Sony Corporation marketing strategy - Research Paper Example

?Designing a Marketing Strategy for a New Product over Time Executive Summary Sony Corporation is one of the leading Japanese manufacturing as well as service organisations which delivers a wide variety of competitive products in terms of electronics, music and gaming console It has been observed that the company already has attained huge amount of revenues from its existing gaming products as compared to its competitors At present, the company wants to launch its new product i.e. PlayStation 4 which is the extension of its existing product line Prior to introducing its new product, the company is required to follow and implement new product development strategy which would facilitate to identify the current market situation, competitors’ performance and changing consumer buying behaviour among others After analysing marketing mix strategies, it has been observed that the company’s new product possesses a wide variety of innovative features which are quite unique from its competitors, which offer similar kind of products In terms of pricing strategy, the company will follow the strategies of discounting price, competitive price and psychological pricing in order to attract the target market across the duration from launch to the upcoming five years Apart from these, the company also would offer trade discounts, seasonal allowances and also offer payment discounts to the consumers who deliver early cash before getting the product Additionally, the company will adopt certain distribution strategies in order to reach more market coverage for the next five years. Furthermore, it will also adopt certain promotional strategies which would facilitate to increase the sales for the next consecutive five years Table of Contents Executive Summary 2 Introduction 5 Organisation Profile 5 Identifying New Growth Segment 6 New Product Development Process 7 Marketing Mix Strategy 10 Conclusion 15 References 16 Appendix 20 20 Introduction Organisation Profile Sony Corporation created its own incredible brand image by delivering ground-breaking products as well as services to its globally acclaimed clients or customers. In terms of product quality, attributes, style and prices, the organisation has attained superior brand name and also obtained higher values from its potential consumer markets within the technological industry (Balakrishnan, 2006). Additionally, the company operates under four business segments such as electronics market, game, Motion pictures and music as part of entertainment and financial services. Since the past few years’, the company has continuously attained huge success through its unique business model and by developing effective capabilities that have facilitated the company to deliver innovative products and services as per the market needs (Sony Corporation, 2013). It has been viewed that the company has earned considerable reputation not only in its domestic market but also has attracted international customers through its unique products and services. Moreover, it offers a wide variety of products by emphasising upon different market segments by which the organisation has comprehend the exact needs of the products and services of the target market. Sony delivers electronic products such as LED TV, Smart TV, music system, mobile phones and also various gaming products including PlayStation (Sony Corporation, 2013). It has been observed that the company has attained core competency particularly in its gaming market segment where it delivers unique gaming experiences along with affordable prices as compared to its rivals. This market segment helps the company to earn huge revenue in the past five fiscal years (Sony Corporation, 2013). The core objective of this study is to present a five year marketing plan for introducing a new product in the gaming segment i.e. PlayStation 4 by considering new product development and marketing mix strategies. Additionally, this discussion also aims to show the company’s new pricing, promotional mix and distribution strategies in order to launch this product successfully and establish it as one of the prime preferences amid consumers in the next five years. This marketing plan also depicts growth and maturity strategies of this product which the company strategically requires to adopt for the next five years. In terms of research method, it can be stated that in order to present a comprehensive marketing plan various academic sources such as scholarly articles, journals and academic books will be referred. In the context of making a new product launch, it can be argued that for the previously launched product in the same series i.e. PlayStation 3 had initially accumulated significant amount of revenues, however, in 2012, the sales of the product had dipped. Thus, it needs to the regenerate sales from the gaming console by bringing in a fresh product (Reisinger, 2013). Identifying New Growth Segment In order to launch PlayStation 4, it is necessary for the company to target certain market segments that would help to identify the needs and the demands of that particular segment. The company should target the consumers whose age group is between 20 to 30 years and belong from higher to middle income family backgrounds. It has been observed that these groups of customers are quite interested regarding video games where the company has already attained huge success from these target market (Simon, 2011). Moreover, the company will be going to launch entirely a new gaming product which is quite different from its previous video gaming console in the same series in terms of features, quality and price (Daidj & Isckia, 2009). In terms of demographic segment, it has already targeted both male and female customers of these age groups with its previous gaming products. By observing the previous trends of this market, it has been noticed that female customers are not comprehensively interest as much of the male customers (Daidj & Isckia, 2009). Therefore, with its new products, the company will target specifically teenage male as well as adult group of customers. New Product Development Process New Product Development (NPD) is also referred as multi-stage procedure where an organisation aims to modify and improve its products by emphasising upon its Research & Development (R&D) department. NPD process primarily comprises various stages such as Idea generation, Idea screening, concept development & testing, marketing strategy development, business analysis, product development, test marketing and commercialisation (King Saud University, n.d.; Ferrell & Hartline, 2010). In relation to idea generation, the company should conduct certain critical research in order to identify its strengths, weaknesses, opportunities along with threats. Additionally, it should emphasise upon its R&D department for identifying consuming trends of target market, competitors, distributors and suppliers prior to launching new product into the market (Furshpan Marketing Wisdom Associates, n.d.; IPM, 2008). In order to obtain idea screening, the company should primarily identify the benefits of the target market from its new product. It is necessary for the company to forecast size and growth rate of the target market which it will obtain after launching the products. Moreover, the company should analyse current and expected competitive threats that it might need to face from its new product. Additionally, it is also essential for the company to analyse past market trends and industry sales of its previous products within the same product line (Langerak & et. al., 2004; Cooper, 2001). In terms of concept development and testing, Sony should scrutinise its intellectual property issues and patent database which would help to introduce the new product into the market. Moreover, the company should evaluate its target market, its buying decisions and the benefits of the new product which would be obtained by these target consumers. It is also necessary for the company to assess its manufacturing costs, new product features and also emphasise upon cost effectiveness of its new product (Stanski Consulting & Ventures, n.d.). In order to develop marketing strategy for the new product, Sony should estimate its product price which needs to be competitive in nature as compared to its rivals. It is also necessary for the company to forecast the sales volume of its target market and is also essential to evaluate, product positioning, distribution strategy, pricing strategy and marketing budget for the next five years (Cravens, 2010). In relation to product development and test marketing, the company should develop a prototype product and test it as per its quality, reliability performance, benefits and packaging. Prior to introducing the product into the market, the company should interact with its target customers regarding product attributes and also conduct trade shows for providing information of the new products (More, 2010). In terms of commercialisation, Sony should launch the product, introduce audio & video advertisement, establish other promotional strategies and also develop strong distribution pipeline which would assist the company to attain significant market position and preference (Slater & Mohr, 2006). Marketing Mix Strategy Marketing mix is considered as a strategic business tool by which a company can determine its products, prices, place and promotion activities. Through this tool, Sony can analyse its new product development strategies, establish competitive pricing strategies and determine place as well as promotional strategies in order to push the new product into the global market. Product Sony is going to launch a new product i.e. PlayStation 4 which is considered as the extension of the same product line of gaming console. Therefore, in order to attract the target market segment, it is necessary for the company to develop the new product with whole new ideas and also to make it quite different in terms of features, quality, performance, reliability and price (Lin & Chang, 2012). The attractive feature of the company’s new product i.e. Play Station 4 is that it has 3D effects where consumers can obtain 3D gaming experiences. Moreover, the company’s new product also comprises certain unique specifications which are quite innovative as compared to its previous products. PlayStation 4 offers bigger memory where consumers can store a lot of HD games, it will be smaller in size and also render attractive designs in comparison to the previous models. Additionally, PlayStation 4 would comprise x86-64 AMD "Jaguar", 8 cores processor through which the consumers can obtain more faster and better gaming experience as compared to the previous models (Ehmke & et. al., 2005; Lawler, 2013). Moreover, the wireless controller of PS 4 also has unique features such as light bar, built in mono speaker and vibration. These are the all attractive as well as innovative features of the company’s new product by which it can attract more number of consumers within its target market. The company will also offer 1 pair of 3D glasses with every set of gaming console which can influence customers to purchase this product. Furthermore, through its new product, the company will create new packaging technique and also deliver services related to the product issues. In this way, the company can influence more number of customers by which it will be able to attain long-term profitability (i.e. for the targeted five years). Price New product pricing is one of significant factors as well as difficult tasks for every company where its competitiveness and profitability are entirely dependent upon. In order to attain competitive prices, it is necessary for the company to set the prices in the introduction/launch period in such a way that it should be affordable as compared to the rivals’ products. The price of the new product should be higher than the company’s existing product but lower as compared to its rivals’ gaming products so that consumers start to prefer its products (Houghton Mifflin Company, n.d.). Moreover, the company’s new product would offer more innovative features which are quite dissimilar as per its existing as well as rivals’ products. Therefore, price should be adjusted according to the quality, performance, and features of the product (Ehmke & et. al., 2005). Additionally, the company should follow alternative pricing strategies to remain competitive within this market in due course of time i.e. post-launch prices. The price of the new product should in between ?300 to ?400 according to the geographic locations and target consumers’ previous buying trend. During the course of five years’, the company can implement value-based pricing, competitive pricing, discount and psychological pricing. In terms of value-based pricing, the company can set prices according to the buyer perception towards the competitor products in terms of quality and features. In relation to competitive pricing, Sony should evaluate the prices which are charged by its competitors regarding the same product that would help the company to deliver products with less competitive prices. With the intention of launching its product by the end of the October 2013 which is just before the time of Christmas, the company can obtain an opportunity for earning high sales by offering discounting price to its target customers. Moreover, at the time of launching, the company may also utilise psychological pricing i.e. instead of ?300, it can offers the product at ?299 by which it can grab the attention of more number of customers. Additionally, it should also determine prices after successfully pushing the product into the target market. From the month of April 2014 to March 2016, the company can set its product prices by analysing consumer buying behaviour, geographical location and competitors’ offerings. The company may also adopt post launching pricing strategies such as seasonal allowance, trade discount, cash & early payment discount and credit terms among others. Place Place is primarily considered as a distribution channel by which a company delivers its products in the hands of its target consumers. It has been observed that Sony’s distribution channels are quite strong where it suppliers play a vital role for distributing its product directly to the consumers. In terms of a new product, Sony can either distribute with its suppliers or directly sale to its customers through its retail outlets. Therefore, the company can adopt direct sales method for distributing its product during the first year i.e. October 2013 to October 2014 and also sales its product through intermediary or third party resellers for the next four years i.e. December 2014 to December 2017. Contextually, the company can conduct direct sales through its retail stores, door-to-door, mail orders and by online distribution method. Sony already has its e-commerce site where it can introduce its new product and provide unique online shopping experience to its target consumers. Through these direct distribution method, the company’s sales team can make face-to-face interactions with its customers, which would also help to identify market changes as per the competitors’ products (EBS Entrepreneurial Business School, 2004) Sony can also distribute its new product through a set of intermediaries such as wholesaler or retailer who will be going to resell its product. With the help of this method, the company can expand more its market coverage rather than the direct selling method (Ehmke & et. al., 2005). Moreover, through this distribution method, the company can reach huge number of customers which are quite difficult for the direct selling method. Additionally, the company can also effectively control its inventory and maintain its production flow while distributing its product through intermediaries. Furthermore, the company may also adopt intensive, selective and exclusive distribution strategy while delivering its product through mediators. Promotion Sony’s objective of the new product promotion is to deliver information as well as explain its potential consumers regarding product benefits, features, pricing and the reasons behind purchasing of this product. Through the promotional strategy, the company can grab the attention of the target audiences towards the new product offerings. In order to promote its new product, the company may adopt television advertisement, word-of-mouth, print advertisement along with conducting road shows and online advertisement. The product life cycle of technological industry is quite short due to the constant focus on new product innovation; therefore, the company should make its promotion in quite a unique manner so that product image can be created and ingrained within the minds of the consumers for long period of time (Malhotra, & et. al., 1996; The University of Chicago Booth School of Business, 2012). In the first two years, the company should effectively emphasise upon television advertisement as well as print advertisement in order to reach more number of consumers. From the third consecutive year, the company should focus on road shows and online advertisement in order to enhance its sales. Additionally, at the fourth and fifth consecutive years, it should conduct word-of-mouth for obtaining feedbacks regarding product features, reliability and its benefits. The feedback would facilitate the company to assess the chances of decline in product preferences and would also enable it to rectify the requirements to alleviate the chances of decline (Armstrong & Kotler, 2005). During the introduction stage, the company should invest on television advertisement along with print media so that consumer can obtain comprehensive information regarding new product launching. At the time of growth stage, the company should emphasise on road shows and online promotion in order to enhance the sales. Conclusion From the overall discussion, it can be stated that Sony’s new products i.e. PlayStation 4 can be successfully launched in the market and also it would help the company to attain a distinctive market position as compared to its rivals. In the technology industry, Sony has already attained huge success by creating strong brand image through its existing gaming console products. This brand image would help the company to launch successfully its new product within the same product line. It has been also observed that for the next five years, the company can attain major success and competitive advantage by implementing new product, pricing and promotional and distribution strategies. References Armstrong, G. & Kotler, P., 2005. Marketing: An Introduction. Pearson Education, Inc. Balakrishnan, P. V., 2006. 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Test Marketing and Problems Faced By the Companies during Test Marketing. International Referred Research Journal, Iss. 8, pp. 7-9. Reisinger, D., 2013. Sony Sees Revenue Rise, Losses Decline As Turnaround Hopes Gain. CNet. [Online] Available at: http://news.cnet.com/8301-1001_3-57568138-92/sony-sees-revenue-rise-losses-decline-as-turnaround-hopes-gain/ [Accessed April 16, 2013]. Slater, S. F. & Mohr, J. J., 2006. Successful Development and Commercialization of Technological Innovation: Insights Based on Strategy Type. The Journal of Product Innovation Management, Vol. 23, pp. 26-33. Stanski Consulting & Ventures, No Date. Best Practices for New Product Development. A White Paper for Innovative Organisations, pp.1-4. Simon, J. P., 2011. The Economics of the Video Games Industry. JRC European Commission. Sony Corporation, 2013. About Sony Group. Technology. [Online] Available at: http://www.sony.net/SonyInfo/ [Accessed April 16, 2013]. The University of Chicago Booth School of Business, 2012. New Product Innovation, Development, and Implementation Strategies. Executive Education. [Online] Available at: http://www.chicagoexec.net/chicago.nsf/C3428A30FCEAEDEB85256C2F0049117B/$File/NPD.pdf [Accessed April 16, 2013]. Appendix Product Development Process Sales Forecast Read More