Nokia takes four-lane road to consumers.

NEW DELHI: After having grabbed a king-size 79% share of the Rs 15,000-crore mobile handset market in India, Nokia India has found a new way of
connecting people.

The mobile handset manufacturer has embarked upon a brand new retail strategy that is based on a classification of its consumers into four major
groups that separates people in terms of usage, income level and lifestyle.

The classification is based on an extensive survey – the Nokia Segmentation Study —that was carried over two years involving 42,000 consumers from 16 countries. It studied the impact lifestyle choices and attitudes have on the mobile devices consumers buy and how they use them.

The strategy, which was announced globally in June last year, is being unfolded in India now. While the nitty-gritty of the new strategy is still being worked out, it is likely that the company would follow separate marketing strategies for the four different segments. The advertising campaigns could be
different for the segments.

Nokia’s entire product portfolio has now been re-aligned towards these four groups to address the specific needs of each. The first of these segments Live, aimed a first time users whose basic need is to stay in touch with voice as the main driver, would have basic handsets low on features and price.

“These may be functional phones but the target group for these phones range from SEC C (low socio-economic class) to SEC A1+ (very high socio-economic class) markets,” says Nokia India marketing head Devinder Kishore. The second segment Connect looks at more evolved users who look for more functionality and features and connectivity. Accordingly, phones in this segment would have GPRS, camera and music capabilities.

The next two categories, Achieve and Explore, are aimed at high-end users and have Nokia’s top-end handsets. For example, Achieve segment looks at enterprise users who need to have business functionalities in their phones. Nokia’s new E-series has been put under this segment with handsets having QWERTY keyboards and full Internet capabilities.

Aimed at high-end lifestyle users, Explore would be the most prominent segment for the company in the coming years. Says Nokia India multimedia business director Vineet Taneja, “This segment would see the most vibrant growth in the coming year. It will look at five different areas – applications, imaging, mobile TV, music and gaming. We are fast developing the ecosystem to support these areas.”

Nokia acquired music solution and content provider LoudEye and GPS solution provider Gate5. It is all slated to launch its most high-profile handset, which boasts of having a 5 mega pixel camera and GPS capabilities apart from iPod quality music, in February.

Says Taneja, “There is increasing demand for convergence and multiple functionalities in high-end handsets. The N-series will try to address that.” Nokia feels that the new platform strategy wherein different handsets are launched under a platform, like the N-Series, will become a status and style statement and drive numbers.

Questions
1. Identify the four market segments that Nokia plans to address as per the news report above.

2. What is the basis of classification of the market used by the company?

3. What do you mean by realignment of product portfolio? Illustrate this from the case above.

4. Identify the points that can be highlighted in marketing campaigns for each segment.

5. What are the different considerations in the mind of consumers of each segment while purchasing mobile phones as given in the above case?

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Solution

1. As per the given news report, the four market segments that Nokia plans to address are –
i. Low socio-economic
ii. High socio-economic
iii. Business class
iv. Prominent class

2. The basis of classification used by the company is the potential scope of use of the mobile phone that a segment would make. The segment which is expected to make the maximum use of the technology is given the maximum features, on the other hand, the one which is expected to make the minimum use is given only the basic features. For instance, the phone targeted at low socio economic segment has only the basic features, on the other hand, the phone that is targeted at the business class has the top end handsets with high end features as mobile TV, music, gaming, imaging, etc.

3. Realignment of product portfolio means rearranging the entire product range and classifying them into different market segments. For instance, in the given case the entire range of mobile handsets of Nokia have been divided into four market segments based on the lifestyle and attitude of the target population.

4. The points that can be highlighted in the marketing campaigns of different segments are as follows.

Name of the Segment Highlighting Point in the Marketing Campaign

Live Simple to use and low price

Connect Connectivity along with features as GPRS, camera and music capabilities

Achieve Business functionality for work on the go with QWERTY keyboards and internet capabilities

Explore Most high end handsets with applications as imaging mobile TV, music and gaming

5. Considerations in the mind of the consumers in different segments are as follows.

Name of the Segment Considerations in the Mind of Consumers

Live Price and simplicity to use

Connect Connectivity along with functionality and features

Achieve Business functionality

Explore Convergence and high end multiple functionalities

Suggest Corrections

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Name of the Segment	Highlighting Point in the Marketing Campaign
Live	Simple to use and low price
Connect	Connectivity along with features as GPRS, camera and music capabilities
Achieve	Business functionality for work on the go with QWERTY keyboards and internet capabilities
Explore	Most high end handsets with applications as imaging mobile TV, music and gaming

Name of the Segment	Considerations in the Mind of Consumers
Live	Price and simplicity to use
Connect	Connectivity along with functionality and features
Achieve	Business functionality
Explore	Convergence and high end multiple functionalities