Marketing Audit Report for SONY

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University of Wollongong in Dubai

Marketing Management

Marketing Audit Report: Sony Corporation

Prepared For:

Dr. K.Prakash Vel

Prepared By:

Nazerke Yermekova 4409784

Zaid Wani 3761988

Shabbir Hussain 3557509

Nehl Abbasi 4368496

Idrissi Bedraoui 498578

Academic Year: 2012 – 2013

Dec 2012

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Executive Summary

Sony is the pioneer in the entertainment and electronics industry for decades. Founded on 7th

May 1946, this Japan corporation was ranked 87th

in the Fortune Global 500 listing of 2012.

Sony began growing its territory in the electronic sector with TV‟s and Radio system,

However Sony shocked the market in early 60‟s with their entry in Laptops, Mp3, Home

entertainment system and Mobiles. As of 2012, Sony stands strong with more than thousands

of products in its range. Sony has established strong market in the Picture/Film industry with

hits such as “Spider Man” and “Men in Black”. In the late 90‟s, Sony came up with Play

station gaming console, a revolutionary masterpiece in the gaming sector that out took the

leader in the industry; Sega Mega and Super Nintendo. Today, Sony is still competing head

on with Microsoft gaming console at a higher volume than compared to Super Nintendo.

Sony has adapted all the marketing strategies to reach the top position in the market, it has

also adapted to the 5 product functions which includes core, basic, expected, augmented and

potential. With presence over more than 150+ countries Sony targets its customers very

carefully with augmentation in products in terms of designs and performance to cater

different kind of customers, ranging from teenage to businessmen to everyday user. Sony

isn‟t dependant on any heavy promotion tactics; it has very well positioned the brand and the

product in the consumer‟s mind which attracts many loyal customers. However, Sony does

advertise some of it new products such as Bravia TV but at a low scale and not spend

millions on its single promotion. As per industry reports and expert talks, there is presence of

what can be concluded as Critical Issues which is causing downfall in some sectors of Sony

Corporation and affecting its performance. What Sony needs now is a breakthrough

technology to get more awareness than its big time competitor Samsung who is a threat to

this industry with its revolutionary models every 6 months. In this report we shall be looking

to various fields of marketing in relation with Sony Corporation, it shall inspect topics on

Situational Analysis, SWOT Analysis, Competition, Product Offering, Key success factors

and Critical Issues, Marketing Strategy and Mix followed by Recommendations.

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Table of Contents

Executive

Summary…………………………………………………………………………..Error!

Bookmark not defined.

Introduction to

Sony………………………………………………………………………….4Error!

Bookmark not defined.

Mission Statement……………………………………………………………………………6

Target Market ………………………………………………………………………………..7

SWOT Analysis……………………………………………………………………………8

Competition………………………………………………………………………………10

Key Success Factors ……………………………………………………………………..11

Critical Issues…………………………………………………………………………….12

Marketing Strategy………………………………………………………………………….15

Mission

Positioning

Strategy………………………………………………………………………15Error!

Bookmark not defined.

Marketing Mix……………………………………………………………………………….16

Product

Price

Place

Promotion

Conclusion and Recommendations…………………………………………………………20

References…………………………………………………………………………………22

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Introduction to Sony

Sony Corporation was founded in Kōnan Minato, Tokyo, Japan on 7th

May 1946. Sony

Corporation is owned and managed by its Parent company named “Sony Group” which

indulges its activities in Sony Electronics, Sony Financial Services, Sony Motion Pictures and

Sony Music Entertainment.

The first product from the Sony Brand the TR-55 a Transmitter radio which was released in

1955. However, until 1958 Sony company was then called “Tokyo Tsushin Kogyo”

(Wikipedia, 2012). Sony is the first company in the world to come up with a portable music

player, then branded as “walkman” in 1979, the brand name walkman is used today also in

mobiles and Mp3 players.

While walkman is the brand name for Sony Audio entertainment, VAIO represents the

elegant designer Sony laptops, VAIO stands for Video Audio Integrated Operation, the first

kind of name in its market to directly target the consumer with Visual and Audio effects.

Whilst Sony is trying to capture every segment in the electronics market, it makes its grip

stronger in the Camera segment with worldwide brand name “Cyber shot” camera; these

were digital camera until 2006 Sony entered the DSLR market by taking over Konica Minolta

Company. One of Sony‟s most profitable segments is the Mobile Communication

Department; Initially Sony was in joint venture with the Swedish Company Ericsson, but due

to recession and intense competition from Apple Iphone, Sony has then parted ways from

Ericsson and focuses solely on Sony Mobiles. There latest mobile now supports Android and

is branded under Xperia name. Sony marketing strategy has always been to serve the niche

market of techy consumer and high end products for which they wouldnt compromise in

price.

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As of today, Sony continues to capture every electronic market possible recently being the

CD market with its Blu-Ray disc format. However, Sony faces tough competition in other

segments from major competitors such as Samsung, LG and Panasonic.

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MISSION STATEMENT:

The leaders and pioneers of the electronic industry today are the Japanese giant, Sony. Sony

does not generally keep a publicized mission statement. In the beginning days the mission

statement of Sony was “Become the company most known for changing the world-wide

poor-quality image of Japanese products." (Hester and Huen, 1987)

With time as the position of Sony corporation changed in the global market and it gained a

greater market share along with an ever evolving product line ,so did its mission statement

and vision. (Jhones,2011)

At present the mission statement is kept to the point and very simplistic. i.e. – “Become the

company most known for changing the world-wide poor-quality image of Japanese

products."

As for specifically aiming at the Middle East Sony has not incorporated any new or different

mission statements towards this particular region and goes on with the same Sony corporation

mission statement formulated in Japan throughout the world. However, if not by countries or

region Sony has indeed separated its mission statement according to the segments of different

product offerings in the market. Just an “electronic supplier” does not do justice to a mega

giant and leading innovator of the field of electronic and entertainment media today. Thus

Sony categorized its mission statement and aimed it towards its differentiated product

offering lines as shown below.

SEGMENT MISSION STATEMENT

Sony Ericsson “To provide quality end to end communication services to small and medium

sized corporate business.”

Sony Music “With a strong customer focus we aim to provide our customers with quality,

on-time and on budget

solutions. With our extensive experience we understand what it takes to deliver

a quality

solution for your business!”

Sony Playstation "To experience the joy of advancing and applying technology for the benefit of

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The most recent mission statement released by Sony was from its Europe head quarters in

Berlin. In the company profile of Sony the mission statement read as, “Sony is committed to

developing a wide range of innovative products and multimedia services that challenge the

way consumer‟s access and enjoy digital entertainment. By ensuring synergy between

businesses within the organisation, Sony is constantly striving to create exciting new worlds

of entertainment that can be experienced on a variety of different products.”

Situational analysis:

Masashi Imamura, a senior vice president who is responsible for home entertainment

products said recently that: “Year-end demand isn‟t looking good globally”.

Presently, SONY company experiences difficult period of time as electronic market has been

entered by a huge amount of other competitors such as Apple, Lenovo, Samsung, etc.

Furthermore, environmental issues such as an earthquake in Japan and floods in Thailand

caused challenges for factories as it led to disruptions in supply chain of SONY corporation.

It has been stated that SONY will be experiencing approximately £2.1billion deficit in their

financial report. Moreover, the company decided to reduce their labour by eliminating 10,000

jobs within 2012. (Hartung, 2012) This amount of job losses is equal to 6 % of Sony‟s global

workforce. The company has faced problems with sales of goods such as televisions due to

the fact that rival companies have started to apply same technology and use of competitive

workforce. Even though the status of company stays competitive, Sony experiences

difficulties. Nowadays, Sony acquires their profit by trading life insurance via Sony Life.

(Kain, 2012)

According to Taipei Times, Sony is experiencing difficulties such as reduction in sales within

TV industry, as they concluded: “ …its main TV operation may lose about $1 billion in the

year ending March 2013, a ninth straight year of losses from the business.” (Taipeitimes.com,

the public."

Sony Corporation "To become a leading global provider of networked consumer electronics,

entertainment and services."

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2012) Moreover, the company decided to decrease TV sales number from “17.5 million units

to 15.5 million” in order to retrieve from net deficit and gain strength. (Harlan, 2012)

Recently, SONY decided to affiliate with Panasonic to produce innovative advanced TV

models such as usage of organic light-emitting diode panels, in other words OLED screens.

(Warman, 2012) Such alliance is very efficient as two brands will increase awareness of

consumers, and such way of business action is quite popular within electronics companies yet

this kind of affiliation between these two businesses is first time. According to Masashi

Imamura, who said that such “collaboration with Panasonic is running smoothly and the two

companies may offer OLED products after March 2014”. (Taipeitimes.com. 2012)

From November 23, Sony implemented “84-inch sets using so-called 4K technology in

Japan”. Furthermore, the company decided to evolve their organizational structure in order

to gain efficient decision making of employers especially the top ones, an example is that

recently Sony proposed their executive employers to repay their bonuses. (Barker, 2012)

Target Market

A key variable in the consumer demand of any country is its total population therefore

understanding of demographics of the country is essential (United Arab Emirates Retail

Report - Q3 2012). Per capita income of UAE has reached US $ 85850 in 2011 (Statistics

Centre-Abu Dhabi SCAD) and the younger consumers of the UAE are self-assured to

confirm the growth of retail operators (United Arab Emirates Retail Report - Q3 2012). Not

only is the total population of a country a key variable in consumer demand, but an

understanding of the

demographic profile is key to

understanding issues ranging

from future population trends to

productivity growth and

government spending

requirements. Sony Corporation

is a varied brand that provides

products and services for a wide

variety of people and is focusing on diversifying into the women‟s market as they impact

80% of the purchases made in the electronics market (2012 Business Monitor International).

0

500

1000

1500

2000

LCD TV Set Sales (000 units)

Digital Camera Sales (000 units)

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The percentage of urban population out of the total are expected to increase up to 79.5% of

the total population of the UAE which means that the purchasing power of people increasing

hence, the growth in the consumer market (World Bank, UN, BMI. 2012). Sony is one of the

biggest vendors of electronics 3D TV of the UAE with 5% of their total TV sales here with

sales for digital professional cameras about 36000 units per month with a growth rate of 6%

by 2016 (source: BMI) as consumers want to upgrade their cameras and replace them with

the ones with new features.

SWOT analysis:

Strenghts:

One of the fundamental strengths of Sony corporation is a well-known brand name which is

acclaimed and honoured by majority of customers which is a very competitive advantage in

comparison with other electronic companies. Moreover, SONY has created a brand that

interprets for customers as a superior and innovative company that has a great history of

entering market and inventing breakthrough products.

The name and status of the company stays steady and there are a majority of loyal customers

who still purchase Sony's products even though it declined within InterBrands 2009 ranking.

(Kekli, 2012 )

Furthermore, an important aspect is that Sony gains profit from entertainment industry as

movies such as “Men in Black” and “Spider-Man” increased corporation‟s revenue. 14.7

percent of corporation‟s sales are calculated as the profit from movies and music which is

very essential feature for company especially for present days. (Hartung, 2012)

Among all the products, Playstation is the most remarkable achievement that was created and

implemented by Sony; it has been exceptional since the beginning and stays the same,

increasing their customer‟s number.

In addition, corporation‟s goods can be purchased within almost whole world involving

nearly 200 countries.

Weaknesses:

Due to the usage of advertising, which valued a huge amount of revenue for Sony, it

impacted corporation‟s pricing plan. Moreover, television industry of a company dropped to

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approximately $6.3 billion within eight years, which is a heavy disadvantage for Sony.

(Kekli, 2012) Among other competitors such as LG and Samsung, Sony has been facing

reduction of market share that becomes another problem that has to be coped by an

organization.

As the company was expanding into various market segments, it started to lose out their main

and significant feature to create competitive electronic goods. It led to misrepresentation of a

brand image, which is highly inefficient for a company.

Sony is experiencing a huge slow recently in making of electronic products as their rival

businesses use cheaper workforce and thus cheaper prices which usually gets consumers

awareness. Furthermore, corporation started to develop flat-panel models in a bad timing

which meant that it would be more difficult to rebuild.

Opportunities:

In order to maintain and enlarge Sony‟s product range, it can apply its powerful features such

as movie and music industries and also combining it with the gaming industry. This plan can

be an excellent opportunity to rebuild their brand image much stronger and gain exceptional

brand status. Moreover, it has a great chance to affiliate with other businesses, yet such joint

ventures are in the process such as acquisition with Panasonic which is very effective idea. In

addition to this kind of acquisitions, Sony determined to set up joint partnership with Sharp,

which involves an idea to create “large-sized LCD panels and modules”. Such affiliations

and partnerships with various rival businesses is very significant part of increasing

corporation‟s performance and revenue. Furthermore, it can be seen that Sony has an

advantage of being adaptive to join and be part of crucial alliances.

By the year 2014, the Consumer Electronics Market is said to be increasing and will achieve

$136,700 million. This kind of update is very appropriate chance for Sony to use it accurately

and smartly. (Kekli, 2012)

Threats:

Recently the world has experienced economic downturn, which impacted negatively on

nearly everything around the world including Sony‟s revenue especially in United States,

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Japan and Europe. These markets have an influence on corporation‟s profit revenue and

performance as the majority of Sony‟s activities and sales are going within these territories.

Lately, the Japanese Yen became higher than US dollar or Euro, which affects negatively on

sales within Japan as these products become more expensive and it leads to lower profit

margin.

Falsified products are becoming more and more widespread within our world; moreover these

products disturb electronics market by decreasing the number of possible sales if there was no

piracy. These fake goods lead corporations to receive fewer revenue as such goods are sold

by cheaper price and the feature is lower than the original Sony product.

Moreover, there are barriers such as compliance rules, which include environment, health and

safety, and these norms can be troublesome for Sony‟s performance and activities. If the

corporation does not obey these rules, it can lead to high fines and charges, which can

influence on firm‟s profit.

Competition

Japan‟s leading technology manufacture Sony has always been in battleground with

competitors such as JVC in the early 1960‟s to various China and Korean technology

manufactures in late 2000‟s. However, Sony heads strong in the market due to its brand loyal

customer and utmost performance oriented products. Sony has not only been a product

manufacture and service provider but has kept its financial ground strong with revenue of

$3,636.7 Million (Hoovers, 2012) by diversifying its business in various fields.

Sony Competitors List is as follows:

LG – This Korean company is one of the biggest competitors of Sony in the TV and

Audio Video sector.

Samsung – This no.1 South Korean company is competing Sony in almost every

technology sector. TV‟s, Audio, Mobile, PC, Tablet, Home theatre system. Samsung

has managed to capture a lot of technology market share by its ever-changing

innovations.

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Toshiba – Japan‟s 2nd

favourite in consumer electronics; Toshiba. This company may

not compete Sony in every sector but is however a major competitor to Sony in

Computing, TV and the latest being in Tablets.

Panasonic – Being the Japan‟s oldest company. Panasonic is only competing Sony in

the Audio and Video Sector.

Apple – Apple competes Sony in only the Mp3 and Mobile sector. In which both,

Apple leads the market by its iOS operating system differentiality.

Blackberry – After android the most favourite Operating System for socialising is

Blackberry. This is what makes Blackberry a major competitor of Sony, as more and

more people want simple phone and not technological android phone which is being

focused by Sony Smartphones.

Key Success factors:

Sony has developed a brilliant brand image by implementing and introducing innovative and

contemporary products which influenced enormously on consumer's view of electronic

goods. First of all, Sony introduced the Trinitron Color television, VCR, Walkman which

brought great awareness for electronic industry. (Hartung, 2012) An alteration of TVs by

making introducing the Trinitron Color, led consumers to watch TV in a colored quality and

established a novel way of using TVs. An introduction of Walkman was a remarkable novelty

for customers as people could record their favourite music songs and listen to them by not

being at home, this kind of innovative change is greatly perceived by customers and made

Sony to become the transcendent corporation. These goods were brought by Sony, yet

presently electronic market was entered by other substitutes, therefore the corporation began

to implement goods which involved new and modern style features that market was asking

for. Such new schemes to implement new products involved an organization to assist by

creating the magnetic recording tape, and more significantly the Blu-Ray disc which is used

very often nowadays by the majority of customers who greet novel items. Moreover, by

going past to history, Sony has a great effect on electronic industry as it firstly developed

solid state transistor radios which made customers to purchase them by cheap price and hear

the sound in a better way. Furthermore, corporation advanced televisions by substituting

pipes which made TVS become more durable and authentic, and also making TVs waste less

energy. In addition, Sony introduced Vaio laptops which increased customer‟s awareness as

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these laptops involve excellent function and also design which was perceived by other target

segments such as teenagers and women. The most unique and significant product for Sony

corporation is Playstation which when was introduced made consumers to purchase them

immediately and it impacted Sony by creating a brand image of something remarkably

innovative. Playstation entered a new market and increased awareness of new segments

which is quite efficient for Sony's overall performance.

CRITICAL ISSUES:

The critical issues of a market plan highlight the main very important and inevitable features

of the marketing plan and formulate the strategy for the same.

Even if Sony Middle East today has a very well written market plan in papers and there is no

proper strategic implementation map for the same plan it may result in several issues and also

might terminate the marketing plan as fail. (Merdlin, 1996)

For the same reason, in this part of the report we analyze the critical issues that are attached

to the marketing plan of Sony in the form of – the target market, the environment, product

and promotion and finally place and price.

Target market and environment of Sony Middle East :

The CBRE survey on global retail expansion revealed that Dubai ranked second most

targeted city by international retailers and the UAE as the world's second most international

retail market. (United Arab Emirates: Wednesday, April 18 - 2012 at 13:55 press release)

UAE serves as a very important strategic location for Sony corp. not only as a hub and a port

but also as a very high responsive and one of the most important markets of Sony as claimed

by the former CEO Kiyoshi Shikano, who exclaimed that the UAE is of most important

strategic importance specially when the markets of the rest of the world are on a low or

slowing down.

Sony has created well built business ties with the leading electronic retailing chain of the

UAE – “JUMBO electronics” as a local distributor and also a partner in the Middle East. The

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entire top notch and 1st in, new products that are marketed out in the UAE first, are through

them.

Sony has bought in a wide array of new products ranging from 3D binoculars to 3D Bravia in

the largest screen sizes and much more into the UAE market.

Though the sales of Sony in the Middle east overall form the past few years have remained

on a immensely low rate and the chief executive of jumbo MR Deepak Khetrapal was

reported to have said: “We at Jumbo have complete faith in Sony's capabilities and customers

can come in to experience Sony right here." (The National, 2011)

The investors in Sony were taken by a shock when Sony warned them of a fourth year of

consecutive loss in 2010 thereby causing its shares to go down the slope.

The growing strength of the Yen has also made many of Sony‟s products less competitive

globally and this has also resulted in the Television business of Sony (Bravia) to go down as

loss making for the eighth consecutive year in 2011. (National, 2011)

Sony also has to recently face a number of environmental problems like the earthquake that

hit Japan in 2010 because of which production and sales both took a plunge in Japan. This

was then later followed by a high scaled hacking intrusion where all the personal details of

the hundred thousands of Sony play station network customers were stolen that included an

approximate of 1 million customer form the middle east.

But in a press release in 2011 Mr Shikano (CEO of Sony corp.) said, “The incident had not

damaged the PlayStation Network, with subscriber numbers increasing from about 82 million

to 90 million globally this year”.

Aside from that Sony strongly believes in the potential of the UAE market which consists of

a very high percentage of generation Y populations that Sony states are its main targeted set

of customers. The lifestyle, needs and other various demographics aspects of the population

of UAE which comprises of 80% expats, the majority of which are single and tech savvy

represents a highly responsive and strategically significant market to Sony Corp. ( Grabier,

2006)

4 Critical P’s of Sony :

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Product: Sony offers a wide range of product in the UAE ranging from gaming and

entertainment to electronic devices like phones tablets, cameras and much more. The Major

categories of the Sony products based on the market share and percentile revenue returns can

be classified as: Televisions and projectors, Home video, Information and computers – vaio,

printers etc, Home audio, Home theater system, Digital photography, Sony hanycam video

cameras, Computer nonessential, Portable audio Gaming, Car entertainment systems, Mobile

phones, Storage and recording devices, Batteries and chargers and Others.

Place: Apart from having a very strong online presence globally and not only in the UAE,

Sony also has strong business ties with Jumbo Electronics which act as the main local

retailers and partners of Sony corporation in the UAE. Sony has built a good relationship with

almost all of the leading retail giants like Carrefour, Geant, Axiom, Sharaf DG etc.

Promotion: Sony has a strong communication mix for the Middle East. Sony has prime time

advertisements in many languages like Arabic and English in the entire gulf‟s leading TV

channels like MBC etc. Sony provides its Middle Eastern customers with many loyalty

programs like the Sony Playstation card etc. They also have promotional strategies involving

huge discounts during the electronic exhibitions like „GITEX‟ and also during the „Dubai

Shopping Festival‟. Further than that Sony Sponsors a variety of local and international

Sports events and many UAE local events and sports teams. Sony Middle east also has a

Facebook page dedicated to it.

Price: Due to the YEN becoming a stronger currency Sony is having difficulties in globally

competitive pricing of its products. The Pricing for Sony products in the UAE is slightly

above that what its competitors are offering, but the strong Brand image that Sony has built in

the Middle East over the years has still kept it in a strong market position.

Process: The Strategy applied by Sony in the UAE for its product line is the Umbrella

Branding Strategy where the corporate name and the product named are placed together.

Through the use of this strategy although the products gets a personal identity and is able to

formulate its own positioning it also feeds the Sony Brand image overall and thus building

the customers confidence in the brand. This kind of a strategy is mainly used by Sony to

launch its new products in the market.

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Physical Evidence: Apart from the many local retail dealers Sony also has two Head office

buildings in Dubai, UAE. One of them is located in the technology hub of the city – Media

city giving its corporate image a boost while the other division is located in the Jebel Ali free

zone industrial area.

People: Mr. Kaz Hirai has been appointed as the head and CEO of Sony corporation recently

in early 2012. The Head of Sony Middle East and Africa presently is Mr. Miura who recently

took the regional reigns from Mr. Masaru Tamagawa. Sony approximately employs two

hundred thousand people worldwide currently (source: Sony Media City Office DUBAI,

2012)

Marketing Strategy

Mission Statement.

Sony is committed to developing a wide range of innovative products and multimedia

services that challenge the way consumer‟s access and enjoy digital entertainment. By

ensuring synergy between businesses within the organization, Sony is constantly striving to

create exciting new worlds of entertainment that can be experienced on a variety of different

products.

Positioning Strategy

Sony has positioned itself in the market as a path of un-beatable quality and assurance for the

upper middle and upper social strata as it gives the scent of a luxury electronic brand while

providing products of un-match able quality as compared to its competitors. For example

Sony Ericsson is positioning its Android Range as the best way to watch games while driving

in order to boost its share in the market of the smart phones. It has done that by the help of a

four-week campaign which promoted its partnership with sports broadcasters ESPN which

allowed the customers to set free video clips of the goals. To compete with the already

existing smartphones in the market, Sony is positioning its smartphones as the “most

entertaining smartphones” (Sony Ericsson in Soccer Push, Marketing, 2010). Historically

speaking Sony positioned itself as a “Made of Imagination” which it has shifted now to “one-

touch sharing” in order to avoid customers who get confused while focusing too much on the

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technology used in making the phones(Marketing Director, Catherine Cherry, Sony Mobile to

push 'one-touch sharing',2012).

Sony holds a strong position in the mind of the consumers as a quality brand providing all.

"It's all about Sony as a group, music, movies and games" said Mr. Simon Hovell (The

Australian, 2011). The company launched a global campaign in 2011 to position its TVs as

“Television Redefined” to promote its TVs‟ internal capabilities of internet as well as flowing

happiness from the other Sony divisions. ( The Australian, 2011 ). For almost 40 years now

the world had a love affair with Sony and its products during that time the company created

several consumer products and technologies that helped in making their lives easier,

productive and more enjoyable. During this time the company earned a solid reputation in the

minds of the consumers and positioned itself in the market as providers of “quality,

reliability, innovation and stylish designs” (North American Publishing Company, 2006).

Sony has reinforced and extended its market position by taking a quantum leap in

revolutionary new technologies providing high speed and precision with the ease of

portability. Sony Corporations‟ brand message “Make Believe” spreads unity across its group

of products: electronics, games, movies, music, mobile phones and network services, which

signifies the spirit of Sony as the power of creativity and its ability to turn ideas and dreams

into reality and to believe that “what you imagine, you can make real” (Middle East

Company News, 2011).

Marketing Mix of Sony

Product

The products that Sony corporations offer diversify into the following categories Audio

products include navigation systems for personal use, homes and cars. Video category

includes video cameras, digital cameras, DVD players and recorders. Wide range of

televisions are also available that include LCD TV, projection TV, CRT based TV.

Information and Computers category include personal computers and printers. Semi-

conductors like LCD and CCD. Gaming electronics like PlayStations. Sales of consumer

electronics in the United Arab Emirates is expected to rise from $3.13 billion in 2012 to

$3.97 billion by 2015 (Dubai Chamber Analysis) due to the increase in demand and

popularity of products like LED and 3G TV sets(Asia Pulse Pty Ltd Oct 11, 2011).

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Price

The development of marketing strategy is highly influenced by pricing variables such as

dealer price, discounts, rebates, allowances, retail price and credit terms which can be altered

very quickly and are always made in consultation with marketing management. Prices of Ego

intensive of technology based products are always related to quality by the consumers. Sony

targets its prices from moderately high to high because it provides quality products. The

perception that consumers have of Sony products is a Luxury Brand. Its prices are high as

compared to its competitors because the company believes that the market is relating quality

and price together so it inclines to sell its products in Japan to maintain high quality which is

one the main reasons of high process as the labour in Japan is expensive. Selling price varies

in different regions and countries due to the economic conditions. The change in the

exchange rate with different countries causes change in selling prices. The Sony company

uses price skimming to get as much as possible from each market as it is a top brand the

technique is worth using.

Place

Sony Corporation is present online in many formats like its website www.pro.sony.com

which provides information about its products and prices. It also provides information about

its product offerings. Distributors that sell VARs+ System Integrators include: ASI Corp,

Avnet Inc. and Bell Microproducts, Micro-land Electronics Corp. some of the wholesale

distributors of Sony‟s products are Jumbo electronics, MTC FZCO, Golden Systems

Electronics FZCO, Asbis Middle East FZCO, Empa Middle East FZCO, eSys Technologies

FZE, Al Yousuf Digital LLC, Mindware FZ LLC, Logicom Dubai LLC, Comtronix LLC,

and Jumbo IT Distribution. Jumbo is one of the biggest distributors of Sony electronics in the

world and biggest name in the field of consumer electronics with 32 retail outlets and 9

service centres in the UAE (Middle East Company News, 2010).

Promotion

Sony offers discounted coupons ranging from 25% to 50% on the purchase of Sony product

like PC speakers, Blue-Ray Disc Players, laptops etc. it also offers Sony card and play station

cards on which customers can earn redeemable points whenever they purchase any of its

products or services. Its refund zone website provides refunds like 500$ refund following the

purchase of a Sony Camcorder or a Sony Hard Disc Recorder.

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Promotional mix elements include advertisements, personal selling, sales promotions, direct

marketing, publicity etc. Sony uses all of these promotional mix elements.

Advertising

Sony advertises its products through many channels. There are many different advertisements

of its products such as Sony wega TV or Bravia televisions. It always advertises its products

by targeting television programs like dramas and sports for example it advertised its products

in England premier league Football. Sony also has its own TV channel called Sony TV.

Newspapers and posters are also used to advertise its products which are sent to a lot people

all over the UAE. Sony Company has also used direct response advertising through which

consumers are encouraged to respond by providing feedback to the advertiser or placing an

order by telephone or mail. This type of advertising is done through catalogues, brochures or

direct mail. Sony Company also integrates co-operative advertising during its advertising

process. It provides its dealers with the guidelines to develop advertisement for print media,

television or radio commercials.

Sales Promotion

Sales promotional techniques include discounts, rebates, free coupons, premium membership

cards, bonus scratch cards, sweepstakes, exchange offers, warranty, and free sampling etc.

Sony corporation uses many different sales promotional strategies like for example after Sony

BRAVIA TV sets were released, the company was promoting them with early bird prize by

saying that the claim made by the first 35000 customers on the purchase of BRAVIA full HD

TVs during July 2012 would qualify for a bonus PlayStation 3. Sony Company also provided

its customers with free scratch cards with the offer to download 10 free software applications

on the purchase of Sony Ericsson P1i phone and on the purchase of K550i Mid-Range cyber

Shot phone the customer would get a free Bluetooth.

Public Relations and Publicity

Sony has provided contact details to its customers through its website in case of any need of

information through which the company can create and maintain a mutual relationship of

trust with them and ensure their satisfaction. To minimize the negative image created as a

result of bad events which may even crate negative reactions from the public. For example

the advertisement of Sony in which the man was wearing a crown with button symbols on it

and read ten years of passion which supposedly took advantage of the Mel Gibson movie

Passion of the Christ. This ad created negative reaction in the Vatican community as well as

20

many local Catholics saying that Sony went too far after which the promotional campaign

was quickly discontinued.

People

Chief Executive officer of Sony corporations is Howard Stringer. Executive Deputy President

of consumer products and devices groups is Hiroshi Yoshio. Executive vice president is

Kazuo Hirai. Total employees worldwide of Sony are 167,900. Sony Corporation also has a

development initiative like in 2010 it created 13 global talent directors who are given to

detect individuals in all businesses and develop them into future business leaders. It also

includes the process of job rotation by changing the schedules of the individuals to give them

exposure of variety of businesses and regions.

Process

Sony works through an umbrella branding strategy by putting the corporate name along with

the product‟s name. This method enables the product to adopt its own individuality and

positioning, but also take the strength of the corporate brand. The goal is to augment the

confidence in the consumer related to the product. The company uses this strategy to launch

all of its new products. It spends around $5 billion on research and development activities in

2011. The strong inclination towards R&D helps the company in launching new and

innovative products and allows the group to recuperate its product base as needs are directed

towards the customers. For example the introduction of SONY BRAVIA a thin, lightest LCD

TV which features LED lightning. Another example includes VAIO notebook which is the

world‟s lightest 8 inch notebook. The Sony company works from a philosophy which says

“uniquely Sony”. It seeks to assist the improvement of its staff but also shoots its employees

to manage their own careers and avoid labelling. This is the small scale version of the

company‟s wish to nurture compliance. And its wide outlook expands to the CSR which is

the corporate social responsibility throughout its supply chain. For example it made the Green

Partner Environmental Quality Approval Program for Sony suppliers and only purchases

parts from suppliers who certification as Green Partners.

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Conclusion and Recommendation

In conclusion it can be seen that Sony corporation is referred as high end

company with a competitive brand image, yet it faced a lot of setbacks in recent

years which affected enormously on the sales and their overall performance.

These problems were caused by several reasons as mentioned earlier in the

report. Firstly, it started to lose their market share in the electronic industry due

to high competition from rival companies such as Apple and Samsung.

Moreover, various circumstances influenced their business profile such as

environmental issues and economic downturn. In addition to this, Sony had

difficulties with supply chain management including high costs in procurement

of raw materials and mass media usage that led to an overall rise of Sony‟s

production, whereas their competitors are strong in their supply chain

management. Furthermore, Sony had a very vague differentiated marketing

strategy due to its very vast line of product offerings where as the competitors

such as Samsung and apple has a very strong concentrated marketing strategy.

Recommendations

Sony Corporation should focus more on heavy advertising campaigns to promote its products

and invest further in the wireless technologies. It should lower the production cost of its

electronics especially TVs which result in expensive products. More specialty stores should

be created which sell only the products of Sony. The company should team up with Microsoft

aspects and incorporate it into its TV designs. It should implement an efficient manufacturing

structure to maintain high quality products which is the basic Sony ideology. The recall of 9.6

million Sony Laptop batteries did a massive damage to the company‟s reputation and image

of highest quality products hence it should implement Total Quality Control (TQM) strategies

to ensure quality at every level of production. To regain its image in the market heavy

investment in advertising and promotion should be done.

Since the foundation of Sony, it has successfully diversified into various businesses like

electronics, pictures, games, music and financial services and just recently into medical

equipment and electronics. While this diversification and variety has increased its recognition

22

but has also scattered the company‟s resources such as Research and Development,

Marketing and promotional activities, customer service etc. into un-related areas. The

company is facing high competition in every segment and has not been able to establish its

competitive advantage in any of the segments therefore we recommend that the company

should find a segment focus and restructure the company around that focused segment.

Restructuring will help Sony in applying most of their resources into the most productive and

profitable segment. The least profitable segments should either be eliminated or integrated

into other profitable segments. The restructuring will propel the company into developing

exclusive product collection or proprietary group of Sony hardware. The main and the most

profitable segment will eb the centerpiece of the collection. The company will tehn have an

advantage over their competitors because no other company has equivalent experience in the

diversity of segments in which Sony is currently operating. Furthermore, the restructuring

will be a strong indicator to the market which will hopefully reverse the present downward

trend in consumer and investor confidence.

23

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