Nokia becomes a challenger brand

19 December 2012

HELSINKI: Nokia, the mobile telecoms group, is seeking to "cross the divide" with consumers as it aims to adopt the mentality of a challenger brand and reverse its ailing fortunes.

Speaking to CNET, Stephen Elop, chief executive of the company, argued that gaining a clear insight into the preferences of shoppers was essential to the firm's long term prospects.

"It's always about meeting the needs of our consumers, going over every detail of what they like, making sure our employees are motivated and understand they have to serve these people," he said.

More specifically, Elop suggested that marketing – at the point of purchase and the broader level – would play a central role in building closer bonds with the primary target audience.

"If we can get our message across and show off the quality of the product, then we will be very successful. We need to cross that divide with the customer," he said. "It's walking into the store and making sure the products are properly explained."

As part of this process, Nokia has attempted to adapt its corporate approach to one approximating that of a start-up, in a bid to tackle market leaders like Apple and Samsung.

"There's been a marked shift towards this challenger mindset. We have to move with urgency. We have to have empathy and listen to our customers," said Elop.

In keeping with this process, Nokia's priorities include responding more rapidly to changing consumer demand, and actively disrupting the competition. "From what I've seen in this organisation, that shift is happening," Elop said.

The Lumia 920 smartphone, powered by Microsoft's Windows operating system, is a key element of Nokia's strategy. This gadget is available in the US exclusively through AT&T.

Elop said: "The first Lumia phone was delivered in a fraction of the time that a phone has ever been produced at the company."

In an indication of the obstacles facing Nokia, its quarterly smartphone sales have declined from 26.5m during Elop's first quarter in charge in 2010 to just 6.3m in the third quarter of 2012.

Nokia's mobile phones arm also made a net loss of €683m in its last reporting quarter, while net sales fell to €3.6bn, yielding a negative operating margin of 19.2%

"Everyone knows every single day we have to work harder and with more urgency. We need to challenge what everyone is doing. We need to keep doing that," said Elop.

Data sourced from CNET; additional content by Warc staff