Sony Corporation - Research Paper Example

Sony Corporation Table of Contents Introduction 3 Strategic Planning 4 Mission Statement 4 Market Summary 4 Advertising 5 Channel sales expansion 7 Service Operation Enhancement 7 Local Talent Development 7 Push Strategy 7 Segmentation and Targeting 8 Positioning 10 Marketing Mix (4Ps) 12 Product 13 Price 14 Place 15 Promotion 16 Social Responsibility 17 Conclusion 20 References 22 Introduction Sony Corporation is a Japan-based multinational conglomerate formed in 1946. It changed its name to Sony Corporation in January 1958. It has its headquarters in Tokyo, Japan. It has diversified its business mainly into electronics, game, entertainment and financial services sectors. It is presently the leading manufacturers of electronic products in the consumer segment. On 2012 list of Fortune Global 500 companies, Sony is ranked 87th. Sony Corporation is the parent company of Sony Group. Sony group has many segments like electronics, music, motion pictures and financial services. These include Sony Electronics, Sony Computer Entertainment, Sony Pictures Entertainment, Sony music entertainment, Sony Financial. Sony is the third-largest manufacturer of television in the world after Samsung Electronics and LG Electronics. It has the huge range of products like consumer electronics, semiconductors, video games, media/entertainment, computer hardware, and telecom equipment. It also provides services like financial services, banking, insurance, credit finance and advertising agency. The founders of the company under consideration were Akio Morita and Masaru Ibuka, who gave the name Sony from songs, the Latin word for sound. The company has the current slogan of “make.believe”. Sony Corporation has given the world many new ideas on electronics goods. Sony Corporation created the world's first portable music player, the Walkman. Sony bought into the market digital audio format SDDS which challenged the Dolby Digital 5.1 surround format. Sony introduced Compact Disc (CD) to the world. Sony offers the range of digital cameras like Cyber-shot. They are now presented the third largest manufacturers of cameras behind Canon and Nikon. Strategic Planning In this study, the one product category which has been chosen is Sony’s computer products. Sony started making computers in the 1980s only for the Japan market. Then the company withdrew its computer business for a decade. It again re-entered into the computer market under a new brand name, VAIO brand in 1996 with PCV series of desktops. Mission Statement Sony’s mission statement is “To experience the joy of advancing and applying technology for the benefit of the public”. Sony develops a wide range of innovative products and services which changed the way consumers enjoy the digital entertainment. Sony strives continuously to create new areas of entertainment which can be experienced by the variety of products they offer (Sony, 2003). Market Summary For any marketing activity promotion of its product is a key step in enhancing its revenue. Through the promotional effort, Sony is trying to create awareness among the public about the product and the services it offers. Sony has increased its marketing budget to Rs 250 cr in this financial year on advertising and promotion of its premium segment of consumer electronic goods mainly on laptops, TVs etc. The Vaio was not the first PC created by Sony. The first was a transistor based calculator, SOBAX manufactured in the year 1967. It then withdrew its product because of stiff competition from Casio and Sharp. It was not until the mid-1990s when household consumers in Japan started using PCs for their activities. This opened up the possibility of using PCs and audiovisual medium. The full form of VAIO is Video Audio Integrated Operation which shows their ambition to integrate PCs with telecommunication, movies, and music (Chang, 2011). Sony VAIO is the best brand in the laptop series that is available in the market. Sony VAIO series is mainly targeted at youth category with the slightly high range of prices. Hence VAIO mainly uses pull strategy in promotion techniques which attract consumers with its advertising to buy the product. The consumers receive the information from media like on TV, billboards, radio, leaflet, Internet etc. With this strategy, they can sell the product without any suggestion from the seller. Advertising VAIO uses the advertising medium to communicate to the consumers. It has different segments of the market through which they communicate different messages according to their lifestyles. The communicated messages must be different and classified according to the target audience like teenager or young. Such target group, for example, wants a notebook in accordance with their lifestyle. Such messages carry the factor of being smart, cool and modern which are the terms associated with teenage youngsters. Recently VAIO is also using the emotional factor in the advertising. Using the emotional aspect makes the consumer feel proud to own the VAIO. For example, they have their famous advertising campaign "SHOW It with Your VAIO". Such ads emphasize the pride ness in possessing the VAIO. VAIO had launched the new series under "More Colour, More Style" brand campaign. It is targeted to fulfill the needs of all users from stylish youth, PC beginners, and students to the business executive. Sony has understood and recognized the growing importance of using digital media as a mean to reach the people and engage with them. Sony VAIO works closely with media agency MEC for building an environment which will change the behaviors of Latin American consumers. Hence Sony started digital advertising by creating a Facebook page for their company which helped their brand to reach out to every people who will like their Facebook page. Sony VAIO launched in March 2010 was created where consumers can easily interact with the brand. Once they got their Facebook page online on the Facebook page, they changed their marketing strategy in June 2010. They wanted to build a long-term commitment to the users so that it maximizes the opportunity to engage with the brand's fan base. Initially, Sony VAIO set a goal to increase the number of the fan base from 10,000 to 90,000 in 10 weeks. To build a long-term relationship with their fans, MEC used a social media strategy like creating a Paid-Owned-Earned strategy that uses Facebook as the central entity for their digital campaign. Using their Facebook page they could easily target their ads at youngster from ages 18 to people of ages 34 years old. Using other social media like Twitter, YouTube. They can effectively reach their target consumers and give proper weight to their marketing campaign (Armstrong and Gar, 2004). Channel sales expansion Sony has increased its presence globally by increasing their distribution network globally. In India, itself Sony has 10,400 sales channel including brand shops and national chain stores. They now want to aggressively increase their presence to 12,200 by FY2014. Service Operation Enhancement They have also enhanced their customer service by providing flexible, fast and comprehensive solutions to its customers. Sony presently has 255 touch points and plans to increase it to 285 by FY14. Local Talent Development By developing local talent Sony has been able to grow strongly in the global market. They have increased their manpower to match the growing business demand. Compare to other technology companies, Sony has the highest score based on parameters like talent management, collaboration, innovation, leadership, empowerment, values etc. They have a low attrition rate which shows that they give a comfortable working environment. They quickly replenish their vacancies with fresh new talent. Push Strategy Sony also uses Push strategy along with the pull strategy to enhance its promotional techniques. Using push strategy they create more demand for the products by suing trade promotion strategies. Using sales promotion they can get the consumer to know more about its features. For example, it can distribute accessories along with the premium product like the mouse, pouch, VAIO laptop bag etc. It can provide rebates, discounts, scratch cards, organize contest, exchange offers etc. For example in VAIO CS series the consumers can pay the price by instalments within a year (Adweek, 1998). Segmentation and Targeting Sony Vaio is a popular brand among the Laptop vying consumers. It has given superior performance as comparison to most other laptops. But the management has tried to segment the target market according to new demands of the industry. Mainly they segmented the market based on demographics. The VAIO brand image has been positioned as a premium laptop entity which presents a distinct status to it. Sony uses Status Focused segment approach in China. According to a report, major segment of the Chinese consumers enjoy a status similar to those of developed world. Also majority of the Laptop owners in age between 18-34 years of age, who are now pursuing college degree education and has money to buy such products. Most of the consumers who are going to buy laptops within a year ranks Sony higher than another laptop brand. They all disagree that giving laptop knockoffs indicate a good laptop brand. It shows that they are willing to purchase such products. Sony also targets family user segment which wants that their work be done easily without them having to download lots of software separately. Hence here technology integration works well. Sony has made their Vaio series installed with important multimedia software. It increases the ability to do video editing, photo editing and other things into a single suite. This family user segments also prefers stylish laptops which fits perfectly with the strategy of the company as they mainly give importance to their design component like reducing the weight and size of the laptop. It shows that their target segment consumer is willing to pay for the aesthetic appeal and on convenience which are their product strengths. Hence they have would do well to segment the market according to the age and their needs. Like for a teenager who would have limited money will prefer to buy a Notebook which is much lighter and adds to their style of design and status. But for a business man or a college graduate the need would be to have a laptop which can do some powerful computing with inbuilt software inside of it. They will also look for performance and durability issue which is also good in Sony laptops. Sony has come out with Vaio laptops which have both processing speed and style features. They have introduced laptops of different colors according to the wishes of the current young generation. The colored laptops appeal more to youngsters while the white and the black color appeal to the business man. Sony must segment the market based on the age group of the consumers because the priorities of the consumers change with change in the age group. Sony has started to target the consumers who are the willing to spend a few extra bucks in exchange for the quality they receive. For Sony laptops it is the perceived quality which is more important than the actual value. Perceived value is the price which the consumers at willing to spend to buy the product. They have a high perceived value which gives them an edge over their rivals. According to manufacturers’ report on information technology, total PC sales between April 2012 and March 2013 were 11.21 million in India which is a growth of five per cent over the last year. This figures included desktop computers, notebook and netbooks etc. Sony Vaio for the first time in India hit number one share in 2011 financial year with a share of 20%. In FY11 they have achieved a sales figure of Rs. 6,313 crore in India. Among other products VAIO have contributed 20% to its total sales figure. As per Customer Equity Tracking Study done by Nielson 2012, Sony has ranked as the Number one brand in electronics goods. All this shows that Sony so far has done a good job in segmenting the market and targeting appropriate consumer. Positioning Brand Sony has long enjoyed the popularity amongst the customers. For any notebook lover Sony Vaio is now a preferred choice. Sony has positioned Vaio as an ultra-thin laptop and as a lifestyle accessory and not as a notebook. The brand is competing against Mac Air, HP, Lenovo and Toshiba, Dell. Earlier the price of a laptop used to cost more, nowadays the entry price has scale down significantly. This lowering of prices has attracted a whole set of new customers in this segment. Individuals started looking at laptops as a means to enhance their productivity. Companies started to give their executives laptops so that they can work while they are in motion. Sony Vaio has always promoted itself as a brand with aesthetic appearance to it. It gives the user a feel of possessing something valuable. They have never tried to go for the Volume game. But as days went by Vaio saw that technology can no longer be a major differentiator. It recognized that they have to reposition their brand to oust their rich rivals. Sony came out with Vaio CR to take on the new segment. It targeted the hip hop youth aged 18-26 with the variant CR. It became a fashion accessory instead of becoming a learning/working tool. There are attractive color options Blazing Red Pure White Beauty Pink Indigo Blue and Aroma Black. The new variant with its attractive features like Luminous Trim which reflects light gives it a shining look. The brand now catches the imagination of the youth market. With this Vaio is trying to integrate the brand image, aesthetics, technology into the minds of the youngsters. In Notebook world, Sony Vaio has been facing intense competition from Dell. Dell being a reputable company offers a wider range of notebooks as compared to Sony’s Vaio. Also Dell has use Cost leadership as its competitive advantage which has made it tough for Sony to compete. Being a premium category product in the market Sony’s Vaio has to change its positioning strategy in the market. It is investing heavily in R&D and trying to come out with new products successfully (Moore and Pareek, 2009). Sony was known as an innovator but this marketing strategy is now obsolete for them because new strategies are being implemented by its competitors. Like Apple’s iPod and iPad has added features which are something new to the world and hence has left Sony far behind. The competitors have also been able to beat them down on the quality aspect. Sony now should try to reposition the brand and make use of its core competencies to leave its competitors behind. Since Sony has been known for its high quality products it must increase its quality so that customer loyalty remains with them. Quality being its core competence they should try to re-establish the brand based on that feature. Sony can also come out cooperative strategies like having a strategic alliance to make the product more successful. Joint ventures are common a strategy implemented by popular companies so that both of them can use each other’s resource to gain competitive advantage. Sony also needs to make its organization more adaptable and flexible to change. They will continue to face the strategic challenges in future which they have been facing in the fast. So they need to come out with strategies with proper planning and ideas. Successful strategies need to be formulated to the changing market conditions. They need to use just-in-time system and quality management techniques which have given Japanese firms the edge over other companies worldwide. Hence Sony shouldn’t be aimed at cost-cutting techniques but they must go for long-term planning like planning to attain differentiation along with the cost leadership skill. Marketing Mix (4Ps) Sony Corporation is one of the leading manufacturers of video, audio, information technology and communication products for the people and professional markets. Effective product differentiation strategy, brand extension strategy, significant service marketing activities and high product quality are the major growth drivers of Sony Corporation. This part of the report will conduct a marketing mix strategy in order to determine the adopted and implemented marketing strategies by Sony Corporation for its products of computer segment. Marketing mix is also known as 4Ps framework. This analytical tool is generally implemented in order to determine the product, price, and promotion and distribution strategy of an organization. Product Sony Corporation is popular among people due to its large product portfolio and high quality of each and every product segment. Sony Corporation is one of the leading multinational organizations. The organization effectively capitalized on the business opportunities that are developed due to technological revolution and globalization. Significant product differentiation strategy helped the organization to meet business objectives as well as current market demand. Sony is one of the popular and profitable organizations within the personal computer segment. Latest Sony Vaio laptops are highly popular among the target customers due to several factors. The organization used to implement advanced technology in business process in order to offer modern and advance personal computer for the target customers. Laptop is considered as an important and most familiar personal computer product segment. The laptops sold by Sony Corporation in global market include a significant series of Sony Vaio. Sony Vaio is the example of brand extension of Sony Corporation. The series of Sony Vaio includes Vaio SR, Vaio Tokage, Vaio NR, Vaio CR, Vaio SZ, Vaio TZ and Vaio FW models. All of these Sony Vaio models boat on the excellence perfection, performance and mobility. The organization introduced laptops for students, businessmen and common people. Significant differentiation strategy and product variation help the organization to develop a significant global client base. The organization succeeded to meet the market demand and satisfaction level of the customers. Each and every product under this brand has high brand value due to advanced features, applications and high quality. In addition to this, effective research and development unit of Sony Corporation continuously tries to improve the quality of product to tap new target customers and maintain existing target customer base. Price Pricing is one of the important strategies that help the products of an organization to sustain in the competitive business environment. Sony Corporation never compromises with the quality of products. The organization adopts reasonable pricing strategy for the personal computers as the organization ensures high quality of the products. Sony Vaio achieved huge customer preference due to the significant quality and advanced features of the laptops. It is true that several price variables, such as retail price. Dealer price, distributor price, allowances and discounts influence the adoption or development of marketing strategies. The price of all the laptops is not close to each other. The recent financial crisis and global economic recession affected the global economic environment. Now-a-days, people used to prefer high quality products in low price level due to the reduced purchasing power of people. Looking into these social and economic challenges and issues, Sony Corporation introduced different Sony Vaio level starting from an economic price range to a premium price range. It helped the organization to target people of both middle and higher income group. In addition to this, the organization incorporates several business strategies in order to reduce the business operation cost. This reduced business operation cost helped Sony Corporation to reduce the price Level of the Sony Vaio Laptops. It is highly important for an organization like Sony to ensure quality of products in order to retrain the strong client base. On the other hand, it is known to all the personal computer industry is highly competitive as several potential PC makers and distributers are implementing competitive pricing strategy. These intense market competitions forced and influence Sony to ensure the reduction to business operation cost in order to back the customers’ purchasing power and meet current market demand. The Sony Vaio laptops are available in economic price as well as premium price. The organization targets each and every people of different demographic and geographic segment. Place The distribution process of each and every product depends on its nature of the products. It is important for the leading multinational manufacturing organization to strengthen and widen the distribution and supply chain network to provide products and associated services to each and every target audience. Sony Corporation is positions itself as the manufacturer and seller of the consumer durability products. It is important for the organization to increase its business performances across the potential global areas in order to maximize business profit and increase market share. It is important for the organization to establish an effective supply chain network in order to enhance business expansion strategy. However, the organization always uses trustworthy and effective distribution network in business process in order to overcome several legal challenges. In addition to this, the organization motivates its suppliers and distributors to follow the developed organizational policy as according to the organization sustainable business practices can help an organization to gain significant competitive advantages. Now-a-days, the Sony Vaio laptops and personal computers have the presence in each and every major town and city. The number of Sony outlets and organizational partners is increasing at a significant rate. Sony Corporation used to follow one level distribution channel which is considered as traditional and conflict free distribution channel. The distribution channel of Sony Corporation consists of Manufacturer, Retailer and Customer. The organization focuses on green supply chain options in order to bring sustainability in environment and business process. Low carbon emission in supply chain transportation is considered as the important characteristic of the distribution and supply chain of Sony Corporation (Watkinson, 2013). Sony Vaio laptops are available in several emerging areas due to the strong supply chain network of the organization. It is important of a leading global manufacturer to offer products to the target customers around the globe according to the right demand for the products. However, Sony Corporation succeeded to do this due to its reliable suppliers, distribution and wide range of supply chain network. Promotion Promotion is considered as the most important marketing activity. Effective promotional strategy ensures success, preference, acceptance and profitability of a product. Sony Corporation is one of the leading electronic goods manufacturers and distributors in global market place. It is important for the organization to implement effective promotional strategy in the business process to maintain its competitive advantages in the global market place. The organization implemented aggressive marketing strategy in the business process in order to achieve significant competitive advantages. The organization used to provide advertising on each and every medium. Acceptance level of online and social media advertising among the target customers is increasing at a significant rate. Day by day, the number of special media networks’ users is increasing at a rapid pace. On the other hand, an organization can target significant numbers of target customers through this online advertising and promotional strategies in addition to this, effective digital media and print media advertising and promotional activities increased the brand awareness of each and every Sony Vaio model. It is discussed earlier that the organization tries to introduce products of supreme quality. Therefore it is easier for the organization to implement aggressive marketing strategy as it can never affect the brand image of the products and services. Effective word of mouth promotional strategy helps Sony Corporation to create huge brand awareness among the target customers. The organization heavily depends on its retailers, distributors and dealers as their strong and effective personal sales activities help the company to maximize the sales of the products. In addition to this, personal selling activities in urban and semi urban areas ensured effective customers. Each and every dealer and retailer ensures effective after sales customer services that enhance the brand image of the products. Moreover, several discount offers, free samples, rebates, coupon and exchange offer activities help the target audience to be the potential customers of Sony Vaio. Last but not the least; sponsoring several educational or business seminars increased the grand awareness of Sony Vaio laptops among the students and business professionals. Social Responsibility Sony Corporation believes that the each and every business has both direct and indirect impact on the society and community. Sony Corporation is highly socially responsible. Use of sustainable business practices helped the organization to achieve significant reputation around the globe. Effective electronic waste management strategy, environment-friendly policy development and sustainable resource allocation strategy helps Sony Corporation to increase its brand value and reduce the business operation cost. Effective water recycling, energy-power recycling and maintaining zero solid waste in the business performances are considered as the major corporate social responsibility activities of the Sony Corporation. It is known to all that the high consumption and usage of fossil fuel in the business operation process can create several legal and environmental challenges for an organization. Huge consumption of fossil fuel can increase the level of carbon emission. High carbon emission level can create several human diseases as air and water pollution is the major consequences of high carbon emission (Donnelly, Harrison & Megicks, 2012). Looking into these above aspects and issues, governments of several developed and developing countries motivate the organizations to use sustainable business policies. In addition to this, governments have developed environmental and business operation policies and regulations for the organizations to limit the level of carbon footprint. It has been identified that several organizations follow unethical business performances in order to maximize business profit. These business practices can hamper the environmental balance either directly or indirectly. In addition to these, several organizations used to maximize the consumption of natural resources to reduce the business operation cost. Sony Corporation understands the significance of business operation cost. Sony Corporation adopted and implemented water recycling strategy in order to reduce the consumption of natural resources. Governments generally support the multinational organizations due to several factors. First of all, these multinational organizations contribute significantly to the economic growth of the nation. In addition to this, the business operation of leading multinational organizations helps the government to reduce several economic challenges, such as high unemployment rate. Sony Corporation uses environment friendly mode of transportation in the supply chain management. In addition to this, the organization used to implement advanced technology in each and every business process to sustain business practices. The organizations generally focus on corporate social responsibility activities to get support for the internal and external stakeholders. Effective electronic waste management strategy helps Sony Corporation to reduce the impact of environment of the manufactured products (Blanchard, 2011). On the other hand, effective water recycling process helps the organization to reuse water in business operation. The consumption level of natural water can be reduced by the adopted water recycling strategy. It is clear from the above discussion that Sony Corporation used to provide high quality products. The Sony Vaio laptops and other personal computers are considered as the products of high quality (Harrison, Newholm & Shaw, 2005). The organization always used to introduce environment friendly products as the demand of customers is changing slowly and gradually. Effective power consumption and power back up process in the laptops and high durable batteries help the products to reduce the consumption level of electronic power source. Therefore the products of the organization are considered as the green products. These effective corporate social responsibility activities help the organization to integrate effective and key external stakeholders in the decision making process. This strategy helps Sony Corporation to give respect to the opinions of the stakeholders. Therefore, the organization can develop and implement several effective decision making strategies. On the other hand, the Sony Corporation organizes effective training and development programs in order to create awareness about the developed environmental policies by the organization among the stakeholders, employees and suppliers (West, Ford & Ibrahim, 2010). Following environment and community related legal and other legislations or po0licxies enhances the corporate social responsibility of the Sony Corporation. Conclusion It is clear from the above discussion that Sony Corporation has implemented effective marketing strategy in the business processes in order to maintain its competitive position in the global market places. Sony Corporation is one of the leading manufacturers and distributors of the electronics goods around the globe. Personal computer product segment has been selected for the purpose of this report. The organization has adopted several key marketing strategies to get success from these developed products. Sony Vaio is considered as one of the popular and profitable brand extension of Sony Corporation. Each and every Sony Vaio laptop has unique features that can meet the current market demand. The target audiences of these products are the business professional, college students and households. Effective product differentiation strategy helped the organization to create huge demand for the products among the target customers. Sony Corporation implements cost-quality positioning strategy for each and every Sony Vaio Model. Major business objective of the organization is to maximize business objective by providing high quality of products to the target customers. Recently it has been identifies that the purchasing power of people get affected due to unexpected economic downturn. People are trying to consume quality things at affordable price level. Sony Corporation implemented several effective business operation strategies in order to reduce the business operation cost. Effective cost control aspects ensured the economic pricing of products that created effective brand value of these Sony Vaio laptops and personal computers. Sony targets people of both middle and higher income level for these products. It is highly important for the leading multinational organizations to increase its supply chain networks in major cities and town in order to fulfill market demand. Strong supply chain and distribution channel is considered as significant business growth drives. If an organization cannot supply the products according to the market demand and needs of target customers, then the customers can switch to other brands. Therefore, it is important to have wide range of supply chain network. The organization ensures strong supply chain network by having significant numbers of business clients, channel partners, distributors and retailers. Most importantly, the presence of Sony Vaio laptops and PCs are identifies in several emerging small towns and sub urban areas. In addition to this, effective promotional and advertising activities help Sony Corporation to create significant brand awareness for these products. Effective CSR activities help an organization to gain strong brand reputation among the stakeholders, customers and employees. The organization used to develop and evaluate environmental policy to maintain the sustainability in business process. In addition to this, several sustainable activities, such as water recycling, electronic waste management, ensuring zero solid waste and green manufacturing process help Sony Corporation to reduce several possible legal and environmental threats and challenges. The organization motivates employees, stakeholders and all the suppliers to maintain sustainable business practices to ensure corporate social responsibility. References Blanchard, O. (2011). Social Media ROI. New Jersey: Pearson. Donnelly, R., Harrison, G., & Megicks, P. (2012). CIM Course book. London: Routledge. Harrison, R., Newholm, T., & Shaw, D. (2005). The Ethical Consumer. London: Sage. Watkinson, M. (2013). The Ten Principles behind great customer experience. New Jersey: Pearson. West, D., Ford, J., & Ibrahim, E. (2010). Strategic marketing. New York: Oxford University Press. Sony., (2003). Company Profile. Retrieved from http://www.sony-europe.com/article/id/1178278971157. Chang, S. (2011). 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