15687192 Marketing Report On Sony

Introduction to Marketing SONY VAIO

ACIM Aishath Seena 000018283 Aishath Shaheedha 000017573 Shahuleeza Mohamed 000017497 Eanath Ibrahim 000017593 Mariyam Nixna 00009274

Introduction to marketing

Table of contents Introduction_______________________________________Error! Bookmark not defined. Marketing Practice__________________________________________________________________3 Marketing Environment______________________________________________________________3 Macro Environment_______________________________________________________________4 Political________________________________________________________________________4 Economical_____________________________________________________________________4 Social__________________________________________________________________________4 Technological__________________________________________________________________5 Micro Environment_______________________________________________________________5 Customers______________________________________________________________________5 Suppliers_______________________________________________________________________5 Competitiors_____________________________________Error! Bookmark not defined. Employees______________________________________________________________________6 Marketing research_________________________________________________________________6 Consumer Behaviour________________________________________________________________6 Need recognition_________________________________________________________________7 Information search________________________________________________________________7 Evaluation of alternatives__________________________________________________________7 Decision making_________________________________________________________________7 Post purchase behavior____________________________________________________________7 Branding alternatives________________________________________________________________7 New Product Development___________________________________________________________8 Idea Screening___________________________________________________________________8 Concept development and testing____________________________________________________9 Marketing strategy development_____________________________________________________9 Financial analysis_________________________________________________________________9 Product development______________________________________________________________9 Commercialization________________________________________________________________9 BCG matrix_______________________________________________________________________9 1

Introduction to marketing Star__________________________________________________________________________10 Question______________________________________________________________________10 Cash Cow_____________________________________________________________________10 Dog__________________________________________________________________________10 Ansoff Matrix____________________________________________________________________11 Market penetration______________________________________________________________11 Product development_____________________________________________________________11 Market development_____________________________________________________________11 Diversification__________________________________________________________________11 Conclusion_______________________________________________________________________12 Reference list_____________________________________________________________________12 Reference list____________________________________Error! Bookmark not defined.

SONY VAIO Introduction This is a report based on a sub brand of Sony, Sony VAIO. Shortly in this report we will portray the marketing practices of Sony Vaio to stand against their biggest competitors Dell, HP and Apple Macintosh with its magnificent features. Sony is one of the global electronics company with its headquarters in Tokyo, Japan with an estimate of 163,000 employees (Sony Corporation, 2008). The sub brand of Sony, Sony VAIO stands for “Visual Audio Intelligence Organizer”. Sony Vaio was first introduced by Timothy Hanley in US in early 1996 as a major player in the laptop market across the world. 2

Introduction to marketing Today, Sony is positioned among the top five global brands worldwide with $8.87 trillion a year. “Sony’s sales performance for the next year is expected to see revenues rise by 1 percent to $9 trillion” (Sony Revenue and Profits Rise as Europe Becomes Biggest Games Market, 2008).

Marketing Practice Sony started Vaio business in Asia in 2000 with a customer oriented business platform. It uses the marketing concept as its marketing management philosophy which identifies, anticipates and satisfies customer requirements profitably. Vaio’s target market is the youth market that looks ahead of the speed and memory into design. Consequently it comes in variety of colours like Blazing Red, Indigo Blue, Pure White, Beauty Pink and Aroma Black.

Marketing Environment In the evolving economy of 21st Century in an ever more linked world, companies must be excellent in customer relationship management to keep up with the expectations of the customers, clients and the external environment of the company. However to do this, businesses should understand it’s inside and outside environment before beginning the marketing process which will influence the business and its relation with the target buyers as, “Marketing environment consists of the factors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers” (what does Marketing Environment mean,2009). The marketing environment includes MACRO and MICRO factors, the external and internal analysis of the business.

Macro Environment The vital roles of ecological issues result in businesses adapting to green practices and extensive use of the PEST structure. PEST analysis thoroughly reflects the MACRO environments influence on political, economical, social and technological factors.

Political Political factors include the government’s ideology towards the business, the legislations to go through and the governments support for the business. The rules and regulations like taxes, subsidies and minimum wage acts affect businesses in both optimistic and pessimistic 3

Introduction to marketing ways. Subsidies or the financial grants may facilitate the business to expand whereas trade restrictions might have a negative affect for a globally operating company like Sony.

Economical Economic factors consist of the income level, pattern of consumption, exchange rates and inflationary level of the economy. As now the world economy is in a bad shape, people will have less buying power and the pattern of consumption of people or how often people buy will be less. Furthermore, exchange rates have been falling persistently making Sony importers and Sony suffers badly for the first time in history. “The company blames the global economic downturn and the strength of the yen for a lesser demand for its products” (Sony's first loss in 14 years, 2009).

Social Social factors include the demographic and the behavioral aspects in an economy. In other words social factors are all about people. It consists of population growth rate, age distribution and cultural aspects. As Vaio laptop is also targeted for business people, economy’s working age group and their income level also should be taken into consideration. Social factors also include working for economy’s best interests like Sony has been promoting science education for children as stated among the social contribution activities in its official website. “The Sony Corporation and its subsidiaries immediately donated 4 million dollars to disaster relief funds. It donated 3 million to the American Red Cross Disaster Relief Fund (NY chapter), as well as 1 million to the Twin Towers Fund, which benefits emergency personnel affected by the tragedy” (Sony, 2001)

Technological Finally the technological factors include the research and development activities. Laptop industry is represented as ongoing developments in high quality and design resulting in several introductions of new products. Like in 2006 Sony produced the World's first Blu-ray equipped notebook just weeks after the launch of Toshiba’s Qosmio G30 notebook (Sony VAIO VGN-AR18GP, 2006). Hi-tech technology is being used to improve working process through new machinery, software’s etc... to keep up with the speeding and high turnover of laptop products establishing cost effective ways of inventing high quality. 4

Introduction to marketing

Micro Environment Businesses should not merely focus on building relations with their external environment but also they should have good relations among the internal environment of the business, the MICRO environment. Internal factors have direct impact on organizations strategy, counting consumers, employees, suppliers, competitors and media.

Customers Why no customers? No clients? There is no business when there are no customers and no clients. Sony can only survive on the basis of meeting the expectations of Sony customers worldwide. Failure to do so will result in disastrous business approach.

Suppliers As boost in raw material prices have a knock on affect on the marketing mix strategy of any company like Sony, keeping closer relationships among the suppliers guarantee that they formulate competitive and quality products to the company.

Competitors The competitor market should be evaluated to grant a better product and uphold the position in the market. And in a market economy, it is only through competition that the true price of anything can be determined. Among Sony’s competitors comprise the Dell Company with Ultra-slim Adamo Notebook, HP with HP Pavilion G60-120US and Apple with its MacBook Wheel, competing in the laptop market.

Employees Employees are the back bone of any business. Keeping these staffs motivated is an essential part of Sony, as training and development plays an essential role in consumer electronics industry. Their staffs are well trained for it.

Marketing research Marketing research can be defined as systematic gathering, recording, analyzing of data about problems related to marketing of goods and services and its objective is to identify and assess how changing elements of the marketing mix impacts customer behavior. Here we will suggest ways for Sony if Sony had to do marketing research in Maldives. Marketing research 5

Introduction to marketing in Maldives will not have to be expensive because transportation costs inside Maldives is not too expensive as this is a close- knit society. They can do it for least charges as we are only three million as a whole occupying an area of just 300 sq km. They can conduct focus group studies asking people about their attitude towards a product or the concept. Questions can be asked in a place where participants are free to talk with other group members. They can also do market perception studies by carrying out series of surveys assessing the markets opinion of their performance, the degree to which they meet customer needs and of course people’s perception on their brand name. Various factors like consumer behaviour and culture should be taken into consideration as different cultures follow different practices and a product might not suit the particular market. Most importantly they have to understand the competitive environment that consists of other firms trying to win customers that take account of all instant business rivals of the company.

Consumer Behaviour Consumer behavior is defined as an appropriate marketing stimulus based on customer personality of how people buy what, when and why they buy. The steps involved in consumer buying process are…

Need recognition The buying process starts with need arousal. When you feel you need something and you miss something that’s when a need is activated. A student may need a laptop to study and an office worker to do his work. It might be the peer pressure of his co workers or he might be a person doing his office work in the comfort zone of his house meaning telecommuters.

Information search Here the consumer gathers the sources of information about the product. In this stage Sony can influence the consumers with providing information on internet which consumers use mostly when searching for information. He may ask his friends and family and also may go to a laptop vendor. Here the company can make available leaflets about pricing and features of the product to vendors.

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Introduction to marketing

Evaluation of alternatives Having collected the information, the consumers clarify and evaluate the alternatives. Searching for a laptop the first thing comes to mind is hardware consideration. So Sony can make its product features and product prices more attractive than the competitors.

Decision making Here the consumer decides on which particular brand to buy. But sometimes people deviate from the final decision also because o unanticipated situational factors as looks or manner of the salesman or the way business is carried on.

Post purchase behavior After buying and trying the product the consumer will feel some level of satisfaction or dissatisfaction with the product. The dissatisfaction he feels about the product he bought is what we call dissonance. To avoid this Sony can give out a call to its customers to ask them if they have any problems or need any assistance regarding the product which will make the customer feel valuable.

Branding alternatives Four Branding Alternatives is a strategic marketing communications technique. It is a fun and creative approach that can add value to any class that likes to discuss brands and how they could be innovatively developed (Four Branding Alternatives, 2009). A new product is developed when new ideas and meanings are introduced to the customer. Sony Ericssons Bravia TV phone can be an example. It’s an exotic looking super-flip factor phone perfect for viewing movies, which they launched after mixing up their sub brand Sony Ericsson and Bravia. With this Sony Ericsson BRAVIA you can experience high definition cinema in your hands. Flanker brand is when a new brand is introduced into a category where the organization already has established products. A possible example is the introduction of Sony VAIO series into the PC market. When a current brand name is introduced into a category where the organization already has established products, it is line extension. Sony recently launched Sony Ericsson Xperia X1 into their existing brand Sony Ericsson which is a good example of line extension. Franchise extension is when a familiar 7

Introduction to marketing brand is taken to a product category where it is unknown. It may be Sony entering the market for eco friendly motorbikes or cars.

New Product Development New product development is the term used to illustrate the entire technique of launching a new product or service to marketplace and promoting the product. It is the systematic search of ideas. An idea can be generated either internally or externally from R&D department or from the company employees or by just analyzing the competition. Sony have this concept called, VAIO ZOOM CONCEPT which is not officially a Sony concept. But we can say it is one of the most exciting and competitive product we will ever see.

Idea Screening This is where the ideas are taken into standard format and are verified for technical and financial viability and marketability. This concept is a laptop which has a holographic glass screen that goes translucent with a touch sensitive keyboard that turns opaque when turned off. This might sure not be easy to produce with the existing technology we have now. So the product should be technically tested to see whether they are financially in a good position to invest and whether they have the required technology to support.

Concept development and testing In this stage all the concepts and ideas are placed with other similar concepts and they try to sell the idea. But the laptop concept we have here is something with features that doesn’t really exist till now.

Marketing strategy development Here the probable selling prices are estimated based upon competition and even customer feedback is done. The sales volume based upon size of market and the profitability is assessed to place the product in market.

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Financial analysis The probable sales, profits and costs are reviewed as this is a product that surely will need much more advanced technology, the probable costs will be higher compared to any other product of the company.

Product development Here the Research and Development department generates the product focusing on production and quality of the product turning the idea into a product. These are products that are prototypes of the product to test physically for test marketing.

Commercialization This is where you go to the full length of the product. Here the decision to launch the product is taken and the 7p’s of marketing is applied. When, where, to whom etc… like if Sony make zoom concept a reality also the product will be targeted for first class prospects due to estimated high cost of production.

BCG matrix BCG matrix is a chart created by Bruce Henderson for the Boston Consulting Group in 1970 to help corporations analyze their business units. This helps the company to allocate resources and use analytical tools in branding and marketing (Growth-share matrix, 2009).

Star A star is when huge quantities of profit is produced because of the powerful market share and high growth rate. We can say Sony Cybershot camera is a star because they are the first who came into market with face detection technology with 40% of market share with no close competitors.

Question A product becomes a question when they have a lower market share and they do not generate much profit or cash. This is a good example of Sony BRAVIA. Because due to tough competition from Samsung Panasonic and other competitors, they couldn’t make as much sales as they expected and their market share was only 14.5% where as Samsung was leading 9

Introduction to marketing the LCD market with 27% of market share (Samsung number one in the UAE with a 27% market share, 2009)

Cash Cow We can say Sony Ericsson w980 from their walkman series is a cash cow. We say a product is a cash cow when the product show signs of that the come back on assets is better than the market growth rate, and makes more cash than they use. In case of Sony Ericsson W980, it’s a phone with touch sensitive music controls and an 8gb of internal memory which means you can store up to 8000 songs. This product positioned Sony Ericsson as a market leader in the music world.

Dog A product becomes a dog due to low market share and a low growth rate and when the product neither produces nor uses up bulky amounts of cash. Sony PlayStation 3 is placed in the category of dog because Ps3 was beaten up badly by Xbox and the company suffered a loss of 3billion. When the CEO of Sony was asked if it could make back the loss they made. He responded saying “Not for as long I live”. This shows how disastrous the product was in market (Sony CEO: Wii Business Model 'Superior,' Sony Won't Recoup PS3 Investment, 2009).

ANSOFF Matrix ANSOFF matrix is defined as ways to grow the business via existing or new products, in existing or new markets. This matrix helps companies to determine what path they have to follow and what action they should take under certain circumstances. The matrix consists of four market combinations or strategies including market penetration, product development, market development and diversification. Here we will see how Sony’s practices resulted in growing the business.

Market penetration In market penetration company enters a market with current products. Here we have the Sony BRAVIA LCD TV which became a question earlier. Then what they did was they relaunched the product this time with a promotion which was when you purchase a BRAVIA 10

Introduction to marketing TV you get their dog product, a PlayStation3 for free. Market penetration is said to be the least risky way for a business to grow.

Product development It is the approach of building up other products catering to the same market. In product development what Sony did was after the launch of Sony VAIO in 2000 in New Delhi, India, Just after 4 years they started a new business of IT peripherals targeting to the same Indian market.

Market development The third strategy is market development. Where an already existing product in the market is targeted to a diverse customer sector like Sony targeted their PlayStation 3 to children and after the maturity stage of the product it was targeted for adults.

Diversification And the fourth strategy is diversification where the company enters new markets with new products. Here we have taken the example of Sony Walkman because when Walkman was introduced into the market, there were no existing markets for portable music.

Conclusion On balance, as a globally operating company in consumer electronics, Sony is a successful company with a good brand image with victorious products including its VAIO series which we talked about in the beginning. It had ups and downs as any other company in its marketing practices all over the world.

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Reference list ➢ http://en.wikipedia.org/wiki/Growth-share_matrix 12

Introduction to marketing ➢ http://in.answers.yahoo.com/question/index?qid=20090315070929AAiEMI2

➢ http://www.bbc.co.uk/worldservice/learningenglish/newsenglish/witn/2009/01/09012

3_sony.shtml ➢ http://www.cn-c114.net/578/a394265.html

➢ http://www.computerworld.com.au/index.php/taxid;567450213;st;3 ➢ http://www.marketingteacher.com/Lessons/lesson_four_branding_alternatives.htm

➢ http://www.shacknews.com/onearticle.x/54453

➢ http://www.tomsguide.com/us/Sony-Financial-Results,news-1340.html

➢ https://www.courses.psu.edu/comm/comm497d_amh13/fall01/sony.html

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