Running head: SONIC PROJECT 1
SONIC PROJECT-GROUP DELTA
Amanda Bowen
Ronald Jones
Heather Rodriguez
Andrew Westphal
Liberty University-Busi 520-D09
December 12, 2022
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Introduction
Provide a brief introduction delineating the purpose of the analysis and what it entails.
The American Marketing Association (AMA) has defined marketing as, “…the activity,
set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large” (Marketing, 2007).
In a similar fashion, The Chartered Institute of Marketing (the British contemporary of the AMA)
describes marketing as, “The management process responsible for identifying, anticipating and
satisfying customer requirements profitably” (Marketing Resources, 2010). Marketing is one of
the most strategic elements in success of a new company. As a new start-up company, Sonic has
recognized the need for proper marketing analysis. Founded by two partners 18 months ago,
they are on the verge of launching the Sonic 1000 Smartphone. A detailed analysis of the current
market is needed. The Smartphone market is in the mature stage of its product life cycle, with
very established and recognized competitors. If Sonic is going to succeed, it will need to
evaluate the current status and be completely knowledgeable of the Smartphone market. This
analysis can provide Sonic the elements needed to be an effective competitor within the
Smartphone market. A study has been made of the proposed marketing plan for Sonic, the
current economic environment, and other business models to provide a reasonable evaluation.
Sonic will now have the tools to achieve success. This analysis will offer an effective
mission statement, which has been tested against professional tools. A suggested competitive
strategy is also reviewed and evaluated. A thorough examination of the proposed target market,
market needs, and market environment has been executed with detailed descriptions. The current
consumer market, competitor market, and market segments will also be evaluated and resulting
suggestions will be provided. A positioning statement has been formulated along with the
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product branding elements and proposals. Additionally, product services, pricing and promotion
will be analyzed and detailed recommendations will continue to assist Sonic. Finally, this study
will evaluate the current marketing effort proposed and cautions against becoming too
shortsighted by marketing myopia. If incorporated effectively, this analysis will give Sonic the
means to enter the Smartphone market with an advantage against the competition.
Part Two: Issues Analysis (20-24 pages; include the following questions in the paper)
1. What should Sonic's mission statement be?
An effective organization is always guided by a strategic mission statement. A mission
statement provides proper direction for the organization to follow. Too narrow of a mission
limits the company’s future, and hinders the organization’s full potential. If the mission becomes
too wide, it can potentially loose its direction and employees could become lost in an ambiguous
fog. A mission statement is critical for the successful future of Sonic.
In developing a mission statement, one must look deep inside the company’s values.
Established 18 months ago, Sonic is the dream of its two entrepreneurial founders with strong
values. Philip Wickham (1997), in addressing the value of the mission statement, says, “a sense
of mission can be a powerful force in shaping and guiding an entrepreneurial venture… it
focuses the entrepreneur’s vision and gives it a real strategic direction” (p. 373). Wickham
suggests that the strategic part of the mission statement for a new venture should focus on seven
elements. The first element is the scope of the firm’s offerings. For Sonic, this implies wireless
mobile communication devices. Next, Wickham suggests defining the target market. Sonic will
focus on two main markets: consumers and businesses. The third element is to provide the
companies competitive advantage. Sonic will compete based upon it’s secure and value-priced
multiple use device. It is also important for the mission statement to express the customer’s
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needs. Sonic’s target market’s needs include organization, communication, and entertainment.
Fifth, a mission statement must articulate the benefits its customer’s will receive. The
customer’s that purchase a Sonic product will be equipped with a versatile multi-use device. The
company aspirations provide the sixth element of an effective mission statement. Sonic
endeavors to become a market leader in the Smartphone market and achieve break-even status by
the second year. Lastly, Wickham says a company’s mission statement should incorporate its
values. Sonic has demonstrated that it values quality, customer satisfaction, and innovation.
As a result of this analysis, Sonic’s mission statement should read as follows:
Sonic helps consumers and businesses wirelessly manage their information and communication
needs. Sonic will endeavor to become a profitable market share leader, by providing versatile
products, developed with innovation and quality, at a fair price.
Kotler and Keller (2009) also provide five characteristics of a successful mission
statement:
1. Focus in a limited number of goals
2. Stress the company’s major policies and values
3. Define the major competitive spheres within which the company will operate
4. Long-term view
5. Short, memorable, and meaningful
Sonic’s mission statement addresses these issues, also. Its goals of market share leader and
profits are clearly stated. Sonic’s policies and values (innovation, quality, fair-priced) are also
provided. Sonic will compete in the business and consumer spheres, while not being
shortsighted in its application. Finally, Sonic’s mission statement is not lengthy, is easy to
remember and understand, and is meaningful for all stakeholders.
2. Which of Porter's generic competitive strategies would you recommend that Sonic
following in formulating overall strategy? Why?
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In Michael Porter’s landmark book on competitive strategy, he provides a framework for
explaining an organization’s approach to the market. Porter defines a company’s strategy as,
“taking offensive or defensive actions to create a defendable position in an industry” (1980,
p.34). He provides three generic competitive strategies: overall cost leadership, focus, and
differentiation.
Only one company in a specific market usually achieves overall cost leadership. “Cost
leadership requires aggressive construction of efficient-scale facilities, vigorous pursuit of cost
reductions from experience, tight cost and overhead control, avoidance of marginal customer
accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on”
(Porter, 1980, p. 35). Sonic is a start-up company in an established industry. It will not be able
to achieve cost leadership based upon the limitations in scale, capital, experience, and many
other areas.
A focused strategy involves concentrated effort on a particular buyer group, product line
segment, or geographical market (Porter, 1980). Many times it is the result of a niche market
focus, specializing in one profitable area. Sonic’s product applies to many markets including
professionals, students, corporate users, entrepreneurs, and medical users. To achieve break-
even within a two-year timeframe, Sonic cannot limit itself by a focused strategy.
Sonic must adopt a competitive strategy that will help it be noticeable among this mature
product market. Sonic should compete based upon a strategy of differentiation. Porter (1980)
describes this strategy as, “one of differentiating the product or service offering of the firm,
creating something perceived industry-wide as unique” (p. 37).
As Sonic endeavors to enhance its image and gain recognition among targeted markets,
they will need to be unique. Some advantages will come from being a leader in innovation and
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quality but also with a focus on value pricing. However, Sonic’s main competitive advantage is
the voice-recognition system for hands-free operation. Voice recognition will allow for no-hand
audio recording for students. Entrepreneurs will be able to access their calendar and address
books while on the go, without having to be distracted by pushing buttons. Voice recognition
will also facilitate its use by medical professionals, as they record and exchange information
hands-free, increasing productivity. With all the competitors in this consumer driven market,
Sonic should exploit its differences to gain market share.
3. What are Sonic's target market(s)? Explain
To take advantage of increasing significance of a single device that allows
communication, organization, and entertainment features, Sonic should target a variety of
markets. In the consumer market, Sonic had identified both professionals and students as
customers that would benefit from the Sonic 1000 Smartphone. However, the business market
also supplies more buyers. Corporate users, entrepreneurs, and medical users are Sonic’s
business target market who will also find the Sonic 1000 Smartphone an appealing option.
a. What specific needs does the Sonic PDA address for each target market?
Professionals need to be available at all times and with the Sonic 1000, they will be
connected anywhere. It features wireless email access, to send and receive e-mails from
wherever the professional is located. Cell phone coverage will also offer voice communication
to solve everyday communication needs.
Students have other distinctive needs that Sonic will satisfy. For example, the younger
generation is always on the go and with the Sonic 1000, they will have the ability to record
information and remain technologically savvy. Sonic provides voice recognition for hands free
recording. Students also cannot afford to carry multiple devices to accomplish the variety of
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tasks that are required throughout their day. The Sonic 1000 provides easy compatibility with
various applications and peripherals, and offer cost-effective functionality. Also, students have
the physiological need to express their own style and personality. The Sonic Smartphone
satisfies these students through a variety of different case colors and patterns.
Corporate users are all about business, and any technology that will enhance their job is
an advantage for their company. They need a Smartphone that allows them to store and access
data on the move. Sonic answers this by being compatible with most widely available software.
Also, corporate users need the ability for the device to be useful of proprietary tasks. As the
result of Sonic’s innovation, the Sonic 1000 can be customized to perform any corporate task.
Entrepreneurs need a Smartphone that will be an assistant to remain competitive and
organized throughout their busy schedules. They need to be able to organize and access their
contacts, calendars, and files. Through Sonic’s hands free and wireless technology,
entrepreneurs will be able to check schedules, addresses, phone numbers, or even instantly
connect with anyone.
Medical users have unique needs like no other target market. As the professional visits
with patients, it is essential to be able to update, access, and exchange medical records. In
answering that need, Sonic enables it users to record and exchange information hands free and
wirelessly.
4. Scanning the Market Environment
a. What demographic trends are likely to affect Sonic’s target markets?
When Sonic is scanning their market environment, it is vital that they take into
consideration the demographic trends that will affect the target markets. Since individuals create
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the market, the main demographic strength that Sonic will observe is population. “Marketers are
keenly interested in the size and growth rate of population in cities, regions, and nations; age
distribution and ethnic mix; educational levels; household patterns; and regional characteristics
and movements” (Kotler & Keller, 2009, p. 75). Sonic understands that a developing population
does not mean that their market will automatically be successful, unless these target markets
have sufficient purchasing power. Sonic will target the population age groups of teens, young
adults age 20 to 40, middle-aged adults age 40-65, and older adults age 65 and up. The ethnical
perspective that Sonic will target will be prepared from the 2000 census. Within this data Sonic
learns that the United States population of “276.2 million was 72% White, African Americans
constituted 13%, and Hispanics 11%” (Kotler & Keller, 2009, p. 77). Also, the amount of
households with no children is currently at an all-time high of 70.5 percent. Sonic can target
these individuals effectively because they are likely to have the interest and funds to purchase the
PDA. Married couples with children are the main spenders because they hold the leading
household earnings. Another interesting demographic is that men tend to make more cell phone
calls per day than women do (Marks, 2010, p. 1). Therefore, Sonic should keep this information
in mind when advertising and targeting their markets.
b. What economic trends are likely to affect Sonic’s Target Markets?
Sonic also has to be aware of their economic trends in order to be successful. The
accessible buying power in a country depends on present earnings, costs, investments, liabilities,
and credit accessibility. Sonic marketers will want to pay close consideration to development
influencing the buying power, since they have an effective impact on companies, particularly
because Sonics Smartphone market is targeted to consumers in high-income, mostly medium
incomes and price-sensitive consumers (Kotler & Keller, 2009, p. 79). Customer spending is
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affected by investments, obligations, and credit accessibility. U.S. customers have a large debt-
to-income ratio, which makes them more hesitate to spend money on large ticket items (Kotler &
Keller, 2009, p. 80).
c. What Technological changes can potentially affect PDA development, buy acceptance of
the PDAs and the development of substitute products?
Technological advancements have a major impact on the success of products entering the
market. The amount of innovative technologies created has a major impact on the influences on
the economy’s development rate. The latest technology also generates long-run results that are
not constantly predictable. Marketers should observe the subsequent four developments in
technology: “the accelerating pace of change, the unlimited opportunities for innovation,
varying R&D budgets, and the increased regulation of technological change” (Kotler & Keller,
2009, p. 84). A practical notion for appreciating computer technology developments is the
technology price-performance wedge.
The technology price-performance wedge is created beginning with the two distinctive
product advancement paths that are ordinary in the computer commerce. The first is to
maximize routine enhancements at equal price points. The distinctive performance enhancement
arrays from 30% to 60% within 12 months. The second is highest prices decline at equal
performance stage. The representative price decline varies from 20% to 30% within 12 months
(3.0 Handheld Computer Technology Trends, 2006, p. 18). The abilities of handheld computers
will progress quickly. Moving ahead in computer, interactions and customer electronic
technologies will formulate the handheld computer abilities in elevated demand in the coming
years (3.0 Handheld Computer et al, 2006, p. 23).
5. Analyzing the Consumer Market
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a. What cultural, social, personal, and psychological factors have the most influence on
consumers buying PDAs? Why?
Sonic has to understand all elements influencing consumers purchasing Smartphones.
Culture, subculture, and social class are predominantly significant influences on customer
purchasing actions. Sonic has to identify their target markets by evaluating culture through
individual’s wants and behaviors (Kotler & Keller, 2009). “Through family and other key
institutions, a child growing up in the United States is exposed to the following values:
achievement and success, activity, efficiency and practicality, progress, material comfort,
individualism, freedom, external comfort, humanitarianism, and youthfulness” (Kotler & Keller,
2009). Almost all individual cultures show verification of societal stratification, mainly in the
structure of group classes, moderately consistent and durable groups in civilization,
hierarchically grouped with individuals who have comparable morals, interests, and actions
(Kotler & Keller, 2009). Sonic needs to evaluate the personal aspects of the consumers life in
order to understand which type of customer is interested in the Smartphone. The following areas
are very important aspects when looking for potential buyers of Sonics Smartphone. These
contain the customer’s maturity and phase in the life cycle; profession and economic situation;
individuality and self-concept; and standard of living and morals (Kotler & Keller, 2009, p. 156).
All of these different areas could have a vital impact on the success of marketing and overall
profit and achievement of the Smartphone. Also, Sonic needs to become knowledgeable about
their consumers needs at all times. Sonics target markets need to focus on the psychogenic needs
because this may help consumers to be recognized, improve self-esteem, or even help them to fit
in with a specific group of individuals (Kotler & Keller, 2009). In summation, Sonic needs to
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establish very early in introduction of the Smartphone all elements influencing consumers
purchasing habits.
b. Which aspects of consumer behavior should Sonic’s marketing plan emphasize and
why?
Sonic will become educated on the consumers behavior in order to achieve the most
appropriate marketing plan. Consumers are becoming more conscientious of paying cheaper
prices in order to help cut back. Of the customers who changed to less expensive products, 46
percent believed the products were more superior than predicted, and the big majority of these
customers believed that performance of these items was surprisingly satisfactory. Businesses
that are trying to concentrate on the alteration in customer behavior, considering the economic
hypothesis that clarifies why it is now changing can facilitate resolutions. Sonic needs to
understand that consumers changing the way they buy products, and how they identify the value
of what they are purchasing, will clearly help the marketers more knowledgeable on consumer
behaviors (Bohlen, Carlotti, & Mihas, 2010). In general, consumers would return back to their
normal buying behaviors when the economy regains its stability. “But the central implication of
our research is that even if the willingness of consumers to pay rebounds as the economy does,
changes to their perceptions of the value of lower-and higher-priced products may fundamentally
alter what they choose to buy” (Bohlen et al, 2010). Consequently, Sonic should focus on the
financial buying behaviors of consumers in order to obtain customer loyalty and become
profitable.
c. What kind of marketing activities should Sonic plan to coincide with each stage of the
consumer buying process? Explain.
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Sonic needs to fully recognize and target the consumer buying process. The buying
process begins when the consumer identifies an issue or desire created by interior or exterior
stimuli (Kotler & Keller, 2009). Creating this desire can be achieved by allowing customers to
receive money back for recruiting customers to purchase the Sonic Smartphone. Customer
advertising can be very effective if used correctly. Information search is also a major part of the
buying process which involves the consumer galling into these groups; personal, commercial,
public, and experiential (Kotler & Keller, 2009). Sonic will have to conduct research on other
competitors to understand the competitive advantage, in order to play off of their weaknesses.
The next stage is the evaluation of alternatives. In this phase the customer is looking at all
options and gathering information to assist in making a final decision (Kotler & Keller, 2009)
Sonic will need to bring attention to the best qualities of their Smartphone and alter the
customer’s beliefs on the competitor’s brand. Within the assessment stage, the customer creates
favorites between the different brands of options (Kotler & Keller, 2009). Sonic will need to be
sure that within this stage the customer feels satisfied with their decision and assure the customer
that this Smartphone is the best option available for their purchase. In the final stage, “the
consumer might experience dissonance that stems from noticing certain disquieting features or
hearing favorable things about other brands and will be alert to information that supports his or
her decision” (Kotler & Keller, 2009, p. 173). Sonic should follow up with customer purchases
with a survey to determine the satisfaction of their purchase in order to improve future approval
of the Smartphone.
6. The Competition
a. What factors will be used to determine Sonic’s strategic group? Explain.
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There are several factors that will differentiate Sonic’s strategic group. These factors will
be grouped by prices, features, capabilities, and mainly quality of the Smartphone. Being that
these different characteristics are what customers are looking for in products, this is how
businesses determine which brand is under the appropriate strategic group. When a company
enters into a group, those other brands that are within that same strategic group are the key
competitors within the market (Kotler & Keller, 2009).
b. What other organizations are in Sonic’s strategic group? Explain.
When businesses enter the market, it is extremely important for them to evaluate where
they stand amongst their competitors. There are some businesses that are currently offering
some of the same features as Sonic is going to introduce. These competitors are HandSpring,
Garmin, Palm, and Sony. These businesses all share a few characteristics that can allow each of
them to achieve greater sales and revenue. Some of these features include cell phone functions,
camera, email, color screen, musical capabilities and expansion slots (not all businesses share the
exact features) (Kotler & Keller, 2009). However, among the choices listed above, Sonic offer
more useable features at a much cheaper price.
c. Which firm is the market leader, and what are its objectives, strengths and weaknesses?
All businesses should determine the market leaders in order to grasp what they are up
against. Palm is currently the PDA market leader with a 34 percent share. Palm has exceptional
distribution in various channels and alliances with a strong amount of U.S. and European
telecommunications transporters. Palms objectives are to keep sales growing and remain in the
market leader’s position. The Palm strengths include producing innovative products, best sales in
the market and a brand that customers trust. Palms weakness is that they price their smart phone
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at $499 when Sonic comes to the market with a wholesale price $250. With Sonic having more
product features, this could potentially have a negative impact on Palm’s sales.
d. As a start-up company, which competitive strategy would be most effective for Sonic?
With Sonic being newly introduced to the market, the best competitive strategy would be
the market-challenger strategy. With taking this approach, Sonic can gain ground to overtake
Palm’s market and reach its objective of earning a 3 percent share of the U.S. Smartphone
market. Sonic choosing this market strategy will allow them to attack the other brands in the
market as well by proving they are not truly satisfying the customers. Sonic will perform a flank
attack to recognize changes in the market segments that are sourcing gaps to that need to be
corrected, then Sonic will handle the gaps and build up their brand by improving Palm’s
weakness.
7. Identifying Market Segments
a. Which variables should Sonic use to segment its target markets?
Sonic will have to achieve the geographic segmentation in order to compete with the
other Smartphone brands. This way Sonic can operate in various cities, states, regions and
countries. Sonic should also evaluate the demographic segmentation. Sonic should also
consider the demographic traits such as age, gender, educational levels, and income (Yankelovich
& Meer, 2006). This will help Sonic to understand their consumers better and be more aware of
who is purchasing the products and where they are located.
b. How can Sonic evaluate the attractiveness of each identified segment?
Sonic has to evaluate the effectiveness of each of the segments. “In evaluating the
different market segments, the firm must look at two factors: the segments overall attractiveness
and the company’s objectives and resources” (Kotler & Keller, 2009, pg 229). Sonic will have to
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indentify each segment and see if the characteristics prove its attractiveness by evaluating its
size, growth, profitability, scale economies, and low risk (Kotler & Keller, 2009).
c. Should Sonic market to one segment or more than one in each market? Why?
Sonic needs to be aware that when they initially enter the market all areas are going to
need to be covered in order for customers to see their value. In order for Sonic to be as
successful as Palm or HP, they are going to have to market to more than one segment in each
market. With this type of setup, Sonic should be estimated to more potential success and growth
because they are covering a larger portion of the target markets. Being that all other brands have
had their products out in the market already, Sonic needs to effectively targeting all markets and
segments.
d. Should Sonic pursue full market coverage, market specialization, product specialization,
selective specialization, or single-segment concentration? Why?
Within the product type that Sonic is pursuing to sell, they should focus on product
specialization. The product specialization allows businesses to produce a product and then sell it
to many varying market segments. Sonic will be selling to professionals, students, corporate
users, entrepreneurs and medical users. Therefore, Sonics manufactures will produce the needs
of these five target groups. Sonic will need to target each segments needs differently and create a
strong name in the specific product area. Customer satisfaction among these different target
segments will be difficult to obtain, but if Sonic puts its focus on product specialization then the
business should achieve great success.
8. Positioning
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a. In a sentence or two, what is an appropriate positioning statement for the Sonic 1000
PDA? Explain the statement.
To busy professionals and corporations, who need convenient access to information and
communication, Sonic provides a Smartphone that delivers better hands-free operation of
multiple communication, entertainment, and information resources, than any other competitive
product. With the Sonic 1000, you can do more for less.
A positioning statement is a concise description of the core target audience to whom a
brand is directed, and a convincing depiction of how the marketer wants them to view the brand
(Ingenhoff and Fuhrer, 2010). A significant and powerful position statement will assist the
company in defining its marketing strategy and tactics. When crafted correctly, the position
statement will influence every decision regarding the brand: the brand name, the product itself,
packaging, advertising, promotions, etc. (Brandeo, 2010).
Kotler and Keller (2009) define all the necessary components of an effective position
statement. The target group and their needs should be identified. For Sonic, it’s primary targets
in the consumer and business markets are professionals and corporations, respectively. Their
principal needs include information and communication accessibility. Another key element is to
determine category membership, for Sonic this means the Smartphone market. Finally, the
position statement should define its point-of-difference compared to the competition. Due to
Sonic’s voice recognition abilities, buyers will enjoy a convenient hands-free unit that
accomplishes multiple tasks. For Sonic, this position statement helps guide the marketing
strategy by defining the spirit of the brand, the goals it helps consumers achieve, and the
product’s exclusive features (Kotler and Keller, 2009).
9. Product and Branding
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Branding is endowing products and services with power of a brand. It’s all about creating
differences between products (Kotler & Keller, 2009). The concept of a Smartphone is not a new
phenomenon by any means. This is why Sonic’s goal is to have a clear distinction made between
Sonic and its competitors. Since the product itself is not an original idea, the origination must
come from the product positioning. “Product positioning is a decision by a marketer to try to
achieve a defined brand image relative to competition within a market segment” (Consumer
Behavior, 2007, p.346). Sonic will integrate itself into the highly saturated market of
Smartphone by focusing on branding.
a. What brand elements would be most useful for differentiating the Sonic brand from
competing brands?
The way Sonic will achieve product positioning and branding is by offering a product
that is the most versatile form of a Smartphone. This will bring added value to the consumer in
both their personal and professional life. Sonic will differentiate itself from competing brands by
allowing the consumer to choose between models based on several operating systems. The Sonic
1000 will also provide the consumer with speedy, hands-free dual-mode cell/Wi-fi
telecommunications capabilities, and digital video/music/TV program storage/playback. The
Smartphone will be less vulnerable to hackers and other security threats because of the optional
Linux-based operating system. Sonic will maximize on its individuality in order to succeed over
competing brands through aesthetics such as voice recognition abilities.
b. How can Sonic sum up its brand promise for the new PDA?
There are numerous companies that are offering the same products and services as Sonic, so they
must differentiate themselves with a promise. “Create a brand promise. If there is no promise,
there is no brand” (John R. Graham, 2007, pg 62). Sonic can compete with PDAs and
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Smartphones by offering a unique combination of advanced features and functionality at a value-
added price. By combining the organizational features of a PDA and the communication abilities
of a cellphone, Sonic is providing its consumers with the new innovative way to combine your
professional life and personal life into one mechanism and a single way of communicating. Life
is already complicated, your PDA/Smartphone shouldn’t be. The Sonic 1000 has found a way to
simplify two diverse worlds into a handheld device.
c. What are the attributes and benefits suggested by the Sonic brand?
Sonic will build its business on three identified strengths. Sonic will have an innovative
product, will work off of a specific operating system that will protect the device from possible
security threats, and will offer competitive pricing that is lower than competing multifunction
PDAs. Sonic is strategically focused on their versatility. Although the product is slightly heavier
and thicker than most competitive brands, it offers more storage capacity than the average
competitor. A unique attribute of this product lies in the fact that two of the five target markets
targets are at completely opposite extremes. The Sonic brand can be beneficial to the middle-to
upper- income professional who need one device to coordinate their busy schedules and personal
lives, while maintaining a social well-being. The Sonic 1000 can also be targeted to high school
and college undergrad or grad students who desire a multimedia, dual-mode device. Not only
will the current product be beneficial towards the consumer, but the Sonic 2000 that will launch
the second year will allow for heavier media consumption and social networking, which will be
marketed towards teen and twenty year olds. The primary benefit of this product lies in the fact
that it has the ability to saturate an extremely large market.
d. How can Sonic use packaging and labeling to support its brand image?
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Since Sonic is differentiating itself from “like” brands, their packaging must be innovative as
well and support its brand promise of simplicity of life. The logo will be Sonic’s distinctive
yellow thunderbolt, which will be displayed on the products and packaging as well as in all
marketing campaigns. With each device, the consumer will have the ability to customize their
product to their liking. They will have the choice of color and case with each device purchased.
Consistency is the key while the product is still being introduced into the market. The goal is for
consumers to distinguish your product from others and creating a brand image that buyers will
remember.
10. Services
a. What support services do buyers of PDA products want and need? What are Sonic’s
competitors offering?
Since we are targeting various markets, the needs vary by each target segment. The
professional needs to stay in touch while they are on the go. The business professional desires
to have convenient communication via e-mail with the ability to send and receive messages and
cell phone capabilities from anywhere. The student needs to have the ability to record
information, perform many functions with limited devices and express their originality. The
corporate user needs to input and access critical information on the go and use for proprietary
tasks. Entrepreneurs need to organize and access contacts and schedule details. The medical
users need up update, access and exchange medical records.
Since the market for Smartphones is heavily saturated, Sonic has immediate competition.
The Palm is the leader of this market with a 34 percent share. The Palm uses the propriety
marketing system or windows operating system. This Smartphone has excellent distribution in
multiple channels and alliances with multiple U.S. and European telecommunications carriers.
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The Palm has two different models, the Tungsten C and M130. Tungsten C has Smartphone
functions, wireless capabilities, color screen, tiny keyboard, and wireless capabilities, selling at
$499. The M130 also has PDA functions, color screen, and expandable functionality, selling at
$199.
HP holds 22 percent of the PDA market and targets the business sector of society. Some
of its PDAs can send documents to Bluetooth equipped printers and prevent data loss if batteries
run down. One particular model has enhanced security mechanisms, allowing access by
fingerprint match as well a by password. HP can distribute to a various markets through a full
line of PDAs and various price points.
Apple has increased competitive pressure through the launch of the iPhone. The iPhone
is a smart phone with a 3.5-inch color screen. It is equipped for music, video, and web access; it
includes calendar and contact management functions. Apple initially partnered only with AT&T
network and cut the product’s price to $399 two months after their introduction into this market.
Research in Motion (RIM) has created a lightweight Blackberry, wireless phone/PDA
product that is popular among corporate users. RIM stays competitive through continuous
innovation and solid customer service support strength.
Samsung incorporates value, style, and function. This company is a powerful competitor
due to the variety of smart phones and Ultra mobile PCs for both consumer and business
markets. A portion of their smart phones are available for specific telecommunication carriers,
and others are “unlocked” and compatible to any network. A specific model of Samsung is the
Samsung i500, which is also a PDA with cell phone capabilities. Samsung i500 includes an MP3
player, color screen, and video capabilities, priced at $599.
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There are numerous other PDA/Smartphone products. The Handspring Treo 270, is a
PDA and cell phone with a color screen, tiny keyboard, and has speakerphone capabilities but no
expansion slot, selling at $499. Garmin’s model is the iQue 3600 with PDA functions, global
positioning system technologies, voice recorder, expansion slot, and a MP3 player, but no cell
phone capabilities. This product costs $589. Dell offers the Axim X5, which has no cell phone
abilities, but includes PDA functions, color screen, e-mail capable, voice recorder, a speaker and
is expandable. The last competitive product is made by Sony and is the Clie PEG-NX73V. The
Clie has PDA functions, a digital camera, tiny keyboard, games, presentation software, MP3
player, and voice recorder. The Clie sells at $499.
Sonic is aware of its competitors and have learned from the successes and mistakes of
other products due to its late entry into the market. Because the market has a wide variety of
PDA/Smartphone products, Sonic must establish its brand image through aggressive promotional
tactics.
b. What post-sale service arrangements must Sonic make to handle repairs and how will
this affect customer satisfaction?
With every sale, Sonic will offer a one-year manufacturer warranty. This will cover any
manufacture defects. Sonic will also offer an extended warranty for a low additional monthly
cost. This extended warranty is completely optional and therefor the buyer can purchase if they
desire it. Sonic will also offer a lifetime support service which will provide consumers with
technical support which will be readily available when necessary. Customers will be satisfied
because they will have various options and will feel confident investing in the Sonic product due
to the support and warranty options available.
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11. Pricing
a. Are PDA customers likely to be price-sensitive? Is demand elastic or inelastic? Explain.
What are the implications for pricing the Sonic 1000 PDA?
Depending on the target market, this will determine the price sensitivity. The professionals,
corporate users, and medical users will be the least likely to be price-sensitive. These individuals
are most likely established in their careers and successful companies and willing to spend the
money for a quality product. The student target market will most likely have price sensitivity
because most students live off of college loans, part-time jobs and parent support. They will
most likely be budget conscious and look for a product that provides quality at a reasonable
price.
Price elasticity depends on the magnitude and direction of the contemplated price change
(Kotler & Keller, 2009). Kotler & Keller give an example of a retailer that sold four tiers of 27”
televisions, Toshiba as the priciest, Phillips, Sharp, and then Sansui. The retailer increased the
price of Sansui and lowered the price of the Sharp television. This resulted in the demand for
Sharp rising, the more expensive TV set. The consumer now felt that the Sharp was more
profitable because the more expensive TV set is now comparable to the price of the Sansui.
The current perceived demand is inelastic because Sonic’s product does not have the
brand awareness as other Smartphone carriers do. Sonic has to offer prices that are comparable
to competitors and then convince the customer that it offers the best quality of Smartphone at the
current price. Sonic cannot immediately start at a high competitive price because the brand
awareness of the product is not where it needs to be. This is not to say that the demand will
forever be inelastic. Once the Sonic product has been distributed and the device has the
consumer’s buy-in, at this point they can make slight changes to price. Sonic can do this by
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adding additional storage or creating a product with more features that the current Sonic 1000
Smartphone, lowering the price of the current Smartphone. Sonic has implicated that the Sonic
1000 will be introduced at $250 wholesale/ $350 estimated retail price per unit.
b. What price adaptations should Sonic include in its marketing plan?
Sonic will lower the price of the current model when they expend the product line and
launch the Sonic All Media 2000, which will be priced at $350 wholesale per unit. Sonic will
use the strategy of attracting desirable channel partners and taking share from establishing
competitors.
12. Promotion
Marketing communication could be termed the “voice” of the company (Kotler & Keller,
2009). Without it, a company can have a great product at a good price without consumers even
knowing it exists. It would be comparable to having a thought or idea necessary to survival
without the ability to write, speak, gesture or any other way to communicate it. In that sense,
marketing communication and how, where and when to promote the product, becomes the most
vital part of the marketing process.
a. What communications objectives are appropriate for Sonic's initial campaign? Explain.
The main immediate objectives should be to give awareness and image to the product. Being
new on the market, the first and most important objective should be to create product awareness.
Consumers will not buy what they do not know exists. There are a few common objectives for
most companies which bring a new product into the market (Marcomm, 2009).
1. Create brand awareness for your company
2. Defining a need the product or service can fulfill
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3. Encouraging action from the target
The second objective is to give an image. This is perhaps a broader objective than
awareness and includes two of the common goals. In the case of a new product, giving the
proper image becomes as crucial as awareness, because there is no prior image by which a
consumer can build an opinion of the product. Conveying the image of the product should
establish a need or desire the product can fulfill. It will also define the way a product can do so
that may be different than competing products. The image should not only define the need and
desire but affirm dependability and trust of the product in the minds of the consumers. Lastly the
image through creating the need and desire will show the fulfillment thereof and encourage
action from the consumer.
The goal of giving the product awareness and giving proper image is to create a response
from the target markets. This will lead to the ultimate objective: building a relationship with the
consumers.
b. Which promotional tools would be most effective in Sonic's promotional mix? Explain.
There are many promotional tools but only a few of them fit Sonic’s need. Basic advertising
through print ads, billboards, Sonic’s symbol and logo are necessary for bring the awareness of
the new smartphone to the market. Sales promotions need to be included, especially in the initial
advertisements. Promotions such as rebates, coupons and sampling, will help boost initial sales.
The sales promotions need to play a significant factor in giving consumers incentives for the
initial buy because the product is new and just hitting the market. Sonic can rely on reputation
and reliability later, but for now, it is something that just isn’t there yet.
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Equally important is the tool of direct interactive marketing. Sonic’s product needs to have a
website, and be visible on both electronic and TV shopping. Most of Sonic’s target market
(professionals, students, medical personnel) are web user type clientele. When these target
markets need a product, they will turn to electronic shopping. This is part of the reasons why it
is important to be involved in direct interactive marketing.
13. Evaluation of marketing effort
Evaluation of Sonic’s marketing efforts will play a key role in knowing if the goals for the
product are being met. Without proper and regular evaluation efforts, Sonic would not be able to
know if marketing trouble is occurring, nor will Sonic have the ability to take corrective action.
a. How can Sonic evaluate its marketing? Suggest and explain specific actions that Sonic
should take.
Marketing can best be evaluated by using the four types of marketing control: Annual – plan
control, Profitability control, Efficiency control, Strategic control (Kotler & Keller, 2009). It
would be wise for Sonic to follow this model to best evaluate the marketing strategy.
Strategic control will take place in the construction of Sonic’s marketing strategy, but will
also be used again after evaluation to make any necessary changes to the marketing plan.
Profitability and efficiency control are the means of measuring performance during an evaluation
of Sonic’s marketing plan. Financial analysis, a part of profitability control, is used to examine
where the company’s money is going, both profits and expenditures. This analysis will give
Sonic a firm grasp of the financial integrity of the marketing plan. Efficiency control is a type of
evaluation which gives a marketing manager the information on where the money for marketing
SONIC PROJECT 26
is going and the impact it is having on the sales of the product. Knowing this, a manger can
make future decisions based on the predictive role of this statistical analysis.
Lastly, the marketing control analysis should include annual – plan control. Using the
information gathered from both profitability and efficiency control Sonic will be able to evaluate
whether the company is meeting the annual goals. This will identify any shortcomings in the
annual plan, and if so, pinpoint the problem. Before making any changes in the marketing plan,
after an evaluation, the control process needs to be applied. There are four questions that need to
be answered after an evaluation:
1. What are the goals set by the marketing plan?
2. Are those goals being met?
3. Why is it (whether good or bad) happening?
4. What should be done (corrective or continuance)?
b. What role should social responsibility play in Sonic’s marketing?
Sonic’s social goal should focus on becoming the most admired and increasingly
successful company, through serving customer’s best interests, not just their own (Kotler &
Keller, 2009). The importance of having social responsibility is a major factor because many
times a consumer’s purchasing decisions are influenced by their opinion of the company, not just
the quality of the product. Companies who embrace social responsibility will generally have
better relations within the company as well; similar qualities will also improve the work
environment of that company. Both general policies and a plan for social responsibility should
be adopted by Sonic.
SONIC PROJECT 27
There are several company policies which Sonic can implement to become a loved
company by society. Giving back to the local community and providing fair to above average
wages for employees will not only increase work conditions, but also gain support of the local
community. Sonic’s market managers should also adopt a policy of open door for shareholders
and lower management to create a sense of openness and opportunity for improvement.
Sonic’s plan for social responsibility should include legal behavior, ethical behavior and a
general awareness of social responsibility. Responsible market managers should use legal
behavior for the safety of the company in regards to legal issues, not just company image. There
should also be parameters of ethical behavior towards competitors and customers. Lastly, a
general awareness of social responsibility to best serve the customer.
All the given tools and strategies for developing social responsibility should be
implemented by Sonic. In a world where forces such as rising customer expectations, a
scrutinizing media, tighter government legislation and pressure, and evolving employee goals
and expectations, drive the level of necessary social responsibility of companies higher,
marketing managers need to be using all available resources within reason to establish a good
relationship with society.
Part Three: Avoiding Myopia
12. What 3 actions, found in the Levitt article, can Sonic do to keep from suffering
myopia?
Myopia by definition is a disorder in the eye which causes nearsightedness (Princeton).
Therefore, when using the term myopia in terms of marketing, the definition refers to a
marketing perspective which lacks farsighted vision for the company. Marketing managers who
SONIC PROJECT 28
possess this lack of perspective are bound to repeat history and be left behind as a product
becomes obsolete or beaten by competitors. There are many pitfalls of marketing myopia that
Sonic can avoid, the most beneficial actions would be:
1. Focusing on meeting customer’s needs rather than selling a product.
2. Broaden product definition.
3. Being adaptive for the future.
Companies in the past such as the Railroads, Hollywood, Dry Cleaning and Oil industry have
all suffered or will suffer the effects of focusing on the product they are selling vs. a focus on
continuing to fulfill the need the consumers used the product for. To understand how this can
happen to Sonic, how it happened to these companies must be understood. When focusing on
the product rather than the needs of the customer, a company will limit things such as R&D to
the improvement of the product itself rather than making needed changes which would entail
more than upgrades and improvements to existing characteristics; but dramatic, and in some
cases, totally new features and designs. A good example of this mistake would be Ford Motors.
The company had great R&D in studying what consumers wanted from automobiles. The
problem is that research was restricted to customers need and want within the boundaries of
existing products. As a result, Ford lost out to many foreign automakers in the rise of demand
for compact, fuel efficient cars. The effect of Ford Motors’ mistake obviously is an easier
problem to fix than most, but still a significant lost opportunity. Because this is such an easy trap
for companies to fall into, Sonic should put extra focus on how to improve the product in relation
to the need it fills for the consumers.
The marketing management at Sonic also should have a broad view of what it provides. For
example, the product Sonic is currently selling is the PDA 1000/Smartphone. Sonic’s marketing
SONIC PROJECT 29
managers must remember they are in the communication/organization/entertainment business,
not the PDA Smartphone business, and therefor must define the product by the product’s goal.
Doing this will help Sonic remain focused on the real purpose of the product as they continue in
future years. A classic example of what happens when a product is too narrowly defined is the
railroad. If the railroad industry had defined the product as fulfilling transportation needs rather
than a railroad service, it might have then possessed the mindset needed to continue expanding
(Lovett, Theodore).
In addition to the last two actions to avoid marketing myopia, the company needs to have the
ability to adapt. When companies believe that its product is superior or has no competitive
alternative, it is easy for the marketing managers to become complacent and rely on these factors
to cause future and continued growth. However, reminded by the fact that even oil is starting
down a road to becoming obsolete by the coming alternative energies being researched and
encouraged, no product is invincible. Understanding and accepting this about Sonic’s product,
will help have a broader view of R&D, future product adaption and a long term mindset that can
accept possible major changes in the future to the current product.
Part Four: Credentials and Role of Each Group Member
Ronald Jones has been actively involved in the business market for decades. After being
raised in an entrepreneurial family, he graduated with honors from Messiah College in 1993 with
a Bachelors degree in economics. He assumed a management position at Jones Plumbing upon
graduation, and in 2000 became the owner of the business. As a small business owner he has
been involved in all aspects of business operations: management, human resources, finance,
leadership, and marketing. In addition, he provides training to other small business professionals
SONIC PROJECT 30
through Strategic Global Endeavors, a not-for-profit international organization that he founded.
Currently, he is pursuing his MBA in International Business at Liberty University.
Ronald Jones was able to contribute from his experiences and knowledge to this project.
He served as team leader, where he planned and organized the weekly conference calls. He was
also able to help the team reach a consensus on the team guidelines and project assignments.
Ronald helped the team by contributing the introduction and answering questions 1-3 and 8 in
the Sonic analysis. He served as a reviewer of questions 9-13 and part 3. In addition to weekly
conference calls, Ronald worked with his team in supporting other students by providing input
on the discussion board. Also, weekly research was conducted to provide ample examination of
the Sonic analysis, and in the end, present a professional and thorough study.
Amanda Bowen is involved with the business market in a unique way. After the
influence of her business teachers in high school, Amanda graduated from Averett University in
2006 with a Bachelors of Science in Business Administration. After graduation, she became a
business teacher and obtained her teaching licensure in Business Education. Amanda teaches
middle school students Keyboarding, Computer Applications, Computer Solutions, and Make it
Your Business. She finds it very rewarding to educate our future on various business aspects.
Amanda plans to teach at a community college after receiving her MBA in Human Resources.
Amanda was able to offer the group assistance with her experiences as a teacher.
Amanda actively participated in all group activities and met all expectations of the group project.
She contributed by completing questions 4-7 and a reviewer for questions 1-3, 8 and 10-12. She
also served as a final editor for the group’s final copy of the Sonic project. Amanda provided
strong work ethics throughout the duration of the project and was an effective member of Group
Delta.
SONIC PROJECT 31
Heather Rodriguez is fairly new to the business market. After being the first in her
family to attend college, Heather graduated from Southeastern University in 2008 with a
Bachelors of Science in Marketing. Shortly after graduation she received a job as an Executive
at Target where she is currently working. As a manager she has developed as a leader that drives
profitable sales and ensures customer satisfaction. In addition, Heather enjoys spending her free
time as a part time wedding coordinator for a small company she had an internship with. She
desires to grow within Target as a Human Resource executive, which is why she is currently
striving to get her MBA in Human Resources.
Heather has been able to use on of her strengths at work in this project, being resilient
and adaptable. She has adjusted to the demands of the group regardless of her hectic schedule
and has managed to participate in the majority of group conference calls. Heather contributed by
completing questions 9-12 and a reviewer for questions 4-6. She also served as a final editor for
the group’s final copy that they have submited. Heather continued to provide feedback and work
diligently with Group Delta until the completion of this course.
Andrew Westphal has had little education in marketing but possesses four years of
experience in management positions in which the understanding and application of marketing
has been learn. Most of Andrew’s experience is with both local and franchised restaurants. He
has been involved in all aspects of business operation: management, planning and running daily
operations, marketing, leadership and human resources. Andrew Wesphal has also served as a
consultant for the start of at least two other business ventures. Andrew is now pursuing his MBA
so that he may be a greater asset to the corporate environment and also to himself as an
entrepreneur.
SONIC PROJECT 32
Andrew Westphal’s main involvement with the group is the completion of questions 12-
13 and “Marketing Myopia”. Andrew is also involved in the editing process of the entire project
for Sonic’s marketing analysis. Aside from these contributions Andrew was also able to provide
analytical and decisive input during phone conferences and on the group discussion board.
SONIC PROJECT 33
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