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Sony Corporation essayIntroduction:Sony is one of the leading trademarks in electronic goods. The name Sony stands for great
quality, technological leadership and prestige. Sony products range from personal to home
entertainment, digital cameras, communication devices, personal computers, laptops to robots.
Sony is a Japanese Legend in electronic products which evolved as a multinational company
head quartered in Tokyo. This report brings you an overall view about marketing concepts and in
depth familiarity about how Sony practices these concepts in real world.
Brief HistoryIn 7th May 1946 at Nihonbashi, Tokyo, Masaru Ibuka and Akio Morita gave birth to Tokyo
Telecommunication Engineering Corporation commonly known as Totsuko. Apparently it started
with 20 people in 1946 and it has grown to 8000 people in 20 years' time. The first product ever
produced by sony is a electric rice cooker, then in 1950 Japan's first magnetic coated - paper
based recording tape was introduced as “Sony Tape”. In 1955, they decided to change the label
for their products as Sony. In 1958, they changed their name from Totsuko to Sony Corporation.
In 1960, Sony's performance and products were exported and expanded to United States, China
and different countries all over the world. Till date, Sony continued to show consistent
improvement in all sectors and branches it step in.
Current Market of Sony CorporationThe total revenue recorded for Sony in 2009 was US$ 78.9 billion. The most common objective
of Sony Corporation in business is to increase the market share. By increasing the market share
Sony keep its pace consistent in the market above the competitors. Sony has evolved its root in
all areas such as entertainment arena- Television, LCDs, CDs and DVDs etc., in gaming arena-
PlayStation, gaming CDs and DVDs, in music arena digital players, music downloads, Walkman
etc., producing mobile phones with brand name as Sony Ericsson and Laptops with name Sony
VAIO for professional market. By this kind of diversification Sony brings its advantage over its
competitors by upright to the words “survival of the fittest”.
Prophecy“After the initial assessment, a company must set its basic objectives by deciding which products
to bring to market at what price and which customers to pursue” (Curry& Edmund,J 2009: 9).
Sony being a successful implementer of this objective in its business, now announces its
emphasis over environmental issues.
photo0Source: "Environmental Vision Towards Sustainability" (http://www.sony.net/) 2009
Sony's “Environmental Vision towards Sustainability” gives all its reverence for environment and
nature. Sony vision on future is mainly focussed on four steps,
ü Marketing must be the first priority of the company.
ü Consumer views are most important than the company's.
ü Focusing on the future investment.
ü To be patient after doing these steps.
Section 1: Organizational OrientationOrganizational orientation provides complete information of the organization. This tool is used
mainly for large organizations {private and public corporate}. The profitable organizational
orientation Sony established from changing its brand image from “economical and reliable” to
“quality and competitive” made some effective changes.
The four major steps to succeed in market are,
The performance of the firm relative to its competitors is not necessarily dependent upon the
sales figures because changes in sales may occur because of the changes in economic
conditions and changes in the size of the market. But it is actually how much proportion of the
market the firm has allocated as compared to its competitors which is called the company's
market share. The main advantage of using market share is because of the wide macro
environmental variables which are abstracted from the industry such as the state of the
economy, the change in tax policy, the proportion or percentage of the total segments of market
and the availability of the market that is being serviced by the company. The higher in the market
share, the higher the performance of the company.
Market share can be calculated as follows:
Market Share= Firm's Sale / Total Market SalesAs the increase in Market Share increases the profitability, many firms are concerned in
increasing the market share. The reasons lies behind are as follows,
ü Increasing the growth of sales even if the industry is not growing.
ü Developing cost advantage.
ü Increasing the bargaining power due to which the firm has an advantage in negotiation with
channel members and suppliers.
ü Increasing the reputation of the firm.
Sony's Market share analysisSony is a global multinational company so the market shares are ranged all over the world in
different market places, so we can't specify a particular market. Sony is also participating in other
major markets such as game console market, computers market and communications market,
specially the cell phone market with its merger over Ericsson.
The graph below shows that only 13.65% of the market has been captured by Sony with the
Sony Ericsson brand in the cellular market.
http://stats.getjar.com/mr_technology_charts/world/Sony-Ericsson.png
This is because the cellular industry is full of other giants such as Nokia which captured 51.4%,
Samsung captured 9.91%, and Blackberry 1.93% etc. “Our target is to become one of the top
three players in the industry, and the momentum we established in 2006 makes this an
achievable ambition,” said Miles Flint, President of Sony Ericsson.
In the gaming industry, Sony holds 70% of the market shares while Nintendo and Microsoft share
15% each. “Pricing is the only area of global marketing mix where policy can be changed rapidly
without large direct cost implications” (Hollensen,S 2007: 475). A cheaper version of Play station
3 was launched by Sony to compete with Microsoft Xbox 360 and Nintendo Wii. The company
aims to sell 10 million PS3 consoles this year compared to the 9.24 million sales in the previous
year. The firm is also aiming to sell 15 million play stations portable handheld game machines
this year compared 13.9 million sales in the previous year. Sony's biggest competitors in the
gaming industry are Microsoft and Nintendo.
Sony is best known for the Television industry. The biggest competitor for Sony is Samsung
Electronics Co limited and has left Sony Bravia a long way behind in the Global Flat TV market.
“Sony has said it aims to make its LCD TV operations profitable in the financial year starting next
April” (bbc.co.uk 19th November, 2009). Also Sony is aiming to launch 3D TV's next year and for
its electronic reading devices Sony is looking forward to grab 40% Market Share in 2012/13.
The various sections discussed about the organization,
1. Corporate CitizenshipSony has a widespread range of responsibility towards the society. Sony is one of the world's
corporate organisations which give desired respect to their employees and also help their
employees to develop their knowledge by various learning methods like organising training
program, orientation towards new products etc. Sony also shows high levels of co-operate
integrity to both stakeholder and society
2. Business PlanningSustainability and performance is the key factor of their prior consideration in planning a new
product and services. Creating new business models is to decrease their environment impact
and to move forward to attain a sustainable growth.
3. Research & DevelopmentThe main objective of Sony international ltd, is to develop a new technology which can contribute
towards the improvement of our society, they will also aim to increase their productivity and the
product performance and services to make them sustainable and to access high quality concept.
4. Product DesignSony is applying its creative technology principle to design all their product and services in the
sense to meet the environmental benefits. All their product has been designed in such a way to
reduce their technological impact on the environmental throughout their life period, Sony also
focus their attention towards reducing electronic wastes which is very harmful to the human life.
5. Manufacturing Process and Site ManagementSony continuously focusing its entire concentration in environmental management through
improving their sites both at manufacturing and non-manufacturing and tried to move towards
zero emission production .Sony is implementing technological innovation and environmental
management to reduce its impact on environment while manufacturing their products.
6 Distributions, Sales & MarketingSony marketing is mainly based on their product qualities. Sony has tried to reduce their impact
on environment in almost all their processing sectors like packaging, distribution. They
successfully include all the vital information for the costumers in their products.
8. Information Disclosure and Stakeholder CommunicationSony always discuss the matters all its products and other matters with stake holders and also
disclose all its information details in a form that is accessible to public they also consider the
suggestion of the staff and opinions of the stake holders and take effort for a detail evaluation to
improve their products and performance.
9. Risk, Health and Safety ManagementThe Sony also focuses the attention towards health and safety problems that arise during the
manufacturing of their products. They also take efforts to concentrate in all the management part
to rectify it. They aim to reduce the accidents and causality to zero. Sony's management had
discussion about the risk factor with stakeholders and public as they realise these measures are
the integral part of any business organizations.
Section 2: Analysis of Sony's Competitive AdvantageMarketing Strategy of Sony Corporation“Competitive marketing strategy occurs within department, across organizations, and within
people's head as a way of doing business. Marketing strategy defines the specific market
towards which activities are to be targeted and the types of competitive advantages that are to be
developed and exploited” (West et al., 2006: 04, 35)
“Primary focus is to effectively allocate and coordinate marketing resources and activities to
accomplish the firm's objectives within a specific product market” (Mullins and Walker 2010: 43)
Sony is a well-known, popular, and successful company and strongly emphasizing on strategic
marketing planning that enables the company to stay competitive and alive in its industry. The
current marketing strategy and plan has made Sony Corporation a hot cake in the industry and is
satisfactory to customer needs. Sony is continuously expanding its products and services from
electronics to digital i.e. Sony Home Entertainment and BMG Music Entertainment and lot more
like movie production and distribution (Sony Picture) and Games. Sony has launched 3D-related
products for the home, including TV, Blu-ray Disc players/recorders and 3D gaming on
PlayStation3.
4 simple ways to approach marketing strategySource: West et al., 2006: pp:05
“The marketing plan is the central instrument for directing and coordinating the marketing efforts.
The strategic marketing plan lays out the target markets and the customer perceived value
offerings the firm will offer, based on as analysis of the best market opportunities” (Kotler, et al.,
2009: 86)
Competitive Advantage of Sony CorporationThe most important thing the company should aware of the competitor's activities, and acquire
their actions and backgrounds when implementing its strategic marketing planning and this can
be done by different kinds of strategies and the most important one is (Porters generic strategies)
because gaining knowledge and information against competitor's enable and help in creating
measures to gain advantage over competitors.
Unique and innovative standard quality technology owing to heavy emphasis on research and
development, the commitment of Sony Corporation's to research and development in industry
has always been one of its top priority i.e. strategies to gain leadership and remain competitive in
the market. The competitive advantage possessed by Sony is discussed with the help of Porter's
generic strategies and Porter's five force analysis.
Porter's generic strategiesProfessor Michael Porter suggested that some of the most rudimentary choices faced by
companies are essentially the range of the markets and competition in their respective markets.
The profit of any organizationis the difference between its total revenues and costs. Therefore
high profitability can be attained through achieving the lowest costs or the highest prices with
respect to the competition. The Porter's generic strategies are:
Ø Cost
Ø Differentiation
Ø Cost Focus
Ø Differentiation Focus
. The main strategy of Sony is Differentiation and Differentiation Focus:Competitive Advantage
Low Cost Product Uniqueness
Target Industry Wide
Scope
Market Segment
Source: http://www.quickmba.com/strategy/generic.shtml
Product DifferentiationSony Corporation is able to create its own firm specific advantages through its innovative, unique
production i.e. differentiated products and from their activities of research, development and best
marketing practices. Because of its differentiated strategy, Sony products are hard to imitate and
also make its hard or difficult for competitors to find substitutes. It is exactly because of this
differentiated approach, Sony is able to market their unique products globally (Worldwide), in
return which enables them to maximize the returns on both research & development
expenditures.
The competitive advantage of Sony Corporation could be persistent provided the company would
continue to emphasize on its core competencies both inside & outside approach. Sony
Corporation should not be satisfied with the things they already know about their competitors and
should make every effort to find out things about its competitors that cannot be clearly noticed.
However the corporation has to be strongly aware of the latest technological changes both
(inside & outside approach). In the consumer market, Sony Corporation has gain much success
as compared to its competitors like Samsung, NEC, LG, HP, Dell, Lenovo etc. but the
Corporation's future goal has to produce and sell more.
Sony Corporation has numerous core competencies by which they could gain more advantage
over their competitors another core competency of the company is its brand management. In
today's market structure most top companies including Sony find it very hard or difficult to create
any kind of sustainable competitive advantage based on product alone. The key internal
strengths of the Sony Company are the correct and effective marketing strategies, but there are
continuous changes and emerging condition in globalization, stiff competition and technological
innovation into which Sony has to improve its operational standards.
Porter's five competitive ForcesSource: (Mullins and walker, 2010: 82)
According to Michael porter view “the collective strength of these forces determining the ultimate
profit potential of the industry and the ability of firms in an industry to earn rates of return on
investment in excess of the cost of capital”. Technology is continuously increasing and the
electronic industry has a rapid growth. The present brands have made high entry barriers for new
entrants and its takes so long for the new product to be popular in the present market place.
Rivalry among Present Competitors“Rivalry occurs among firms that produce products that are close substitutes for each other,
especially when one competitor acts to improve its standing or protects its position” (Mullins and
Walker, 2010: 82)
Sony Corporation is the world top producer of the electronic devices and equipments. Sony is
having a big market share for hand held Computer OS. The usage of Sony Laptops in USA is
eighty percent and also Sony is holding a big share in hardware market as compared to its
competitors like Toshiba, Samsung, and Hitachi etc. In Laptop market Sony's major competitors
are DELL and HP both is providing standard class of computers to their attractive customers.
Sony is facing threat from Samsung Home theatre market and Cannon Digital Camera's, which is
coming to market with an effective policy and low cost strategies and this has lead Sony to
intense rivalry.
Threats of New Entrants“The greater the threats of new entrants, the less will be an industry's attractiveness” (Mullins
and walker, 2010: 83) As technology is continuously growing the entry of new electronic
company will have to face and deal with high costs for their introduction of technology in the
industry also they have to face marketing and advertising issues. Sony Corporation is facing a
great threat from its competitors like Samsung in Home theatre Products like (Plasma TV, Sony
Bravia). All Sony major competitors are establishing their distribution channels globally. Sony is
an emerging company with several hundred unique products but political factors for Sony can be
alter at any time because the government is holding the power to do amendments in trade policy
any time, so from this aspect Sony Corporation must aware of these governmental laws, which
can strongly effect its performance and weaken its competitive position.
Bargaining Power of Supplier“The greater the bargaining power of the key supplier to an industry, the less will be the overall
attractiveness of the industry” (Mullins and Walker, 2010: 84)
The suppliers of Sony Corporation are powerful as suppliers want a platform of industry and right
channel for their distribution & consumption. The suppliers of Sony Corporation's competitors
have relatively less bargaining power because the value of their products in the market is less as
compared to Sony products and still their product have to establish reliability or consistency in
the market. The brands of competitors are in conflict with Sony Brand where these products have
been able to protect the confidence of its attractive customers globally. Sony has unveiled plans
to rapidly boost its 3D product range over the next year, launching TV, Blu-ray and gaming
products with the technology.
Bargaining Power of BuyersIn the mobile computing industry it is fact that the bargaining power of the buyers is relatively low
and aside from Sony there are several more giant players in the industry. For price and model
customers are always having less bargaining power as they are all the time looking for cheap
price and also they have the power base of switching costs which allow them to buy the same
kind of products with cheaper price but different classification. Electronic industry has a big
customer base and companies should focus on the market trend. Sony is targeting market from
different aspects while covering every age group for game and home theatre entertainment.
Sony Corporation is now become a brand name with unique and attractive products and getting
customer attention quickly and also makes them to buy a vast range of products.
Threats of Substitute ProductsCompetition in the industry is always on the peak and alternative products of the same purpose
are always available at a low price and minute margins. In electronic industry competition never
stops, to get better results manufacturer are using every market planning strategy to attract
customers for their own products and also spend or invest a lot of money into product marketing
and advertising activity. Customer is looking all the time for quality and brand name. Sony
laptops are little expensive as compared to DELL and HP also play station 3 if we compare it to
XBOX 360 is much more expensive. But Sony strategic management and marketing policies are
much better as compare to its competitors like Cannon, Nikon, HP, DELL, and Lenovo etc.
Section 3: Marketing MixThe main concept of marketing is the Marketing Mix that includes all the necessary marketing
issues that a company could adopt and follow to influence and attract the customers towards
their product and services. The marketing mix decisions generally relies on 4 P's such as
Ø Product
Ø Price
Ø Promotion
Ø Place
PRODUCTProduct Mix:Any tangible or physical things or services, that satisfies a customer need is often referred as
product. As this satisfies the customer by providing their functional requirements, the product is
considered as the core element of Marketing Mix.
Sony Corporation is the parent company of Sony Group and is the electronics business unit. The
various products of Sony Corporation are explained below
Product Line and Product Mix:Product Mix:The total brand sets that are marketed by a company is termed as Product Mix. Product mix is
the total sum of the product lines of the organization. The Product mix of the Sony Corporation
falls under different categories such as
Ø Electronics
Ø Entertainment
Ø Games
Ø Financial Services and others
Product Line:The total set of product items and variants offered by the company, which are closely related in
their functions and benefits are known as Product Line. The product line of Sony Corporation is
as follows:
a) Television and Home Cinema
b) VAIO Computing
c) Digital Cameras
d) Printers and Photo frames
e) Camcorders
f) Hi-Fi and Home Audio
g) MP3 Players and Portable Audio
h) Car Audio
i) Reader eBook
j) Sony Ericsson Mobile Phones
k) PlayStation
l) Recording Media and Batteries
m) Accessories and Headphones
With all these types of Sony Corporation Product two products such as Television and Home
cinema, and VAIO Computing has been described in detail as they both are considered to be the
core products of Sony Corporation.
ü Television and Home Cinema:There are a wide range of products of Sony Corporation in the category of Television and Home
Cinema based on their style, purpose, performance and model. The products of this category
are:
i) Bravia Television
ii) Home Cinema
iii) DVD and Blu-ray DiscTM
iv) Projectors
v) Compatible Accessories
Source: http://www.sony.co.uk/hub/bravia-lcd-televisions?navigationSource=wep
Sony Corporation covered major areas in the style and models according to their functionalities.
Sony followed the strategy of satisfying customer needs according to their segmentation that is
the demand for the accessories such as DVD players, projectors, Bluetooth adapters and other
accessories related to the Television category has been covered by Sony. The recent television
release of Sony is KDL-52NX803, full HD 1080, ultra slim, built-in Wi-Fi, Smooth blur-free in fast-
action scenes and built-in tuner for easy access to free view HD
ü VAIO Computing:Sony provides latest technology IT Devices in order to attract the market and the customers by
fulfilling their needs. Sony produced different configuration laptops and Desktops/Notebooks. The
Brand name for their laptop is VAIO which means Video Audio Integrated Operation; this has
been currently redefined by Sony as Visual Audio Intelligent Organizer to indicate their customer
about their improvised ‘Quality' and ‘Design'. Categories of VAIO computing are:
Ø VAIO Laptops
Ø Business/Customized Notebooks
Ø VAIO Accessories
Ø VAIO Software
The recent introduction of Sony VAIO laptop is FW series that has a revolutionary 16.4” real wide
display which enhances the multimedia entertainment. This display fits best for office use by
allowing the user to open two maximized windows and work simultaneously making the multi-
tasking ease. The introduction of Sony JS series is a multi-purpose desktop that allows the user
to enjoy wide screen display with latest Processor, 500 GB hard drive capacity, 3GB DDR2
SDRAM, face tracking technology, automatic zoom adjustment, integrated echo proof
microphone, and five times faster wireless connectivity. The JS series is an award winning
desktop.
Brand:The brand name of Sony corporation product is Sony which is common for electronics and other
products, and specifically, Bravia brand for Televisions of Sony Corporation and VAIO brand
name for the computer peripherals, which is familiar around the world for its consumer electronic
products and gaming systems.
The following figure depicts the category, brand and variants of Sony Corporation:CATAGORY
BRANDS
VARIANTS
Source: Jobber.D (2007), Principles and Practice of Marketing, 5th Edition, pp: 328
The following table illustrates the world top 20 brand ranking for the consumer products (ABI Score 2009) Sony acquired 9th position in it:World Top 10 Brands (2009) according to ABI Score:
2009 Ranking
Brand
2009 ABI Score
1
Microsoft
49.1
2
47.4
3
Australia Post
45.3
4
Bunnings
44.7
5
Bonds
42.5
6
Cadbury
42.2
7
Nokia
41.2
8
Vegemite
40.6
9
Sony
40.0
10
McDonald'sThe engagement scores for the world's top 100 brands 2009, rated Sony Consumer Electronics
product in 18th position, the following table depicts the position of Sony:
Engagement Scores for the World's Top 100 BrandsSource:http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_2009.pdf
The following graph depicts the interest and usage of Sony digital camera according to the
gender. The graph shows that 18% to 30% of men and 30% to 45% of women use Sony digital
camera:
The worldwide combine market share for Sony Corporation for its notebook and PC during the
year 2009 is shown in the following figure:
Source: http://www.guardian.co.uk/technology/blog/2008/dec/10/acer-asus-netbooks
Sony secured 3rd position in the top 5 LCD TV Brands in North America rated by unit shipments:
Top 5 LCD TV Brands in North America: 2009 Ranking by Unit ShipmentsQuality:Sony Corporation leads the quality and reliability for its LCD TV Brand with better clarity in
picture, sound effects, ease of use and low problems.
Services:The support and maintainability for the troubleshooting, repairs, upgrades and operations in PC
and laptop of Sony is better than many other products. This could be shown from the following
graph where 9% of the product is easy to support, 33% is Ok to support and only 9% of the
whole products is hard to support:
Maintainability and Service Graph of Different PC and Laptop Manufacturers:Price Mix:Setting Price for the product considered as the essential and important one in marketing as price
is a revenue earner and it would be the return to the company for its effort in manufacturing and
marketing a product. If the price of a product does not cover the costs made for the product then
the company would acquire a loss, therefore price of the product should be not be set in isolation
rather it should be blended in accordance to the other 3 P's.
The Demand Curve:One of the important concepts of pricing is demand. The relationship between the demand and
the pricing is given by the following demand graph. The graph describes that when the price of
the product increases, the sales will be low with a decrease in demand which do not require
more quantity of the product. If the price is low, sales would increase and the demand will be
more which increases the requirement of the quantity of the product.
Source: Jobber.D (2007), Principles and Practice of Marketing, 5th Edition, pp: 458
Pricing Methods of Sony Corporation:There are three methods of pricing based on the cost of the product, competitors for the product
and the marketing of the product. The products of the Sony Corporation are priced on the basis
of the Cost of the product and Competitor of some of its electronics products, and very few
products are priced according to the marketing
Source: Jobber and Fahy (2003), “Foundations of Marketing”, McGraw-Hill, pp: 164
Pricing Strategies of Sony:
There are various strategies for pricing such as premium pricing, economy pricing, psychological
pricing, product line pricing, optional product pricing, captive product pricing, product bundle
pricing, value pricing, geographical pricing, and promotional pricing. Sony follows the pricing
strategies such as:
Ø Premium Pricing
Ø Economy Pricing
Ø Psychological Pricing
Ø Product Line Pricing
Premium Pricing:The core product of Sony comes under Premium pricing. The following products are some of the
premium priced products the sample price for them are also provided:
Ø Bravia LCD TVs: Price ranging approximately from £250 to £1600 according to the different
model and functional facilities
Ø VAIO Laptops and Desktops: Price ranging from £250 to £2175 depending on various
configurations and performances
Ø Projectors / Home Audio: Price of the projectors ranging from £153 to £770 and the Home
Audio prices range between £150 and £1500, the price of home video
Economy Pricing:Some of the product of the Sony Corporation adopts economy pricing that is products with low
price and high quality, such as:
Ø Digital Cameras / MP3 Players: The economy pricing of Sony digital Cameras are from £100
to £1600 and for MP3 Players - £35 to £360 with high quality audio
Ø Car Radios: Car radios of Sony Corporation ranges from £50 to £150 according to the audio
effects
Ø Mobiles (Sony Ericsson): Sony Corporation released variety of mobiles based on their styles,
functionalities and performance ranging from £40 to £475
Product Line Pricing:Sony Corporation released variety of products and their sub-products based on their style and
performance. For Example Sony VAIO has many sub-products based on their configuration in it
such as VAIO F series, FW series, NW series, Z series, W series, AW series, P series ranging
from £250 to £2175.
Psychological Pricing:The Sony Corporation also provides the products under psychological pricing strategy that
attracts the customers psychologically. For example, some of their products such as Digital
Cameras ranges £99 instead £100, MP3 ranges from £29 instead of £30 and Bravia TVs from
£249 rather £250 and VAIO laptops from £1599 instead £1600.
Penetration Pricing:The launch of some new products of Sony Corporation would have a low price with high quality
(Penetration Price) in order to enter in to the market. Some of the VAIO laptops of Sony have a
price range of £300 to £500 approximately as a penetration price. This price will be modified later
once when the product became familiar among customers or when the demand of that product
increases.
Skimming Price:
The Skimming price strategy is used by the company that provides high price products for the
customers who do not focus on price of the product. Sony Corporation provides very least
products in this strategy, such as MP3 Players prices £350 and some digital cameras pricing
£1500.
Price - Quality Matrix for Sony Corporation Products:Many of the core products of Sony Corporation possess high quality with high price that are in
premium positioning such as VAIO laptops, VAIO Desktops, Bravia TVs, XPLOD and play
station. Some of their product's quality is medium with medium price that are considered to be in
the medium value position (Economy Pricing), such as, printers, photo frames and MP3 players.
Products such as Digital Cameras, Batteries, and Home Audio etc are of high quality with
medium price that are considered to be in value position.
QualityLow Medium High
Low
Price Medium
High
Source: Marketing Management: Class Notes [03 March 2010]
Pricing Issues:Sony Corporation provides discounts for their products as Seasonal offers, during Christmas Eve
and New Year era, they also provides summer offers. The Premium products such as VAIO
Computing and Bravia LCD TVs will have medium cost during the offer time and the products
with medium price like MP3 Players and Digital Cameras would be provided in economy pricing
range.
Sample Price Comparison for Sony Corporation:The following table provides a price comparison between Sony VAIO laptops and Toshiba
according to their configuration, performance and functionalities sony vaio price graph
Promotion Mix:The promotion mix includes the following key characteristics that a company follows to promote
its product:
Ø Advertising
Ø Personal Sales
Ø Direct Sales
Ø Sales Promotion
Ø Public Relations and Publicity
Ø Internet Promotion
Promotion Mix of Sony:Sony follows all the six key characteristics of Promotion mix in order to promote its products:
Advertising:Sony Corporation spends $3.6 billion (Mike Bradbury, Neal Kissel, 2006), every year for
advertising its products in order to push its products to the customers and pull the customers
towards their products. During 2007 and 2008 they have reduced their advertising expense by
50% due to recession, but currently they have improvised their expense in advertising to same
(Mintel: April, 2009). Sony Corporation advertises its products in adopting many different ways
and media. For example, majority of their advertisements is on television for their core products
such as, Bravia LCD TV and VAIO laptops. Some of their products such as Playstations were
promoted through sports, like Football in England Premiere League. Advertisements were also
published in various newspapers and Magazines in order to make people aware about their
products.
Sony also supports Co-Operative advertising, which provides materials and guidelines to their
dealers such as ‘Sony World' for promoting advertisements in television and radio commercials,
here the media costs will be shared between the Sony Corporation and the dealers.
Direct Marketing:Sony covers a wide range of methods for promoting its products directly to customers:
Ø Telemarketing: Sony hires some companies for marketing its products through telephone
using both in-bound and out-bound call centres. In January 2010, Sony Corporation provided
IBM to outbound its part of Business processes (Source: sony.net, January 2010).
Ø Direct-Response Advertising: The promotion of the Sony products are also done by direct-
response advertising that is, providing coupon to customers and getting their feedback or by
providing ‘phone now' options.
Ø Catalogue Marketing: Sony frames its products catalogue about their various products and
provides to customers for promoting its new featured products among the People
Ø Electronic Marketing: A wide range of ads are place in Internet, E-mails and Interactive Cable
TVs which promotes the recent release consumer electronic goods to customers.
Ø Inserts: Many of the ads of Sony products features and functionalities are placed as leaflets in
some of the magazines. Door to door leafleting is also carried out in some of the places.
Sales Promotion:The sales promotion is usually done in two ways:
Ø Consumer Promotions: this is done by offering coupons, Premiums, Money off, Bonus packs,
free samples, Prize promotions and loyalty cards.
Ø Trade Promotions: This is processed by providing pricing Discounts, Allowances, Competitions
and free goods.
Sony supports the two promotions by providing: Money Off, Seasonal offers during Christmas,
New Year and Summer time offers, in order to increase its sales. They also provide premiums
such as warranty and free services to customers who purchase some Premium products.
According to a report Sony sold 20 million units of its product Playstation3 during the year 2008,
in order to promote and increase its sales further Sony planned and reduced the price for the
Playstation3 which improvised the sales for 2009 as expected by the company (Mintel, 2009).
Sony promoted its Mobile product Sony Ericsson P1i by providing free scratch cards that would
allow the customers to download 10 free Software for that mobile phone. Also Sony Ericsson
K550i provided an offer of free Bluetooth headset and a year Manufacturer's warranty, when
purchased.
Public Relations and Publicity:This characteristic provides importance to the other groups besides customers and distributors,
such as shareholders, the local community, employees, government, pressure groups and
media. The activities of public relations include publicity, lobbying, publications, corporate
advertising, charitable donations and seminars (Jobber.D and Fahy.J, 2003).
Sony Corporation supported Cause-Related Marketing, For example, to support the
environmental education and green power installation, Sony Corporation collaborated with the
“Solar-bear” fund where Sony Corporation donated a part of their retail batteries and battery
chargers sales revenue. The money has been donated to three kinder gardens and nursery
schools. In the website of Sony corporation contacts of them is published for the customers to
contact the company regarding any of the products or services. This would maintain a good
relationship between the customers and the company is easily reachable by the customers as
well as the distributors. Sony also provides charitable donations with its increased sales. Sony
gained prestige and reputation from the customers by following all the government legal issues
which maintains a good relationship with the government. The publicity for the Sony product is
made by providing the news to the media, about the new release products, reduction of prices for
their products, about seasonal offers and about their company upgrades.
Personal Selling:The process of selling the products to the customers directly by the company either face-to-face
or through a medium is known as Personal selling.
Sony supports personal selling by selling its products directly to its customers through its
website. All the details about the various categories of products are displayed in the Website of
Sony Corporation. The customers could verify the details of the product and compare their
prices, and could purchase the products directly from the website. This would offer an ease of
purchase to customer and would develop trust among them about the company.
Place Mix of Sony:The marketing decisions on place that is distribution of the products of the company should focus
on the adequacy of the product quantity and customer needs.
Distribution Channels of Sony:There are four main types of channels for distributing a product such as:
Ø Producer -- Consumer
Ø Producer - Retailer - Consumer
Ø Producer - Wholesaler - Retailer - Consumer
Ø Producer - Agent -- Wholesaler - Retailer - Consumer
The Sony follows the following distribution channels:Source: Jobber.D (2007), Principles and Practice of Marketing, 5th Edition, pp: 682
Ø The product is distributed directly from producer to retailer through Online that is allowing the
customer to place the order in the website of Sony Corporation and delivering the requested
order directly to the customers by sending the order to their address.
Ø The other channel of Sony is distributing the products to the distributer or retailer where the
customers could purchase the products from the retailer by visiting to their showroom.
Ø Sony also supplies the product to the wholesalers who then sells the product to the retailer
where the consumer could buy the goods directly by making their presence over the branches of
Sony such as Sony World, Sony Centre, Sony Shop and many other Sony retail outlets. The
Sony stores location could be found by accessing their website
http://www.sony.co.uk/dealerlocator/search
Distribution Intensity:There are three types of intensity according to the nature of the product. They are Intensive
distribution by utilising all the available outlets, Selective distribution by utilising limited number of
outlets, and exclusive distribution where there is only one wholesaler/retailer available in one
sales area.
Sony Corporation's distribution intensity is “Selective Distribution” by providing products to the
selective dealers.
Sales Channels of Sony:Sony Corporation supports three major sales channels:
1) Direct Sales channel
2) Dealership Sales channels
3) E-Commerce
Sales of the variety of the products of the Sony Corporation, is made through the company's
website which is the direct sales. The alternative way of Sony Corporation in selling their
products is by selling the products to dealers who then sells to customers. The most widely and
ease of purchase for the customers worldwide is through E-commerce that is by selling the
products via marketing websites such as Amazon, ebay, etc,. Mostly the price of the product
purchased by the customer using either of the methods will not be affected. But the prices may
vary from the rural areas to urban areas.
Section-4: Sony Corporation's SuccessAs per the brand message “make.belive”, the Sony Corporation signified it spirit of ability and
creativity in turning ideas into reality by innovating new products and implementing new
technology in them. Sony products are good in quality and satisfactory to customers for fulfilling
their needs. The company's success could be observed from the release a new products and
technologies to world and leading the top in the list of semiconductor manufacturing. Sony's
achievements and product fame could be estimated from the surveys made by the media in
which soy has been placed in top 10 to top 20 worldwide brands.
The migration of the electronic services to the digital services raised Sony's market by showing
its innovation strategy to the world. Customers also felt that the prices of the basic products are
medium with a good quality. Sony influenced most the worldwide customers with its wide range
of products that includes various functionalities and high end performances. The Quality of the
products that are manufactured by the Sony Corporation seem to increase every year. But there
are some minor defects with their parts such as non-longevity of the batteries of the laptops.
Sony concentrates on marketing the products of it in order to make them available in the
customer's view. Sony keeps on releasing new products by delivering new technologies and new
products for the consumers. As the product's prices are fair with the good quality and
considerable service, Sony seemed to retain its customers with it, with improvises or stabilises
the revenue of the company.
The company sticks to its strategy by following it strictly which make it differentiated from its
competitors. Sony Corporation tends to release new products by March 2010, such as world's
first ‘Demodulator LSI for DVB-T2'. Sony joins with discovery communications and IMAX to
launch the world's first 24/7 3D Television Network in U.S.
The following are the recent successful news about Sony:
Ø Sony opened the 3D technology in Sony Picture Studios
Ø Sony Corporation develops the World's first ‘Millimeter-wave wireless Intra-Connection
Technology for internal high speed data transfer in electronic products which observes 11Gbps
transfer speed with footprint of 0.13mm'.
Ø By acquiring iCty Sony enters the Flow Cytometry business in life science
Ø With 9 top accolades Sony designs Excel
Ø For the large Projectors Sony Corporation produces Laser light source module that is highly
efficient
Ø Sony and FIFA announced the world's First 3D FIFA world cup
Ø Sony Corporation commercialized the world's first ‘TransferJet' Compatible LSI
Ø Based on Magnetic Resonance Sony developed Wireless Power Transfer System that are
highly efficient which transfers electrical power of 60 Watts over 50cm distance
Ø High frame single Lens 3D camera Technology was produced by Sony that captured high
quality 3D images at 240fps
Sony Organization's Downturn:The sales and operating revenue of Sony has been decreased from the year 2008 to 2009. Sony
Corporation has also suffered during the recession period of maintaining its revenue even it is
not possible to improvise the revenue during the period of recession. But the sales had been
decreased from 8.9 trillion yens to 7.7 trillion yens with a 14% loss in sales. The following
financial charts explain the downturn of sales of Sony Corporation clearly. As the sales and
revenue gone down the Operating income of the organisation gone down simultaneously,
resulting in a loss of operating income from 475.3 billion yens (including equity, 2008) to 227.8
billion yens (including equity, 2009) with a 52% loss in Operating Income.
Financial HighlightsSource: http://www.sony.net/SonyInfo/CorporateInfo/qfhh7c000000lpn1.html
The net income decreased as the sales and the operating income reduced. In 2008 the net
income of the company is 369.4 billion yen, while in 2009 the net income is 98.9 billion in yen.
The loss in net income is 73% when compared to the previous year.
Source: http://www.sony.net/SonyInfo/CorporateInfo/qfhh7c000000lpn1.html
The capital expenditure has been reduced from 335.7 billion yen in 2008 to 332.1 billion yen in
2009, which shows that the company focuses on ‘Cost Reduction'. The R&D investment is one of
the expenditure and cost saving function where the company reduced the expense of R&D from
520 billion yens in year 2008 to 497.3 billion yens in 2009.
Financial HighlightsSource: http://www.sony.net/SonyInfo/CorporateInfo/qfhh7c000000lpn1.html
The following graph shows that the U.S Market share of Sony has been decreased from 30% in
2008 to 36% in 2009. The Market share of Sony Corporation seems to decrease for the past
three years when compared to Ninetendo.
industry-marketshare-by-stakeholder-2009Source:http://www.blogcdn.com/www.joystiq.com/media/2010/01/industry-marketshare-by-
stakeholder-2009.png
The causes for their downturn is due to their concentration in reducing the overall cost towards
the organization in manufacturing and selling the products. The price of the Sony products are
considered to be fair by middle-class people but the people below the middle-class feels difficulty
in affording price to the Sony products. The following are some suggestions to stabilise and
improvise the company's Competitive advantage.
SWOT analysis:The term SWOT means Strengths, Weakness, Opportunities and Threats. SWOT is an efficient
tool to identify and evaluate current business strategies and entities. It is composed of internal
strength and weakness of a business as well as the external opportunities and threats. [Sandler,
D.M. and Shani, D. (1991)]. Every organization uses SWOT for their improvement and to self-
estimate them. SONY uses this SWOT to improvise them and to provide customer satisfaction.
Strengths:SONY is well known by its name thus it possesses all its strengths. Concentrating on high quality
of products and focusing in one kind of stream (Electronics) and rooting all around. Positioning in
first three places in all the sectors it involved. Focusing on customer oriented products and
services and successful in introducing a new product in the market. Improving the performance
each and every time and learning from the past and customer's feedbacks. Increasing market
share and establishing distribution networks provide more support to the organization.
Weakness:The main weakness for SONY products are the demand is not consistent and it's seasonal and
depends on external environmental factors like good monsoon, recession, political situation etc.
Poor communication within the functional departments and poor management in some sectors.
Centralized power and arising conflicts between the divisional branches.
Opportunities:The Uniqueness in product range will gain strengths and opportunities. Making the products cost
effective is an alternative successful strategy. Expanding the sales in areas such as India, a
highly populated country will gain the advantage over sales and services. But to expand they
need the proper marketing techniques and technicians.
Threats:The increased competitors are the biggest threat for every organization and for SONY as well.
The competitors for SONY are Microsoft, DELL, HP, Apple etc., SONY possesses a threat of
holding its position in the market in sales and service. The changes which occur in the
technology in quite period of time for example, in digital arena the change from VCDs to DVDs
and now DVDs to USBs and Hard disks. These changes affect SONY's growth and
improvement. Sudden change in the market like recession which influences the organization and
forces it to reduce the price is also a considerable threat. Poor infrastructure in some branches
no proper involvement of management will increase all these threats.
Recommendations for Changes and Improvements to Stabilize Competitive Advantage:The concentration of the Sony during recession was to focus on their Cost for the products and
to reduce the Cost, by minimizing the capital expenditure and other expenses. In order to
implement this strategy further Sony started to reduce their investment in marketing expense by
50% during the year 2009 and the company also reduced their research and development
expense.
The competitors for the market are increasing rapidly according to current market trends. The
Sony Corporation hold a good brand name and brand image for their products. It is necessary for
the company to maintain the brand name and the brand image towards its customers in order to
retain their customers with them.
As the Sony's Competitive strategy is to provide product Uniqueness and Innovation, it is
essential to maintain the constant innovation process for the products and it is necessary to
invest in the innovation. Showing differentiation in their products is their ultimate aim and they
trust that only the product differentiation would make them stand in the market. In order to
provide differentiation in products it is suggested to concentrate on constant innovation for the
products which could be carried out by the research and development department and technical
department. So the cost for the research and development should not be avoided so as to
maintain the competitive advantage of the company of the company. From the above graph it
could clearly identified that the Sony Corporation has reduced the investment in R&D though it
cannot maintain or improvise its revenue rather resulting in a loss. Further they have focused to
maintain and reduce cost without focusing the profit and sales, that made them to acquire a
considerable loss in their sales, income and net profit.
Moreover marketing is very important for company to make its product reach to the customers
which would improvise the sales. Without marketing the new products would stagnate in
inventory, inspite of reaching the customers. In order to attract and influence the customers it is
necessary for a company to concentrate in marketing their new products in appropriate way. As
the Sony Corporation is highly inventors that they tend to release new products often, it is
mandatory for them to ‘invest more money in marketing' for introducing new products to the
customers. But Sony has reduced 50% of its marketing expense, this should be modified. Sony
should invest more in marketing for convincing the customers and to make them aware about
their products.
We have seen before that Sony has reduced the price of Playstation3 and improvised their sales
more than 20 million units worldwide. This shows that, if the Sony's premium product's prices are
reduced to a considerable price then they could improvise their sales in all the field of products
they manufacture. Thus they should consider in ‘reduction of product prices'.
It is also necessary to consider that innovation is hard to subsidize with cheap costs. That is if the
products are manufactured with very cheapest machine in order to cut off the cost, the product
thus produced will not be good enough to have longevity and maintain a good quality name for it.
This problem would minimize the sales of those cheapest product produced from cheapest cost
machines. Hence care should be made in investing money in manufacturing products and there
should not be a tight cut off of cost for producing a quality and highly innovative products.
When considering the Boston Consulting Group growth-Share Matrix the position of the Sony
Corporation is “Problem Children”, which is considered as cash drains, as they have low
profitability and therefore require some investments to maintain their market growth. The
company need focus in turning the problem children into star where the market growth in high
and stands as market leader. The following figure illustrates the market growth-share matrix of
the Sony Corporation:
Source: Jobber and Fahy (2003), “Foundations of Marketing”, McGraw-Hill, pp: 140
It is necessary for the Sony Corporation to maintain its website more reachable to customers.
They provide all the products recent details in their website but the marketing for their website is
low. The website should be marketed to people and even the people from the rural areas. Some
of the offers for the products should be extended by the Sony Corporation.
Sony's Product Growth Analysis using Ansoff Matrix:The basic alternatives for the business directive in future could be given by the analysis of the
Ansoff Matrix for the Sony. The following are the four elements in Ansoff Matrix:
Ø Existing Products and Existing Products: Market Penetration or expansion of the product by
the organization
Ø New Products and Existing Market: Product development in the organization
Ø New Market and Existing Product: Organization should focus on Market development
Ø New Market and New Products: Diversification strategy
The following figure explains the product growth strategy of Sony in Ansoff Matrix:
Products
Existing New
Existing
Markets
New
Source: Jobber and Fahy (2003), “Foundations of Marketing”, McGraw-Hill, pp: 140
Sony Corporation concentrates on the Product development as they currently exist in market and
in developing new products. In order to improvise its current profit Sony need to improvise its
sales which could be made by developing its products or creating new products to the people.
Therefore to stand in the market it is necessary for Sony to release new products further by
concentrating on market and improvising its marketing investments as new products should be
promoted and to be insight of people. Taking these steps would improvise Sony's profits.
Conclusion:On a sense of balance, as a universally operating corporation in consumer electronics, Sony is a
successful corporation with a noble brand image with many successful products. It had ups and
downs as any other company in its marketing practices all over the world. Based upon the
research we can identify and analyze the marketing strategies of SONY and we recommended
the useful ideas to implement and improvise the business and take it to a position at number 1.
Thus we thank our Coventry University for giving us an opportunity to explore marketing
techniques and develop our management skills for a competitive workplace environment.
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