HMD to Boost Nokia 3310 in 5 states

-Faisal Kawoosa

Nokia is back in market with the iconic 3310 up for sale in India.  The price is definitely on a higher side as in the same vicinity there are various Smart options to explore. However, it does indicate a couple of things about HMD. The most important clue that I get is that they want to convey message loud and clear that they are confident of their products and don’t want to replicate what I would call ‘Jio-ise’ the market, the phenomenon started by Jio in the telecom services segment.

The downside of this is that competition would counter with the pitch of “We offer more for same or even less price.” At the same time, for HMD to revise or bring down even a fraction of price over a period of time, which is a normal function of time horizon, would be very much noticeable as it has tagged it with the model number in the present case of 3310.

Based on our big data analytics programme for mobile handsets in India – Mobilytiks, I have something to prescribe for Nokia.  This prescriptive sales strategy is based on a quick SWOT of the brand in the backdrop of what the data suggests.

The best part for HMD is that Nokia is still No 2 brand in mobile handsets by installed base in India and in most of the states it ranks No 2.  It is also No 1 in a few states.  Interestingly, it is nowhere No 3, and Madhya Pradesh (including Chhattisgarh) is the only state where it ranks 4^th.

As per data suggested by Mobilytiks, there are still nearly 120 million Nokia branded phones in use in the country and, historically, Nokia has always enjoyed a very high NPS (Net Promoter Score), which is a universally acclaimed score of repurchasing or recommending a brand.  But, this does not mean HMD could potentially service all this market and be the market leader by having near 40% of the market.That’s not the interpretation or even the point I want to make.

We have to factor in that the market dynamics are changing; there is an increasing preference towards and acceptability of Chinese brands and several other things like the advent of 4G, which affect any brand including Nokia.

HMD should not ignore the fact of huge installed base of Nokia brand and this should be the first anchor that it should leverage from.  We have to realise that HMD is starting off as a startup and it will have its limitations by way of resources it can employ in the market. Hence, I would suggest that it goes with a few markets where it ranks 1^st or 2^ndby installed base and those markets (states) collectively amount for around 50% of the mobile handset users in the country.  The other characteristic of these markets is that they are predominantly FeaturePhone centric.

The five states that I would recommend HMD to kick off their sales activities with would be Uttar Pradesh, Maharashtra, West Bengal, Bihar and Andhra Pradesh.  Based on the strengths of a Nokia brand, HMD could start offering a loyalty driven sales discount in these states where the existing Nokia users could buy a new handset at special price.

There would be around 36-40 million Nokia FeaturePhone users in these 5 states, and nearly 80% of these would be due for a replacement going by the national average of 2-2.5 years of replacement period.  By driving a localized loyalty driven sales programme, HMD could look forward to a sizeable addressable market right from the beginning.

To sum up, while HMD has to be now aggressive from brand building activities point of view at a country level, its sales strategy has to be localized by aligning the brand strengths and the product for sale.  In the case of Nokia 3310, it can rely on only two segments, a niche of avid business travelers okay to have two phones and ready to shell out  Rs 3310 for a FeaturePhone and a potential loyal brand base, which will have to be induced to buy a FeaturePhone while they go for a refresh by rewarding their loyalty and through Mobilytiks we have attempted to identify those potential pockets of opportunity for HMD.

(Faisal Kawoosa leads Industry Intelligence Practice at Cyber Media Research (CMR). Mobilytiks is a telecom intelligence program of CMR focused on mobile handsets)