Situation analysis
According to Shields (2012), the sales of Nokia’s Windows-powered Lumia smartphone have gotten off to a slow start. Data acquired from a straw poll by mobile indicate that the Lumia phone acquired approximately a fifth of online smartphone market share sales in November. This executive summary is about a marketing plan for improving the sale and productivity of the newly launched Lumia smartphone by Nokia Corp. by the end of 2012.
Nokia Corporation has current forecasts margins of -3% in the first quarter. This is different from its earlier estimates of “breakeven.”Nokia’s operation in the second quarter is expected to be “similar to or below the first quarter 2012 level”. (O’Reilly, 2012a, para. 7). According to O’Reilly (2012b, para. 13), there was a 21 % drop in Nokia’s revenue for the fourth quarter of 2011 to 10 billion Euros. This was in spite of making sales of over a million pieces of Lumia devices in the same phase.
According to Steven Elop, Nokia’s President and CEO, the first quarter of 2012 has been disappointing in terms of financial results for devices and services offered by Nokia, including the Lumia smartphone. The CEO further observes that the projected sales of the second quarter of 2012 show that Nokia Corporation is still in the transition phase. This transition has been a result of the recent partnership between Nokia and Microsoft that has seen Nokia concentrating on the Windows Phone operating system rather than its own Symbian OS (O’Reilly, 2012a, para. 8).
Marketing objectives
The Nokia Corporation is hopeful of broadening the market of the Lumia series to attract new segments like the lower end of the market, traditionally the stronghold of Nokia with Symbian handsets and feature phones (O’Reilly 2012a, para.2). Through this approach and as exemplified by the recent launch of the lower-end Lumia 610, Nokia is optimistic that it will succeed in pushing down the price of the Windows Phone device. According to Steven Elop, Nokia’s president and chief executive, “there will be more devices of a similar pricing range to come” (O’Reilly 2012a, para.5).
Additionally, Nokia has the ambition to repeat the accomplishment of its sponsored DeadMau5 light projection show in the UK at Millbank Tower in November, Overman adds, as it seeks to make events that will attract people to share. So far, more than three million people have already watched the event video on YouTube (O’Reilly 2012b).
Strategies and tactics
As part of its strategy to compete in the lower market ends of the smartphones, Nokia Corporation is toiling to speed up the tempo at which it can influence the price of Windows Phone devices. This was the reason behind the recent launch of the lower-end Lumia 610 model (O’Reilly 2012a, para.6).
In spite of astonishing projections to incur losses during the first half of the financial year, in the midst of harsh competition in emerging markets, Nokia strategically announced its intention to speed up the production and sales of new Lumia models. Much of the next iteration of Nokia’s global marketing strategy will center on inviting consumers to share content they have made or experienced via their smartphones, which could potentially feature in upcoming campaigns. To exemplify this change of strategy, Nokia recently crowdsourced every part of the imagery on Nokia’s Mobile World Congress stand (O’Reilly, 2012b).
Co-creation is the new strategic approach for Nokia as consumers are invited to join forces with the company’s marketing team and, through motivation from some of its accepted promotions in new market segments to generate more excitement about the Lumia brand (O’Reilly, 2012b, para.2). According to O’Reilly (2012b), in October 2011, Nokia changed its marketing strategy to embrace youthfulness. This happened at the same time that Nokia was launching its first Windows Phone series, Lumia, with the intention of reclaiming its position as the market leader in smartphone production.
Nokia is also “reversing the innovation flow” when it comes to marketing and will be rolling out successful campaigns that originally emerged from its developing markets to Western territories, rather than the more traditional opposite approach. This could result in the launch of similar campaigns in the UK like the “Qwerty” campaign, which was launched in Mexico and Indonesia to promote the launch of Nokia’s Asha range. In the “Qwerty” campaign, customers gave their suggestions and challenges to the “Qwerty Man,” who was the brand ambassador with the responsibility of carrying out all the suggestions and taking videos of the best ones. The best suggestions were also published on social media and televised in sports (O’Reilly, 2012b).
Financial considerations
As can be seen from the table above, there was a decline in the first quarter of 2012 in all regions on net sales of Devices and Services on a year-on-year basis. The drop in sales was especially more severe in China, mainly due to the industry dynamics of competition that negatively impacted the net sales of both Mobile phones and Smart Devices. Apart from North America, which showed a 75% growth in sales, there was a decline in all regions in the net sales of Devices and Services on a sequential basis.
North America reordered an increase in sales by virtue of the recent introduction of the Nokia Lumia 710 with T-Mobile. This shows that there is a need to invest in the marketing of the Devices and Services in all regions, particularly for the Lumia series, especially in China.
Implementation timetable
References
Nokia (2012). Nokia Corporation Q1 2012 Interim Report. Web.
O’Reilly, L. (2012a). Nokia steps up Lumia marketing. Web.
O’Reilly, L. (2012b). Nokia reveals ‘chapter two’ of new strategy. Web.
Shields, R. (2012). Online sales poll indicates slow start for Nokia Lumia. Web.