Marketing is a term that is used to refer to all steps that are employed to realize final sales in an organization by taking special attention to customer needs and preferences. These steps may involve various processes such as planning, pricing, promotion in order to contend individual or organization. Marketing entails more than selling a product. Many companies have failed due lack of efficient information of the market in which they are operating as a result they fail to meet customer needs and expectation. They mistakenly believe that by carrying out and aggressive advertisement they will encourage customers to buy their products. Many companies have tremendously achieved success by embracing effective marketing strategies that have enabled them stand out in markets that are characterized by stiff competition. Marketing strategies refers to those patterns or plans that blends an organization’s key objectives , policies and action sequence in a unified whole to realize customer needs, wants, preferences and expectations and at the same time the organization run at a profit. For instance a company like Sony has been able to position itself as a world manufacturer of high quality electronic devices despite the stiff competition from other international companies such as LG and Samsung. This success is hugely due to a strong brand that they have taken many years to build and effective, viable and customer oriented marketing strategies that have made sure that their customers have access to the right product at the right time and at the right place. This has been made possible by embracing high technology procedures when manufacturing their products and through efficient distribution channels.
Marketing Concepts and Theories
The marketing concept is based on a practice goal to effectively determine market needs and demands and finding way of meeting these needs in an efficient and effective manner that surpass your competitors. This will require that you effectively understand your target market and put a lot of concentration on your customers’ needs, preferences and expectations. This will also require coordination of various marketing activities and at the same time ensure that the company is operating at a profit.
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Other marketing concepts that a company should put into consideration are marketing segmentation, targeting, differentiation and position. This process involves recognition and profiling different groups in the market set up who require different services or products and/ or marketing mixes. Marketing segmentation plays a very significant role as it enables an organization or company to have a clear understanding of the market needs thus putting the company in a perfect position in meeting market demands that are usually diverse in nature. Marketing segmentation also helps an organization to properly utilize its limited resources and match them with strengths in meeting marketing demands because this process enables a company identify the unutilized opportunities in the market and thus putting the company in a better position over its competitors. Segmentation entails carrying out intense surveys in the market to identify market opportunities and special needs by customers. The next step involves analyzing the data obtained and then outlining the steps that the company should follow to firmly position itself in the market based on the data obtained. The process of segmentation should be based on the demographic factors, geographic factors, behavioral and psychographic factors. Effective segmentation requires that homogeneity to be established in the identified market segment and heterogeneity should exist between various market segments. After identifying various market segments the company should move forward to identify the most viable segment that it is going to target. This will involve developing an effective and workable marketing plan that is based on the need of the market. The company should then move forward to position itself in the target segment by establishing and communication the company’s image offer to its customers. This will enable the company to establish a valued place in the target customers’ mind relative to their competitors. This process involves evaluating customers’ requirements, analyzing the competitors serving the target market, identifying opportunities, selecting a viable position strategy and then monitoring performance. The process of differentiation is very indispensable when serving a given segment. This process involves creating a set of important differences between the company’s offer and those of the competitor. It is also required that these distinctions should put the company in a better position relative to competitors.
Adopting effective marketing research and marketing information systems will enable a company make marketing plans that are realistic. Marketing information systems consists of people, knowledge to collect, sort, analyze, evaluate and dispense essential appropriate and accurate information to market decision makers in an organization. Market research entails systematic design, gathering, analysis and reporting of data findings that is applicable to a given marketing condition. Marketing research can be based on various aspects for instance buyer behavior, buyer attitudes, industry analysis, distribution, pricing and promotion. Marketing research involves defining a marketing problem, putting in place research objectives, planning a research, gathering data, evaluating data and then presenting findings.
Marketing essentially entails making effective decisions on product, pricing, distribution and promotion. Prior to making decisions affecting these areas an effective and viable plan to serve as control should be put in place. This marketing strategy involves various stages that will have to be followed. The first process involves putting in place a mission statement which is a short statement of the company. This statement gives information on the current position of the company and where it is aspiring to be in future and also information about their main product and the customers or the market they are targeting, the company’s desired image, devotion to survival and profitability.This statement should also contain the outstanding technologies used by the company. The company must take enough time and concentration to come up with an attractive mission statement that will reflect the true image of the company.
The second process will involve setting goals that the company intends to realize. When setting these objective the company must put in place both short term and long term objectives. These objectives can be about profitability (based on sales, total investment or share of common market), volume of market the company wants to achieve within specified period, production capability exploitation, the sales rank that the company wants to realize and stability the company intend to realize in terms of profitability and sales capacity. These objectives can also be non-financial for instance promoting corporate image and improving technology and quality of their products. These objectives are characterized by various fundamental traits. The objectives must be achievable; otherwise there is no need of setting goals that the company will never realize, they must also blend well with corporate mission. These objectives should also be characterized by measurable parameters and have a finite time when they will be implemented and how. They must also be supple or flexible so that any unforeseen uncertainties that may occur during implementation are taken care of. The laid objectives must be motivating and participatory to those who are assigned with the responsibility of implementing them. Once the company has laid down its objectives, the third step will entail putting in place a comprehensive competitive plan that will shield it from competitors who are in the same business. This strategy can involve adjustment of prices on their products without compromising quality or expectations of their target customers or by diversifying their products so that have features that are highly regarded by the customers.
The fourth critical step in planning is building marketing objectives or goals. Effectively developed marketing objectives will put the company in a better position in realizing overall objectives. These marketing objectives can include the market share or volume of sales it intends to realize within a specified time, improving and sustaining market share and maximizing cash flow and maintain profitability. The next step will be to develop a viable marketing strategy clearly defining clearly how each of the laid down marketing objectives will be realized and the corresponding timeline. This stage is indispensable as it will give the company a marketing course by aiming to position a product or service in the context of buyer needs and specifications.
The last step in market planning is building marketing programs. These are activities that will enable a company effectively realize its mission and objectives, competitive plan, marketing objectives and strategies. These will entail activities such as promotions (advertisements, trade shows, pricing, and sale programs) and product or service distribution channels. Promotion is a major constituent of a marketing program and is concerned with effectively and efficiently communicating the decisions of marketing plan, to favorably persuade ‘target customers’ perceptions to make possible exchange between the marketer and the customer that may satisfy the objective of both customer and the company. A company’s promotional measures are the only convenient means to build awareness among the public about itself, the products and services it offers. Promotion can be done for instance through advertisements. Advertising is any paid form of non-personal mass communication through various media to present and promote product, services and ideas etc. by an identified sponsor. Sales promotion involves making use of a range of incentives techniques to configure sales – related programs targeted to customers, trade, and/or sales levels that produce a specific, quantifiable action or response for a product or service. Sales promotions for instance includes discount, coupons, contents and sweepstakes, premiums, exchange offers, early bird prizes and free samples.
Sony Marketing Strategy
Sony Corporation is one of the largest media conglomerate in the world. By 2008, it had revenue of US $ 88.7 billion and it employs directly over 180, 0000 people worldwide in over 2010 countries where it operates. Its head quarters are based Minato, Japan. This media company specializes in electronics, video, communications video games consoles and information communication technology for both consumer and professional markets. It is for instance one of the leading television manufacturers in the world. Sony’s major business operations include Sony Corporation (Sony electronics in US), Sony pictures entertainment, Sony computer entertainment, Sony BMG music entertainment, Sony Erickson and Sony financial holdings. The company has a marketing slogan ‘like no other’ which has so far been effective in marketing their high quality products.
In their marketing plan Sony Corporation has put in place various marketing objectives for their products. These objectives include: to increase the sales of its electronic products which form the backbone of its business and a major source of revenues, and to deliver corporate value to their customers and partners. Electronic consumer market being such a big market, Sony has set an objective of to claim a lion share of this market irrespective of the economic turmoil that the world is experiencing.
Sony has effectively embraced the concept of market mix and segmentation as a part of the marketing strategy. Sony offers a variety of products to serve special needs in the market. Some of their products include: television and projectors, home audio, home video, in- car entertainment, home theatre systems, digital photography, hand cam video camera, storage and recording media. Each category of these items is broken down into sub-categories to serve special interests in the market. For instance, in the category of television and projectors, the company offers products such as Bravia LCD TV, CRT TV, business projector, home theatre projector public display panel. This effectively shows how Sony has adopted market mix and segmentation where the demand for displaying devices is high and diversified. By adopting these marketing concepts Sony has been able to meet the need of customers who may want display devices for different uses. Through effective market segmentation and market mix, Sony has been able to position itself as the leading provider of display devices.
Another marketing aspect that Sony has embraced is integrating globalization into its marketing strategy. Globalization refers to a situation where national economies are integrated into international economy via trade, foreign direct investment, migration and spread of technology. This concept enables marketers to reach a wide range of consumers of their products .Sony has embraced globalization in its marketing procedures through many ways. For instance, the company has taken its time and resources to build a strong global brand ‘Sony’ with millions of loyal customers. This brand is present in over 200 countries worldwide. This strategy has been one of the driving forces behind the success of their marketing programs. Sony has also adopted this concept by globalizing the basics that are associated with the mother company for instance core technology, design, and globalised promotion and globalised customer service. They have managed to market their products all over the world as if they are acting as a national or regional company. Globalization has enabled Sony Company to provide high quality products at low prices. For instance the cost of manufacturing television sets is very high in Japan as compared to china. Because of this, the company uses its Chinese manufacturing center to make television sets for the world market at low production cost.
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Sony has effectively incorporated marketing communication into its promotional strategies. Promotional elements that have been adopted by Sony Corporation include advertising, personal selling, direct, sales promotion and publicity of the company. Sony has vigorously advertised its products through various means including the media for instance advertisement of Bravia television or Sony Wega has been done through TV advertisement. For their advertisement to reach as many people as possible, Sony has always targeted favorite TV programs or events for instance series and sports. It even has its own channel known as Sony TV channel which it employs to market its products. Another form of advertisement that Sony has embraced is the use of play station 2 and play station 3 and PSP using favorite sports events for instance the English premier league. By using most read magazines, Sony has advertised an extensive range of products they offer to its customers. The company has also put integrated corporate advertising in its advertising procedures for instance Sony has provided dealers of their products with materials and procedures to create advertisements for print, for use in televisions or for radio commercials. This makes sure that their target customers all over the world are effectively informed of the products they offer. Sony Corporation has also promoted their products through various sales promotional plans. Each plan is prudently developed to suit the product to be promoted by influencing the target customers to purchase it. For instance during the launching of Sony Bravia television sets, Sony said that all Bravia full HD LCD TVs purchased during July 2008 and registered within two weeks will be eligible for a bonus play station 3 as long as the customer claims is one of the first 50,000 customers acknowledged and confirmed by Sony. This made many rush to buy the TV set so that they qualify for the bonus. This did not only promote sales of the product, but it also provided basis for the new product to establish itself in the market that was characterized by high competition. Also during the promotion of Sony Erickson p1 i-phones, the company offered customers with scratch cards which gave the customers an offer to down load 10 software applications for that mobile. This enticed many customers to buy the product and boosted sales more than the company expected.
Sony Corporation has established an effective model of public relation and publicity in which it has employed a wide range of communication tools to establish a mutual relationship with its customers, suppliers, employees, shareholders, prospective investors, government organizations and the society in general. Its website is effectively designed to offer its customer with all the information they might require about their products or about the company and one can even launch complaints through this web site. This puts the company in a perfect position to establish a mutual relationship with its customers and to make sure that the company meets the needs and expectations of their customers. This strategy has promoted the company to maintain loyal consumers of their products and at the same time create a good image for itself.
Another indispensable marketing strategy that Sony has perfected is distribution (place). Through use of intensive and extensive distribution channels for their wide range of products, Sony has made sure that all their products are available at the right time and at the right place for their customers throughout the world; something that has enabled the company to content the needs of their customers effectively. Depending on the nature of the product and the size of the target market, the marketing management usually put in an exclusive and selective distribution channels that are served by appropriately selected and registered dealers and wholesalers. Depending on the product and the target customers Sony has employed various distribution channels. That is; zero-level, one-level and two-level channels.
Zero-level: Manufacturer → customer (consumer)
One-level: manufacturer →retailer → customer (consumer)
Two-level: manufacturer → wholesaler → retailer → consumer (customer)
Efficient marketing is about taking products or services in front of the consumer where they will see them and be fascinated to them, this can be perfectly executed through the use of the internet. To implement this strategy, it calls for prudently taking sufficient time to comprehend the way the consumers use the internet. This will enable the company to ensure that the customers see the products and services online when they are participating in their usual activities. Marketers at Sony Corporation are moving from traditional internet marketing procedures and have devised new strategies of connecting with their consumers through online courses. For instance in 2006 Sony rolled out its first online tutorials providing its customers with information on digital photography. These tutorials have so far been magnified to four forming a system they refer to as Sony 101. Sony 101 constitutes of four “campuses” that are meant to serve online customers and visitors. These campuses offer their customers with information regarding personal computing, digital photography, home entertainment and business solutions for small scale businesses. Customers and other online visitors can sign up in any of the four campuses which usually feature four to five courses every month that touch specific topics in the field. These topics are facilitated by an expert in the field. To intensify this strategy, Sony partnered with Powered Inc., an Austin, Texas-based online consumer teaching technology dealer that assists in providing the content, plus a hosted software platform and marketing and data services. Sony supplies its own internal and marketing resources, and response from its customer service centers, to help develop the courses. Evaluation on the success of this program is based on the number of visitors the campuses receive and register and the conversion to sales and retention. Retention in this case refers to the number of users who return for a new course on completion. Sony also carries out surveys to determine if the content of the courses is appropriate and whether it will improve the sales of their products and the image of the company. These campuses have so far achieved immense success. For instance, during 2006 Sony received favorite ratings of more than 90 percent from its customers. It was established that those who were taking the courses were not only likely to buy the product they are learning about, they were also more likely to purchase a Sony product for their other uses. When Sony carried an analysis it was established that more than 60 percent of the audience were brand-loyal and that more than 80 percent of those who went through the program would recommend it to a friend. This program has enabled Sony to maintain a close relationship with its customer and at the same time attract more prospective consumers of their products. This program has more than 80, 000 registered members who give response and insight through questions to the instructor. This has greatly enabled the company to anticipate customer service questions and developing strategies in advance to take care of the needs of its customers. Sony makes sure that relevant products are available online throughout the course. According to studies that were carried out is was found out that more than 25 percent of the students clicked through to a Sony product electronic micro-site and more than 15 percent purchased a Sony product in the process.
Marketing Strategy for a New Product
The new product that Sony should come up with is a new media and internet oriented touch screen i- phone model.
Mobile Phone Market
This is one of the most viable and ever expanding markets in the world. For instance according to studies that were carried out during 2006, it the mobile phone market grew by 12 percent to reach US $ 104.3 billion. The global mobile market is projected to reach US$ 211.9 by 2011. Also studies during 2006 indicated that the global mobile phone market grew by 22 percent to reach a volume of 800.1 million units. It is projected that by 2011 the volume will grow to reach 1.8 billion units with the American market accounting for 39.1 of the global market. Therefore, this market is ever increasing and therefore justifies why Sony should invest here. Although it is characterized by competition from major players such as Nokia Corporation Motorola Inc, sum sang electronic and Apple- the company will use its advanced technology to manufacture products of high quality at relatively lower price and using its strong distribution networks, the product will reach many consumers.
This product will be manufactured through integration of various modern technologies and will have outstanding features. For instance these features will include; high resolution touch screen, high performance music and video tools, internal memory of 32 GB and can accept memory cards of up to 80 GB, high resolution camera devices of up to 12 megapixels, extra slim, wide screen and high sound resolution, 3G internet access, long life battery and TV enabled .The product will be sold at price of 300 US$ dollars. This price is far lower compared to what the competitors are offering for phones with far lower specification than this new model. For instance Apple which is a leader in the market, 3 Gs 16 GB and 32 GB i- phones ranges between US $700 and US $ 900.
The market for mobile phones is one of the largest single markets in the world. To be effective in a market like this it needs to identify viable opportunities within this market. In this market there are many groups of consumers who require separate services. For instance within this market the youth will require a phone that looks flashy, wide screen, fast internet (at least 3G), advanced media tools (high video and music quality), enough memory to store their stuff. This will form a major market segment that will be served by this new i-phone model. On the other hand elder people require a phone that they can basically use for communication and do not real care so much about the fine details provided it is offered at an affordable price. Another segment in this market belongs to consumers who use phones for business purposes and therefore will require a phone that will perform most of their business activities.
This new i-phone model will target the youth all over the world. The youth form the largest and viable group in the market. This group has distinct behaviors when it comes to using phones. For instance, frequent access of the internet for socialization purposes, downloading favorite videos and music and many other internet applications. If these behaviors are well exploited, the company can make take a lion share in the market. There this product will target mainly the youth.
(i)To make over 500 million people to be aware of the product within the first one year.
(ii) To sell units of over one million within the first one year after launching the product.
(iii) To take 40 percent of the market share within the first one and half years.
(iv) To make sales of over 1 billion US dollars within the first one and half years.
This market segment is currently being served by other companies who also manufacture and sell i-phones. The major competitors will be Apple Company, Nokia corporation, Motorola, LG and Samsung. Currently this market is dominated by Apple Company which is reputed for manufacturing high quality i-phones. Their weaknesses include: failure to pay attention to some special needs by customers and offering their products at a price that is not customer friendly. Also Apple Company does not have extensive distribution channels for their products outside the United States (Jason 2008: 18). These weaknesses by the competitor will form some of the tools that Sony will use to position itself in the market and beat the key player in the market.
Market Differentiation and Positioning
The company will greatly depend on its highly respected brand to position itself in the market. This brand is associated with products of high quality, unique, affordable prices and convenient. A strategy will be developed that will enable the company communicate effectively to its loyal customers who are consuming its other products. For instance company will inform the prospective customers about the uniqueness of this product using its already well established e-business and by advertisement through the media, to make sure as many people as possible get to know about the product, the company will employ its already extensive distributors throughout the world to inform potential customers about the product in local areas where they serve. To stand above its competitors such as Apple Company, the product will have unique features that meet the needs of the target market and thus this product will easily stand out from those of competitors. Some these features will include high resolution touch screen, high performance music and video tools, internal memory of 16 GB and can accept memory cards of up to 60 GB, high resolution camera devices, extra slim, wide screen and high sound resolution.
The price of the products will be set at a lower level than that of the competitors. Although the key selling point is going to be the high quality and innovative features that will be associated with the product, relatively cheaper and affordable prices will give the company an added advantage over competitors. Since this market is already dominated by strong players, the company will adopt the low cost/high turnover strategy (John 2005: 37). This will be made possible through efficient promotions, use of intensive and extensive distribution channels that are already in place all over the world. This strategy will enable Sony gain status in the market as, the main manufacturer of low cost, high quality i-phones and also to acquire market share of 40 percent within the first two years after product release. This pricing strategy will also enable the product survive and to avoid risks that may be associated with competing products.
(ii) Promotional Strategy
The mobile market is characterized by strong competition by companies with international status. Therefore promotional strategy will play a key role in determining the success of the whole marketing strategy of the product. The promotional strategy will ensure that the product is properly shielded from other competing products and that it stands out. Promotional strategies will include 32 GB free memory card for the first 1 million buyers and 10 % discount for the first 500,000 customers. The promotional strategy will also employ other viable advertisement outlets for instance advertisements through news papers, trade shows, cooperative advertising, in-store demonstration, mobile demonstration also the company will use, its already efficient e-business to advertise and promote the product.
Sony has already in place efficient intensive and extensive distribution channels throughout the world than any of its competitors. These channels are efficiently served by registered Sony dealers. This is the main tool that the company will employ to ensure that it sells large volumes of the product throughout the world. Through these distribution channels the company will ensure that the products are in store at the right place at the right time for its target customers throughout the world. This will ensure that the company meets its objective of acquiring mass market for this product and that the product is always available for the mass market.
Cost-volume- profit Relationship
The marketing cost will include the expenses incurred during promotions and advertisements. The product will be expected to return the amount spend for manufacturing and the cost incurred during its promotion and all other activities that are employed in marketing the product, including the distribution costs. Cost-volume concept will be employed to realize this. By increasing the volume of output, this will allow the company to decrease the cost per unit. Increasing volume of output will enable the company decrease the cost per unit and therefore, Sony will be in a position to offer the product at low prices and still run at a profit. This investment will be anticipated to break-even after four years in which estimated 8 million units of the product will be sold at a price of US $300 .Break-even point is the point where total revenues become equal to total investment. Below this point losses are incurred and above break-even points profits are incurred. Fixed costs will include the amount spend on manufacturing the product and in launching (promotions and advertisements) and distributing product. Revenues will come from sales of the product.
Break-even point (C) = total fixed costs (B)
Unit contribution (A)
Table: 1 break-even analysis for the product
Unit price US $ 300
Unit variable cost US$ 10
Unit contribution US $ 290
Estimated sales 8 million
Revenue US$ 2.4 billion
Fixed costs (B) 2 US$ billion
Variable costs 80 million
Profit (loss) US $320 million
Break-even (C ) units US $ 6896551.72
Break-even point (C) = 2 US $ billion = US $ 6896551.72
Marketing is one of the most fundamental aspect that determines whether accompany is going to be in business or not. Working out a viable marketing plan calls for prudence and hard work. This will also require one to do sufficient market research so as the marketing strategy is relevant with the customer needs and preferences. An effective marketing strategy will enable a company to maintain loyal customers and attract more prospective buyers and can be used as a tool to beat competitors in the market. An effective marketing plan will enable a company or an organization to realize its overall objectives and run at a profit. An effective marketing plan also enables a company in establishing a close bond with its consumer that is based on mutual relationship. Sony is one of the companies that have adopted good marketing models that have enabled it establish itself as the leading manufacturer of high quality and affordable electronic device. A Good marketing plan will also play a vital role when a company is introducing a new product, because the performance of the product in the market depends on marketing approaches that are employed.