Nokia: Microsegmentation and the collapse of a brand

In 1865, Fredrik Idestam, a rubber company called Nokia, was born in Finland. Driven by the First World War and the great demand for this material, it quickly moved on to the next sector, becoming a large manufacturer of shoes. The first time the company exposed its brand to the consumer market.

In 1912, he entered telecommunications with a telegraph patent. 1965 arrived and the company created the first prototype of a GSM mobile. And the story until today, we all know it. A leading company in the production of terminals, which accounts for almost a third of the market, present in 120 countries with more than 123,000 employees. But where is it? Has anyone seen it? We are witnessing the decline of a brand with one of the biggest identity crises of the last decade. A sleeping giant who doesn't seem to want to wake up has been beaten by the competition into oblivion. A brand that has made some key branding and brand strategy mistakes,

That has led you, and is leading you to the precipice. With a 40% drop in annual profits, it is a company that needs to look back and see how it went from rubber to high-tech manufacturing, and reinvent itself as it already did. Today Nokia is a brand that has lost focus with its consumers and above all has lost the rhythm of the market, something unforgivable for a leader. A brand that was born based on the product has allowed its value proposition to become a commodity, a generic one: 'Connecting People', yes, that's the goal of any telephone operator or manufacturer. A value proposition that has become obsolete and that did not evolve beyond the functional level of its famous and mythical terminals.

Nokia company has not been able to build an emotional bond with its consumers, it has not even known how to transmit a story to the market, it has simply become the mobile factory.

Any brand worth its salt must answer a series of questions: Who am I? What do I do here? and Why am I important to you? If we think about it carefully, surely we are not able to answer 2 of these 3 questions, at least today, in 2012. This is inexcusable for a brand that wants to lead a market like this.

Leaving aside that it did not know how to react to the iPhone, that it did not anticipate the Android operating system, that sought to dance with the ugliest of the moment, Microsoft, to create a Windows 7 mobile operating system, obsolete before being born due to the reputation of the system Windows on PC (viruses, crashes, etc ..), which did not know how to get rid of the 'keys' in time ... forgetting all this, the most serious errors of the brand are: - The Extreme Microsegmentation - The Value Proposition Lo we watch carefully. Microsegmentation Brands should use their portfolio of products or services to reinforce their positioning and optimize their brand strategy.

The product portfolio serves to segment target targets and markets. Create focused value propositions and meet specific needs.

These strategies usually lead to adequate brand architectures to respond to this portfolio.

Well, Nokia's main problem was this, an endless catalog of terminals that tried to respond to micro-segmentation.

Nokia established a functional market segmentation, that is, it established the needs of its customers based on the use they were going to give the terminal. So if 100 different uses were detected, 100 different specific terminals were created for each use. E.g.: A terminal only for calls and messages, A special terminal to chat by message, A special terminal to listen to mp3 music, A special terminal to use the camera, A special terminal to connect to the Internet ... etc.

Result of all this, the absolute loss of focus of the brand. It was not able to build a single common brand experience among all its consumers, so the brand became a different perception for each of Nokia's users, and therefore, it did not finish building a unique and global personality.

The person who used the special terminal to take photos had a different brand perception than the one who used the mp3. This was changed by the iPhone, which integrated all the specialties under a single terminal and a single brand, so now we went from a brand with multiple meanings, to having a brand with a single proposal.

Segmentations and portfolio strategies must ensure the integrity of the brand, and help build a global image by adding meanings, not dividing. It is true that we must try to focus our proposals on each of our targets, but always from a brand umbrella platform, otherwise we create schizophrenic brands with multiple personalities.

The Value Proposition

On the other hand, there is an emotional disconnect between the brand and its consumers. The mistake is very simple, the brand delegated the emotional aspect of it, to the product and not to the brand itself. That is, if something connected us emotionally to the brand, it was the terminal we owned, who did not want to have a Nokia? Advanced in design, the smallest, the brightest, etc ... it was an aesthetic issue, a fashion, a trend, something ephemeral.