Why Nokia should enter the 3D Printer Business

I never worked at Nokia but I did work for them on a number of Consumer Data and Consumer Experience projects as Client Partner for a Berlin based mobile agency. That's the time where I saw first hand, back in 2009, how stubbornly blind they were to what was coming their way. I was one of their first clients back in the 90's when I got my first Nokia 1011 and always loved their phones. I had one till 2010 or so, the last one being the E71. Then came the iPhone, also for me, followed by the Android Tsunami and the rest is history. The latest Lumia models are nice, very nice indeed but I find it hard to believe that they can survive on a "Me has smart phones too". Although nice and refreshing Windows Phone is simply not the disruptive change and jump forward we'd all love to see and have as consumers.

So where should they go from here? My suggestion: they should enter the 3D Printer Business. Here's why.

From past to present

Look up Nokia and on Wikipedia you learn that this company started out in the wood pulp business and then went into the electricity generation business near Tampere in Finland. It added Rubber to its portfolio and started marketing rubber boots under the Nokia Brand Name. It then evolved into a conglomerate of businesses that included over a period of decades, telegraph and telephone cables, bicycles, robots, television, military communication equipment, gas masks and chemicals. The first step towards telecommunications was made in the 70's when they produced a digital switch for telephone exchanges which became the workhorse of the telco industry.

Through its military engineering experience Nokia started experimenting with wireless telephony in the 70's as well and they were directly involved in creating the first communication standards for wireless telephony. Its first GSM phone came out in 1989 and was delivered to Finish telco operator Radiolinja. From there, in less than a decade Nokia quickly dominated the mobile phones business with Motorola and Ericsson in its slipstream.

What does the history of Nokia teach us? Well, they have a lot of experience in engineering, designing and building electronic hardware and they have two decades of programming software for this hardware under their belt. But all of this experience is now at a critical cross road where they risk loosing lots of this heritage if their smartphone business strategy doesn't deliver.


What about 3D printers?

If you believe the hype, 3D printers are going to change the way we live and do business in under two decades from now.
For those who don't know here's why 3D printers are so important:

• They will change the way we produce an increasing number of products dramatically. From prosthetics, via glasses, household items and jewels all the way to the scandal inducing possibility of guns and rifles. 
• This new way of producing one off and personalized goods can potentially make a chunk of what's mass produced today redundant. It will open the door to a new type of retail commerce, i.e. specialized 3D printer stores, that are simply there to turn digital ideas into tangible objects. I'm sure you will see specialized stores springing up because not all printers can deliver all objects. You could metaphorically consider 3D printers as the last missing output module of the internet.
• Although the technology is still in a very early stage and end-results are not always satisfactory, its just a matter of time till we will buy a 3D printer for at home or in the garage and start using it to enhance our daily lives. 

3D printing today is in its infancy. You can buy a 3D printer today for a price that would buy you a sophisticated fridge or washing machine but defining 3D objects, using graphical software, is not an easy task. Of course one can find 3D printer forums and blogs by the dozen and they most will offer  some form of file sharing. Experimentation is still part of the process though but as said before, the promise of being able to print personal objects for a wide variety of applications is getting the attention of an increasing number of consumers, start-ups and businesses. 

So why should Nokia go into the 3D printer business?

Its my strong believe that if any company in the world is capable of entering this space and turning it into a strong new business its Nokia. As I pointed out before they have long standing history in hardware AND software manufacturing. My guess is also that they have access to a well trained workforce and an extensive line up of production partners around the globe. All that's needed is a nod from Stephen Elop and the creation of a 3D printer task force with a R&D budget attached. My  guess is that they'll be able to churn out a 3D printer with an easy to use interface and software within a year. They should not forget to leverage their experience in creating eco-systems. Anyone remembers Ovi or MyNokia? If they create an eco-system around these 3D printers using the same principles as Apple once did with Music and Movies via iTunes, they're in for a healthy future.

So, who introduces me to Mr. Elop so I can pitch the idea? :-)

Thanks for reading my Blog.

Matt

For further reading:
http://3dprintingindustry.com

If you want one yourself check Cubify

Branded in China - The Long Term View

Is Brand Management in China a waste of time? Recent research is starting to show that this is no longer the case. Brands have always been important for the Chinese but in the past this had more to do with status which in turn is more connected to price and exclusiveness.  The Chinese have begun to discover that good Brands come with attributes such as authenticity, quality and distinction. This change opens a road to building Brand Equity for Chinese and non-Chinese Brands alike. A recent visit to Beijing made it clear that there is a change from "Made in China" to "Branded in China".




In a market fraud with counterfeits anyone can have a Louis Vuitton bag. So the next thing is to have something genuine from a Brand or to adopt a lifestyle that gives the items an new dimension. But as one can read in the excellent study: The Rise of Chinese Brand Equity by Swiss Brand Valuation Experts BV4, there are a number of reasons behing the rising importance of Brands in China. Some of them are quite obvious and come with economical and social changes. The Chinese middle class is growing and is more and affluent. Contrary to the more collective behavior most Chinese grew up with there is a new tendency towards individualism. Partially this has to do with the one-child policy but being part of a growing middle class there is an increased desire to develop and position oneself as an individual.

The view from within China
On a recent visit to China I spoke about these changes with a good MBA friend, Alex Lin, CEO of Chinavalue.net, China's most influential Business Blog. He confirmed that a growing part of the Chinese are Brand Sensitive and Brand Aware. The German car brands come to mind but also the French luxury Brands are of growing importance. At the same time he acknowledged that local Chinese Brands are beginning to see that national but also internationally there is value in developing a clear Brand Strategy. 
Brand significance is not only important in Consumer Products. The Chinese travel easier not only because they are more affluent but also because travel regulations have been simplified over the past two decades. This means that the Chinese are also looking at education elsewhere in the world, specifically in the US and Europe. Also here they search for the better Brands, using the familiar rankings such as the one from the FT.

A European Brand coming to China
My brother Alain Vermeulen is CMO of Vitaminstore.nl. He decided two years ago to move closer to his IT-supplier who happens to be based in Xiamen, a city of 3 Million inhabitants close to Taiwan. 
In the mean time he has opened a webshop for his Vitamins and Food Supplement products and a first retail store in Xiamen. His experience is that the Chinese are sensitive to security that Brands could offer. This is specifically true for e.g. Baby Nutrition where a couple of major scandals have tainted the national food brands in China for years to come. The obvious step has been to start selling foreign Baby Nutrition, e.g. Milk Powder from New Zealand.
Yet there is still a lot of exploring to do according to Alain. The Chinese try things out but are less loyal which leads to fluctuations in demand. The optimal mix of Branded products under the Vitaminstore China Brand is still under close scrutiny but the first results are promising.


From China into the rest of the world
There are a great many Chinese Brands that we hardly know or see outside China. Yet Brands like Midea, Haier and Geely are well established in China. They now start to eye the rest of the world. A Brand like Geely 'bought' itself a ticket into the foreign car industry through the acquisition of Volvo. Volvo in return got itself a platform into China. On both sides this partnership still has to grow but one thing is sure. Once the Chinese have mastered safety and reliability issues a bit better they will become an important global player and with that a global brand. For both the Vitaminstore Brand on a small scale and Geely as a corporate giant one thing is true though; only trial and error will show these businesses how to build their Brands for both China and the rest of the world.

Social Media
In the end it is amazing how important Social Media is in China. Although almost none of the Western channels (Youtube, Facebook, Twitter) are officially accessible from within China, the local platforms such as Sina Weibo, are immensely important for the Chinese. They research Brands and Products, look at recommendations but also share experiences and if necessary the occasional warning for dangerous or counterfeited products and services.
The fact that in a society with so many cultural and historical differences Social Media are of equal importance shows one more time how Brands should embrace this channel instead of ignoring it.

The long term view for both sides
The Chinese government has started to address the importance of IP Rights. When building Brand Equity having some form of protection through Trademark Registrations and Patents can be vital. Increased legal action and control of counterfeiting helps the Chinese market also to gain a reputation as more brand friendly environment. This does not mean that it is all of a sudden very easy to establish a brand in China. The cultural and language barriers remain important. The Chinese on the other side will find it hard getting rid of the 'cheap and low quality' image of 'Made in China'. A Brand like Lenovo has managed by simply acquiring the IBM Thinkpad Brand. But the opportunities to buy your way into a Western market are scarce and should be carefully managed.
Fact is that we will have more Chinese Brands coming over, also of good quality with probably an exceptional price/quality ratio. And as for Branding in China itself, I think we're just at the start of an enormous task with an immense upside.
Brand Managers and Agencies, stay tuned!

The concept of Brand Mass & Brand Risk and its impact on change

Audi carefully honed its brand to sheer perfection over the past two decades. From an also ran with little aspiration it is has become the benchmark for top-quality interiors and modern consistent design. A few years ago however it noticed that its reputation was slipping in the polls. The Brand got more and more associated with arrogant and agressive drivers, with similar road manners, an image that belonged more to BMW and some Mercedez Benz drivers. Audi's board then issued the task to its branding and marketing people to turn this around.

The board simply issued a simple brief: Audi should delight customers as a Brand. That's a clear call for more emotion. Through a host of changes in the Corporate Image guidelines, changes in sponsoring programmes and in marketing, the brand transformed itself to the more solid, cool and somewhat understated brand it is today. The excitement was clearly achieved via the R8 and the victories at the 24 Hours of LeMans. In the product marketing, even the faster and more agressive models, such as the RS series, come with descriptions that are not referring to its extreme speed and acceleration capabilities. Instead the focus its on the design details that set the RS5 apart from the standard A5 model.

The interesting aspect of the branding repositioning exercise is not that the fact that every now and then a Brand has to go through such an exercise. These days, a shit-storm in the internet can create more  damage in a few days than a branding department can handle and correct in a few months.

"Vorsprung durch Identity"
What makes Audi an interesting case is the fact that their branding is fairly monolithic. The often called 'Marushka' dolls design principle leads to cars that look alike between series. You need a trained eye to spot the difference between an A4 and an A6, specifically from the back. Audi only does one type of design for a series of cars that sell extremely well, specifically in Asia. The brand has become extremely recognizable but also more one-dimensional and it has also gained substantial global presence.

The associated brand identity works well because with brand promise, 'Vorsprung durch Technik'. The advantage is reflected in the design and in the specifications of the actual cars.

Audi has what I would call substantial Brand Mass. Whether you like it or not, as soon as you get in touch with any Audi product or touchpoint you will meet the same 'Audiness' everywhere. Its comparable to an oil tanker. Once pointed in a certain direction it is hard to change its course and even harder to reverse.

Brand Mass in itself is not bad. Its come with efficiencies that consumer product giants like Nestlé and P&G can only dream of. Yet it also comes with a certain risk. If consumers keep seeing Audi as an arrogant brand for drivers of the single-male-macho kind it could loose its appeal as a whole to a group of consumers that suddenly associate the monolithic brand experience as one big affront.

In other words, increased Brand Mass means increased Brand Risk, specifically in the reputational area.

Is there a way to mitigate this risk? The obvious answer would be, yes through diversification, i.e. the creation of Sub Brands. Toyota and Nissan have done this through the creation of the Infinity and Lexus luxury brands. Although it requires the creation of new Brands it does help spreading reputational risk, specifically if the sub-brand are still subtly but firmly attached to the 'Master' Brand. The Best in Class example here is BMW with their superbly integrated MINI and Rolls Royce Brands.

Audi seems to have taken one step in that direction by acquiring Lamborghini and recently Ducati. But for now this connection is hardly ever highlighted. Its mostly the Automotive Media that refer to this connection. 

Audi remains though a class-act when it comes to the total integration of Corporate, Brand and Product Strategy with a superbly consistent Design and Experience based on the Brand's values.

For further reading:
Audi's Corporate Strategy
A very good Audi SWOT by marketingteacher.com