Canon Digital Cameras - Essay Example

Canon Digital Cameras 1.0 Executive Summary Companies, which have had huge profit margins in the past, are beginning to feel the heat of the competition. Moreover globalization has thrown open the protected market of many countries to international brands. The immediate result of this is that all the activities of marketing are seemingly becoming exclusive to companies with bigger financial outlays. Even after spending so much money in marketing efforts, companies are not able to gain the desired benefits from their efforts (Aaker, 1995). On the other hand, we have seen that many smaller companies with comparatively very small marketing budgets that are able to penetrate the market and are able to become popular with the customers. The reason is that such companies have adopted effective strategies than relying on raw money power and propaganda. The lack of sensible strategy and the failure to use technology, combined with obsolete methods of marketing seems to be the bane of many companies who are not able to make a successful thrust in the market. Most ideas are either short sighted or serve only the immediate purposes of the company. Lack of professionalism is very evident in the management of many companies that has great potential. A very important aspect of business that still is a gray area for many business organizations is effective customer management. This report focuses on different aspects of Canon brand digital imaging products famously known digital cameras. This report covers the history of the company, its corporate philosophy, mission statement, evolution of the company through different stages. Description of company’s main product share in global and UK markets, mass communication and marketing strategies on Canon are also discussed in this report. In addition this report also reviews relationship of company’s communication mix with its success and marketing efforts. Furthermore a 12 months communication plan is also suggested to Canon to enhance their public image, brand loyalty and market share. This report further focuses on the development of long term business strategy for the growth of Canon cameras in suggestions. 2.0 Corporate Brief: More than 60 years of experience and know-how, “Canon started out as a company with a handful of employees and a burning passion. That company soon became a world-renowned camera maker and is now a global multimedia corporation. However, the origins of our success remain unchanged: the passion of our early years and technological expertise amassed over more than 60 years. Canon will continue using its technologies to benefit people as it pursues its objective of becoming a company that is loved by people throughout the world.” 2 Canon is a world-leading innovator and provider of imaging and information technology solutions for both home and office environments. Canon (UK) Ltd. is the UK marketing and sales operation for the US$33 billion global company based in Tokyo, Japan. In the UK and Ireland Canon employs over 2,000 people in various locations (Canon Inc., 2006). 3.0 Canon History: History of Canon in the digital camera market Canon's success in the digital camera market was not built overnight. The company's first internally developed model, the Power Shot 600, was announced in 1996 and originally marketed as a computer peripheral through a subsidiary company. When it became apparent that the future of digital cameras was going to be in the consumer market, Canon reorganized itself from the top down and assigned responsibility for design, development, manufacturing and marketing to its Camera Division, which had a long history of success in traditional 35mm cameras. When the Power Shot S100 Digital ELPH and EOS D30 Digital SLR models appeared in 2000, their unique and innovative features catapulted Canon into the spotlight of media publicity and popularity with consumers. At that point, it was clear that Canon was on its way to the kind of success it had come to expect after nearly 25 years of market leadership in the traditional camera industry. 8 Canon's long 70-plus year history of expertise in the photographic industry positions us for such market leadership," said Yukiaki Hashimoto, senior vice president and general manager of the consumer imaging group at Canon U.S.A., Inc. "We are proud to be the camera of choice for consumers and professionals. We are the only camera company today that truly offers a full line of consumer and professional digital imaging solutions. By designing and manufacturing our own lenses, CMOS image sensors (found on the company's digital SLRs) and image processors, we can control both image quality and cost - ultimately providing consumers with the best digital imaging options. 2 More and more customers have come to recognize the high quality and reliability that Canon designs into its entire range of digital cameras, from the highly acclaimed Power Shot series to the full line up of award-winning EOS Digital SLRs. The digital camera category is clearly one of the best selling hardware segments in the photographic industry, and it is one of the most competitive. In the digital camera category, Canon has consistently turned in strong performances, thus enabling the company to expand its market share. In fact, IDC currently forecasts U.S digital camera shipments to reach more than 31 million units in 2006, an all-time high 7 3.01 Business Description: Canon operates in the industries of electronics and precision engineering. The company has three main business divisions including business machines; cameras; and optical and other products. The company’s business machines division is split into three further units comprising of copying machines, computer peripherals, and business systems. The copying machines unit produces office copying machines, personal copying machines, and color copying machines. The computer peripherals unit manufactures products such as laser beam printers, bubble jet printers, and scanners. Its business systems division produces facsimile machines. (Canon Inc.)5 Canon's camera division manufactures a range of digital cameras, single-lens reflex (SLR) cameras, compact cameras, video camcorders, and interchangeable lenses. The company's optical and other products division manufactures semiconductor production equipment, TV lenses for broadcasting stations, ophthalmic instruments, x-ray equipment, medical image recording equipment, and photovoltaic cells. In addition, the company's Canon software subsidiary offers IT services, software for use with Canon products, business applications, and outsourced software services. Canon's global operations span the Americas, Europe, Asia, and Oceania. (Canon Inc.)5 4.0 Corporate Philosophy: Canon formally introduced its corporate philosophy of Kyosei in 1988. Kyosei aspires to a society in which all people, regardless of culture, custom, language or ethnicity, harmoniously live and work together for the common good. Based on the concept of Kyosei, and in the pursuit of the “excellent global corporation” ideal defined by this philosophy, Canon endeavours to bear the responsibility for the impact of its activities on society, not only in its business but also in other human endeavours. First and foremost, Canon must provide customers with excellent products for further customer satisfaction while returning profits to its various stakeholders. Guided by its corporate philosophy of Kyosei, Canon, as a good corporate citizen, focuses its efforts on diverse activities to realize a society where all people can comfortably and peacefully live together while making meaningful contributions to society through its business. (Canon Inc.)5 5.0 Marketing Communications Defined: “Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers----directly or indirectly---about the products and brands and that they sell. In a sense, marketing communications represent the ‘voice’ of the brand and are a means by which it can establish a dialogue and build relationships with consumers.” (Kotler) Marketing communications represent the consolidated and integrated marketing efforts of a company designed and targeted for successful selling of a brand. It may include a variety of measure applied by company time to time including advertising, publicity, sales promotion, expose, public relation campaigns and any other promotional techniques. 6.2 Corporate Values: Canon believes in Kyosei, its own philosophy aimed at showing and developing the global culture of tolerance and wellbeing. Canon’s firm belief in its values is obvious from the various social and cultural activities it performance globally on yearly basis. 7.0 Market Share: Canon enjoys a joint global majority market share with Nikon. Both companies jointly own 80% of modern camera market share. In UK market Canon is also a leading brand as per Canon’s corporate global share analysis of 2005 by having 63% of market share. (Corp. Data –Canon Inc. 2006) Trend is taking a further positive ride after January 2006, when company refocused its marketing efforts in European markets and made various successful marketing efforts for this purpose. Apart from the overall growth trend, after 2005, rapid evolution of digital photography has taken it toll over both compact film cameras and SLR cameras and a sharper decline is experienced by the company in these two segments of photographic equipments. Despite this emerging change, company maintained its growing pace and sustained its profitability by strictly controlling its operational cost and other overheads. 1 The above diagram of the market share of Canon UK, illustrates the percentage of market share of Canon, which shows that Canon has the highest percentage of market share, in addition the market share of Canon has increased from 16.2% to 16.8% between the years 2003 to 2004. 8.0 Camera (Product) Line:1,2 Canon offers in UK market following brands to satisfy various segments of population. 1. Digital Compact Cameras: Range of versatile digital cameras, can achieve the best possible results with every picture. Each model offers the optimal balance of style and substance. 2. Digital SLR Cameras: EOS system, a combination of high-performance auto focuses SLR cameras and world-class electronic-focus (EF) lenses. The EOS range is the first choice for professional photographers everywhere. 3. Film SLR Cameras: Combination of fast auto-focus SLR cameras with world-class EF lenses, the EOS system takes photography further. Recent EOS cameras have up to 45 auto-focus (AF) points and shoot 10 frames per second to helps photographer capture that moment decisively; other models incorporate eye-control focus. 4. EF Lenses: Extensive range of EF (extended focus) lenses. Each one is designed to maximise the performance of SLR cameras, enabling user to create outstanding results on film quickly, quietly and easily. 5. 35mm Compact Cameras: New Sure Shot range from Canon, when it comes to capturing those precious moments in bright, vivid detail. Designed for fun and ease of use, each model promises exceptional results. 8.01 US Copy Rights Commission Status for 2005: 2 Rank Organization Number of Patents 1 IBM 2,941 2 Canon 1,828 3 Hewlett-Packard 1,797 4 Matsushita Electric 1,688 5 Samsung Electronics 1,641 6 Micon Technology 1,561 7 Intel 1,549 8 Hitachi 1,271 9 Toshiba 1,258 10 Fujitsu 1,154 As illustrated from the diagram above (8.01), Canon is ranked second in the US copy right commission status for year 2005. 9.0 SWOT Analysis for Canon in UK: A SWOT analysis has been created below for Canon cameras to understand its strengths, weaknesses, opportunities and threats. One of its main strengths is having a variety of products which made it a market leader. However it faces some threats such as new competitors from China and Japan. SWOT Analysis for Canon in UK 3, 4, 6 10.0 Marketing Communications Strategy: Canon firmly applies its corporate philosophy ‘Kyosei’ in all of its corporate plans and demonstrates its ambition and willingness to change the global society into a better and tolerate civilization. To exercise full threshold of marketing ambitions a company has to adopt various possible sources of marketing communication process. Main factors adopted by Canon are; Company Itself, Sales Representatives, The Media, Hired Promoters, Retailers, Combined Sources Effects.6 Here we compare the various factors of marketing communications strategy Canon exercises in UK specifically. Evaluation of the current Marketing Communications Mix: 10.01 Channel Selection: “Marketing communications is a subject which has become popular…There are those who prefer too confine marketing communications to promotional activities, which is mostly an academic point of view, and there are those who see the subject in broader terms, embracing every form of communication used in marketing, which is how the subject is practised in the business world.” (Pickton, Broderick 2001, p.7) Canon in the UK uses innovation of communication mix to build and sustain its image in photographic segments. Canon applies innovative communications mix and applies it thought the concept of AIDA. AIDA model modestly defines that consumer’s move step by toward final purchases. Creation of Awareness, Interest, Desire and Action with tactical efforts is the core of this concept. (Kotler, Depicting Markets in 21st Century, 1998, pp198). 10.02 TV Advertising TV is the medium with highest influence rate over all types of audience. Some audience specially younger ones get highly influenced through TV advertising. Canon is presently doing selective advertising on few news and entertainment channels like BBC, Travel Guide and some on some streams of DSTV. Whenever most of messages and communication campaigns are implemented through print and online media options the option of TV advertising is not fully utilized. In print media, publishing ads in newspapers, magazines included. Other out of home options, hoardings, point of purchase (POP) displays, kiosk designing and promotions through events are also applied by the company. Though TV advertising is a neglected area of Canon’s marketing efforts. 4 10.03: Database Marketing Canon has its sheer focus on reaching its customers at their spots. Canon applies modern methods of data collection, data consolidation, data-mining and data networking to promote its product online and with the help of email and tele marketing. Canon also conducts its user’s surveys and feedback. Canon enloys a fairly well developed data base of its customers since it beginning. All customers information is not in digital form and its not easy to contact all customers in this way, so Canon describes its own rules for database marketing. Canon contacts its old customers by regular mail on their addresses in Canon’s record and for new customers canaon uses email data and telephone numbers for online and telemarketing respectively. Canon actively plans to promote its products through data base and presently its mainitaing handful information about the new customers to fulfil futuristic needs of company’s marketing. The term database marketing means “the use of accurate customer and prospect customer information, competitor information, market information and internal company information stored on a computer database to focus marketing activities towards targets” (Pickton, Broderick 2001, p. 292) 10.04: Digital Strategy Digital marketing efforts applied by Canon are remarkably good. Online focus in a concentrated way is obvious from company efforts, focus on marketing as well. Link sharing, participation on photography and art related websites, participation in online groups, blogs and events is also a common practice in Canon’s communications. Company also focuses on promotion of various strategic marketing related events on digital front specially the event company manages are promoted through all digital possible fronts. Canon offers various free entries and participation opportunities to promote their photographs and art works. Canon itself appears on various windows of online programmes and sites like yahoo, hotmail, BBC, CNN as well. Digital event management, exhibitions, sponsorship of international nature are other activities aimed for marketing communications by canon. 4 10.04 Public Relations: “Some additional but regularly run Public Relations activities are arranged on regular basis: Encounters with people through the event to help artist participants send impressive messages The Canon Foundation in Europe aim at improving understanding between Europe and Japan. Foundation also supports scholars and scientists from Europe and Japan. Canon Giessen has been supporting the AIESEC Giessen University branch since 1992. Official Sponsor to the Barbican Great Performers Series Supports CG-ARTS Canon Europe supports the World Press Photo Foundation Also supports sports events of young and kids “ (Canon Inc 2004.) 10.01 Target Audience: During last two decades a revolutionary changes is observed in the target market, as a result, now target audience is different from the previous one. No one can work and succeed unless they listen, who will buy. 6 Generally all photographers or camera lovers were the audience before, now digital photography is more popular because of its own convenience, economy and quality. More focus is on digital audience. Canon targets all segments of photography using film or digital cameras. Canon’s target audience includes; young and lively people, house holds, sports lovers, nature lovers and hobbyists. 10.02 Message Selection: The main theme of Canon’s messages everywhere is “Worldwide in the Pursuit of Its Corporate Philosophy of Kyosei.” The theme goes differently in different regions of the world like: In Asia/Oceania it is: Protecting the Irreplaceable Earth In Americas it is: Preserving and living with nature In Japan it is: Ensuring a prosperous future And Europe and UK is: Putting Smile on Everybody’s face 1 11.0 Comments on Current Communications Mix: Canon’s communications are in accordance with global changes and needs. “The figure below taken from company’s corporate communication indicates all societal areas of concern where marketing communications applies”4 5(Canon – News) 12.0 Recommendations for the next 12 month: This report will make some recommendations to Canon’s communications over the coming 12 month: Product Focus: Focus on products’ Unique Selling Preposition (USP) would be applied Public Awareness: Public awareness campaigns for new brands should be organized Public Relations: Apart from present PR efforts, some focus on house hold users can add a significant number of customers. Contests: Photography competitions can accelerate demand in young UK buyers, special focus on college and universities will help a lot. Photography Exhibitions: To promote the image of products, photographs taken with Canon brands should be exhibited for excellent promotion and increase sales. Activities and Event Planning for Young i.e., Music Concerts, Reality Shows, Adventurous Tours can further enhance the positioning of products among target audience. TV Advertising: Television advertising “remains one of the most powerful mass communication media in existence” with 98% of UK households having at least one or more television set (Blythe 2000, p.66).Television, though expensive but is still very popular and effective medium. Canon should focus on TV program sponsorship, or spot advertising to enhance its communications’ results. Canon must focus on increased market share and rapid sales growth as it is the only way to retain success. Only budget cuts and control over overheads will not work in long run. Canon must make strong efforts to maintain its brand & market leadership. Digital cameras don’t cost significant after-shot cost. Canon should try to increase the number of customers in these segments and should also develop special range of digital cameras for the young and teenagers. Slice of Life promotion strategy can be another good tool to enhance the use of Canon cameras in UK. Canon should also utilize the existing customer base and must make the use of Canon a conviction among UK customers by promoting through slice of life and spokes persons based advertising campaigns. Most consumers get overly influenced when they see their self image and identity in company communications. New baby arrivals, birthdays, weddings, my first day at college, my new home, my first salary, my baby’s first walk are some themes of slice of life Cannon can use in UK to promote its cameras. Celebrity Focus can bring more attraction for both youth and house holds. Movie stars, sports stars and social workers and journalists can be presented as Canon spokesperson to enhance its positioning in the market for long term business benefits. (Author’s original concept does not need reference 13.0 Conclusion: In conclusion, Canon has a powerful brand image and has been able to leverage its position as a prominent camera manufacturer. It has been able to consolidate its market and is also paying attention to growing its business across countries and different groups. Canon being a successful and progressive company uses appropriate communications mix. The need of the time is developing new customer and focusing more to fulfil the needs of youth and digital camera lovers. Canon should also consider the recommendations and use them to improve them. By emphasising on these two points, Canon can significantly increase its share. In relation to UK market, students, young and household user are very important to be focussed well. 14.0 Bibliography: 1Canon (2006-2007), “Canon Social & Cultural”, Support Activities 2006/2007 – Canon Inc. Japan, at: http://www.canon.co.uk/For_Home/cameras.asp (Accessed: 28 April 2007) 2Answers.com (2006), “Canon Company news”, at http://www.answers.com/main/ntquery?dsid=2541&dekey=1&company_name=Canon+Inc&s2={2843A625-3800-484D-AB0D-B0EF182E621D} (Accessed date: 25 April 2007) 3Blythe, J (2006), Essentials of Marketing Communications, Pearson Education, Essex, England 4McKenzie Franzik, War of Brands, Advertising Journal, European Publishing, Norway (Oct-2005-p78). Christopher, M, Payne, A, and Ballantyne, D. (2002), Relationship Marketing: Creating shareholder value 3rd ed., Oxford, Butterworth-Heinemann. ©2002 Coughlan, Almitus (2001), Marketing Channels. 6th ed, New Jersey, Prentice Hall. 5Canon Inc. – Head Office News Letter – April 8-21- 2004- page30-2, David Loudon & Albert J. Della Bitta, “Consume Behavior Concepts and applications”, McGraw Hill Int. 3rd ed.(2002) David Becker (2005), “Canon leads in digital camera sales” at http://news.com.com/Canon+leads+in+digital+camera+sales/2100-1041_3-5671205.html (Accessed: 26 April 2007) 6Millerman Loudon – Innovations and 537 Philip Kotler, “Marketing Management”, 12e, 2006 De Pelsmacker P, Geuens M, Van den Bergh J, (2005), Foundations of Marketing Communications: A European Perspective, Pearson Education, Essex England 7Evans, Bermin, ‘Future of Global Expansion’, Daily Tribune, March 24,2001 8C. David, “Changing Markets and Products”, Wolves-Books, New Jersey ©2004 Martin J. 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