The Marketing Strategy Of Sony Marketing Essay

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Introduction

This analysis is intended to interpret and analyze the marketing strategy of Sony, Inc, television division. The plan will evaluate the marketing strategy of Sony Inc televisions in general. The plan will evaluate the use of information in marketing strategy, alignment with organizational strategy, global background in marketing planning and management of e-business in marketing. The project will also evaluate market trends, target markets, marketing mix strategies, SWOT analysis, competitor analysis, and recommendations drawn from research.

The company situation:

This study is designed to provide information on the nature of Son’s Business in the television market, brief history of company ‘s progress over the time, goals and objectives and position of the company in the future.

History:

1946, Masaru Ibuka and Akio Morita along with the small team of the dedicated group of employees started Tokyo Tsushin Kenkyujo( Totsuko) Tokyo Telecommunication Research Institute ‘ today it is a billion dollar conglomerate. The main objective of company was to design and develop innovative quality products for people.

Started from creating a rice-cooker to Japan’s first magnetic recorder, the innovative company has created valuable products, which won the company international acclaim and international acclaim of a truly global company for its development of innovative quality products.

The significant milestones of the company are: Japan’s first transistor radio (1955), Trinitron color television (1968), Walkman personal stereo (1979), Handy cam video camera (1989), PlayStation (1994), Blu-ray Disc recorder (2003), Play Station 3 (2006), LCD TV (2005), BRAVIA (2007). Sony is planning to launch 3D LCD TV by the end of 2010.

The origin of the name SONY is comes from the combination of two words “Sonus” and “Sony” ,in Latin Sonus means sound and sonic while Sonny means little son.

In 1958 the company formally adopted name of Sony Corporation.

Goals and Objectives

The main objective of the Sony Corporation is, was to design and create innovative quality products which benefits to people.

Sony Products

Sony is an electronic company whose main products are Audio and Video Electronics. Sony Corporation’s product mix is comprised of various products targeted towards different market segments. Sony sells products, and services globally, the range of products includes; televisions, computers, DVD players, Stereos, memory devices, video game systems, digital cameras and lithium batteries.

Sony’s major competitors are Panasonic, Philips, Sanyo, and Visio. In 2008, Visio became the market leader for 37inch and 47 inch televisions due to its ability to offer low-priced products.

Marketing objectives

Increase sale of Sony innovative quality products, as well as deliver value to Sony customers and partners.

Marketing challenges

Sony has experienced decline in sales in consumer electronics that forced Sony to respond to declining price units, this resulted in size reduction of TVs screen.

Job cuts of more than 16000 and shutting down of sic production bases

Joint ventures

Price increase in raw material

Strategic Analysis

Generic business strategic

SWOT Analysis

Porter’s five Force Analysis

Competitor Analysis

Generic Business Level Strategies

Differentiation: Sony differentiates itself from other companies by offering moderately priced, high quality products. Sony also sets itself apart by offering a choice for everyone. Sony’s product quality, service and supply chain activities are extensive. “

Prestige: Sony has strong brand quality .Their involvement does not end with a customer’s purchase of a Sony product. Rather, it continues until the product has been recycled or has been completely disposed of. Sony is encouraging their employees engaged in product planning to take this long relationship into consideration. As product features and customer needs evolve over time, they will adjust their product communications accordingly to best serve their customers,” (Sony Corp Info, 2009).

Quality Control Program

The quality control program is used to monitor how consumers respond to company’s products and services. Sony is ahead in contributing social activities to help address the needs of communities in the regions around the world where Sony conducts its business. Sony offers many ways to get in contact with their technical support. Sony offers many ways to get into contact with their technical support i.e.: emails, letters, through contact us option on website. It also offers repair and support service. The automated tutorials, news alerts, what is new in updates are also on website.

Superior Quality: As product features and customer needs evolve over time, they will adjust their product communications accordingly to best serve their customers,” (Sony Corp Info, 2009). Sony offers a more for more deal and also a more for same. Their products, especially televisions, are marketed as being a high quality product; therefore, if a customer is expecting more from one specific product, s/he has to expect to even pay more. However, on the turn side, they may offer more for same, because in today’s economic crises, more and more companies like Sony are offering more for the same.

Competitively High Prices: Sony offers a more for more deal and also a more for same. Their products, especially televisions, are marketed as being a high quality product; therefore, if a customer is expecting more from one specific product, s/he has to expect to even pay more. However, on the turn side, they may offer more for same, because in today’s economic crises, more and more companies like Sony are offering more for the same.

Rapid Innovation: Sony is company of first and famous for innovative products

High Customer Service: On a corporate level, Sony uses the Internet to keep track of all its stores and their performance. The Internet creates an open communication line between customers and stores, stores and corporate and even suppliers and stores. Customers can go to Sony’s website when surfing online and do anything from downloading drivers to purchasing new products. Some resell stores have access to corporate entities through email and Sony’s own website where each store can upload information on their financial situations, indicating which items are selling better than the others, like TVs or electronics, etc. Finally, reseller stores that sell Sony products can use the Internet to connect with any of their when purchasing materials like TVs, gaming systems, etc.

SWOT Analysis

Strength:

The greatest strength of Sony is their ability to produce innovative quality products. Sony innovations have become part of mainstream culture; Sony is the company of Firsts, Sony website. The other ability of Sony is their success in several different markets. Sony has made an impact in electronic videogames, computer, and especially in televisions.

The other strengths are:

Strong Sony brand image

Worldwide reputation

Leadership in make share

Diversification in Manufacturing Locations Around the World

Ability to Provide High Motivation to Its Employees

Loyal Customers

Supply chain

Broad product range and High Quality Products

High Technology

Pioneer in the Industry as Being Creative and Innovative

Strong Support R&D Activities

Weakness

Over confidence which sometimes not paying attentions to rivals

Diversification is not always suitable business

Their insists on their own format

Competitively high prices

Decline in product competiveness

Costumer satisfaction issues

Overleveraged financial position

Current exchanges

Yen’s appreciation

Faulty products

Expensive hardware

Opportunities

Business Reorganization

Allocate management resources

Divest, downsize, withdraw from certain areas

Large scale, worldwide layoffs

Partnership with FIFA

Sponsorship includes 2010 & 2014 World Cups

Enhance brand awareness, recognition, and trust

Expand Consumer Electronics Market

Industry expected growth of $171 billion in 2009

Blu-Ray DVDs expected sales more than $1.2 billion for 2009

Continuous growth in their sectors

Increasing demand in technological products around the world

Acquisitions

Innovations

New markets

china upcoming economy

Increasing purchase power

Threats

Threats Integration of joint ventures & alliances

Aligned with Samsung to market S-LCD panels

Result was net loss of $100 million for fiscal year 2005-2006

Increasing price of raw materials

Unstable supply & demand conditions

Currency exchange risk

Expected increase of $350 million for 2008-2009 fiscal year (little Sony can do about it)

Counterfeit goods

Cheaper technology

Economic meltdown

External factors

Lower cost of competitors and or imports

Prices wars

Short products cycles

Imitation of brand and technology

In the market of LCD televisions, Sony excels but still face strong competition from Samsung, sharp, Panasonic. Many of these brands appear in DVD players that Sony has also to compete with.

Industry Analysis (Porter’s Five Forces)

1. Threat from new entrants -Low

2. Bargain power of Buyers- High

3. Bargain power of suppliers- Low

4. Rivalry among existing firms – High

5. Threat of Substitute products- Low

Sony Competitor Analysis

Huge competitors in every business at every level (consumer electronics, music industry, movies, games)

Low PBR (price-to-book ratio)

LCD TVs are Sony’s leading revenue driver

At a disadvantage since they don’t make LCD panels (all their competitors do)

Toshiba and Sharp top competitors in Japan

Panasonic net income, profit, operating profit ALL increased in fiscal year 2007-2008

Sony operating income down 57.2% for same period

Sony Product Strategy

Sony has been a leader in motion picture, television, computer entertainment, music and online businesses.

The product that demonstrates this leadership is Sony’s new BRAVIA XBR9 series televisions.

Major Features:

Ethernet connection that gives the largest selections of free and premium movies, TV shows, and sports out there.

Full HD vibrant screen

Sony’s new Motion flow 240Hz technology, which delivers exceptionally crisp and detailed images by quadrupling the frame rate of conventional LCD TVs.

Sony Marketing Strategies

Sony Target Market

1. Demographics

Sony is a diverse brand that provides products and services for a wide variety of people.

Sony will focus on expanding their segments in the women’s market.

Women make up over half the sales in consumer electronics and influence over 80% of purchases.

Sony Differentiation

Quality: Sony strives on innovative products that are easy for consumers to use.

Market Leader: Sony is the market leader in electronics. In particular Sony is the number one leader in television market share.

Sony Positioning: Sony is one of the world’s greatest brands in the eye of the consumer. Sony products are considered to be high quality, unique, and convenient. Mainstream culture has embraced Sony’s innovation.

Sony Promotional Strategies

Company’s pricing Strategy

Sony TV’s pricing strategy follows market-skimming, product line pricing and product bundle pricing. The price range of Sony TVs starts from $400 to more than $20,000. Sony starts with high prices to sell its new TVs and then gradually lowers price. Sony sets different levels of prices for Televisions with different features.

Factors affecting Pricing Strategy

Different factors affect pricing policy of Sony i.e.; internal and external. Sony use skimming price strategy for its high priced high quality products, and maintains its high prices, rather than following strategy of lowering its prices over time to skim successive market segments.

Internal factors: Marketing objectives, Marketing mix strategy, cost and organization goals.

External factors: nature and demand of market, competition and some other aspects. The nature and demand of market comes for demand for new TVs and LCD or HD TVs. As competition drives the pricing, and Sony is always in competition to offer best innovative quality products, the company of firsts, Sony website. These entire factors drive the high price for Sony quality products.

Discounts

Discounts are based on a corporate decision or the store that runs a sales promotion on the Sony Discounts are offered sometimes during the peak seasons like Christmas, Sports seasons, and seasonal discounts are provided as well. When competition is heavily involved, such as around Black Friday, Christmas, etc., these promotional discounts are a “steal.”

Recent offers are:

Reward points on shopping, 5 Sony reward points per $1 spent at SonyStyle.net and Sony Style Stores

Offer a $ 50 Card credit after purchase of $ 249 or more

Offers reward points, more savings, and prizes, free music downloads more savings, more prizes and more fun with Sony Card. Get instant approval and a $50 card credit after your first qualifying purchase of $249 or more1.

Sony offers financing services partnering with GE Money, the financing ranges from 6 months to 36 months

Save big on selected BRAVIA EX700 series HDTVs; get free BDV-E5705.1Channel Blu-ray Disc.

No interest and no payments for 24 months if the customer applies for the new Sony Financial Services Card at point of purchase.

Save up to $360 when they bundle the BRAVIA XBR9 series LCD HDTV with the new BDP-S360 Blu-ray Disc Player ($299.99 retail

$360 for the 55″, $300 for the 46″, $280 for the 40″

Introduction of a new tagline created to target LG Electronics tagline “Life’s good”

“Now Life’s better”

Promotion

This section describes the different sales promotions offered by Sony.

Advertizing:

Sony Electronics advertizes through direct mail, TV advertisements, newspapers, magazines i.e.: Business week, Times, Wall-Mart, Best Buy, Target, and leading news papers worldwide.

Customer relationship management (CRM)

Sony is strong believer in communication with customers through personal interaction. Market research and marketeering strategy is based on feedback from customers. Sony provides opportunity to its customers to send feedback about the products they purchased. Sony offers instruction manuals on all products. Marketing is not an event but an ongoing process, Sony uses customer feedback to improve their products. Sony welcomes complains, suggestions and ideas from customers and all the information received through feedback is sent to planning and design group.

Public relations:

PR department of Sony Corporation works directly with the executive team to create strong relationship with public. This creates people to be more customers based and involved with customers and their interest, likes dislikes and needs.

Web marketing:

Web marketing is the most dominate feature of Sony. It offers different Videos and pdf brochures to help customers understand their business and products. There is Sony a reward program which offers credit card and opportunities to win prizes and save on Sony products, participates in entertainment games and earns additional points, (Sony Rewards, 2009).

Place/Location

Geographically, Sony produces and distributes to places all over the world.

E- Business:

Sony’s objective is to construct strong customer relationship marketing and direct communication with their customers. To achieve this target Sony has incorporated e-business.

Today Sony communicates with its customers, individuals, resellers, and corporate customers through the internet. This technology has created an open communication line between customers and stores, stores and corporate and also between stores and suppliers.

Sony is looking forward to capturing the voices of every customer for better customer satisfaction and effective communicate with them.

On the corporate level, Sony uses the internet to keep track of all its stores and their performance.

Customers can go on Sony website online and do anything from information on products to purchasing or products and downloading drivers for Sony products.

Resell stores have access to corporate entities through email and Sony’s website where they can upload information on their financial situation and also compare sell of different items.

Building Customer Relationship

Marketers at Sony corporation have found a new way to with customers, i.e.: online courses to enhance customer’s total Sony experience. The online tutorials provide courses to online visitors in personal computing, home entertainment, digital photography and business solutions.

The result of online tutorials had been outstanding; Sony has received more than 90% rating from its customers. Those who attend the course were more likely to buy the products as compared to those who have never attended course.

Sony E- Commerce program

Sony Electronic started an e-Commerce program to create a customizable world class internet platform for direct sales of electronic and its solutions.

The project’s focus was to increase direct sales in new and established markets and establish the customer relationship at all points of the customer life cycle. Markets, Business-business (B2B), and business- consumer (B2C) was targeted.

With this e-Commerce program Sony Electronics got new direction and 60% of their direct sales are online. With the help this program Sony Electronics reacted into new segments in a number of markets from small to large business, governments, and education.

The credit of the success of this program goes to Catapult System that helped Sony Corporation to complete this very important goal in efficient and timely manner. The success of this program allows Sony to move with great confidence in e-Commerce solution that fully meets with technical requirements of company

Assessment f Sony’s marketing strategy

A) Information in marketing strategy

Sony has succeeded in proving value information to its customers through tutorial, pdf documents download, vide steams and through e-support to the customers who buy Sony products.

Sony’s online course has been valuable source of formation regarding technology and its use.

Soy is also active in participating community awareness through its different social programs.

With the support of e-business and effective management of CRM, Sony have provided valuable information and has received constructive feedback from its customers.

B) Sony’s defines business strategy for year 2010

Sony has been leader in innovative quality products and by the end of this year Sony will launch 3D Television. Sony has reformed its organizational structured as desired in 2009. The aim for 2010 is to bolster profitability and transform its operation s with the aim of accelerating innovation and growth and optimize business process in electronics. Sony achieved 80% of its targeted 330 Billion Yen (3.7 billion $) cost reduction for past fiscal year ending March, 2010. Sony is positioned to launch succession of competitive products by the end of 2010.

Sony will focus on use experience rather than developing products on underlying technologies.

For further growth and to enhance profitability, Sony is implementing further transforming measures on following four initiatives.

Target profitability in core hardware business i.e.: TV, games, digital imaging

Provide new use experiences in innovation of services and hardware

Reach out new customers and develop new geographic markets

Increase focus on environmentally conscious products and processes

Green management 2015 will come into effect in fiscal year 20100 and Sony will disclose its progress periodically.

Sony target an annual 5% operating income margin and 10% return on equity by the end of fiscal year end ding March, 2010.

C) Global context in marketing strategy

Sony’s Global Strategies

The vision of globalization is traced back when Mr. Morita travelled to US with the intention to expand his business to US market. Sony, in 1958, developed pocket radio “Sony” after acquiring licensing right of patent from AT & T .The Sony Radio became the first model that was distributed both in Japan and US markets. After that company established Sony Corporation of America an opened Sony showroom in New York City. This can be considered as Sony’s first move in doing global strategy. Presently, Sony is world’s most recognized Brand (Richard A, 2002). Sony develops the global strategies from its core strategic advantages, which are innovation. By virtue of this core strategic advantages Sony adopted it as their global strategy by supplying innovative quality products to global market.

The innovative products are Walkman (personal stereo headphone) DVD Player, Video camera, Trinitron televisions, play stations. All such products became more and more recognized worldwide including Japans, Europe, US and Other Asian countries.

Sony first started its show room s in New York and then in UK, Switzerland, Netherlands, France, and worldwide.

Other global strategies that enable Sony to progress in global competitions are the choice of the location, global marketing and competitive move. Innovative quality products, strand brand and worldwide presence have made Sony a truly global company.

Global context in Sony’s marketing strategy: Sony offers same products in different countries to serve the similar needs of worldwide consumers. This successful strategy has derived from the strengths of Sony over competitors in terms of anticipating hidden consumer needs such as Walkman served worldwide consumers for entertainment. This puts the Sony one step ahead over their competitors. As a consequence of global availability and serviceability of Sony, it has global recognition, which enable Sony to be familiar in every country and as a result customers feel more comfortable.

D) e-Business in marketing strategy

E- Business:

Sony’s objective is to construct strong customer relationship marketing and direct communication with their customers. To achieve this target Sony has incorporated e-business.

Today Sony communicates with its customers, individuals, resellers, and corporate customers through the internet. This technology has created an open communication line between customers and stores, stores and corporate and also between stores and suppliers.

Sony is looking forward to capturing the voices of every customer for better customer satisfaction and effective communicate with them.

Building Customer Relationship

Marketers at Sony corporation have found a new way to with customers, i.e.: online courses to enhance customer’s total Sony experience. The online tutorials provide courses to online visitors in personal computing, home entertainment, digital photography and business solutions.

The result of online tutorials had been outstanding; Sony has received more than 90% rating from its customers. Those who attend the course were more likely to buy the products as compared to those who have never attended course.

Sony E- Commerce program

Sony Electronic started an e-Commerce program to create a customizable world class internet platform for direct sales of electronic and its solutions.

The project’s focus was to increase direct sales in new and established markets and establish the customer relationship at all points of the customer life cycle. Markets, Business-business (B2B), and business- consumer (B2C) was targeted.

With this e-Commerce program Sony Electronics got new direction and 60% of their direct sales are online. With the help this program Sony Electronics reacted into new segments in a number of markets from small to large business, governments, and education.

The credit of the success of this program goes to Catapult System that helped Sony Corporation to complete this very important goal in efficient and timely manner. The success of this program allows Sony to move with great confidence in e-Commerce solution that fully meets with technical requirements of company.

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