Nokia: How Branding has Contributed to its Success

Length: 2526 words

Nokia Corporation is a massive multinational company. With its brand valued at $34.9 billion, it is listed as the fifth most valuable global brand in the Interbrand Best Global Brands list of 2009. This is the only non-US company in the top 5. This makes it an ideal corporation to investigate the contribution of branding to Nokia’s success.

Background

The Nokia Corporation is a Finnish multinational communications company. It was founded in 1865 by engineer Fredik Idestam who set up a wood-pulp mill in Southern Finland manufacturing paper and Nokia became very successful. The factory attracted many workers and a small community grew around it called Nokia and attracted other companies in different areas and expanded into electronics. In 1967 the companies merged to form the Nokia Group. The Finnish Cable Works was part of Nokia Group which manufactured cables for telegraph and telephone networks. However, the telecommunications and mobile phone divisions soon became the supporting pillars of Nokia and by 1992 decided to focus on telecommunications.

Target Market

As the world’s leading handset marker, Nokia seems to target three segments of the market music, youth and fashion segments of this growing market. All three segments target teenagers and young adults. By producing small, colourful and trendy looking phones they seem to be successful in targeting this given market. Nokia advertises itself as a fashion accessory with an urban image, claiming to be the most fashionable phone of the year. Available in ranges of different colours, their advertisements focus on the benefits of having a trendy Nokia phone. By introducing different colours, it attracts their target market, steering away from their competition with standard black or silver phones.

Market Overview

Mobile phones have been a huge demand and are ever-growing; almost every teenager and adult own one. After signing a contract with SOL communications, the number of operators to which Nokia supplies GSM technology increases to 78 operators in 37 countries. It is the world’s leading mobile phone supplier and with demand growing, the market grows. However, Nokia has shifted its focuses on fast-growing emerging markets eg india and china as they are expected to overtake the US by 2010

Competitors

Within the mobile phone market, there is presently a high level of parity between products; the products range from the simple to the complex, but all offers the latest features. Consumers are increasingly jumping between choices based on design and brand name. However, the market is still predictable, with Nokia, Motorola, and Ericsson competing at the top and less successful brands like Samsung, Philips and Panasonic trying hard to make inroads into their top competitors’ market share. Consumers are paying less attention to the product features being offered, and choosing based on the brand name of the product.1 Nokia Group has been steadily working on its corporate brand name and the management of consumer perceptions over the last few years. Its efforts have paid off, because it’s now the number one brand in many markets around the world.

Brand Elements

A brand element is visual or verbal information that serves to identify and differentiate a product.2 The brand elements are:

* Brand name

* Logo & symbol

* Packaging and design

* Characters

* Slogans & jingles

Brand elements can be chosen to enhance brand awareness or facilitate the formation of a strong, favourable and unique brand association. The criteria for choosing a branding element maybe because it is memorable, meaningful, likeable, transferable, adaptable and protectable. While Nokia employs a number of these elements, an obvious element the brand does not utilize is ‘characters’.

Brand Name and Slogan

Nokia has succeeded in lending personality to its products, without even giving them names. it has not created any sub-brands but has concentrated on the corporate brand, giving individual products a generic brand personality. Only numeric descriptors are used for the products, which do not appear on the product; such is the strength of the corporate brand. Nokia has succeeded where other big brands have so far failed, by putting across the human face technology – taking and dominating the emotional high ground.

When Nokia positions its brand in the crowded mobile phone marketplace, its message must clearly bring together the technology and human side of its offer in a powerful way. The specific message that is conveyed to consumers in every advertisement and market communication is “Only Nokia Human Technology enables you to get more out of life”.

The tag line, “We call this human technology”, and the more recognisable slogan ‘Connecting People’, gives consumers a sense of trust and consideration by the company, as though to say that Nokia understand what they want in life, and how it can help. It knows that technology is really only an enabler so that you the customer can enjoy a better life. Nokia thus uses a combination of aspirational, benefit-based, emotional features, and competition-driven positioning strategies. It owns the “human” dimension of mobile communications, leaving its competitors wondering how to position themselves.

Logo & Symbol

Nokia started by making paper; which was at the time, the original communications technology. In 1865, Fredrik Idestam built a wood pulp mill on the banks of Tammerkoski rapids, in southern Finland. A few years later, he built a second mill by the Nokianvirta River; this is the place that gave Nokia its name.

Idestam named his company Nokia Ab in 1871. The images within the logotype reflect the fact that the Nokianvirta River is named after a dark, furry animal that was locally known as the Nokia – a type of marten.

Above, is the early Nokia Company logo that was founded in Tampere in 1865, and incorporated in Nokia in 1871.3 The rich visuals and complex imagery used as the brand logo makes it very protectable and difficult to reproduce.

When a group of Finnish business men decided to establish the company Suomen Gummitehdas Oy (Finnish Rubber Works Ltd) in Helsinki, in 1898, the Nokian Footwear story began. The factory began to produce high quality rubber galoshes

As production grew, the factory was moved from Helsinki to Nokia. Soon the rubber company began to highlight the name Nokia, communicating Finnishness, in its marketing. Demand for the company’s products grew strongly.

Decades passed and domestic expertise in rubber developed. Consequently, the name Nokia became synonymous with Finnish rubber expertise. Shown above is the brand logo of Finnish Rubber Works, founded in Helsinki in 1898. Logo from 1965-1966.4

Here is an image of the Nokia Corporation logo which used ‘arrows’, before the “Connecting People” logo.5 The arrows hold no specific reported significance, but indicate a reference to ‘communication’. It leaves space for speculation and draws on consumer perceptions. The use of arrows as a symbol makes the brand transferable and adaptable because consumers will be able to identify the Nokia brand by the distinct symbol, not only across product range, but also across geographic boundaries and cultures.

Following on from this logo, Nokia introduced its “Connecting People” advertising slogan.6 This earlier version of the slogan used Times Roman (Small Caps) font7, as demonstrated above.

Nokia’s current logo however, now has a redesigned “Connecting People” slogan which uses Nokia’s proprietary ‘Nokia’ font. It is now simply the brand name ‘Nokia’ with its concise slogan ‘Connecting People’ displayed boldly. The font of the slogan beneath the brand name has also been changed from Serif font, to Sans-Serif font; giving the overall logo a bolder look. The font is exclusive to the Nokia group making it protectable, unlike the previous logo which used Times Roman – a font openly available to many.

Nokia’s slogan

Nokia’s slogan, invented by Ove Strandberg, is “connecting people” shows the general goal of the brand. It conveys the idea that the brand helps you keep in touch and communicate with your circle everywhere and facilitates social contacts between people by using modern technologies. They aim at showing that their customer satisfaction is fundamental and is due to their high quality service. Through this slogan they want to convince people of the great power of Nokia and clearly demonstrate their efficiency.

Nokia’s packaging

Mobiles phone packages mainly have to give a message about the product image and to enable the customer to identify the brand. The general goal for design is efficiency but also the environmental aspect that is why recyclable materials (mainly wood fibers) are used in products packages. One challenge for Nokia is to make ecologic packages while stile keeping them attractive and aesthetic. Ecology is a big issue for Nokia, which is why they replaced some of the plastics with cardboard in Nokia’s accessory packages the amount of plastic was decreased by 60%.8

Brand elements

* Memorability

Nokia is the strongest cellular brand in Europe and is the 6th best brand in the world9; Nokia is a very powerful brand. Moreover, Nokia invests a lot of money in advertising campaigns and uses numerous advertising mediums, reinforcing brand awareness and consumer knowledge. Nokia’s logo is very simple to remember, by using certain colors on the logo they maintain brand identity and recognisability, as well as the slogan; they largely contribute to build a strong brand equity.

* Meaningfulness

Nokia’s slogan is in accord with the image that the brand wants to convey and also give specific information about particular attributes and benefits of the brands. It also suggests the nature of sell products since the world ‘connect’ highly refers to electronics ones. So it is suitable and is credible according to the product category.

* Likeability

Nokia’s logo is quite neutral and, aesthetically speaking, simple since the color is soft. The brand’s name is also easy to pronounce, spell and is distinctive. Even if Nokia’s brand elements have a sober style they are agreeable to look at and are attractive. 10

* Transferability

Nokia is a non-meaningful name so it does not have to be translated in different languages, which is very practical as it can be internationally recognized unlike some brands which have to change their names when going abroad. Moreover, the slogan is very simple and easy to understand even for non-English speakers so there is no misunderstandings and no cultural boundaries.

* Adaptability

As Nokia’s logo is very simple it can be easily modified to adapt to new trends and look more modern or fashionable. Indeed, the characters can be changed as well as the color and the logo. As long as the name does not change and that the brand elements remain quite sober, Nokia will still be recognized, the brand elements are flexible.

* Protectability

Nokia has applied more than 850 times for a patent which make it one of the five most principal users of the Patent Cooperation Treaty11. Nokia uses patents to protect innovative ideas such as the download of telephone bells or interchangeable cases for portable telephone, drawings or designs to protect the form of the product (for batteries etc) and brands. The brand also sues some brands which are trying to copy Nokia (Nokiamo, SuonaNokia).

Brand equity

Brand equity is when customers are willing to pay more for a product due to the brand name. This occurs with Nokia many customers would rather pay the extra amount for the name, when another companies offering almost exactly the same product. For example the Nokia 5800 and the Lg pop both have exactly the same features; however the price difference is �100, which customer are willing to pay for the brand name.

Brand awareness

When looking at brand awareness you must look at:

–> Brand recognition: the consumer recognising the brand when prompted

–> Brand recall: where consumer recall the brands when asked about the market or product.

Both factors are in affect with Nokia. Nokia has been recognised as the brand with highest brand recognition, with a 91% average recognising the label.13 In an award ceremony Nokia won an award for the most recallable company14, with tests taking place in India to see which was the most memorable Nokia beat 9 other large companies including Fair and Lovely and Rin and Ponds Body Lotion.

Brand image

When looking at the brand image you have the linking of the brand to different types of associations. Nokia does this extremely well by building a relationship between the company and their consumers. In the relationship they have built up attributes such trust, loyalty and friendship. Nokia development of the relationship has lead to over 67% of the public viewed Nokia as trustworthy and Nokia found 38% extremely trust worthy.15 With Nokia distinguishing themselves their brand differentiates itself from competitors, giving it an advantage.

Brand positioning of Nokia

Nokia have split the target market into 6 categories:

– Camera devices – Music devices

– Map devices – Gaming devices

– Business device – Everyday devices

Rather than limiting themselves they have split the market into six to try and reach the whole market rather than a small minority. The competitors of Nokia are Samsung, Lg and Motorola they all try and keep up with technology, keep phones modern and fashionable. Also the customer’s loyalty to the three companies is one thing they share, but Nokia has managed to keep its trust worthiness quality which the others do not seem to have as strong or as obvious to the customers. However the companies differ in the prices and the markets they are in, as Nokia has a wider one while Samsung seems to be concentrating on higher end phones. With Nokia being a single brand organisation it has allowed for easier recognition.

The Branding Stair-case16

When we look at Nokia the brand and the company we must look at what they do that applied to the brand stair case. The identity of Nokia is mobile company and company in the communication market. Next we see the meaning that Nokia has to the customers, such as it being seen as something reliable and the logos meaning of communicating between people. Due to the reliability of the company and the communication of it logo consumers responded by trusting the company further and increasing Nokia sales. Which then created a relationship were Nokia need to maintain the loyalty, trust and reliability in order to keep sales and relationship up.

Customer based brand equity pyramid

When applying the CBBE model we see that Nokia fills in many of the 6 options.

When looking at salience we look at who are the company in term of the Nokia they are company offering communication through products like mobile phones. Also when looking at the performance we look at brand performance Nokia has different styles to suit different personalities such business phones, music and gamers.

When looking at imagery, Nokia allow you to personalise phones by having changeable covers/faces, allowing consumers to add your own. Nokia also uses imagery by allowing different styles to fit your own mood. E.g. screensavers.

Popular words used to analyse the company are honesty and credibility because of the relationship that has developed with customers over the years. Customers felt a strong relationship between themselves and Nokia. When looking at the resonance of Nokia we see there is loyalty and trust between them.

Conclusion

With Nokia being such a strong company and their effort in development of their brand, the company has managed to allow them to become one of the world’s largest companies and the best in the highly competitive market.

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