Marketing plan for Sony Corporation's digital camera products

Marketing Plan for Digital Camera

Situation Analysis

Sony Corporation is a global leader in the research & development, design and manufacturing of optics-based products including high-resolution digital cameras for personal and professional use. The HDNA technology the company has pioneered is redefining high definition digital photography for the amateur and professional photographer alike (Smith, 2008). Sony also has exceptional control and skill in manufacturing, which has given the company the ability to quickly translate innovations into completed products (Chang, 2010). The Sony corporate culture puts a very high value on taking ownership of innovation and the development of digital platforms and products that liberate consumers to live as the choose (Cooper, 2000). This is the mission their engineers are on and one that energizes their business analysts in constructing new approaches to product development, customization and service (Chang, 2010). Given the strength of the Sony corporate culture to innovate, it has succeeded where other purely technology-driven companies have failed. To understand why this is, an analysis of the company is presented in this section including a PESTLE Analysis, Internal Analysis and SWOT Analysis. Each of these provides a varying glimpse into the approach the company takes to managing innovation, customer relationships, and long-term growth.

Environmental Factors

Sony's ability to innovate also applies to its ability to sense what is most critical for its key customers for a sustainability and green or energy-efficiency standpoint as well. The importance of green computing, low-power consumption laptops and systems, and the development of highly recyclable product designs are a major priority within Sony, as sustainability of products is a design objective (Olenick, 2010). Sony is managing to transform the focus on sustainability or green products into a competitive advantage by unleashing the innovation it has, creating entirely new systems and processes to meet user's requirements in these areas. The concentration on making product lines capitalize on environmental factors is just a segment of the companies' strategy for taking the rapid changing occurring globally and working it to their advantage. As many nations now require corporations who are creating manufacturing and distribution centers in their countries to have complete Corporate Social Responsibility (CSR) initiatives and programs in place to enrich surrounding communities, Sony has responded by taking this a step further and requiring their suppliers globally to do the same (Svensson, 2009). The approach Sony continues to take is one of concentrating on continual process improvement to become more agile and resilient in the face of environmental factors (Olenick, 2010) while at the same time seeking to comply with national requirements for sustainability and green initiatives including supply chain compliance (Svensson, 2009).

Legal Factors -- Sony has a culture that embraces learning as a virtue, and continually strives to gain insights from the experiences of other Japanese companies and their legal and regulatory lessons learned. The case mentioned earlier of Toshiba Machinery Company and their sales of unauthorized milling machines to the Russians decades ago still is a foundational element of Japanese ethical training for managers (Ohishi, Naoto, 1993). As the United States and other western nations have continually seen the level of compliance and reporting escalate up through government edict, Sony has continually had to increase its focus on contract management and legal expertise across multiple geographic regions. The costs of this are among the highest the company incurs from a subsidiary standpoint, yet Sony senior management believes that ethical conduct is part of their brand and without it; they would lose the trust of both customers and governments globally.

Internal Analysis

Despite the global recession of the last three years, Sony continues to show financial resilience and the ability to bounce back from significant financial losses in 2009. During their last fiscal year, the company grew 4% year-over-year. If currency fluctuations are taken into account, Sony would have grown at a 13% rate from 2009 to 2001, an impressive ramp given the losses they experienced in 2009 (BusinessLine, 2010).

This financial growth was driven by Sony's core competencies in the areas of LCD television production, with sales up 19% year-over-year, and high-end Viao laptops, the sales of which are up 24% year-over-year (BusinessLine, 2010). These two product families are where the majority of R&D investment continues to be made by Sony, with heavy emphasis on HDNA technology and low power consumption laptops to meet the European Union green computing requirements (Chang, 2010). Most significant and illustrating these core competencies for the company, operating profit increase to ¥69B, up from an operating loss of ¥33B in the previous year. Sony management credits this significant revenue turn-around to the emphasis on process improvement and re-engineering, two critical areas of focus within the LCD TV and laptop business units (Olenick, 2010). The well-known Sony PlayStation 3 sold 3.5 million units in 2010, which is an improvement over previous years where the PlayStation did not sell over 3 million units (BusinessLine, 2010).

An internal analysis of Sony's financial performance also shows that the company has successfully been able to accurately discern just what R&D, sourcing, supply chain and production processes need to be modified quickly and thoroughly for the company to gain revenue coming out of 2010 (BusinessLine, 2010). Personal electronics including cameras, netbooks and MP3 players continued to gain market share and contribute to the turn-around in earnings from 2009 to 2010.

The internal analysis of Sony indicates that it has exceptional strength in research and development (R&D), accuracy and agility in defining which processes need to be changed and why (as is the case with LCD TVs and PCS0, and also has exceptional control over their distribution networks and channels globally. These results also indicate that the cost of manufacturing at Sony is higher than average for the industry, as their volume to profit levels are low compared to high tech electronics companies (BusinessLine, 2010). This is due to the high costs of operating in Japan and having the majority of its subsidiaries in the United Kingdom and the U.S., two countries that are relatively expensive to operate in.

SWOT analysis

Based on a thorough assessment of Sony's operations, its innate strengths at innovation and the relatively high cost to manufacture relative to competitors, the following SWOT analysis has been completed. Sony's strengths, as has been mentioned multiple times throughout this analysis, are their exceptional command of the innovation and R&D process. The structure of the organization itself as an enabler of innovation is clear, as it leads Japanese manufacturers in patents and in pace of innovation (Chang, 2010). Additional strengths include an exceptionally strong brand and geographic breadth of distribution channels. Sony's weaknesses a very high cost to manufacture and coordination of business units to mitigate losses quickly. Sony excels at process improvement yet cannot move quickly enough as an organization to alleviate the losses it incurred in 2009.

Sony's opportunities include a growing global and consumer industrial electronics market, greater levels of strategic alliances and acquisitions, and significant growth potential in the Brazil, Russia, India and China (BRIC) nations. Threats includes the ongoing fluctuations of foreign exchange rates, ongoing uncertainty over economic conditions, the rising level of compliance and regulations, and the recurring problem of counterfeit goods mostly throughout Asia and the Middle European countries (BusinessLine, 2010).

Marketing Objectives

New Product Definition

Given the en masse adoption of social networks, the need exists for a digital camera that has a display large enough to support previewing images, videos and integrating them onto websites and blogs. The Canon Eleftria 5000 is the proposed product to meet this need. The unique selling proposition of the Eleftria 5000 is that it can be customized to the unique needs of the consumer. There will be over 100 different variations of the model that consumers can order online, in Sony stores and also from channel partner's websites. This is a digital camera meant to serve as a platform in much the same way that the Apple iPad has become the development platform of choice for many of the latest Apple applications. The focus on how to make the Eleftria 5000 a communications center that is smaller than an iPad yet can deliver high-resolution images is the goal of the product design and messaging. The design of the Eleftria 5000 is both lightweight yet also capable of supporting high resolution image editing and uploading on the fly. It will also have two-way conferencing capability and live interactive video and Web chat built into its operating system. Sony engineers it is a design that outdistances Apple at innovation and opens up significant growth opportunities for the company.

Marketing Objectives

The following are the key marketing objectives for the Eleftria 5000:

1. To attain 50% gross margins through Sony Style Direct website sales by creating an online configurator capable of capturing the product design and in real-time communicating it to Sony factories and manufacturing outsource providers.

2. To attain 500,000 units sold throughout all distribution channels within the first six months of product introduction globally.

3. To earn 35% gross margin across all indirect channels within the first full year of sales.

Marketing Plan

Market Segmentation

The market segments that will find the Eleftria 5000 of the most value are males 18 -- 45 years of age who are interested in using the Eleftria 5000 as an interactive gaming platform in addition to conferencing device with f4riends. The secondary market are girls in the 18- to 45-year-old segment, whose interest in the Eleftria 5000 is also in the videoconferencing benefits, yet this group will be more active on Facebook and Twitter, according to studies of comparing iPad usage.

e-Business and Social Media Strategies

The product introduction will rely heavily on all forms of social media including interactive Web pages, a blog and also a series of Twitter accounts that will send out discount codes for consumers to get 10% off the Eleftria 5000. As part of the product introduction a YouTube contest will also be held to see who can create the most effective videos of the unique benefits and advantages of the Eleftria 5000. A Facebook Fan page and application will be developed that allows each new customer to upload their videos and share their initial pictures online as well.

The Eleftria 5000 will also have Eleftria Connect, which is 25GB of free storage for every customer who purchases the camera in the first 90 days. Eleftria Connect will be used as an incentive to get customers to upload their files and images, further creating a unique online experience of the camera. The goal is to create a unique online community where the experiences of using the Eleftria 5000 can be readily seen.

Target Markets

Based on an analysis of Securities and Exchange Commission (SEC) filings by Sony the following demographic profile has been developed for the Eleftria 5000.

Figure 1: Anticipated Demographic Segmentation for the Eleftria 5000

Market Segment

Share

Males 18-45

40.0%

Females 18-45

28.0%

Males

Females

Males >45

6.0%

Females >45

2.0%

Source: Sony Corporation 1Ks and Securities and Exchange Commission Filings

http://www.sony.net/SonyInfo/IR/library/sec.html

The demographic breakdowns are based on the sale of high-end SLR cameras sold by Sony throughout the last five years as reported in the 10Qs and filings with the Securities and Exchange Commission. These demographics are the same where Facebook, LinkedIn, Twitter and other social networking sites are gaining popularity and use. Concentrating on the higher-end SLR buyers whose incomes are above average also ensures a greater degree of pricing flexibility as well.

Positioning and Differentiation

The name Eleftria in Greek means freedom. The intent of naming the camera the Eleftria 5000 is to underscore how free the customers will feel when they can instantly upload and share their pictures from anywhere, anytime. This includes videos and the ability to have two-way or multi-way video conferences as well. The positioning centers on agility and setting people free from their desks, cubicles, laptops or PCs so they can really enjoy life and also be more productivity. The value proposition will center on making people productive by providing a means to enable greater collaboration and communication. The freedom to communicate and work how they choose, while also capturing excellent photographs and being able to share them instantly from anywhere in the world, anytime, is the vision of the Eleftria 5000. As with any successful product, this one strives to create a highly unique and differentiated experience that allows users to redefine the product to match their needs and preferences. That is the reason that the production strategy allows for up to 100 different variations of the Eleftria 5000 to be manufactured to users' unique and specific needs. This unique value proposition of customization will also create a more effective marketing strategy, as inherent in any message of freedom is the ability to break stereotypes and be who one really is. That is the vision of the Eleftria 5000, to allow customers that freedom to allow whom they really are to come out in the pictures they take and content they produce. The product concept is specifically designed to support the creation of a highly unique and differentiated customer experience, which is critical to communicating value in any product or service (Chesbrough, 2011).

Marketing Mix

Product

The Eleftria 5000 is designed to free the consumer to define themselves through the use of the camera while at the same time staying connected to the social networks with an always-on Internet connection. There are many technologies to accomplish this, but the most proven is EV-DO, an advanced approach to always providing a connection to the Internet (Lee, Kwak, Kim, Kim, 2009). The EV-DO technology will allow the Eleftria 5000 to stay connected to the Internet regardless of its proximity to any Wi-Fi location. From this standpoint, the camera becomes an anytime, anywhere publishing platform. The product will also be thinner, lighter and have dual high-resolution cameras, in addition to photo editing and posting software embedded in the chipsets or electronics of the device to ensure fast response time to consumers. The lens will support configuration from 5MP to 15MP, and will also have SLR point-and-click functionality in addition to rapid filming of video clips as well. As part of the configurability options, the Eleftria 5000 can have any customized "skin" or veneer on it the customer requests, even their favorite pictures or favorite public-domain artwork. This is to further support the concept of extreme freedom that the Eleftria 5000 provides to customers. Additional customization options include the flexibility of creating a unique carrying case, a modular series of attachments and options to increase voice quality and clarity, and a series of different screens and optics for the viewing areas.

Price

With SLR cameras from Sony hovering over $500, it is important that this device not undercut it, yet also be priced for rapid accessibility through the channel. As it is a platform for photographic freedom of expression and there are 100 different configurations available for purchase, the pricing needs to be very broad yet not be so low as to communicate lack of value. The price/value relationship many connotes the higher the price, the greater the value and with highly differentiated products, the greater the price premium (Fiol, Tena, Garcia, 2011). The option of producing a personalized, unique and one-of-a-kind model using ones' one graphic images also drives up the value of the Eleftria 5000. All of these factors support a premium-pricing model, and with the Eleftria Connect storage online, this also increases the overall value. The pricing strategy therefore concentrates on the high-end, using pricing as a differentiator and communicator of value.

Promotion

The Eleftria 5000 has an excellent promotional message of freedom of expression and freedom of thought. It also has an exceptional value to anyone who wants to communicate graphically over social networks or is a photography fan who likes to share photos from all over. The promotional campaign focuses on this message of freedom and looks to create more value by showing how social networks can be used to promote it as well. The majority of the promotional budget will be for online initiatives and programs, including the development of custom websites, Facebook Fan pages, and also contests where users generate their own content and upload it. The promotion will be as customized as the products are, as customers will have the chance to share the content they produce online.

Place

The distribution channels that Sony will rely on include both indirect and direct channels, with the majority of revenue being generated from the indirect channels of value-added reseller dealers and through distribution. The pricing of the Eleftria 5000 will also allow for significant price discounting in the channel and an online product configurator will be created to support online ordering. Each channel partner will be able to have the product configurator re-branded on their website for use so they can also take orders in real-time. The channel partner websites will all be interlinked to the main Sony production center for fulfillment of orders in real-time. The development of state-of-the-art distribution networks requires the defining of order capture, order management and order status systems to provide real-time feedback to customers to ensure their satisfaction and trust (Al-Obaidi, Gabrielsson, 2002). The channel management program for the Eleftria 5000 will focus on all of these aspects and provide a synchronized, unified series of responses to customer needs based on where their custom-build Eleftria 5000 camera is in the production and fulfillment cycle.

Figure 2: Proposed Distribution Network

Source: (Al-Obaidi, Gabrielsson, 2002).

Global Business Marketing Mix

The marketing mix will be expanded globally by concentrating on the unique cultural requirements and needs of each specific geography of interest. There will be specific language and cultural variations for the BIRC nations in addition to those throughout Europe and Asia as well. The focus of the marketing mix variations will be on earning the trust of customers with the Sony brand, and the opportunity to create a unique experience online. The online configurator will support modeling one of the 100 variations of the camera, uploading the graphics that will be used as the "skin" and also defining how best to manage the online ordering and fulfillment process as well. The entire online experience will be based on having a high degree of user feedback and control throughout the entire process.

Marketing Budget

The budget to launch the Eleftria 5000 is $1,075,000 and is shown in Table 1.

Table 1: Proposed Launch Budget

Costs

Website and Facebook Application Development

$600,000

Series of advertisements in target market publications

$25,000

Production of a series of testimonial videos for YouTube and regional TV spot

$200,000

Champion for Children PCs Program Sponsorship Strategy

$100,000

Event Marketing Strategies and Investments including channel programs

$125,000

Online Configurator for the Eleftria 5000

$25,000

Totals:

$1,075,000