Nokia Convergence Strategy

THAWBAN BAIG

Why is this important?

Because great brands help grow gross margin…

ASP

Volume

MarketPressure

…while building long term brand equity.

?

…and while we are all the same …we have

different needs

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“I expect the new global consumer segmentation model to re-install our reputation as having the best consumer understanding in the industry”

Olli-Pekka Kallasvuo – August 2005

Nokia’s Consumer Segmentation is of key strategic importance

Global segmentation• Continuously refreshable

research

• 10 billion data points

• 77,000 Consumers x 1.5 hour interview

• 21 countries

• 122 questions

• Understanding of: Values, Beliefs, Attitudes, Lifestyle

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Nokia Consumer Segmentation: a two dimensional space - the Axis

Rational Aspirational

High Involvement

Low Involvement

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Vertical Axis – based on behavior High

Involvement

Low Involvement

How do consumers actually behave?

• Replace phone every 6 months• Tend to pay higher price for mobile• Tend to buy from well known brands• More design driven purchasing behavior

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Horizontal Axis – based on attitude

Rational Aspirational

What do consumers want ?

I use my Mobile Phone as a fashion accessory

I would prefer a mobile phone that is great looking rather than having the latest features

I would be willing to own different Mobile Phone in different situations

I am embarrassed if my Mobile Phone looks outdated

I would like to keep up to date with the latest fashion trends

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Key Attitudes: the quadrants

Rational Aspirational

High Involvement

Low Involvement

Mobile Phone as empowerment tool

Mobile Phone trend leaders

Mobile Phone trend followers

Mobile Phone only when necessary

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Italian Segmentation Model

Young Explorers (10.3%)

Technology Stylists (5.2%)

Style Leaders (5.3%)

Style Followers (6.3%)Family Providers (12.5%)

Life Jugglers (6.3%)

Pragmatic Leaders (3.4%)

Life Builders (8.9%)

Image Seekers (0.0%)

HIGHERINVOLVEMEN

T

Simplicity Seekers (34.3%)

Mature Acceptors (5.6%)

Technology Leaders (3.4%)

LOWERINVOLVEMEN

T

RATIONAL ASPIRATIONAL

(non-existent in Europe)

Key consumer need around modernity the latest and best– technology is a key driver.

Key consumer need around style / fashion. Design conscious consumers. Require well designed stylish products

More mainstream segments, but tend to be younger in demographics. Slower technology adoptionMore rational

attitudes. Key consumer need is the device as a tool for empowerment

Less involved with mobile telephony and consumer need is around a basic communication device

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Global Segment SizesItaly

Wave 1

Italy

Wave 2

Young Explorers (7.9%) 6.9%10.3

%

Technology Leaders (6.1%)

3.6% 3.4%

Technology Stylists (6.4%)

1.1% 5.2%

Style Leaders (10.6%) 4.5% 5.3%

Image Seekers (7.2%) NE NE

Style Followers (6.3%) 6.7% 4.8%

Family Providers (10.3%)

21.6%

12.5%

Simplicity Seekers (13%)

28.1%

34.3%

Mature Acceptors (7.6%)

1.9% 5.6%

Life Jugglers (3.8%) 7.1% 6.3%

Pragmatic Leaders (7.1%)

6% 3.4%

Life Builders (13.9%)12.4

%8.9%

Italy Re-Fresh Segmentation Map

Young Explorers

Technology Leaders

Technology Stylists

Style Leaders

Style FollowersFamily ProvidersSimplicity Seekers

Mature Acceptors

Life Jugglers

Pragmatic Leaders

Life Builders

Image Seekers

SI = Statistically Insignificant NE = Non Existent

Globally, 11.1% of market has moved

onto or above horizontal involvement axis (= most segments

above axis have grown)

Four categories to help people navigate

Young Explorers (7.9%)

Technology Stylists (6.4%)

Style Leaders (10.6%)

Style Followers (6.3%)Family Providers (10.3%)

Life Jugglers (3.8%)

Pragmatic Leaders (7.1%)

Life Builders (13.9%)

Image Seekers (7.2%)

Simplicity Seekers (13%)

Mature Acceptors (7.6%)

Technology Leaders (6.1%)

RATIONAL

ASPIRATIONAL

Smart and collaborative business solutions

AchieveNokia Eseries

Achieving together

LiveDesign and style leadership

Inspiring the sensesConnec

t Essence of Nokia through balance of style and proven benefits

Connecting simply

Innovation and technology leadership

ExploreNokia Nseries

Sharing discoveries

Improve marketing yield

Sharing DiscoveriesAchieving Together

Connecting Simply

Nokia connects people through very human technology to help them feel

close

We believe life is better

when shared

We believe everyone

achieves more when

working together

We believe experiences are more valuable

when shared

WHATWe

Believe

WHATWe

Promise

…expressed through Nokia Connecting People

EXPLORE

Connect

ACHIEVECONNECTLIVE

We believe people need

inspiration to bond even deeper

Inspiring Senses

…expressed through Nokia Connecting People

1 Nokia brand4 Categories2 Sub-brands

With distinct tonalities, not multiple personalities.

What this means for us•Sustainable industry leadership

•Optimal product portfolio offering per category

•Improved marketing yeald

by in-depth understanding of consumer needs per segment

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Thank you