The New Product Marketing Strategy: Bravia - Essay Example

New Product Marketing Strategy BACKGROUND Bravia is one of the brands of Sony Visual products Inc. which is a wholly-owned subsidiary company of Sony Corporation and particularly used for its television products. Bravia is an abbreviation of “Best Resolution Audio Visual Integrated Architecture” (Morrison & MacMillan 2007, p. 27). Bravia is a product promotional name that replaces the “LCD WEGA” which Sony used for their LCD TVs. As such all Sony high – definition flat-panel LCD televisions use the BRAVIA logo. Bravia televisions and their components are manufactured n Sony’s plants that are in different regions such as Japan, Mexico and Slovakia (Sony Redefines Television, 2011). They are assembled from imported parts from various regions of the world. However, principal design works were done particularly at Sony’s research facilities in Japan. The brand name is not only used in Televisions but also on other products such mobile phones. Sony used Bravia as a brand name to emphasize the quality of their television products that were believed to have a high resolution in the market (Morrison & MacMillan 2007, p. 65). In 2014, the name Bravia evolved from being just a brand name of being a subsidiary of Sony. The mother company Sony Corporation is a Japanese multinational conglomerate corporation based in Japan (Tracy 2014, p. 49). The Corporation is a diversified business with a primary focus on the production of electronics (TV, gaming consoles, refrigerators). It is noted the Bravia has a wide range of television products and other such as accessories, mobile phones, Green TV Sony Bravia Internet T vans Video. Its television products have outstanding features which include: a full HD LED Display (1920 * 1080), X-Reality PRO Picture Engine, Motion flow XR 200, Smart TV with Built-in Wi-Fi, easy Wall mount solution as well as USB Recording and Playback (Morrison & MacMillan 2007, p. 87). The company recently launched a new Bravia TV, namely Android TV which has actually revolutionized the clients viewing experience. Android TV has enhanced pictures, beautiful design, and innovative control. This product has 4K Processor which enable it has stunning picture quality. It has inbuilt precision detail enhancer, precision mapping that let it brings out lifelike colors, as well as dynamic contrast enhancer. 2. GUIDING STATEMENT. As in any business, the success of a particular business lies within the ability of the management to position itself strategically and so establish the products or services being offered (Cavinato & Flynn 2006, 78). Additionally, Arnold (2011, p. 28) observed that the success of the business is also determined by the company’s ability and its management to compete and maintain its competitive edge among its array of competitors. That is to say, the company’s constant development and innovation of its products line and the continued growth of its clientele base helps define the corporate standpoint of the company (Crawford & Benedetto 2011, p.34). In this regards, Therefore, Sony Corporation introduced Bravia Android TV into the market, Sony Corporation launched a competitive and compelling brand that basically was a differentiated brand of high quality purely based on reality. To gain a wider viewership and product awareness, Sony introduced advertising campaign featuring TV spots such as “Balls,” “Paints,” Play-Doh” and “Pyramid” which were mainly designed to get the viewer think of visual worked as made up of pixels of color and the combination of those pixels as the key to pleasurable viewing (Cavinato & Flynn 2006, p.81). In TV business, Sony Bravia had continued to enhance the product strength with an aim of increasing the sales and product value. Evidently, by unique incorporation, Sony-developed features such as the X-Reality PRO image processing engine and Triluminous Display” wide color displays which continuously enhance the image and audio quality of Sony’s full HD TV models as well as expanding its 4K LCD TV lineup. This has seen the sales and profitability of Bravia TV products increase in the recent years. To meet the continually growing market, Sony continue to launch models - such as the newly launched Android TV - that are tailored to meeting local needs in order to increase sales volume while at the same time continue to reduce fixed and operational costs (Williams 2012, p. 93). Furthermore, in reference to the strategies that Sony employ to meet its marketing objectives and goals, Crowther (2012, p. 52) observed that Sony Bravia continue to implement successful hardware, software and content integration strategies that emphasize on awareness creation through the use of internet. The company has also devoted sufficient resources to research and development and in respect to the capital expenditures; it has prioritized investments especially in electronics to increase the market share as well as the clientele base (Williams 2012, p. 68). As a way of improving the qualitative objective, Sony Bravia introduced some elements of product design which somehow distinguished it from other TVs. These included features such as energy saving switch, Web browsing capability like the case of Android TV as well as a six-degree title that affected how a consumer positions the TV in his/her home. These additional qualities ensured that the products formed a wider follow-ship and popularity among the young working class (Hart 2005, p. 74). 3. MARKET TARGETS/SEGMENTS Globalization and the constantly growing diverse market, it is of no value for an organization to use the same marketing mix to different consumers. As such as observed by Helmus and Paul (2007, p. 55) market segmentation provides businesses with the possibility of practically customizing a relatively unique set of elements commonly referred to as the 4Ps for particular target markets. The 4Ps are a product, price, and promotion. Through the implementation of 4Ps, a particular company can satisfy its consumers’ needs in a more effective way through a value proposition that is potentially superior to that of the other competitor. According to Hooley and Saunders (2004, p. 63) market segmentation therefore refers to the process of defining and breaking down a wide market into a more identifiable and homogenous groups of consumers with similar characteristics, wants and needs. In the practical sense, there are few organizations and companies that are big enough to be able to satisfy fully the various needs of an entire market (Helmus & Paul 2007, 59). As such most companies are forced into splitting the total demand from their companies into several segments and so they select only those that they are well equipped to handle competitively in the global market (Solomon 2013, p. 67). Market segmentation demands that the segments must be easily and clearly identifiable, measurable, and easily accessible by promotion, communication and distribution channels, stable enough to be profitable (Pride & Ferrell 2008, p. 40; Riggs 2007, p. 52). Targeting on the other side is the directing of marketing activities towards a market segment or segments. This also bring to mind another term, positioning, which is basically the art of designing a company’s offering and image so that company occupy a meaningful and distinct competitive position in the target consumers’ minds (Paley 2005, p. 71). In other words, a product’s position is the way the product is defined and categorized by the consumers on its essential attributes. It is the place that a particular product occupies in the consumers’ mind relative to the available competing products (Kotler 2004, p.35; Murphy 2010, p. 48). Sony Bravia has wide market target since they have devices almost for everyone who do not actually depend on age, sex or geographically locality. Owing to the diversified approach to global market outreach, Sony Bravia has got a market target of all different type of people. That is to say, everybody or anybody can buy and own a Bravia product, i.e. Android TV set, mobile, or another electronic component (Miracle 2013, p. 44). Reviewing its features, Sony Android TVs primarily targets middle-class families with children, working adults. This clearly indicates that its high-quality products make most of the Sony Bravia products to gain a larger market share that in turn demands segmentation. Moreover, the ability to play games like PlayStation TV, and its reliance on Google Paly Store to deliver content make Android TV gain popularity among young people who are strongly attracted to such things. According to Ryan and Jones (2009, p. 82) the very premise of segmentation is a factor that fluctuates among the groups of a particular market yet it is consistent with each group. It is observable that almost every business can be broken down or segmented into diverse ways. Albeit a hefty portion of the bases used to segment a consumer market can likewise be applied to other businesses and organizations, the sheer nature of these inevitably prompts other specific segmentation bases (Skoloda 2009, p. 32). The following is a comparative chart as presented by Solomon (2013, p. 57) and Williams (2012, p 65) of the fundamental techniques to fragment both market types: Consumer market Business market Type of segmentation Variables Type of segmentation Variables Geographic Region, climate, population density, and population growth rate Geographic Location, customer concentration, regional industrial growth rate, and international macroeconomic factors Demographic Age, gender, ethnicity, nationality, education, occupation, religion, income, and family status Customer type Size of the organization, its industry and position in the value chain Psychographic Values, attitudes, opinions, interests, activities, and lifestyles Buyer behavior Loyalty to suppliers, usage patterns, and order size Behavioral  Usage rate and patterns, price sensitivity, brand loyalty, and pursuit of benefits Source; (Tracy 2014). The identified segments are thus profiled and the attractiveness of each segment is adequately evaluated before choosing a target market. Since each, market segment has a differing taste and preference their demand for Sony Bravia will also differ (Riggs 2007, p. 62). For instance demographically, the young people would have a desire for a larger, HD TV panel that is mostly mounted on the walls as compared to the older population (Tracy 2014, p.67). Basically, Sony Bravia products suitably fit the varying appeal of the young people that include the desire to expand to global exploration by a simple touch of a button. That is to say, Sony Android TV models come with all access pass to music, movies, catch up TV and much more which in away make it suitable for this demographic segment populated with young adults (Ryan & Jones 2009, p. 77). The reliability of the Sony Bravia Android TV model has attracted a psychographic segmentation since the users have developed a positive attitude and have a high esteem opinion of the product. This has seen the product to have a wide popularity among the working middle-class people. The globalization and technological advancement have also contributed to widening the physical geographic outreach for Sony Bravia products (Morrison & MacMillan 2007, p. 41). Sony Bravia has also established numerous sales branches to cover the maximum geographical area as possible. This enables it to be accessible to many consumers at one particular moment (Cavinato & Flynn 2006, p. 45). Further to ensure the consumers use Sony Bravia products without the slightest of concern, the company has also developed numerous networks of service centers across the globe. The company also has warehouses in various parts of the world to ensure easy accessibility of the products, as well as the effective supply chain management (Skoloda 2009, p. 66). However, considering the behavioral segment, it is evident that the price sensitivity of Sony Bravia products particularly Android TV locks out the lower middle class out since they are considerably expensive. This translates to brand usage being limited only to among people of the upper middle class since the lower social class cannot possibly afford them (Bevolo 2010, p. 44). In Germany, for instance, when Sony Bravia was being launched, Sony used German soccer player Micheal Ballack as an advert. This advertisement targeted mainly the young working class men formed the core of soccer audience. At the same time, Sony used international advert campaign as a way of aiming higher on the socio-economic scale purposefully to attract older audiences (Riggs 2007, p. 68). In general, depending on the nature of the products, Sony Bravia’s marketing management often places an exclusive, selective and intensive network of distribution while at the same tome selects appropriate dealers or wholesaler (Crowther 2012, p. 72). As a company which position itself as a distributor of durable and high-end products, it practices the selective distribution of its products from the particular dealers. To ensure quantitative objective, it distributes its products through various channels such as Zero-level channel, one level channel and two-level channel adults (Ryan & Jones 2009, p. 89). 4. OVERALL MARKETING EFFORTS a. A general role for the product, including planned changes- the products are the very reason for the existence of the company, as such the products are aimed to bring profit to the corporation and its owners. b. A general role for advertising, including copy platforms-, the marketing effort for Sony Bravia is to improve the sales of the TV products and other electronic devices. The sale of these products also rolls down into improving and increasing the profit of the company (Skoloda 2009, p. 68). c. A general role for personal selling-personal selling is the use of people to promote a product through communicating with potential buyers with the intention of making a sale (Tracy 2014, p.53). This approach as Riggs (2007, p. 67) is used for prospecting or finding new consumers; communication with the existing and potential customers about the Sony product range. Personal selling also helps in information gathering especially about the market that is useful feedbacks for marketing and planning process. d. A general role for other promotion tools- Sony Bravia uses other promotional tools such as mass media, digital technology, and public events. These tools are very useful in increasing and maintaining public information and awareness of the available products (Tracy 2014, p.57). For instanced the newly launched product - Android TV- is marketed online thus increasing the product viewership and attraction from the global front. Moreover, they help establishing proper understanding and connection with clients and customers regardless of geographical distance. e. A general role of distributors (wholesale, retail) - given the size and scope of the market, distributors play an important role in bridging the geographical gap between the manufacturers and the consumers. Distributors are like the intermediaries that help transfer a product from producer to the consumer (Tracy 2014, p.72). The wholesale are those who transport in bulk/large quantities while those dealing in small quantities are the retailers. f. Price policy, including discounts and planned changes- price is a factor that greatly influences the assessment of value obtained by customers. As a company that emphasizes on product quality, it often tends to sell its products with a price range from moderately – high to High prices depending on the use and targeted customers (Kotler 2004, p.45). g. Any special rules for non-marketing departments- these departments tough not directly connected with the product marketing, impacts significantly on the marketability of the company’s products. Data analysis and IT department for instance help a lot in the structuring of marketing strategies and well as ensure effective inter-departmental communication (Paley 2005, p. 71). SONY BRAVIA ANDROID TV: Its market worth, Firm’s value and Competitive Insulation In reference to its stunning features, Bravia Android TV stands a high position of attraction from global users. That is to say, with the increased preference to Android or internet-enabled gadgets, Bravia Android TV meet the taste of many and so attracts a huge following. With these revolutionized features, Sony Bravia enters and maintains it a competitive advantage over other competitors in the same business. As Kotler (2004, p.83) would have the company’s innovative engineering geared towards meeting and surpassing consumers demands, Sony Bravia created a competitive insulation which enable it maintain its products market advantage against the competitive retaliation from other companies. Needless to say, this new product enhances the Company’s competence in the production of quality products geared to the satisfaction of end users- the consumers. Android TV engineering director, Dave Burke, stated that the new TV would be able to handle video from diverse sources such as TV tuners, IPTV receivers, and HDMI. This is a definite satisfaction and contentment that the management has regarding the new product (Morrison & MacMillan 2007, p. 137). 5. APPENDICES A. Portfolio analysis Portfolio analysis is the process which an organization uses to analyze its products and all elements within the company so as to determine the optimum allocation and distribution of resources both human and material (Arnold 2011, p. 38). Most common measures used are market growth and relative market share. In Bravia Company, it is noted that the business has been on the decline in the sale of its products but according to the recent report by the marketing department, its realized that the company is in its recovery path. The company management is confident that their profits will grow significantly despite the past series of losses having improved on their strategies and identified the market structures and consumer demand trends. Bravia Company is currently in the process of detaching from Sony Company to operate independently though still sharing management responsibilities (Kotler 2004, p.45). Through this it aims at responding positively to the frequent market fluctuations in prices and consumer demands and also help in the cutting of production costs which will increase their portfolio to $2.5 +million worth of products (Morrison & MacMillan 2007, p. 56). Over the past years, the company portfolio declined due to the massive decrease in the US television market globally which led to the economic decline due to the loss of 9% in sales. This loss was attributed to the massive fall in the demand in the market for the products (Riggs 2007, p. 73). The main noted course of the fall in demand for the TV in USA was market saturation by other products from minor companies and this made the consumers lose interest in purchasing the new TV introduced by Sony (Arnold 2011, p. 39). The consumers were skeptical in buying the new high definition television because of the perception they had on the poor television from other manufacturers. The new Bravia, however, were highly upgraded and were to the standard of the new high-definition flat screens TV as well as internet-enabled, i.e. Android TV. B. Market Description The main identified competitors of Bravia are the Samsung and LG Companies which also produces similar products with Bravia Company. However, it is noted that Sony still gathers greater market share than that enjoyed by its competitors. According to the report by Jeannet and Hennessey (2014, p. 87), it is noted that Sony enjoys a market share of about 32% by the year 2010 and this has been on the rise in the recent years. In order to compete effectively in the international market, Bravia is merging with the worlds leading container leasing company the Saco Group to acquire containers that it can lease to other companies and thereby adding to its portfolio base (Arnold 2011, p. 78). The main macro environmental factors in which the company operates is realized by environmental scanning that involves the gathering, analyzing and formatting of the market information for strategic decision-making. The process involves the analysis of both subjective information and environmental facts which facilitate the business operations. In the case of Sony, the internal environmental factors that influences its operations are the introduction of the machinery for the production of quality products and the innovation of new and modern technologies, buyers expirations in the future value of their countrys currency and any possible change in the Market trends (Cavinato & Flynn 2006, p. 75). C. A SWOT analysis is connecting internal Strengths and Weaknesses with the content of Appendix a leading to relevant external Opportunities and Threats. These are summarized in a table as shown below: STRENGTHS WEAKNESSES. Production of innovative and high-quality products. Imprinting their Brand among their clients who are spread globally Media mix and presence Having dedicated and experienced engineers Having high competitiveness over competitors Wrong decision- Their joint venture with Samsung to produce LCD has led to some failure and high production cost leading to a loss of about $100million Poor management of its wide products base Loss of about 16,000 jobs worldwide and closure of its six production units. Severe pricing competition from competitors OPPORTUNITIES usage of their branding image as an innovator and avoiding copying of their competitors’ products Building large customer base so as to be very competitive Expansion of their business to other international countries Improving their marketing strategies to attract new clients, create product awareness and build trust among customers THREATS Current economic downturn that leads to the fall in revenue Rise in the black market that sells counterfeit products. Fluctuations in the value of foreign currency exchange rates Rise in the price of raw materials in the international market due to the instability in the supply and demand in the Market D. Evidence of ideation and concept evaluation In Sony Bravia, the company employs highly qualified staffs who have vast experience in the manufacturing and managing of the products. Due to the upward rising of Bravia sales, its quite evident that the workers and management fully understand the ideas of market structures and thereby formulating appropriate entry strategies to counter the competitors (Helmus & Paul 2007, 49). The company is evaluated both internally and externally to help in understanding the business environment that it operates. This also gives the portfolio picture of the business and how to improve sales. E. A financial plan including budget requirements, sales and profit forecasts The following financial projections are based on conservative sales forecasts by month for the next twelve months of the Android TVs by Sony BRAVIA, and by year for the three years after that to 2019.  The company aims to launch the product in the market by May 2016 and thereafter expand its sales of the new unique TV products worldwide. The company seeks to attract an average of 13 million customers per month of the available market potential. This is by the use of online based marketing strategy and forums (Kotler 2004, p.45).   The cost of upgrading the Android TVs after the launch is estimated to be $ 700,000 that will be spread over the first twelve months.  Maintenance cost by the company will require approximately $20,000 per year after that. These details of estimated costs are included in the company’s expenses. Sony BRAVIA Company will expect to generate negative income for the year 2015 July through 2016 April owing to the marketing expenses and the execution of the marketing strategies for the launching of the new product. The company will try to use its resources to absorb the expenses so as to launch the product and start it sales after the vibrant marketing. Sony BRAVIA expects to be generating profits beginning May 2016 and every month after that. The company will require an initial investment of $1,500, 000, all of which will have been recovered by the end of 2017. Out of this $800,000 will be in cash and the $200, 000 in accounts receivable.  By the end of the three years, the company expects to have cash and accounts receivable aggregating to about $ 25,000,000 as indicated in the forecasting layout from the sales (Ryan & Jones 2009, p. 77). Forecasting of the Android TV Sales Using Purchase Intentions In 2014, 500 million TVs were in the country. 95% availability, 40% awareness. Market potential = 500 million x 95% x 40% = 190 million. Assume two-thirds can purchase the TVs = 126.67 million. The percentage that will be among the first to try the new technology of the Android TV = 16%. Forecast for first year after launch =126.67 million x 16% = 20.27 million. Projected yearly growth rate after the launch = 25%. Assuming this upward growth rate, by the end of 2019, expected total sales = about 25 million.  Break-even Analysis This analysis assumes a total running cost of approximately $110,700 per month that includes full payroll (compensation and benefits), rent, utilities, supplies, sales and marketing, training, and other miscellaneous costs. The chart shows the break-even revenue is about $40,000 per month.  Conservatively, the company estimates that by May 2002 we will be servicing a minimum of 120 million customers worldwide of $ 80,125.  At this point of sales, the company shall have crossed the break-even point in May 2016, and it now project profitability thereafter. The estimated profits after the launching period will be about 20 million (Paley 2005, p. 71). The chart below shows a summary as adapted from Paley 2005, p. 72.   F. 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