6365157 Marketing Plan and Strategy of Sony Ericsson Nepal

Marketing Plan and Strategy of Sony Ericsson – Future Marketing Plan and Strategy of Sony Ericsson – Future TechTech

Background

Technology is growing fast in Nepal, causing the cell phone not to be a necessity at this time but a want amongst the Nepali people. The next few years will show that more people in Nepal will be purchasing cell phones. Today customers expect more, have more choices and they needed the best for the amount they spend. So, marketing strategic plan has become so important in this aspect.

Keeping in mind the present global and Nepalese market scenario I have prepared the report to the best of my knowledge and suggested strategic frame work that they could have to implement to have competitive advantage in the market

Introduction: Global Mobile Phone Market:

International Mobile phone market is being growing at a tremendous rate. Based on the research by IDC , vendors shipped 346.4 million mobile phones, a YTY increase of 15.0% for Q1 2008. However, the shipments were 13.8% lower than the record shipments in Q4 2007; the decline was expected owing to the seasonality of the market. More than 100 M 3G phones were sold in 2006 and more than 200 m smart phones will be sold in 2008.

Market Share of different Brands

Brands Share%

Nokia 40%

Samsung 14%

Motorola 14%

Sony Ericsson

9%

LG 7%

Others 16%

Market Size and Demand – Nepal

Demand Nepal has a young consumer market. This will be a potential target market because young adults in the

Nepalese community want to be up to date with technology. Young people of Nepal today are more likely to spend money on

technological items. Nepal will be advertising cheaper cell phones throughout the country so

that more young people can afford them based on their income. With Nepal’s increasing GDP and average income, younger people will

benefit from this growth and purchase more expensive goods. The cell phone trend is going to take off within the next couple of years

throughout Nepal. Rise in per-capita will allow people to spend more on luxury items. The phones will be less expensive. The cell phone will eventually be considered a necessity.

Market Size

Estimated mobile user in Nepal approx 3.5 -4 million

Tentative Market share F/Y 64-65

Estimated Sales last year of mobile Phones is 3.5-4 lakh This year sales would reach approx 5-6 lakh

Brands Share%

Nokia 42%

Samsung 16%

Motorola 14%

Sony Ericsson 7%

LG 4%

Others 17%

Customer Analysis /Target Market.

Gender Male and Female Age Group 15-59

Lifestyle College Youths Working Executives

Geographical Profile Urban/Semi Urban and Rural Where there is mobile connectivity

Competitive Analysis

Direct competitors – Nokia, LG, Samsung, Motorola and other Chinese brand

Indirect competitors Walkie-talkies, PDA's

Marketing Objective : Volume, Share

With the outstanding market potential the objectives on how much volume and share are nearly limitless for the next few years. Since there is such a huge market that needs the supply of phones as long as you have a good brand image almost all, if not all of your stock should be purchased. However setting initial goal of 70 thousand phones is not unreasonable and not to cost problematic.

This will also establish a decent market share. However, the market share of individual phones is ever changing. Since we are with a company which dominates the market share (Nokia, Samsung, and Motorola) and image. We must be having at lease 10-12% of market share for this fiscal year and gradually improve to be No.1 in days to come and I believe it is not at all impossible and ultimately

Grow by doing sales……. Leading to …Growth in Grow by doing sales……. Leading to …Growth in REVENUES !!!REVENUES !!!

What Future Tech Should think?

THINK GLOBAL BUT ACT LOCAL

Nepal - A diverse market Every market is different and requires special actions Faster response to market needs – Dealers as well as customer Planning and implementation to go hand in hand Decision making at field level Delegation at local level

Sales activities and Schemes Network coverage and expansion Local Marketing activities

Integration of all activities at the zone level (Sales, sales support, marketing and service)

Dealer guidance, development and problem solving at the local level Specific strategies based on markets Reaching out to customers. Delivering value.

“GENERATING REVENUE”

Sony Ericsson SWOT Analysis

Strength Diversity among products. Sony as a brand name.

Weakness Lack in understanding Customer Preferences Less technology advancement Lack of user centered designs. Lack of Brand awareness globally

Opportunities Mobile phones market in developing High % of young market Strong Customer demand for innovative product High Disposable income in emerging markets. Network capabilities and low tariff of service providers.

Threats Landline penetration and introduction of Sky phones for rural areas. Intense competition. Bargaining power of consumers.

The Marketing Mix and Product Strategy

Key marketing strategies which are identified:-The products should be stylish and in with the current trend and technology. One of the noted trends is the ‘only touch screen' mobile handsets, with the advent of iphone from Apple and a phone from the LG-Prada tie-up. If the emerging markets and trend are focused, then style would play a major role as the Nepalese consumers are mostly young adults with an increasing amount of disposable income and they look for brands which are fashionable, especially.

Sony Ericsson should be differentiated according to pricing. With heavy competition cutting down on the profits, Future Tech (Sony Ericsson) should look into new markets using the penetration pricing technique and create a new market segment, like what Nokia did in India with their Nokia 1130 mobile which was a dust proof phone with a torch.

Product differentiation could be done on the basis of the respective bundling; if it focuses on music player then it should be placed in a separate category from the handset which has camera as its specialty.

The emphasis should be given to direct marketing and customer relationship management (CRM).).

The Marketing Mix and Product Strategy

A key part of brand development is making your brand more instantly accessible in memory and that's what product placement does. So, placement should be utilized in the digital media to make a mark on the customers psyche. Also, strategic placement of advertisements in youth oriented program to target teenagers.

The product needs to be placed strategically in such a way that customers treat it as a status symbol and a fashion statement. This could be done by direct marketing in mega malls and boutique shops, to improve the brand image.

Future tech should endorse local film stars and athletes for their products and not go for international stars, which the local people wouldn't be able to relate to.

Physical settings of the showroom should be trendy and modern to give the general impression of the brand. It should not just confirm to the assumptions of the consumer but also delight them. The mobile phones should also be placed strategically such that the best phones should be in the front and the cheapest at the back.

The employees dealing with the customers should be given special training as to how to be presentable, pleasing, and well-mannered and how to handle the customers efficiently. The training would set a certain standard across all outlets and increase the consumer satisfaction.

The Marketing Mix and Product Strategy Warranty and Insurance

Sony Ericsson units come with a standard 1-year warranty for parts and functionality and 6 months for battery. The warranty excludes cosmetic damage whereas replacement casing may be purchased and then applied free of charge in Sony Repair Centers. For the holders of Sony Ericsson Privilege card, there is an option for upgraded warranty by payment of a nominal charge.

Insurance is a new terminology in Mobile market, but it is very effective tool globally. Future Tech should tie up with some insurance company for insurance of mobile phone. ( it is a value added strategy or marketing gimmick to attract customers).

After Sale service - Service Plus Future Tech should heighten its already excellent customer service to further

differentiate it from competitor brands. In order to align itself with the various needs of its clientele, there will be a provision for different ‘Tiers of Service' for Sony Ericsson Privilege Card holders - silver / gold / platinum. The Card tiering will be contingent on the points accumulated. Sony customer care service centers promise a one-day maximum period within which to respond to queries. Taking advantage of the client contact which this entails, service representatives handling repairs may extend the option of loaning temporary units at a nominal charge until the user's phone has been completely repaired. Future Tech will also provide assistance to clients who need to retrieve data or contact numbers from damaged units. These servicing station should be very visible and in major outlets as well.

Enhanced 24-hour 7 business day toll free line, and professional staff to help customers solve problems

Branding/Rebranding For Sony Ericsson to boost it’s the corporate identity, it is recommended the re-

branding of mobile phones under the umbrella brand, "Sony." The concept is similar to that utilized by Motorola (Moto-Razor, Moto-Flip, etc.). This strategy will help leverage upon the existing strong brand equity of Sony in the "appliance" industry, as well as its reputation for product innovation.). This not only reinforces the existing brand awareness of Sony but also tells customers about what advantages Sony Ericsson mobile phones are capable of bringing to them.

It is proposed to establish strategic partnerships that will help Sony Ericsson reach the primary target market as well as the secondary target market more effectively. This will help create a stronger brand recall for Sony Ericsson mobile phones in each category.

In addition, a club of Sony mobile users and users of Sony home appliances with cross-product discounts, and membership perks in other establishments will be provided upon purchase of the said appliances. For instance, a customer will be entitled to a certain number of credits which may be used in purchasing a Sony Ericsson mobile phone when he purchases a television.

Launches: Any new product launched by Future tech should be talk of the town. The launch

should be carried out with press meet and backed up with huge media campaign. Pricing Policies:

Future Tech retail price will be issued to the distributors for strict implementation. Strict monitoring will be implemented to ensure that retailers would not dilute the brand by selling it at a lower price.

The Marketing Mix and Product Strategy

Distribution Strategy Existing Distribution system

Sony Ericsson’s current distribution system consists of one national supplier who acts as exclusive distributor agent to the Nepal. This supplier distributes to:

a. 3 Concept Stores which are Future tech own store and display ONLY Sony phones.

b. Over 150 Authorized dealers which are multi-brand stores The problem of ‘Grey market' is huge due to a VAT to be paid to government

Channels Members: Proposed Distribution System In order to increase sales volume and market share, the following alternate

distribution model is proposed: Traditional Distribution Channels

Distributor – Retailer / Distributor – Consumer

We will retain the conventional distribution process whereby it utilizes a selection of distributors. These distributors have the option of either a) reselling units to a network of retailers or b) vending to consumers. The latter scenario applies to distributors who own shops in selected shopping centers. Here, it is imperative that product pricing be comparable to the cellular phone model's suggested retail price.

In order to optimize product exposure in the retail channels, Sony can issue display racks to high-volume retailers, gratis. It will be mandatory for distributors who own retail stores to maintain at least one of these promotional racks in a visible area. Exclusive dealers will likewise be required to utilize company-sponsored racks and follow Sony Ericssions prescribed store layout. We will make our beat route plan and follow up with retailers and dealers to be done on daily basis by sales team.

The Marketing Mix and Product Strategy

Sony Ericsson Outlet Stores Spurring from the utilization of this channel, Sony Ericsson should explore the possibility

of establishing company-owned outlets, whose product line consists exclusively of Sony Ericsson mobile phones and paraphernalia. The availability of warranties for both parts and service differentiates these outlets from independent vendors, whose warranties are confined to repairs. Repair provisions, however, will not be limited to units within their prescriptive warranty, provided the customer is willing to shoulder incidental costs.

Future Tech choice of location will be limited to upper scale malls and boulevards, and restricted to areas mostly outside their retailers' scope of operations.

Factors Affecting Channel Decision It must be noted that in selecting its network of distributors, it is recommended that

Future tech evaluate reputation given by years in trade as well as sales force capabilities in order to maximize market reach while keeping the number of distributors

That distributors are willing to undergo training for repair of Sony Ericsson products is imperative. This allows Sony Ericsson to ascertain that the quality of service to be rendered satisfies Sony Ericsson standards.

Dealers should likewise be assessed in terms of store location, reputation, and customer target segment. These standards are critical in the selection process as contracts with dealers mismatched target markets risk rendering the partnership superfluous due to meager revenues.

Sony Ericsson outlet stores target the brand loyal segment. These are tech-savvy clientele who prefer that their mobile phone accessories (e.g. Hands-free kits, camera plug-in features, car chargers) bear authentic Sony Ericsson labels. Other would-be purchasers consist of Sony subscribers who will opt to pay more for the assurance that warranties for parts and labor will be attended to by none other than future tech professionals, utilizing authentic Sony components.

The Marketing Mix and Product Strategy

Area Wise targets Vis a Vis Competition and expansion of Network All of us understand there is a huge potential in a market and which need to be

penetrated. To penetrate the market Area wise targets to the sales team to be given according to market size and shares.

We have to have proper distribution channel and it is must to have distribution channels where competition is present.

The Marketing Mix and Product Strategy

Promotional Strategy

Advertising

The aim of advertising strategy is to increase the brand-awareness and brand-recall. While Sony Ericsson has been able to establish its name in the mobile phone market, it has not successfully implanted its image in customers' minds as the first mobile phone of their choices. The high priority of advertising strategy is to be able to communicate Sony Ericsson's stance on giving its customers the ultimate mobile phones equipped with functionality suitable for the professionals and state of the art technology.

When marketing to the rural area we have to realize that they do not have various methods of communication such as internet and television. To market to the rural area markets we will place add in popular newspapers and magazines as well as send out mobile vans to market our product. Lastly we will participate in trade fairs and flea markets which are immensely popular in the rural area

Promotional Strategy Executive Series

The "professional edge" should be rooted in the heart of advertising campaign. The message to be delivered through advertising and promotion strategies is "Be yourself! Be a Pro!” This is to take into account that Sony Ericsson’s primary target segment are young professionals in the age group of 25 to 40 years who have been able to prove themselves in their fields of work. They know who they are and they are pleased with what they have achieved in their life so far. Their "centre of gravity" lies in how they feel and how they look. They are confident, sure of themselves and know what they want to look for in life. They accept themselves and are keenly interested in the "Pro world" but not transform into someone else rather than themselves.

Our target is more mature, more pleased with himself/herself. That's not to say that s/he's perfect. It just means s/he is more PRO-centered.“

The advertisement of the above should be featured on television between news or informative programs as these are most watched by this target segment. In addition, it should be printed on magazines such as Himal Magazine, Boss, as well as Nepal which are of high interest to the target segment. Internet advertisement is also highly recommended for this segment.

Strategic advertising partnership with other car distributor such as Hyundai, Maruti, Toyota and the like are strongly encouraged so as to build a co-brand awareness and existence for both Sony Ericsson and car manufacturers. This is made possible after the successful co-operation of Future Tech with these manufacturers in the distribution channel as well as co-advertising. The majority of this target segment is existing car owners as well as professionals that will be seeking to own mid to high-end cars once their incomes increase.

Promotional Strategy

Walkman Series:

Sony Ericsson secondary target segment is the urban population in the age group from 15 to 25. People at this age group are seeking to find themselves and their places in the society. Their sense of belonging is of significant importance. They yearn to belong to a certain group and are greatly influenced by their friends/peers. It could be said that this group's behavior is entirely different from that of the primary target segment. Besides the emotional aspect, they are looking for entertainment features in mobile phones such as music, games.

As such, there arises the need for a different advertising strategy. Advertisements should focus on featuring Sony Ericsson mobile phones as a way to connect friends and as a status symbol of being recognized as a member of a circle of friends/peers. In addition, they can derive great music, and games out of Sony mobile phones.

Television still remains one of the choices of the media. However, cinema, billboard, internet and radio advertising are also chosen for the main reason that this target segment spends much time for these channels. These could prove to be highly effective advertising means.

Sponsorship of Musical programs or live concerts by mean of ambush marketing will be an added advantage to the Walkman series.

Sales Promotion or Sales Tactics

The objective of sales promotion is to induce purchase as well as to retain existing customers by providing special incentives for Future Tech customers.

It is specially encouraged that Future tech should tie-up with corporations to allow discounts for employees. This promotion move will prove to be highly effective as the primary target segment is the young working professionals. This is an ideal strategic tie-up as it will certainly generate sales volume as well as brand awareness. There is no better advertising strategy than "word of mouth" advertising. In addition, there will be strategic tie-ups with TV, FM. For example, audience tuning to Kantipur TV programs answering questions correctly given after the end of the program can get Sony Ericsson mobile phones as prizes. In turn, KTV will indirectly promote Sony Ericsson brand awareness by mentioning the Sony Ericsson as prize-givers. For music stores: customers purchasing CDs, VCDs, DVDs from music stores will get their points added in their.

Sony Ericsson Privilege Cards. Kiosks located in the business district will be geared at promoting the new line, Executive series. This will bring us closer to our primary target segment.

Sony Ericsson Privilege Cards: Sony Ericsson Privilege Cards forges a community of Sony Ericsson customers. This club is not only exclusively for Sony Ericsson mobile phone users but also for users of other Sony Ericsson products. It is aimed at strengthening corporate identity. Based on the amount of purchase, there will be 4 tiers of membership: 1) Regular, 2) Silver, 3) Gold & 4) Platinum. Promo mechanics will operate along the lines of purchases entitling customers membership in Sony Ericsson Privilege Cards. In this system, customers may earn loyalty points commensurate to the amount of their purchase. Upon accumulating a certain number of points, their membership will be upgraded to Silver or Gold status, allowing them increasing privileges.

Sony Ericsson Privilege Cards membership will provide customers many benefits. First, redemption of loyalty points will be in the form of discounts among an extensive range of Sony Ericsson or Sony Products. Depending on level of membership, customers may avail of offers for extended warranties and product service. Members may also earn points on the surrender or exchange of Sony Ericsson products which they intend to replace. Replacements can then be purchased at a discount, using loyalty points as credit. Special promotions and exclusive discounts will be exclusive to members of the Sony Ericsson Privilege Cards.

Sony Ericsson Privilege Card Club will be beneficial not only to customers, but to the company as well. The club will create sustainable strong brand loyalty, promoting customer advocacy and stronger repeat purchase due to perks and conveniences. The Sony Ericsson Privilege Cards Club will be an ambassador for Corporate Social Responsibility, a medium for communicating Sony Ericsson’s social responsiveness to the public. Members will be made aware of Sony Ericsson’s initiatives of proper disposal of hazardous parts via notices which accompany promotional letters, emails, and text messages

Sales Promotion or Sales Tactics

Sales Promotion or Sales Tactics

Public Relations: Sony Ericsson should embark on the program "Batteries Return". Most of the time, when the battery is no longer usable, customers will just throw away and therefore cause damage to the environment. Future Tech should practices Corporate Social Responsibility by asking its customers to return its batteries and to reproduce/or discard them so as not to damage the environment. In return, customers will be able to add in Sony Ericsson points for their Sony Ericsson privilege Cards. This action plan will no doubt be receiving coverage from media such as television/newspapers of this action program is to project Future Tech as a "green" corporation and that people in the Sony Ericsson community care greatly about the environment.

Sales Promotion or Sales Tactics Schemes

Nepal is a discount driven market. It is recommended that Schemes to be introduced every 3 months in form of Consumer scheme.

Dealers Scheme/ retailer Scheme Dealers to be given targets for a year and performance appraisal to be done

quarterly based upon their target achievement. Slab wise target achievement bonus to be distributed in form of cash, goods or motivation.

Schemes Remarks

0% Scheme On Selected Models ( low end models)

Deepawali and Dusheraa Scheme

New Year Scheme

Nepali New Year Scheme

Valentine Day Scheme

Occasional Scheme To Celebrate Teachers Day, Mothers day, Fathers Day, doctors day, lawyers day ( just to create hype in Market and tap the hype through sales)

Exchange Scheme To Exchange old phones with new one ( any brand)

Models 100% 125% 150% 200%

Sales Promotion or Sales Tactics Dealer Commission

Dealer commission to be at par with Competitors and additional commissions on cash purchase bulk lifting to be given to the dealers. Additional 1% bonuses on total turn over to be given if achieved 100% target which is additional to target bonus.

Incentives to Sales persons Model wise sales wise incentives to be given to the sales persons to motivate

them. Participations in trade shows and fairs

To get the word out about our product we will participate in market and trade fairs in different parts of the country. Trade shows in Nepal are no longer based on strictly industrial goods and the business class. Today, the biggest trade shows are organized for the middle income group and more towards household groups that fit into our target market

These Trade fairs will provide us with an incredible opportunity to get in touch with the real end consumers and to understand the needs and also what their demands of our product are.

Continuous Training Programs on sales and Marketing Programs related to sales and marketing to be conducted on regular basis so as to

ensure that sales team is motivated and are not new to the innovation and ideas of the world.

Direct Marketing or mass mailing It is recommended to have a tie up with different commercials banks and

magazines to distribute our product leaflets and schemes to their clientele. Proper use of ATL and BTL Activities.

Thank You