3. Competitors and External Analysis
4. Internal Analysis of Nokia Corporation
5. Survey Findings
6. Brand Equity Analysis
7. Conclusion
8. Recommendations
9. References
10. Appendices
Executive Summary
Nokia is a powerful Brand. It is a truly global Brand. Key theme of Nokia is to accelerate and innovate.
Nokia is focused on innovative ways of working together with the telecom service operators to
accelerate growth in the mobile market. But the current year (2004) is tough time for the mobile-phone
giant as its market share has slipped and younger buyers turn to rivals such as Samsung. It has a dual
challenge in front of it. The First one is growing and building brand on its core competency of
innovation and technology leadership. The second one is managing its brand well, so that it remains the
leading brand in the segment. Nokia must rethink its strategies if it is to meet these challenges. The
recent social, technological, economic, and political and customer preferences have forced Nokia to
take aggressive measures to adapt and grow and remain profitable.
The project report in the subsequent pages outlines some of the ways through which Nokia can
accomplish this. Nokia has to keep a good handle on the pulse of the market and its B2B customers and
end users. It must build its brand around its core competency of brand differentiation and technological
leadership. Nokia also needs to bring new products to market, and, as the market is showing signs of
saturation, shift its focus onto the replacement market. Finally, by forming strategic alliances with
various stakeholders (viz. operators, consumers, scientist, developers and research community,
governments and communities), Nokia can ensure maximizing its brand awareness and brand image to
the end- user. As long as Nokia is open to reworking its branding strategies, it stands a good chance of
remaining the dominant player in the handset market and perhaps can regain and consolidate its lost
glory in terms of high brand equity valuation.
1.0 Issues and Objectives of the project

Nokias current brand valuation has dropped from 6th position last year to current 8th position causing a
corresponding loss in its brand value of over $5Billion (please refer to the table provided below).
Samsung is narrowing the gap fast between itself and the leader. World handset industry is changing
fast.
Indicators
Year 2003
Year 2004
Brand Rating

Brand Value
$M 29,440
$M 24,041
% Change
Country
-18%
of Finland*
Finland*
Ownership
Table: Nokias Brand rating and Brand Equity Valuation over the last two years
Source: Top 100 Brands: Business Week August 2004
* Assuming that due to high flux and volatile marketplace country of ownership may change due to
restructuring or acquisition and merger
Other questions facing Nokia amidst the big strategic issue are - should Nokia continue building its
brand when there may not even be a handset in ten years from now? Should Nokia continue with its
current technology leadership position or compete on cost too? How can it grow and remain profitable
at the same time? What marketing mix strategy shall be most appropriate for it?
2.0 Methodology
We adopted the following methodology in this project: 1. Industry/company analysis based on secondary research
2. Primary research, including analysis of data based on survey of consumers, interviews with
channel members and comparison of brands in stores
3. Analysis of information gathered through primary and secondary source
4. Conclusions and recommendations
Competitors and
Conclusion
External Analysis
Internal Analysis
Diagnosis and
Analysis based on
Aakers Brand
Equity Model
Recommendation
Survey
Diagram: Project Methodology
3.0 Competitors and External Analysis
Dr. Martin Cooper invented the first modern mobile phone in April 1973. (Marry Bellis, 2002) From
then on, mobile phone industry came into being. Mobile phone system can be divided into three
generations. The first generation was analogue system. In 1991, the second-generation: digital system
was invented and got a huge success. This system was supported by unified standard that was agreed
upon (Global system for Mobile) globally. In 2002, the third generation system (also digital) came into
being. (David Cruickshank, 2002)
From 1973 to 2004, the growth in the use of mobile phones has been dramatic. In 2004, there are 1.52
billion users of mobile phones worldwide and this high growth rate will continue. (Profit, Loss and
Value Added, 2004) Nokia has expected that the mobile phone industry in 2005 to grow approximately
10% in volume from the 630 million units as well as in value, but to a lesser extent. Also, the global
mobile subscriber base to surpass two billion users in 2006. (Nokia defines goals and actions for
leadership in dynamic mobile communications market, 2004)
In the mobile phone industry, there is no a recognized segment definition. However, Nokia, the No.1
player in the world, has divided the market into four segments (See table). (Connecting people, 2001)
Hi-fliers
Corporate executives who use a mobile phone to increase productivity at work.

Aged between 25-45. The company sponsors the handset; hence price is not a
Trendsetter
major consideration.
The first segment to adopt an emerging technology (the early adopters). For
Nokia, these early adopters are 'Trendsetters' who are most receptive to
Social
advanced models.
The third segment for Nokia is the upwardly mobile, socially conscious
contact
segment that uses a mobile to stay in touch. Today's youth and affluent
Assured
housewives constitute two major chunks of the segment.

High-profile celebrities, industrialists and other high "net worth" individuals.
The fact that the segment cannot do without a mobile phone makes it the
'assured' segment.
Source: theManageMentor
Currently, several key manufacturers dominate the whole mobile phone markets. Nokia, Motorola,
Samsung are the top three. In the first quarter of 2003, Nokia got a 35% market share, followed by
Motorola (14.7%) and Samsung (10.5%).
Table 1 Worldwide Mobile Terminal Sales to End-Users Estimates for 1Q03

(Thousands of Units)
1Q02
1Q03 Market 1Q02
Market
Growth
Company
1Q03 Sales
Share (%)
Sales
Share (%)
(%)
Nokia
39,479.20
35
32,649.00
34.2
20.9
Motorola
16,561.10
14.7
16,804.30
17.6
-1.4
Samsung
11,878.90
10.5
8,890.40
9.3
33.6
Siemens
8,584.60
7.6
8,121.40
8.5
5.7
Ericsson
5,384.80
4.8
6,000.80
6.3
-10.3
Others
30,785.50
27.3
22,867.20
24
34.6
112,674.10
100
95,333.10
100
18.2
Sony
Total
Market
Source: Gartner Dataquest (June 2003)
Competitor analysis
Motorola
For more than 75 years, Motorola has proven itself a global leader in wireless, broadband and
automotive communications technologies and embedded electronic products. (About Motorola, 2004)
However, Motorola is significantly recognized as the world's leading providers of mobile phone, which
role as pioneer, innovator and visionary is well known. (About Motorola, 2004)
In 2003, PCS (Personal communication system, include mobile phone and other wireless products) net
sales represented 41% of the Companys consolidated net sales. (Motorola 2003 annual report, 2003)
Motorola has set its mobile phone strategy as profitable and sustainable growth through close
relationship with customers, technology leadership and improving cost competitiveness. Motorola are
investing in the development of industry-leading GSM, CDMA, iDEN, and 3G UMTS products, with
an emphasis on appearance designs and features, including large colour display, Bluetooth
technology capabilities, flash memory, VGA camera and intuitive user interface. (Motorola 2003

annual report, 2003) In addition, Motorola set flexible price strategy. For example, in the China lowend market, Motorola set low price for their low-end products to compete with other global
manufacturers. (China daily, 2004) But in the high-end market, Motorola competes by its leading
technology but not price. For instance, Motorola set retail price for US$1,199 for Razor V3 in US
initially. Moreover, Motorola market its products worldwide to carriers and consumers through direct
sales, distributors, dealers, retailers, and, in certain markets, through licensees. (Motorola 2003 annual
report, 2003)
Motorola has continuously evolved its brand. In March 2001, Motorola launched an advertising
campaign to introduce the Intelligence Everywhere brand promise and a new Intelligence
Everywhere logo. These changes to the Motorola corporate signature were driven by strategy to
unify marketing efforts, and to have all business units go to market as one. (The Motorola brand
identity, 2004)
Samsung
Samsung Electronics Company (SEC) was established in 1969 to produce black and white televisions
and then gradually became a key player in the world home appliance manufacturing industry in 1980s.
In the Asian financial crisis (1997), Samsung restructured the organization (e.g. second phase of new
management) to decrease the debt and strengthen its core competency in manufacturing and R&D.
(Samsung Electronics Timeline & history, 2004) Now, Samsung Electronics intends to earn world
leadership and secure overwhelming competitive strength by operation synchronizing, huge investment
in R&D, and quality and productivity enhancement. (Samsung 2003 annual report, 2003)
Samsung developed it mobile phone product in 1991. (Samsung Electronics Timeline & history, 2004)
Samsung wants to enhance market leadership with a steady stream of high value-added products
featuring innovative technologies and functionality. In 2003, Samsung posted record sales of 55.7
million units, a remarkable growth of 32 percent from 2003 due to the timely releases of new products,
which further diversified the Samsung Electronics mobile product portfolio. Such growth enabled
Samsung Electronics rise to third worldwide in terms of sales volume, with a 12 percent global market
share. (Samsung 2003 annual report, 2003)
In fact, Samsung continuously has a leading position in technology and continuously developed
CDMA, GSM, 3G and Mobile Intelligent Terminals (MITs) products. Meanwhile Samsung will
develop and add more new features into current platform (mobile phone). (Mobile phone of Samsung,

2004) The latest features include 5-mega camera (first in the world), high level voice recognition, textto-speech conversion, high-image-quality games and 3D sound effects. In turn, these leading
technologies supported Samsungs premium price strategy. (SAMSUNG Introduces Worlds First 5Megapixel Camera Phone, 2004)
In 1993, Samsung introduced a new corporate identity program to strengthen competitiveness. The
logo was redefined to project determination to become a world leader. The strong blue color suggests
stability and reliability, and exudes a warm and intimate feeling. In synergy with the new corporate
identity program, the SAMSUNG Electronics logo is identical to the main SAMSUNG logo, with the
word "ELECTRONIC" incorporated to the lower-right side.
SAMSUNG Electronics, being reborn as the company responsible for the world's most innovative
digital convergence in 21st century, has adopted a new corporate brand slogan "SAMSUNG DIGITall,
everyone's invited. which conveys SAMSUNG Electronics' desire to make everyone's life more
convenient, abundant and more enjoyable through the development of innovative and multi-functional
products. (Corporate identity, 2004)
Sony Ericsson
Telecommunications leader Ericsson and consumer electronics powerhouse Sony Corporation
established Sony Ericsson Mobile Communications in 2001. Ericsson and Sony equally own this
company. Through the combined strengths of Sony and Ericsson and by its strong consumer-focused
and applications-led strategy, the company is a leading player in the mobile communications industry.
Sony Ericsson is separated from Sony and Ericsson and takes responsibility for R&D, marketing sales,
and distribution as well as customer services. Sonny Ericsson has strong technology development
capability. It has R&D in Sweden, Japan, China, US and UK. (Sony Ericsson mobile communications,
2004)
In 2003, Sony Ericsson sold 27.2 million units globally, which is 19% higher than previous year. Sales
reached Euro 4,673 million, representing an increase of 12% compared to 2002. Income before taxes
was Euro -130 million due to organization restructuring. However, the success of restructuring in turn
supports Sony Ericssons huge achievement in the first three quarter in 2004. In the first three quarter,
Sony Ericsson sold 29.5 million units and got sales of total Euro 4,510 million. Income before tax
reached 256 million. (Combined data from Sony Eriksson press resources, 2004)
Sony Ericsson announced its first joint products in March 2002 and now has a full product portfolio
covering all target groups, which includes GSM, CDMA, TDMA, Satellite, and TDC products. (Press

sources, 2004) In addition, Sony Ericsson developed lots of advanced features. The example is its new
V800, the first true convergence handset in the world. It is a mega pixel camera phone for 3G
consumer services - Video telephony, enhanced imaging and superior entertainment in a sleek compact
design. (Press sources, 2004) Sony Ericsson brand could be understood the polymer of Sony and
Ericsson brand. In fact, this brand completely inherits Ericssons brand identity: the global leader in
providing communications solutions and the prime innovator of telecommunication industry that drives
for this advanced communication to happen. (How we want to be perceived, 2004) Meanwhile, Sony
brand, the most innovative and creative brand (message from management, 2004) add its spirit
innovative and creative into this brand identity. Correspondingly, Sony Ericsson brand will set up
advantages over other competitors brand based on this comprehensive power.
4.0 Internal Analysis of Nokia Corporation

Nokia Corporation is a mobile communications company primarily offering voice-centric mobile
telephones, enhanced communicators, entertainment and gaming devices and media and imaging
phones. Effective January 1, 2004, the Company reorganized its structure and now includes four
business groups: Mobile Phones, Multimedia, Networks and Enterprise Solutions. Nokia manufactures
and sells mobile phones for all major standards and customer segments in over 130 countries.
Multimedia focuses on bringing mobile multimedia to consumers in the form of advanced mobile
devices. Networks are a provider of network infrastructure, service delivery platforms and related
services to mobile operators and service providers. Enterprise Solutions offers businesses a range of
devices and mobile connectivity solutions based on end-to-end mobility architecture (Nokia website,
2004)
The new structure also includes three horizontal groups that support the business groups: Customer and
Market Operations, Technology Platforms and Research, Venturing and Business Infrastructure.
Customer and Market Operations include Nokia's sales and marketing organization, as well as
manufacturing, logistics and sourcing. Technology Platforms is responsible for Nokia-wide technology
management and development. Research, Venturing and Business Infrastructure includes the Nokia
Research Centre, Nokia Ventures Organization, Business Infrastructure and Operating Resource
Sourcing. Venturing at Nokia contributes to Nokia's renewal by identifying and developing new
businesses. (Nokia website, 2004)
Source: Nokia Website

Current Performance
Nokia is currently the worlds largest mobile phone manufacturer, with 64.4% of the GSM/TDMA
market and 2.9% of the CDMA market. For 2003, the total mobile telephone sales volumes achieved
by Nokia reached a record level of 179.3 million units, representing growth of 18% compared with
2002. Nokia net sales increased slightly from third quarter 2003 levels. This was a result of the mobile
device market share gains in Europe and continuing strong mobile device sales in China, Latin
America and the rest of Asia offsetting the negative sales development in North America. Sales in the
infrastructure business grew significantly in Europe, Latin America and Asia as investments in
capacity and coverage increased. Please refer to the Appendix for information on three years financial
performance of Nokia.
Core Competency of Nokia
Nokias technical and designing capabilities, innovativeness and customers trust in these capabilities is
Nokias biggest core competency. Its global reach, work culture, partnerships and internal branding are
other distinctive advantages.
Brand Analysis
Nokia has thus far managed to establish a powerful brand that has been widely recognized as the key to
its recent successes. Nokia brand is an asset that has been carefully built and managed by the Nokia
brand managers during the past ten years. In addition to a superior design, Nokia developed its

expertise to mobilize its R&D efforts coupled with market research to bring about a winning product.
A cross functional team consisted of engineers, graphic designers, sociologists, psychologists, market
researchers and product managers. Nokia has successfully segmented the market to target specific
demographic groups. For example, in the year 2000, different phones were marketed to appeal to the
rugged user, the sophisticated user, and the youth market, among others. With all these product
innovations, designed to satisfy customer preferences, Nokia has reinforced its brand image of
providing cutting-edge communications technology. (A Tale of Two Mobile Telephone Makers, 2000)
Brand Personality
Analysts have positively characterized the company by describing it as young, sexy, sophisticated, hip
and generally with it. Subsequently, Nokia leveraged its superior marketing strategies and powerful
brand to avoid the price wars that have recently afflicted its key competitors. (Nokia expects to meet
estimates, 2001.)
Brand's positive associations
What is it about Nokia that people within the company - and outside of it - most admire? People tend to
be attracted to Nokia's distinct way of operating and clear values of customer satisfaction, respect,
achievement and renewal. Additionally customers perceive Nokia a fast innovator, reliable and hi-tech
product. There is a strong band of loyal customers who have trust and take pride in buying Nokia's
latest models as soon as it is introduced in the market.
B2B and end-users Customers
Telecommunication companies like AT&T, Rogers and Aliant are few of the B2B customers of Nokia.
These operators buy Nokia handsets in volumes and sell that to the end users at a much cheaper price
(major portion of the price is hidden in the scheme cost). Nokia has demonstrated success in delivering
a wide range of mobile voice connectivity and security solutions to suit specific business needs. Nokia
has been co-branding phones with operators in the north America since 1991 as well as providing
modified hardware for the inside of the phone. The pen-based Nokia 6108 and Nokia 3108 for
inputting Chinese characters provide an excellent example of how hardware design can meet the needs
of a specific market.

End users may directly buy handsets from the market as well. Please refer to the distribution channel
diagram for a better understanding of this. Nokia has varied segment of customers with a vast
demographics and economic class. Age group may vary from even 14 years to 70 years. Older
customers are found to be more loyal to Nokia as compared to the younger customers.
Products
Nokia aims to offer high value-adding products to its customers, including operators, consumers and
enterprises, by persistently renewing its competences and brand portfolio. Nokia has a wide brand
portfolio comprising of over 200 products positioned across cheap to luxury brand continuum. Brands
share a sub brand type architecture where Nokia as the master brand drives other sub brands such as
Nokia5468 or Nokia1473 etc. It is quite similar to the approach adopted by Dell Computers. Recently
Nokia launched an upmarket luxury brand called Vertu priced in the range of $400 to $4500. To
further the focused renewal of its brand portfolio, Nokia introduced and started shipping several new
mobile devices during the current year. The newly launched products strengthen its high-end and midrange offering and include a trio of fashion-category phones, the Nokia 7260, Nokia 7270 and Nokia
7280; third mega-pixel imaging smart phone, the Nokia 6670; and the Nokia 9300 enterprise smart
phone.
Pricing
Price of Nokia phones in the showroom (without any operator-scheme) ranges from $200 to $10,000 at
the high end (e.g. Vertu). However, as part of one-three years plan, operators offer handsets in the
range of $25 to $400.
Promotion
Besides regular IMC, Nokia releases Co-op advertisement with operators like-Telus, and Rogers
Distribution Network
Handset end- users do not purchase directly from Nokia instead, they enroll in cellular calling plans
from service providers. Nokia sells its phones to the mobile service provider after building each
handset using many components manufactured by other vendors. This position puts Nokia at a
negotiating disadvantage, where it is constrained by the costs of the handset components themselves,
while it is simultaneously at the mercy of the service provider when selecting a handset-selling price.
Component
Vendors
Handset
Makers
Telecom
Service
Operator
Consumer
Diagram A: Value Chain Service Provider Channel
Handset
Makers
Component
Vendors
Distributio
n Channel
Consumer
Diagram:
Diagram B: Value Chain Distributor Channel

Alternatively, as shown in diagram B it may also sell to the end users using distribution channel.
Joint Ventures and Partnerships
Collaboration is a key ingredient in Nokia's growth strategy. They work with other companies, research
institutions, authorities, and industry organizations to further the competitiveness of company and the
strength of the industry as a whole. Nokia has entered several joint ventures, particularly in the areas
of manufacturing and research and development.
Nokia meets technology challenges
Mobile communications is merely a part of Nokia's future that now embraces also mobile multimedia,
entertainment, games and serious business solutions. The company has changed to meet the challenge
head-on.
Great Organization Culture encouraging Innovation and Risk Taking
Despite its size, Nokia's management structure is not excessively hierarchical. It aims to provide a
platform for personal growth through value-based leadership. Respect for individual qualities, as well
as a willingness to work together in a constructive, positive, even enjoyable, way are all essential for
high-quality work culture. Motivated and satisfied employees of Nokia create a service profit chain,
which helps internal branding in Nokia to evolve inside out.
Nokia's success so far has been very much a team effort. At Nokia one is allowed to make mistakes.
Risk taking is encouraged. One of the greatest challenges before Nokia is maintaining an innovative
edge as a company grows. Key to maintaining an innovative edge is speed and flexibility in decisionmaking. Decision making at Nokia is quite decentralized. In addition the company believes in equal
opportunity and openness towards people and new ideas. It is also noteworthy that job rotation is
strongly encouraged even at very senior levels. Thus all this leads to a great innovative and service
culture in Nokia.
Partner Relationship Management (PRM)

Nokia Research is an information-sharing channel for researchers working in academia or the business
world to promote cooperation. Nokias innovation networks extend beyond the company and include
research centres, academics and business partners, and entrepreneurs. Nokia is also partnering with
companies like Ford and Nissan to carry out path breaking researches for introducing GPS base
telephony in cars. All this is giving a big brand identity to Nokia.
Primary Research
We conducted a consumer survey in Nova Scotia, Canada (with 30 responses) to gauge the consumer
perception of Nokia brand vis--vis its competing brand. This survey was designed to give us insights
on developing a positioning map for Nokia and other details, which we have already mentioned above.
5. 0 Survey Findings
We conducted a consumer survey (Questionnaire, having 19 Questions), as part of our primary
research, involving 30 respondents in Nova Scotia. We tried our best to conduct the survey personally
by reading out to the respondent questions from the questionnaire and noting down their responses.
This helped us in getting candid responses for our survey. We also interviewed channel distributors
(direct product selling as well as service providers). For confidentiality reasons, we would not be
mentioning the names of the channel partners whom we interviewed. The findings are summarized as
below:
Nokia had the highest unaided brand recall. Nokia was recalled 29 times compared to Motorola
(26), Samsung (14) and Sony Ericsson (6) times. Motorola was recalled 19 times in the first place
compared to Motorola (5) and Samsung (5). The bar chart and pie chart for the recall for the brands
is given in Graph 1 and Graph 2 in appendix 2.
Nokia had more positive brand associations compared to a neutral or a negative brand
association. Positive words like Durable, reliable and beautiful were mentioned 22 times in the
first and 17 times in the second recall. Neutral words such as small, handy were mentioned 8 and
5 times respectively in the first and second recall. The bar chart for brand association response is
given in Graph 3 in appendix 2.
Price and quality were the most critical factors in mobile phone purchasing decisions. Quality and
price got a mean score of 4.500 compared to functions (3.900), appearance/design (3.967) and
radiance protection (3.567) on a five-point scale with 5=very important and 1= very unimportant
Nokia was rated the best on five key attributes: performance, price, appearance/design, quality and
radiation protection vis--vis its competitors (five-point scale with 5=very important and 1= very
unimportant). The brand evaluation scores (mean score) are given in Graph 4 in appendix 2.
Nokia was placed significantly higher than its nearest competitor (Samsung) in the brandpositioning map (Graph 5 in appendix 2). This positioning map was made after evaluating the five
key attributes and finding the most critical factor (price and quality here) for purchasing decisions.
Nokia was placed high on Competence (4.133), Sincerity (3.867) and low on Sophistication
(3.667), Ruggedness (3.033) while evaluating the five dimensions descriptive words (Sincerity,
Excitement, Competence, Sophistication, and Ruggedness) of the Jennifer Aakers personality
theoretical framework (brand personality construct). Evaluation was done on a 5-point scale
(5=extremely descriptive, 1=not at all descriptive). Refer to appendix 2 (Table 6) for Nokias brand
personality mean evaluation scores.
Switching on to a new mobile phone generally takes long (more than a year). 40% of respondents
would not like to switch over to a new mobile set before a year. Only 20% responded positive in
switching over to a new mobile set in between a time frame of 9-12 months. (Refer Graph 7 in
appendix 2 for switching time comparison)
Respondents had a mixed response on preferred pricing level while making their next mobile
purchasing decision. 36.67% customer preferred a price level of $100-150, 16.67% preferred $150200 and 23.33% preferred $200-250. (Refer Graph 8 in appendix 2 for preferred pricing
comparison)
Nokia (64.28%) was behind Samsung (75%) in terms of percentage satisfaction level of the
existing handsets. 9 out of 14 respondents were satisfied with their Nokia mobile phone and
wanted to recommend it to others. The rest 5 respondents were neutral in their response. Out of the
16 of the respondents who did not purchase Nokia, 6 were neutral in their response.
Out of 14 respondents who chose Nokia as their recent mobile phone purchase only 2 respondents
agreed to pay more less than $15 as price premium. Rest all were in the range of $15-$100. NonNokia users (Motorola users in particular) were very likely to buy Nokia as their next mobile
phone.
TV advertisements (76.6%) and Internet (53.3%) were seen as the top sources of information about
Nokia brand. A decent percentage of respondents also came to know about the brand from friends
(43.3%) and print media (46.6%).
Key demographic details of the respondents 50% Male and 50% Female respondents. 60% of the
respondents were in the age group of 25-35. 37% of them had a Bachelors degree to their credit.
33% of them have their household income greater than $40,000. 77% of them were Canadian
citizens and 67% of the respondents were having white as their ethnic background. (Refer Table 10
in appendix 2 for demographic details).
We also had interviewed key persons at two of the electronic product chain stores (Future Shop and
Radio Shack) and two of the mobile service providers (Telus and Rogers) in Nova Scotia. The key
findings out of the interviews are as follows:
Customers are not very brand sensitive when they make a purchase decision. They look more
in terms of benefits (key attributes, functions) that the mobile phone is offering.
Medium to high involvement of customers in purchasing mobile phone
Nokia has decent brand equity where customers are highly aware of the brand.
Nokia has recently launched a model 3205i exclusively for Telus Mobility.
Nokia has not yet launched `flip-open` style phones even though customers have a preference
for that style.
No point of presence of Nokia banner or advertisements in any of the shops
Nokia does not have an aggressive promotional strategy (at least in Nova Scotia)
6.0 Brand Equity Analysis

We took the inputs from our primary and secondary research to do some diagnosis and come out with
brand equity analysis for brand Nokia. We decided to base our brand equity analysis on the brand
equity models given by Aaker (brand loyalty, brand awareness, perceived quality, brand associations,
other proprietary brand assets) and Keller (brand knowledge) brand equity model.
Brand Knowledge
Brand Awareness
Nokia has the highest top of the mind recall compared to its competitors. Hence it has high
brand salience. The aided recall (brand recognition) for Nokia is also higher compared to its
competitors
Brand Image
Nokia has significant positive brand associations compared to neutral or negative associations.
Customers acknowledge Nokia for its reliability. The perception of the customers towards the
brand is also positive.
Brand Loyalty
Customers who already have a Nokia mobile phone are ready to re- purchase a Nokia mobile phone by
paying a price premium. This means that Nokia users are loyal towards their brand. The loyalty factor
of customers having other brands is less as compared to Nokia. Loyalty factor helps in attracting new
customers by creating awareness and reassurance in the brand (Aaker, 1991). Nokia can also use this
factor to respond to threats posed by competitors.
Brand Awareness
We already have mentioned that Nokia has the highest brand awareness in the market. Another factor
that buttresses our stand of Nokias high brand awareness is that a significant number of non-Nokia
users are ready to switch over to Nokia brand in their next mobile phone purchase.
Perceived Quality
Nokia is positioned at the top of the mobile phone category in terms of perceived quality factor. The
brand-positioning map positions Nokia high both in terms of Price and Quality (refer Graph 5 in the

appendix). This factor differentiates Nokia from its competitors and affects purchasing decisions of
potential customers as well as builds positive associations with its channel members.
Brand Associations
As already mentioned by us, Nokia has positive brand associations to its credit. This factor would work
as a significant parameter for potential customers for their purchasing decisions towards Nokia.
Other Proprietary Brand Assets
Nokia has over 100 small and large patents in the area of technology and research. This factor helps the
company with a competitive advantage by restricting competitors to capture its customer base and
loyalty. It is more of a strategic branding strategy to face the competition.
Brand Personality
As a person, Nokia stands for competence, which means reliable, intelligent and successful. It also
stands for sincerity, which means down-to-earth, honest, wholesome and cheerful.
Brand Elements
Logo of the brand is `Nokia` which is short and easy to remember as a brand name. It has a punch line
``Connecting People`` which fits very well with the business that Nokia is into and the strategic
direction that it wants to see for itself in the future.
7.0 Conclusion
As part of this project, we did competitors analysis along with external analysis for Nokia to find out
the opportunities and threats that Nokia was facing in the present context. We also preformed internal
analysis for Nokia brand to find out its strengths and weakness. Our customer survey and interviews
with channel members that were based in Nova Scotia, Canada reflected the primary research findings.
Insights from all these findings were used as inputs to prepare a brand equity analysis.
Nokia has high brand knowledge. Brand awareness and brand image is significantly higher than its
competitors. Customers are loyal to Nokia brand to a satisfactory degree but they also seek key
attributes (functionality and reliability) in their brand. Perceived quality is high for Nokia brand and it
attracts positive brand associations compared to its competitors. Nokia has state of the art research and
development centres across the globe that employs the best talent available in the industry. This
talented human capital adds significant value to the overall brand value of the company. The cutting

edge R&D initiatives help Nokia to build their other proprietary brand assets (in terms of patents). This
strategic move equips Nokia with a competitive advantage to face the threat arising out of its
competitors.
Nokia is truly a global brand with its presence in all the continents. It uses the virtues of being a global
brand to consolidate its brand equity. It has country specific websites and offers specific products
related to the consumer behaviour of that specific market. It is seen more as a `Master Brand` in the
Brand Relationship Spectrum. The brand identity of Nokia (core and extended) provides its customers
with a value proposition that stresses on functional as well as emotional benefits. Nokia has primarily
relied on TV advertisements as well as Internet advertising for its marketing communication plans,
particularly in North America. In recent times, Nokia has tied up with Telus Mobility and Rogers for
co-operative advertising campaigns. This strategy builds good relationship with the channel partners as
well as reduces the high advertising costs. Nokia has a good opportunity in the area of customizable
software and user interfaces to cater to the demand of the operator of cellular services. This calls for
customization related to the unique functionalities that the operator seeks.
There are challenges arising from the external environment where the world of telecom is moving
towards convergence. There is a very difficult task before Nokia to position itself with the rise of
strong competitors like Samsung. There are also issues related to customers (whom to target, first time
users or replacement users), technology (which technology to focus companys resources) which the
Management at Nokia has to sort out to maintain its high brand equity
8.0 Recommendations
Continue with Product Differentiation. Nokia should avoid commoditization that arises in
mature markets such as North America. Nokia therefore should offer next generation of
handsets that work on the concept of convergence with MP3, camera and computing facilities
all built in to attract cool and hep teenagers and young adults. For professional users,
Nokia should provide the ability to remotely access their data and files through the handset.
Mass customize for your operator (Telus, Rogers etc). Service providers also want customers
to see the names of their respective companies and not only those of the handset makers.

Nokia can tie up an operator in a long-term contract and use co-branding. Operators can be
lured to use the Nokia brand to attract customers.
Nokia should continue selling to the end user through distribution channel. Nokia should
continue with direct-to-consumer advertising, including sponsorships and product placements.
(The way Intel has done for branding the ingredient and branding to the end-user).
Leverage Nokia brand in future diversification in other related business such as networking
and Internet services. Customers are expected to have positive associations.
Future lies in the replacement market (European and American markets are fast approaching
saturation by 2006, the only viable source of growth for the mobile handset industry is the
replacement market)
Come out with flip open design to cater to the demand of this design of phones, which is huge
according to our findings.
9.0 References
Aaker, David A., ``Managing Brand Equity``. The Free Press, 1991.
Bellis, Mary. (2002), History of Cellular/mobile phone. Retrieved Nov 13, 2004 from
http://inventors.about.com/library/weekly/aa070899.htm
Cruickshank, David. (2002) Mobile phone history. Retrieved Nov 13, 2004 from
http://www.see.ed.ac.uk/~dgmc/ieetalk/sld003.htm
Profit, Loss and Value Added: The Mobile Phone Industry Activity. Biz/ed. (2004). Retrieved Nov
13, 2004 from http://www.bized.ac.uk/educators/1619/business/marketing/activity/profitloss.htm
Nokia defines goals and actions for leadership in dynamic mobile communications market.
Phonecontent.com. (November 2004) Retrieved Nov 20, 2004 from
http://www.phonecontent.com/bm/news/nokia/548.shtml
Connecting people. TheManagerMetor.com. (2001). Retrieved Nov 10, 2004 from
http://www.themanagementor.com/kuniverse/kmailers_universe/mktg_kmailers/0702_6.htm
Gartner Says Worldwide Mobile Phone Industry Experienced an 18 Percent Increase in Unit Sales in
First Quarter of 2003. Gartner.com (2003). Retrieved Nov 10, 2004 from
http://www3.gartner.com/5_about/press_releases/pr2june2003b.jsp
About Motorola. Motorola website. (2004). Retrieved Nov 2, 2004 from
http://www.motorola.com/content/0,,1,00.html
Motorola 2003 annual report, Motorola website. (2003) Retrieved Nov 2, 2004 from
http://phx.corporate-ir.net/phoenix.zhtml?c=90829&p=irolSECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD
9yZXBvPXRlbmsmaXBhZ2U9MjY2NzQzOCZhdHRhY2g9T04=

Motorola to launch new handsets in China. China daily. (Nov, 2004). Retrieved Nov 5, 2004 from
http://english.sohu.com/20041123/n223130288.shtml
The Motorola brand identity: Motorola corporate signature. Broadband Motorola. (2004). Retrieved
Nov 2, 2004 from http://broadband.motorola.com/mso/MotoCorpLogoGuidelines.pdf
Samsung Electronics Timeline & history. Samsung website. (2004) Retrieved Nov 5, 2004 from
http://www.samsung.com/AboutSAMSUNG/CompanyProfile/TimelineHistory/sec_timeline08
.htm
Samsung 2003 annual report. Samsung website. (2003). Retrieved Nov 20, 2004 from
http://www.samsung.com/AboutSAMSUNG/CompanyProfile/AnnualReport/pdf/2003/007_Bu
sinessoverview.pdf
Mobile phone of Samsung. Samsung website. (2004). Retrieved Nov 20, 2004 from
http://www.samsung.com/Products/MobilePhone/aboutourdivision/index.htm
SAMSUNG Introduces Worlds First 5-Megapixel Camera Phone. Samsung website. (2004).
Retrieved Nov 11, 2004 from
http://www.samsung.com/PressCenter/PressRelease/PressRelease.asp?seq=20041020_000007
4352
Corporate identity. Samsung website. (2004). Retrieved Nov 8, 2004 from
http://www.samsung.com/AboutSAMSUNG/CompanyProfile/CorporateIdentity/index.htm
Sony Ericsson Mobile Communications. Sony Ericsson website. (2004). Retrieved Nov 9, 2004 from
http://www.sonyericsson.com/spg.jsp?cc=global&lc=en&ver=4001&template=pc2&zone
=pc&lm=pc2
Press resources. Sony Ericsson website. (2004). Retrieved Nov 5, 2004 from
http://www.sonyericsson.com/spg.jsp?cc=global&lc=en&ver=4001&template=pc1_1&zone=p
c&lm=pc1

How we want to be perceived. Ericsson website. (2004). Retrieved Nov 14, 2004 from
http://www.ericsson.com/about/compfacts/mission_vision.shtml
Message from management. Sony website. (2004). Retrieved Nov 9, 2004 from
http://www.sony.net/SonyInfo/Environment/management/message/coo/index.html
Nokia Website. (2004).www.nokia.com. Retrieved Nov 24, 2004
A Tale of Two Mobile Telephone Makers. 8 Cahners Business Information, , May 2000.Haas
School of Business, U.C. Berkeley
Nokia expects to meet estimates . CNET. September 12, 2001
10.0 Appendices
Appendix: 1 - THREE YEAR FINANCIAL SUMMARY
NOKIA: THREE YEAR FINANCIAL SUMMARY
(Unit: Euro in thousands)
Key Index
2001
2002
2003
Net Sales
31,191,000
30,016,000
29,455,000
EBITDA
6,092,000
6,504,000
6,302,000
EBIT
3,948,000
5,193,000
5,164,000
Net Profit
2,200,000
3,381,000
3,592,000
Intangibles
1,984,000
668,000
371,000
Long Term Invest.
1,576,000
1,343,000
551,000
Fixed Assets
2,514,000
1,874,000
1,566,000
Current Liabilities
9,566,000
8,412,000
8,280,000
Long Term Debt
117,000
125,000
20,000
Minorities
196,000
173,000
164,000
Total Shareholder Eq
12,205,000
14,281,000
15,148,000
Stocks/Inv.
1,788,000
1,277,000
1,169,000
-1,279,000
-1,341,000
-1,410,080

Cash
1,854,000
1,496,000
1,145,000
KEY RATIOS
2001
2002
2003
Net Profit Margin
7.05
11.26
12.20
ROE
19.12
25.53
24.41
Cur. Ratio
1.6200
2.0900
2.4200
Debt/Capital
0.0500
0.0200
0.0200
World Vest Base Inc., Copyright 2003
Appendix -2
20
15
first recall
10
second recall
third recall
5
0
Nokia
Motorola
Samsung
Sony
Others
Graph 1 - Bar chart for the recall for the brands
Nokia
Motorola
Samsung
Others

Graph 2 Top of the mind recall for the mobile brands
25
20
15
firs t re call
10
s e cond re call
third re call
5
0
Pos itive
Ne utral
Ne gative
Graph 3 - Bar chart for brand association response

5
4
Nokia
Motorola
Samsung
Sony Ericsson
tio
n
ot
ec
li t
y
Pr
pp
e
A
Q
ua
ar
n
ce
ic
e
Pr
Fu
nc
ti o
ns
Graph 4 - Brand evaluation scores (mean)
High (Price)
Nokia
Samsung
3.5
Low (Quality)
High (Quality)
Motorola
Sony
Ericsson
Low (Price)
Graph 5 - Brand Positioning Map
Sincerity
Excitement
Competence
Sophistication
Ruggedness
3.867
3.800
4.133
3.667
3.033
Table 6 - Nokias brand personality mean evaluation scores
less 6m
6-9m
9-12m
1-1.5y
more 1.5y
Graph 7 Switching time comparison
less50
50-100
100-150
150-200
200-250
more
Graph 8 Preferred pricing level for customers
14
12
Latest purchase
10
8
satisfied and
recommendation attitude
6
4
neutral satisfied and

recommendation attitude
2
0
Nokia
Motorola
Samsung
Others
Graph 9 Comparison of customers satisfaction level
Gender
Frequency
Percent
Age
Frequency
Percent
Education
Frequency
Percent
M
15
50%
F
15
50%
<16
0
0.00%
Elementary
16-24
3
10.00%
School
0
0.00%
High school College

0
9
0.00%
30.00%
Household income <20000

Frequency
3
Percent
10.00%
25-35
18
60.00%
36-45
5
16.67%
>45
4
13.33%
Bachelor
11
36.67%
Master or more
10
33.33%
20000-25000 25000-30000 30000-35000 35000-40000

4
3
3
2
13.33%
10.00%
10.00%
6.67%
>40000
10
33.33%
Refuse
4
13.33%
Nationality
Frequency
Percent
Canadian
23
76.67%
Chinese
2
6.67%
India
0
0.00%
Ethnic group
White
20
66.67%
Yellow
8
26.67%
Black
2
6.67%
Frequency
Percent
US
0
0.00%
South America Others

0
5
0.00%
16.67%
Table 10 - Demographic Details

Appendix-3
Nokia Mobile Phone Brand Survey Questionnaire

Notice: We are second year MBA students in Saint Marys University and want to develop a study of
consumer attitudes toward Nokia mobile phone brand. It is voluntary to write this questionnaire and
respondents can withdraw at any time. In addition, all responses will be anonymous and confidential.
We will not track or identify the respondent.
Brand Equity Survey

1. Can you recall the brands in the mobile phone (cell phone) category?
2. When you consider purchasing a mobile phone, how important are the following attributes. Rate
each of the following attributes on a five-point scale where 5=very important and 1=very
unimportant.
Very
Attribute
important
Function
5
5
Price
Appearance/Design
5
5
Quality
Radiation
5
Protection
Very
Important
4
4
4
4
4
Neutral
3
3
3
3
3
Unimportant unimportant
2
1
2
1
2
1
2
1
2
3.
Evaluate each brand on the following attributes using a five-point scale, where 5=very satisfactory,
4=satisfactory, 3=neutral, 2=unsatisfactory, 1=very unsatisfactory. Please write the number that
best corresponds to your level of satisfaction for each brand/attributes.
Attribute
Function
Price
Appearance/Design
Quality
Radiation
Protection
4.

Nokia

Samsung

Sony Ericsson

Motorola
Please list all words that come to your mind when you think of Nokia mobile phone?
5. Respondents will rate Nokia brand personality on a 5-point scale (5=extremely descriptive of the
brand and 1=not at all descriptive of the brand).
Extremely
Attribute
Descriptive
Sincerity
5
Excitement
5
Competence
5
Sophistication
5
Ruggedness
5
6.
Descriptive
4
4
4
4
4
Neutral
3
3
3
3
3
Slightly
Not at all
Descriptive
2
2
2
2
2
Descriptive
1
1
1
1
1
How often would you change your mobile phone?

Less than 6 months
6-9 months
10-12 months
> 1 year but < 1.5 year
More than 1.5 year
7.
Which of the following price ranges are you willing to pay for your mobile phone?
Less than $ 50
$50-100
$100-150

$150-200
$200-250
More than $250
8.
Which is your latest mobile phone brand (Nokia, Motorola, LG, Sony Ericsson, Siemens, Sharp,
Panasonic, Samsung)?
9. Considering my recent purchase of mobile phone, I am completely satisfied.

strongly agree
agree
neutral
disagree
completely disagree
10. I would recommend my latest mobile phone brand to others without any hesitation
strongly agree
agree
neutral
disagree
completely disagree
11. How much more are you willing to pay for your favorite mobile brand?
Less than $ 15
$15-30
$31-50
$51-75
$76-100
More than $100
12. For the next purchase of a mobile phone, how likely you are to buy a Nokia mobile phone?
very likely
likely
neutral

unlikely
very unlikely
13. Where would you prefer most to buy Nokia mobile phone?
Electronic product chain stores (e.g. Futureshop)
Network providers (e.g. Rogers)
Electronic department of Superstores
Retail shops
Others. Please specify
14. From where did you come to know about Nokia mobile phone?
(You may check more than one option.)
Family and/or friends
Advertisements (includes TV, prints, billboard and outdoor)
Magazines and newspapers
Internet
Others. Please specify
15. What is your gender?
Male Female
16. What is your age group?
<16
16-24
25-35
35-45
>45
17. What is your education background?
elementary school
High School
College Diploma
Bachelor degree
Master degree or higher

18. What is your yearly household income?
Less than $20000
$20000-25000
$25000-30000
$30000-35000
$35000-40000
More than $40000
Refuse to answer
19. Your nationality (citizenship) and ethnic group?

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