Export and import Managment- sony- combating markets for PSPs - Essay Example

The PSP was launched in the US with the difference of a few months after its launch in Japan because of various reasons. UK saw the official launch of the PSP nearly one year later but regardless of the delay retailers in Europe began to import PSPs from Japan and the US whilst keeping all the revenue for them self. Sony, in order to counter this took legal action against several importers in Europe demanding confiscation and monetary damage (as cited in CNET News. 2005). An online retail firm “EBL” stood up against Sony stating that Sony had inadequate trademarks regarding PSPs in Europe and that it only targeted smaller firms.

Such a controversy created doubts regarding PSP’s official launch in Europe. Sony soon won the case and caused various retailers to put down the products off from their stores and websites. Nevertheless PSPs still were being traded in the gray markets while Sony waited for the UK High Court to declare a decision. To add up to Sony’s obstacles, hackers continuously tweaked the PSPs to run unauthorized games and software for which Sony has to tirelessly keep developing newer versions of the PSP and its firmware as well. Q1. E-commerce alone is the primary driver of the ever-growing gray market and counterfeit activity.

Numerous online auctioning and trading websites remain unmonitored and controlled which further feeds the gray markets. Products like the PSP coming from their widely successful and popular parent product “PlayStation” undoubtedly would receive a vast number of consumers, many of which would be willing to accept higher prices to acquire it as early as possible. Adequate control over the company’s distribution network is amongst the vital weapons against gray markets. Large firms, given the resources available to them should carefully monitor how and where their products are traveling before finally reaching to its consumers.

A strict distribution network involving detailed shipment tracking, authorized dealers, official labels/logos/etc would enable the manufacturer being completely aware of its products rotation in the market which would result in the prevention of leakages into the gray markets. Q2. An innovative product with a strong fan-following automatically results in a desire to acquire it. Sony officially launched the PSP in Japan earlier than in the major markets with time lags of a quarter or nearly one year.

The huge number of demanding consumers in the international markets who were willing to pay more fueled the gray markets by giving higher profit margins to the importers. Sony did indeed launch the PSP a little early. Instead it should have manufactured enough quantities to cater to all the markets and launched in the Triad simultaneously. Sony rushed to launch the PSP because the gadgets were made available in the market even before the PSP was launched. Therefore Sony had to rush to introduce the PSP in order to avoid duplication and counterfeit and also to prevent the retailers from snatching Sony’s deserved revenues. Q3. The sale of PSPs in Europe was indeed a threat for Sony primarily because of the fact that it pushed the production capacity of Sony to the edge in order to cater to the “unofficial demand”.

Before launching the PSP in UK, Sony ensured it had enough PSP units available to meet the demands