Nokia Life Tools for Rural Markets

India's mobile user base is expanding rapidly. Come 2010, the number of mobile users will be somewhere around 500 million. And much of this growth will come right from the heart of India, the rural India that is still untouched by the mobile revolution. People who could utilize the power of mobile phones to boost their agricultural output, to get better prices for their produce, and to add more zing to their lives. No one knows this better than the biggest mobile maker in the world - the mighty Nokia. The company that's connecting people around the globe.

The cell phone sales may be falling in many parts of the world due to recession but the story is different in India. Here, whopping 10 million new mobile connections are being added every month. The rural India only has about 13% penetration so far so the real growth potential lies in the rural belt.

In mid2009, Finland-based telecom giant, Nokia Corporation (Nokia) launched its Nokia Life Tools (NLT) service in the state of Maharashtra in India. Analysts viewed it as the company's bid to expand its rural base in the country. Targeted at the rural consumers, the NLT service offered a range of services in the areas of agriculture, education, and entertainment. In doing so, Nokia not only tapped the growing potential offered by the rural population but also sought to address the information gaps in the rural community.

Nokia began its focus on the rural markets in India in 2003 when it launched a mobile handset with features such as longer battery life, one-touch flashlight, etc., that catered to the needs of the rural consumers.

Over the years, it extended its support to the rural markets by launching several low-end phones that rural consumers found affordable. Taking its rural thrust forward, Nokia planned to offer value added services (VAS) through its mobile handsets to the rural consumers. Subsequently, in November 2008, the company launched a pilot program for testing its NLT service in Maharashtra. The results of the test phase showed that farmers and students, in particular, had benefited through this service. The farmers could access the latest information on crops, weather, market prices of seeds, fertilizers, and pesticides, etc. The students benefited by learning the English language and gaining local, national, and international general knowledge.

Nokia planned to roll out the NLT service in more states of India and also in other emerging markets.

“Filling in the information gaps in agriculture and education with Nokia Life Tools, we strive to contribute towards empowering people with the right tools to help them make informed decisions in their daily lives. Nokia Life Tools was developed to help bridge the Digital Divide in the emerging markets."

- Jawahar Kanjilal, global head of Emerging Market Services at Nokia Corporation (Nokia), in November 2008.

"There were many in the rural and emerging areas whose needs and pain points were being unmet?"

- Dinesh Subramaniam, senior manager of communications for Nokia, Finland, commenting on the launch of Nokia Life Tools in India, in June 2009.

"It's important to remember that this is about money: Nokia wants to sell handsets to this growing market, and providing services to farmers in India may prove as lucrative as selling us applications and content through Ovi. But better informed farmers grow better crops so, for once, it seems everyone can be a winner."

- Bill Ray, The Register, in April 2009

Nokia began focusing on the Indian rural market in 2003 when it launched a mobile handset with features such as longer battery life, one-touch flashlight, etc., that catered to the needs of the rural consumers. Over the years, it extended its support to the rural markets by launching several low-end phones that rural consumers found affordable.

However, the company felt the need to serve the rural market by offering a value proposition along with its handsets. It noted that the rural consumers, especially farmers and students, had little or no access to the information they needed due to lack of resources and erratic Internet connections.

This prompted Nokia to launch a service that would be embedded in its handsets and would serve the needs of the rural community. In November 2008, the company launched a pilot program for testing its NLT service in Maharashtra. The test phase was carried out for a period of four months and the results, revealed in April 2009, showed that farmers and students, in particular, had benefited through this service.

The farmers could access the latest information on crops, weather, market prices of seeds, fertilizers, and pesticides, etc. through this service. The students benefited by learning the English language and gaining local, national, and international general knowledge.

Having received the feedback, Nokia commercially rolled out the NLT service in 10 districts in Maharashtra, in June 2009.

Targeting the Indian Rural Market

Nokia had always been at the forefront in coming out with products that would cater to the needs of the Indian consumers. While it focused on launching products for the urban market, it also focused on serving the rural population. In 2002, Nokia announced its emerging market strategy under which it planned to lower the initial costs of owning a mobile phone in addition to lowering the operating costs.

Nokia Life Tools

The Pilot ProgramTaking its rural thrust forward, Nokia planned to offer VAS through its mobile handsets to the rural consumers. The company felt that adding content that would benefit the rural consumers while offering the mobile handset at an affordable price would help it further tap the rural market.

Launching Nokia Life ToolsBuoyed by the success of the NLT pilot program, Nokia launched the service commercially in Maharashtra, on June 12, 2009. The company signed a Memorandum of Understanding (MOU) with the Maharashtra State Agriculture Marketing Board (MSAMB).

That's not all. Nokia also announced micro-financing scheme which will be made available to women first. The objective of micro-financing is to make Nokia phones more affordable for rural masses. The micro-financing scheme will be launched in 12 states initially. The scheme was tested in two states on a pilot basis. It allows people to make small payments for as low as rupees 100 per week for about 25 weeks. The scheme virtually removes the cell phone affordability barrier.

Nokia President and CEO, Mr. Olli-Pekka Kallasvuo, said that the company will also be looking to offer local content in entertainment and gaming. Does that mean we'll get Nokia phones loaded with folk music and games around folklore? Let's wait and watch. But the idea definitely sounds very interesting.

Promotional Strategies

Nokia had earlier launched a basic handset with a torch (large parts of rural India don't have electricity and power cuts are commonplace even in the cities) -- having a torch built into a mobile phone is a distinct and tangible benefit. The Nokia 1100, the first made-for-India phone, has been a runaway success. Manufactured at Chennai, it is also being exported. The 1100 incorporates a torch, an alarm clock and a radio. "Innovation is something which consumers reward in this market".

For reasons of affordability, in rural areas a phone may be shared by several people. The models being launched to cater to this need will have separate address books, individual billings and

more. People initially doubted the torch phone, too, but it became a popular product.

Product Promotion… Advertising: Through TV, Sign boards, Bill boards, Radio, Newspaper, Broachers, Posters, Dummies and display stands

Experts lauded Nokia for launching VAS (which, till then, had been mostly offered to the young urban customers) through its mobile phone for the rural people. According to Naresh Priyadarshi (Priyadarshi), head of Synovate Business Consulting India , "VAS will definitely be the driving factor, but what is important is the end-offering customized to appeal to the target segment. It is very important to understand the needs of the rural population to ensure that the services are aligned on those lines. Vernacular content is already a differentiating factor, considering the wide language diversity in the rural population which a lot of handset manufacturers are already exploiting."

In December 2008, it went one step further with the launch of Nokia Life Tools. "Nokia Life Tools is a range of agriculture, education and entertainment services designed especially for the consumers in small towns and rural areas of emerging markets," says the company. "Aimed at providing timely and relevant information customized to the user's location and personal preferences directly on their mobile devices, Nokia Life Tools is the first step towards bridging the digital divide."

The Distribution Edge

In rural India -- which constitutes 70% of the population -- affordability is an issue. So there is a different range for this constituency.

Nokia started distributing its phones through a partnership with HCL (formerly Hindustan Computers Ltd.), which had already built an extensive network for its own products. Recently, Nokia has decided to supplement that with its own distribution efforts. Both companies realized that there was a tremendous growth opportunity and it was best that we utilized the resources of both organizations in an optimum manner.

Nokia has opened its retail outlet ‘Nokia Priority’ as well as many authorized dealers at various places. Consumer Manufacturer Dealer

Promotion Mix AIDA in Nokia – : A – Attention : attract the attention of the customer. I – Interest : raise customer interest by demonstrating features, advantages, and benefits. D – Desire : convince customers that they want and desire the product or service and that it will satisfy their needs. A – Action : lead customers towards taking action and/or purchasing.

Supply Chain Management :

Supply Chain Management Channels: Nokia > Distributer >> Whole seller >>> Retailer >>>> Customer

Discounts are provided to online Nokia purchasers through Nokia discount coupons or coupon codes Commission is also provided to retailers on the sale of every Nokia cell phones and accessories.

The Challenges

One of the biggest challenges that Nokia faced with its NLT service was in offering timely and accurate information to the subscribers, according to experts. Some experts also felt that the growth of this service would be limited since it was offered only in some areas such as agriculture, education, and entertainment.

The Road Ahead

As of 2009, Nokia was the dominant player in the Indian mobile phone market. Experts felt that its product innovations coupled with its ability to appeal to various segments of consumers were the reasons for its success..

A rural push offers Nokia the opportunity of entering a market that is still in its early stage of growth, and then pushing for users to upgrade their phone, feature-by-feature. Of course, rural markets do not operate in complete isolation to urban centres, but it will take time to plateu. In order to drive this growth, Nokia will have to push consumer adoption by educating users and a significant distribution and service push.