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COMPANY DESCRIPTION
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Introduction
The general reputation about company and its products is its high-technology electronic goods
and innovation. Sony has utilized its innovation to build markets out of no where, and has
created a multibillion, multinational electronic empire with its wide range of products.
• 1987 —Sony acquired CBS Records Group from CBS. It was renamed "Sony Music
Entertainment" in 1991.
• 1989 — Acquired Columbia Pictures Entertainment from The Coca-Cola Company
for US$3.4 billion, to be renamed "Sony Pictures Entertainment" in 1991.
• 1989 — acquired The Guber-Peters Entertainment Company for $200 million.
• 1995 — Sony/ATV Music Publishing, a joint venture of Sony Corporation of America
and Michael Jackson.
• 1997 — ST Liquid Crystal Display Corporation (STLCD), a joint venture of Sony
Corporation and Toyota Industries.
• 2004 —a 50-50 merger between Sony Music Entertainment and BMG. The new
company was named Sony BMG Music Entertainment .
• 2005 —The MGM Company (Metro-Goldwyn-Mayer and United Artists) was
acquired by a Sony-led consortium (Providence Equity Partners 29%, TPG Capital
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21%, Sony 20%, Comcast 20%, DLJ Merchant Banking Partners 7% and Quadrangle
Group 3%) finalized the deal to purchase the film studio for about $4.8 billion,
including $2bn in debts from Armenian-American Kirk Kerkorian.
• 2006 — Sony NEC Optiarc Inc, a joint venture of Sony Corporation and NEC
Corporation, was established.
• 2006 — acquired digital Single Lens Reflex (Digital SLR) cameras section from
Konica Minolta including digital camera support and servicing.
• 2006 — Acquired Grouper Networks (now Crackle, Inc.), for $65M.
• 2007 — Qreatic Design Inc, a joint venture of Sony Corporation and Qimonda AG.
• 2007 — Moversa GmbH, a 50:50 joint venture of Sony Corporation and NXP
Semiconductors.
• 2008 — acquired Grace note, Inc. for $260M.
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Microwave Ovens
Microwave ovens are kitchen appliances that uses dielectric heating to cook or heat food .
This is achieved with the help of microwave radiation to heat water and other polarized
molecules in the food. This fairly uniform excitation, results in thorough heating of food
(except in thick objects), a feature unique to microwave heating technique.
Unlike conventional ovens basic microwave ovens do not brown or bake food. This renders
them unsuitable for cooking certain foods. These additional effects can be added to
microwave ovens, to achieve certain extra effects.
Microwaving food raises several safety issues, but also reduces certain risks, such as that of
fire from high temperature heat sources.
Uses of Microwave
• Microwave ovens are generally used in both industrial applications such as restaurants
and at homes for time efficiency
• it is preferred by, people who want fast cooking or to reheat stored food (including
commercially available pre-cooked frozen dishes) in a short time
• . Microwave Ovens can also be used to defrost food items that are then cooked by
traditional methods, reducing the time to defrost foods naturally.
• Microwave ovens have the ease of performing some traditionally cumbersome kitchen
tasks, for example softening butter or melting chocolate. Popcorn is also a very
popular use of microwave oven.
Sony Microwave
Sony's principal business operations include Sony Corporation (Sony Electronics in the U.S.),
Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment,
Sony Ericsson, and Sony Financial. Now Sony is al set to step in the field of the household
appliances. Sony is going to launch its Microwave oven in the market which is designed in a
manner to give a tough competition to all the existing Companies of microwave in the market
with its latest and updated technology used in the product.
Sony Company is known for its upgraded and high technology products. So its microwave
oven is also providing same technology features.
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Design of Sony Microwave Oven:
• a high voltage power source, with a transformer, which passes energy to the
magnetron
• a cavity magnetron, for converting high-voltage electric energy to microwave
radiation
• a magnetron control circuit with a microcontroller
• a waveguide to control the direction of the microwave
• a cooking chamber
ISM band 2,45 GHz frequency was selected for Sony microwave as it is available world wide
and does not require very expensive equipment
Sony microwave ovens allow the user to select among several power levels, inclusive of one
or more defrosting levels. In Sony Microwave ovens, there is no change in the intensity of the
microwave radiation; it has inverter power supplies which provide continuous low-power
microwave heating with the help of pulse width modulation. In many other ovens, the
magnetron is driven by a linear transformer which can only be switched completely on or off.
The Sony oven’s cooking chamber is a Faraday cage enclosure which prevents the
microwaves from escaping into the environment. The oven door is a glass panel with a layer
of conductive mesh this combines easy viewing, with shielding effect. The perforations in the
mesh are of much smaller size than that of the microwaves' wavelength thus preventing the
microwave radiation from passing through the door.
Compact:(Sony Mini)
Sony compact microwave, is a small, portable, or countertop, it is the smallest type
This model is 45 centimeters (18 in) wide, 30 centimeters (12 in) deep and
25 centimeters (10 in) tall. The power rating is 500 watts and measures 26 liters in
capacity. This oven is primarily meant for reheating food and making microwave
meals and popcorn. This ovens are not meant to cook large quantities of food. This
model will cost USD$100 (around £50).
Large-capacity(Sony LC)
This is a big microwave model designed for cooking large meals. This oven can
handle 25 by 35 centimetres (9.8 by 14 in) casserole dishes, and cook tall items like
roasts or turkey breast, it has a large number of "auto-cook" and precise temperature
control measures. Power use is 1500 watts and has 60 litres of capacity. Dimensions
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are: 50 centimetres (20 in) wide, 50 centimeters (20 in) deep, and 30 centimeters
(12 in) high.
Efficiency
Sony microwave ovens are far superior to other microwave ovens in the market on power
conservation. Most MW ovens convert only part of its electrical input into microwave energy.
A typical consumer microwave oven consumes 1100 W of electricity for an output of 700 W
of microwave power, an efficiency of 64%. Sony’s microwaves have a power efficiency of 70
to 75%.
Sony commercial microwave ovens use a timer; when the timer runs out, the oven turns itself
off. This prevents overheating and power loss.
Sony microwave ovens heat food without getting hot themselves. When removing a pot from
a stove, except by an induction cook top, a dangerous heating element or trivet is left that will
stay hot for some time. Similarly, when taking out a casserole from a conventional oven, one's
arms are exposed to the very hot walls of the oven. Sony’s microwave oven is free from such
problem.
Food and cookware taken out of a microwave oven is rarely much hotter than 100 °C
(212 °F). Cookware used in a microwave oven is often much cooler than the food because the
cookware is transparent to microwaves; the microwaves heat the food directly and the
cookware is indirectly heated by the food.
The lower cooking temperature gets rid of the formation of tars and char, which are
carcinogenic. Microwave radiation pierces deeper than direct heat, with the result the food is
heated by its own water content. Direct heat, in contrast can fry the surface even when the
inside is still cold. Pre-heating the food in a microwave oven reduces the time needed to heat
the food and decreases the formation of carcinogenic char.
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Business Mission
Sony Microwave is committed to the Sony Company; which provides an unmatched level of
product support. Sony targets to provide its products to all categories of people irrespective of
their salary level or their living standard. Sony has made use of different technologies from
NANO to hybrid technology in its products. Sony aims at providing all sorts of products to all
its consumers.
The Sony Corporation has main focus on the Electronics for example IT products and
components, Game like Play station, and Entertainment such as motion pictures and music
and household appliances like microwaves. Sony Corporation not only represents a wide
range of business, but also remains globally unique. The business thrust of Sony Corporation
is to market and distribute innovative and high quality consumer electronic products.
The marketing objective of the company is to establish itself as an expert in the intermediary
marketplace. The Sony microwave has to establish itself in the new marketplace like its other
products. The critical idea of marketing was to make the product available to all the
consumers in need of the oven and to place the product within reach of all potential buyers.
An aggressive marketing strategy was adopted by the company. Sony has lowered the price
of the product in recent months in hopes of sales.
The essay will focus on the management strategies (i.e. TQM, CRM and
marketing) of Sony and effect of these variables on its progress..
Marketing Strategy
1. Product and design innovation to make the microwave oven suited to India
cooking
2. Local manufacturing facility to promote innovation
3. Continuing to import high-end models
4. Reducing import content to cut cost
5. Boosting volumes
6. lowering the prices
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Situation Analysis
External Environment
• Geographical Segmentation:
Urban and suburban regions of India
• Demographic Segmentation:
The targeting people with a stable income of over Rs.6000 pm
• Behavioral Segmentation:
Micros 1200 will be most useful for heavy users whereas the Micros 1000 for light
users.
• Life-stage Segmentation:
The Micron 1000 model is set to target young people single or newly married couples.
Micron 1100 is targeted towards Full Nest 1 (youngest child under 6) andFull Nest 2
(youngest child six or over)
List of Sony’s competitors is fairly long but the most important ones are: Samsung, whirlpool,
Panasonic, LG, Videocon. due to the stiff competition, Sony must endeavor to provide the
latest technology and updated products to its customers.
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The major competitors are, in order:
• Samsung India is in the lead presently having a 240,000-unit microwave oven market.
Its share was 33.6 percent over October-March 2003.
• LG was marginally behind Samsung having a 31.3-percent share in market.
• Ken star brand of Videocon International's held number 3 spot with a 10.6 percent
share of the market
• Panasonic's brand is next in order having a 6.1 percent share.
• Japanese major Sharp and Whirlpool are extremely close to each other with a 4.2 and
4.3 percent share in microwave oven market, respectively,
• BPL Appliances & Utilities Ltd is currently at the bottom of the list with only 1.6
percent market share
• LG has taken over as current market leader in microwave oven segment its share is
37.2% followed by Samsung with 23.4%.
• The performance of the market is forecast to accelerate, with a CAGR estimated at
5.4% for the period 2006-2011 and is expected to drive the market to a value of $4.9
billion by the end of 2011.
India’s estimated population is about 1.2 billion, being second only to China. India has a GDP
of US$1.237 trillion, and is the twelfth-largest economy or fourth largest in terms of
purchasing power. India is ranked 128th on the basis of nominal per capita income which
stands at US$1,068. So Sony has priced its product according to the pocket of the Indians i.e
its targeted market India.
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Distributors Situational Analysis
Sony sells some of its products online. However, the major chunk of their sales is generated
from distributers such as Wal-Mart, Amazon, kitchen keepers and others.
Internal Analysis
SWOT Analysis
Strengths
Sony’s utmost strength lies in the ability to create innovative, quality products. Sony
focused on digital technology when building the PS3 and it has the ability to export video
in high-definition. Utilization of high technology remains its biggest strength. Whichever
product is manufactured and introduced into the market the consumer can use them easily.
No complexity is added to the product. The products are used for a long time. The
products last for long. Consumers face no problem of exchange or default in the product.
1. High technology
2. Product is simple to use
3. Sturdiness
Weakness
Sony’s prime and latest weakness is lack of innovation with PS3. The PS3 has the
capability to export video in high-definition. however since this technology can only
be seen on a high definition TV which is out of reach of a vast majority so a majority
will not even be able to realize its full potential. Another drawback with PS3 is the
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high price which Sony has of late cut down by $100. The high cost of production
perhaps is a major weakness that the company is facing. Sony has to realize a huge capital
for its product production.
The second weakness Sony is the high maintenance cost to be directed for the of
the microwave to be launched in the coming days. As Sony is launching a wide variety of
microwaves depending upon the requirement, which are less common in the targeted
market. The targeted market is more versed with the available simple type of microwaves
available in the market by other companies. So Sony is facing the problem of making the
consumers versed with the utility of its appliances.
1. High cost expansion for production
2. High cost for maintaining the microwave(for user)
3. Not common in use in India (strange tools)
Opportunities
Sony seeks a lot of opportunities that utilize their strengths of innovation.
Changing customer’s demands and flavors has helped Sony launch it product at a mass
scale. Today most customers are looking for new and updated products that provide
maximum benefits at the same time. So Sony sees an opportunity of its product’s being
accepted at a considerable pace. The second opportunity Sony is the huge population of
the targeted country so the consumer base requiring such appliance is going to be large.
Moreover the countries economic condition and the industrial atmosphere is quite healthy
which also enhances the opportunity for the company.
1. Changing customer needs / tastes
2. Huge population (1.3 billion)
3. Economic condition and good industrial atmosphere
Threats
Competition isn't the only threat Sony is facing. Sony most recently had to make a
public apology concerning the use of a backdrop in a violent video game,
"Resistance: Fall of Man." Sony used the Manchester Cathedral in northwest
England in this video game, which features a bloody gun battle scene between
American soldiers and aliens. Sony made a formal, public apology on July 6, 2007.
However, when asked to withdraw the game or make donations to community
groups, they have refused.
Sony has threat from its competitors. More and more companies entering into the
microwave oven field is increasing the competition level. Sony is facing such competition
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which has added in its threat. Moreover one more threat Sony is facing is the Socio
Cultural Trends in the society.
1. Competitor
2. Socio Cultural Trends
Sony utilizes the latest high end technology to attract the customers. The women in the age
group 22-45 who are looking for latest updated technology in kitchen appliances constitutes
the main market target. To reach them feature are added that are catching to these group of
people. Although women are the main target group, Sony does not underestimate men either
in their importance as they can also influence the housewives decisions and can also have
interest in cooking
MARKETING MIX
Introduction:
Marketing Mix is a major concept in modern marketing and involves practically everything
that a marketing company can use to influence consumer perception favorably towards its
product or services so that consumer and organizational objectives are attained, in other words
marketing mix is a model of crafting and implementing marketing strategy.
i. Product
ii. Price
iv. Promotion.
Products
The first element in the market mix is the Product. A product is any item that can be offered
to a market for attention, acquisition, use or consumption that might satisfy a customer’s
needs or wants. Product decision normally base on brand name, Functionality, Styling,
Quality, Safety, Packaging, Repairs and support, Warranty, accessories and Services. These
product attributes can be manipulated depending upon the requirements of the target market.
In addition, customers are always on the look out for new and improved things, this is the
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reason the marketers should improve the existing products and/or develop new ones. The old
products not in demand have to be discontinued. Sony has a vast range of products and it now
has entered into the market with its new innovation “Sony Microwaves”. In short, Sony
products can be classified into the following major product categories:
v. Digital Photography.
ix. Games.
x. In-Car entertainment.
While taking microwaves into consideration Sony has thought of following points:
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SONY Promotion
Brief Introduction
Promotion is a key element of any marketing program. The idea is to communicate the
strategic decisions related to marketing in an effective and efficient manner so as to influence
the target customers ultimately satisfying the objectives of both customer and the company.
The promotional efforts are controllable means directed to create awareness among the public
about its product the microwave oven and what it offers which influence their attitudes
favorably.
Sony Marketing Communication Mix: Sony India has laid down Rs200crore on advertising
and promotion in the current financial year (Promotional Budget) for the entire range of
consumer goods, out of which Rs 60 crore will be spent only on Sony latest innovation Sony
Microwaves. The major elements of promotion mix will include advertising, personal selling,
sales promotion, direct marketing, and publicity. Sony Corporation intends to use all of these
marketing communication mix elements.
Advertising
Advertising can be defined as any paid form of non-personal mass communication through
various available media sources so as to present and promote product, services and ideas etc.
through a designated sponsor. To date, SONY has advertised its new product microwave
ovens through many different ways. Sony uses some popular events like Miss India to
promote its products. Through leading newspapers like Times of India, through Posters and
direct – response advertising (where consumers are encouraged to give feedback to
advertisers). Such advertising is done through direct mail or catalogues. Sony also includes
co-operative advertising in its advertising process. It provides materials and guidelines to the
dealers (e.g. Sony World) for developing ads for print, television or radio commercials
regarding its microwaves.
Sales Promotion
Sales promotion is a marketing field that makes use of a variety of incentives that generate a
specific, measurable action or response for a product or service. Sales promotions include free
samples, discounts, rebates, exchange offers, coupons, premiums, scratch cards, early bird
prizes, etc. Sony is promoting its microwaves through different sales promotional strategies.
It is using Public Relations and Publicity Public relations for creating and maintaining
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positive relationship with employees, shareholders, suppliers, media, educators, potential
investors, financial institutions, government agencies and society in general. The potential
customers have been provided contacts through its website for availing any information
regarding the company and its product. Following things has been taken into consideration
while promoting the product in the market:
Changing awareness about benefits of Oven ( not only reheating but also cook well)
by direct marketing:
Organizing cookery classes : with famous chef
Recipe contests, in-house demos
Giving away freebies in the form of accessories such as glass bowls, aprons and
gloves and hosting co – promotions
Distribution channels need to be decided so that the product is made available in adequate
quantities at places where one normally expects customers to shop.
The marketing management has decided to establish an selective distribution of its products
through its selective dealers i.e. SONY World. Sony distributes its products through various
channels. It makes use of zero-level channel, one level channel and two-level channel. In
India, Sony will use the method of one-level channel for launching its microwaves. In other
words, customer will buy Sony microwave from the approved retailers who will in turn buy
the product directly from the company. Sony will assist the potential buyers, through the
internet to find the nearest retail shop where to buy the Sony products. For this, one has to go
to its website e.g. www.sony.co.in/section/shop and specify the product and location. Then it
will display all the nearest retail shop available. To start with, launching of microwave ovens
will be in India’s top seven cities ( 70% of market with Delhi and Mumbai) at the same time
endeavoring to expand and explore in nonurban, semi- urban markets.
SONY Price
Price is the only marketing mix variable that can be modified quickly. Price variables that
influence the marketing strategy include dealer price, retail price, discounts, allowances,
credit terms etc. Price remains a crucial factor that can influence the evaluation of the product
by customers. Customers tend to directly link price to quality, especially in case of products
that are intensively technology based. Since Sony stresses on product quality its products sell
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with price ranges which are moderately to high price range, according to its utility and the
targeted customers. So it has laid down various price categories of its microwaves
depending upon the consumption capacity of the masses. Moreover the flexible prices of
the microwaves are: (Rs7.000; Rs18.000); (Rs12.500; 15.000) and ( Rs17.900 for an oven
with grill functions)
Sony wanted to launch a new product of its company into the market. This time company is
launching SONY Microwave ovens with different shapes, colors and features. They had done
homework and decided exactly what t o offer and how to generate the sales. It is very difficult
to increase sales because these days large number of products of same kind was launched in
the market one or the other day and thus the company had to face a tough competition. Sony
microwave is the brand extension and will provide the benefit in the success of the product.
These are the following steps kept in mind……..
1. Identifying the competitors: - Before launching the product a proper market study
must be done to know the competitors in the market and their strategies. There are
various competitors of SONY in market offering large range of products like Panasonic,
LG, Onida etc. So for this there is a need of market survey and have to take a serious
look at competitors by doing the proper SWOT (strengths, weaknesses, opportunities
and threats) analysis. With this strategies and target market of competitors will be
known which will be of help in making the policies to compete with them. As Sony is
launching microwave ovens under the brand name SONY it is important to know the
products offered in the market by competitors. There are various products like
Panasonic microwave type countertop, Onida microwave, LG double door microwave
etc offered by competitors. If new product or service is entirely unique and without any
competition, it's important to put product according to the customers prospective .Once
it is decided there will be competitor’s, review their marketing strategies, including their
ads, brochures and websites and target market after all the process it is to be evaluated
how new product will stand up against other products.
2. Target the customer. To successfully launch a new product with minimum financial
outlay, it's essential to focus exclusively on those customers who are targeted according
to the different segments. These customers may be those people who are currently
buying something else and can appreciate the additional features of new product offered
to them. So for targeting the market there must be a proper segmentation according to
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age, sex, taste, preferences etc. There will be a proper positioning of product in the mind
of the customers.
3. Define marketing strategy and techniques. After defining the target customer, sales
and marketing channels also must be decided. It must be decided whether to distribute
through internet or dealers .Generally, multichannel marketing or 360 degree
marketing approach is considered as of greater success. It is necessary to know target
customer and target market. Suppose your strategy is to market a low-cost customer
you might choose traditional direct marketing sales as your primary channel. The trend
from traditional strategies based on personalization, rather than generalization
approaches integrated. If you want to target high cost customer you might use
traditional as well as modern techniques to distribute the products. HUL involve the
whole organization, because it needs both internal and external communications to
identify the strategy and direction of the organization
4. Test concept and marketing approach. With all the efforts and money it takes to bring
a new product to market, it is undesirable to rush to the launch phase without testing
product. It's best to examine product, marketing message and marketing materials
offered by the company. Before launching the product it is to be tested whether the
product will be accepted by the customer or not. Only after testing is complete, company
should proceed to the final creation of marketing approach and strategy.
6. Roll out campaign. Campaign often plays a vital role in the launch of a product.
There are various ways of campaign like through advertisement, events, public relations
etc .But no matter what publicity route you choose, first make sure your product is
ready and available for purchase in order to maximize returns. And other marketing
efforts should follow closely on the press roll out. Monitor the results of all media, and in
the first weeks and months, be prepared to adjust campaign to take advantage of what is
working best. Company must hold various promotional events, advertisements for the
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promotion of the product. As SONY is launching the microwave there must be
awareness and availability of the product in market which is only possible by
promotional campaign. All the Medias like newspaper, TV, Radios; internet etc must be
used for the promotion of the product.
7. Launch of the product: - After a proper campaign process it is to be decided about the
launch of the product keeping in mind the various concepts of marketing mix. A proper
process must be followed keeping in mind the 4p’s price, place, product, promotion
.when all is set launch product by handling an inaugural ceremony.
8. Taking the feedback from customer: - Work doesn’t ends after launch of the product
now it’s time to take feedback from customer about the product. Feedback will tell
whether the product is successful or not. Company will also come to know about the
need of customer and can review the product. Feedback is necessary because by this it
can be specified that what consumers want and what they are getting. It will also help in
the launching of new product.
9. Know your product's lifecycle. The campaign which is used during the introduction
phase of product launch will need to be updated as product matures. It is needed to
monitor the marketing results carefully and record the results that will indicate when
it's time to revise the product, media message for generating the higher revenue. This is
needed because every product reaches the maturity stage where revenue generations
decrease and it’s time to review the product.
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Projected MARKET GROWTH of MICROWAVE
This graph shows the projected market growth of the product after the one month of
launch up to the fifth month. According to this market survey the product market share
is hoped to increase rapidly in the first month but due to the tough competition in the
market it starts declining at the ending of the second month.
But after the end of the third month sales will again increase due to the quick response of the
company SONY will increase its sales promotion of the microwave creating awareness in the
market. Due to this there will be an increase in the sales and will remain constant up to fifth
month. This shows that after launching the product job doesn’t ends but it needs regular
promotion in case of new product. After examining the market cause of decline in the growth
of product may indicate that it was caused by the decrease in the price of the competitors’
products. So here SONY will reduce its products prices and records an increase in the growth
rate and maintain it. Market survey is must in today’s competitive world because market
trends keep on changing regularly so that’s why it’s necessary.
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Pricing Strategies
Premium Pricing
Use a high price when the product or service is unique. This approach is useful where the
product has a sizeable competitive advantage. Such high prices are charge for luxury products
as Sony charged for its laptops, plasma televisions, audios, Television and Projectors, Home
video, Hand cam video camera, Computer Peripheral, Portable Audio.
Penetration Pricing
The price charged is set artificially low for products and services in order to gain access into
market share. Once this is achieved, the prices are adjusted to higher level. This approach was
used in Sony mobiles, Sony audios.
Economy Pricing
This is an economic low price approach. The marketing and manufacture costs are kept
minimum to set such prices. Supermarkets often have economy brands for soups, spaghetti,
etc.
Price Skimming
A high price is charge since the product has a substantial competitive edge due to its unique
features. However, such advantage can not persist for considerable time because high price
will bring forward fresh competitors into the market, and the prices eventually fall due to
increased supply. Manufacturers of digital watches used skimming approach in the 1970s.
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This tempted other manufacturers into the market resulting in lower production costs bringing
down the prices. Hereafter companies had to adopt other marketing strategies and pricing
approaches.
Apart from the above four main pricing policies/strategies which form the bases for the
exercise, there are other important pricing approaches.
Psychological Pricing
This approach is used to induce an emotional response from the consumer instead of a
rational one. For example 'price point perspective, 9999 rupees and not ten thousand.
When there is a range of product or services and the pricing reveal the advantages of parts of
the range. For example car washes. Basic wash could be $2, wash and wax $4, and the whole
package $6.
Companies try to increase the amount spent by the customer once they start buying. Optional
'extras' result in increase in the overall price of the product or service. For example airlines
charge for optional extras such as guaranteeing a window seat or reserving a row of seats next
to each other.
Companies charge a premium price in situations where products have complements to capture
the consumer and then regain margins from the complement. For example a razor
manufacturer will charge low price for the razor and recover its margin (and more) from the
sale of specially designed blades which only can fit into the razor.
Here sellers sell products as a single package. This also serves to shift old stocks. Videos and
CDs are often sold using this approach.
Promotional Pricing
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This is a very common and popular approach to promote a product. There are several
examples of promotional pricing approaches such as BOGOF (Buy One Get One Free).
Geographical Pricing
Geographical pricing means there are variations in price in different parts of the world. For
example rarity value, or where shipping costs increase price.
Value Pricing
This approach is applied when external factors such as recession or increased level of
competition makes companies provide 'value' products and services to maintain sales e.g.
value meals at McDonalds.
Building of Strategy
It would be very difficult for the company to find suitable successors for two two pioneers of
the umbrella strategy company. Sony is a multi national company having major branches in
Europe and the United States with stock listing in 23 stock exchanges. In order to become
more profit oriented, the Japanese school culture strategy is not good enough. It should lay
more emphasis on market share, especially in Japan where its market is shrinking. Strategy
should aim at greater control and better communication between managers and workers,
especially the engineers in the R&D Department. Company should adopt a more planned
strategy, outlining the general direction for the company
Diversification
One possible direction is putting more focus on household appliances’ know- how in non-
consumer business. Currently, the consumer has the power to choose from a wide range and
competition is tremendous. The competitors are capable of copying the product in a short
time. To increase its profit margins, Sony should focus on the business sector and industries
that supply high technology equipment and parts. This would fully utilize the R&D
Department, the strongest plus point of Sony without waiting for the price cutting and
technology adaptation in order to suit the average consumer’s requirements. This would also
make Sony less dependent on coming up with a steady stream of relatively short-lived
hit products, and able to use its unique talents in video and semiconductor technology to
create its version of the office of the future.
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Sony is often equated to expensive, high-profit end of the market. It is advisable that the
organization should expand its product range and offer lower priced, simpler featured
products which would take care of other imitators. With the lower priced line, Sony can
increase its shares in both Japanese as well as overseas
Sony should try to become a leader instead of being a maverick. There is a great difference
between the two, the leader, is not only a great innovator, but also is a great coordinator. New
products, which entail both hardware and software features such as the Mavica, should
attempt to attain industry wide standards. Even if these standards may not be the best ones yet
by pioneering the product Sony, would gain a considerable head start in the field allowing
Sony to concentrate on further improvement and development of the product. Sony is not
large and strong enough to provide both software and hardware support for a single product.
They also do not have enough know-how of the creative software market.
Within the company, the different R&D groups should collaborate more effectively. It is also
crucial to have product line that is much more compatible with one another. That means a
thorough communication between groups and managers, without any secret projects. Products
should have a higher added value and durable frequent model changes should be avoided.
There is need to change from a manufacturer-orientated approach to a consumer-orientated
one. The brand-line compatibility also leads to brand loyalty from the consumers.
A more cooperative approach is required with the other Japanese consumer electronic firms.
When the Japanese took over the US market through cheap yet quality consumer goods, there
was stiff competition at the lower end of consumer goods, from other Asian countries such as
Taiwan and South Korea, which had low labor costs. For that reason, the Japanese firms
should cooperate in setting up standards in high technology areas to harvest maximum profits
and pass on the technological lead-time to fellow Asian countries.
Cost Cutting
Cost cutting is an important issue. R&D plays a central role in the success of Sony and
although it takes up 10% of sales it cannot be cut drastically. Therefore, cost cutting is the
only plausible way to improve profit margins.
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Sony at present is not making full use of lower cost areas in the world, especially Asian
countries. , Sony can set up factories in these countries take advantage of their cheap labor. In
addition it will get a head start in these potential consumer markets.
It can also, refine products instead of reinventing them. This way set up cost will reduce and
greater automation can be achieved.
Cost cutting, with stress on utilizing the cheap labor available in the Asian developing
countries, should then be implemented. This could be part of a long term strategy. The work
force could also be made more elastic. Finally, diversification, emphasizing the need for
making business supplies a key part of Sony's business. Sony should endeavor to achieve
these long term goals. However, the end product ratio between consumer and business
products should be regularly reviewed right through the process to realize the optimum mix.
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Conclusion
Although other electronic firms are taking market share and profits from Sony by being
copycats, the heart of Sony's success, the innovative spirit and quest of excellence and
perfection cannot be copied. Sony's main task is to integrate its talent by placing
common goals and priority for this increasing competitive market. Sony also has the
potential to innovate into a company with international operations as well as culture
since it was one of the first Japanese companies to set up a main branch in the United
States. With strategy and luck, Sony could become a great firm as it was and will be.
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References
1. http://www.sony.net/SonyInfo/CorporateInfo/
2. http://www.sony.net/SonyInfo/IR/financial/fr/08q4_sony.pdf
3. http://www.sony.co.jp/SonyInfo/CorporateInfo/History/
4. http://reviews.cnet.com/4511-5_7-html?
qt=delldhsnotebookseditorsratingtab&do=1&ds=1
5. http://news.sel.sony.com/en/corporate_information/sony_brand
6. http://en.wikipedia.org/wiki/Sony
7. http://www.salespromo.co.uk/article/40
8. http://www.appliancemagazine.com/news.php?article=257&zone=0&first=1
9. www.financialexpress.com/news/microwave-oven.
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