Supply Chain.

Market Position Analysis

Introduction

Market segments for an organization comprises of potential customers that possess common needs and characteristics that differentiate the target market segment of an organization from other market segments (Armstrong et al., 2009). Identifying and defining these customer segments for individual products of an organization leads to creation of target market segments that enhances the marketing planning comprising of marketing mix, product positioning and segmentation strategies (Voola & O’Cass, 2010). An organization with diversified product portfolio has different target customer segment for each product portfolio. Sony Corporation is an organization that have diversified product portfolio comprising of entertainment, electronics, blu-ray, gaming and cell phones.

Entertainment portfolio of Sony, also known as Sony Pictures possesses motion pictures and television shows rights such as Spiderman and Stuart Little. The electronics portfolio of Sony consists of Vaio laptops, camcorders, mp3 players, cameras and television sets including plasma screens. Sony launched the play station series and home video gaming console. Blu-ray, an innovation from Sony was used to record the television shows digitally (Ovitez, 2010). The cell phones portfolio is another competing segment that comprises of mobile phones and tablets from the organization. The customer target segments for all the product portfolios differ and this paper discusses the target market segment characteristics, competitive position and marketing mix of Sony electronics.

Target Customer Segment

In the electronic market, Sony is one of the industry leaders comprising of whole array of products ranging from plasma screens to laptops. The products of Sony epitomize class for its consumers and the innovative products of the company are easily recognizable through their product names such as Bravia and Vaio (Elkin, 2012). The company has identified seven target customer segments for its electronics divisions that have specific and differentiated needs and wants. These customer segments along with specified needs and wants and the company’s ability to meet them are;

Affluent – This segment includes the customers with the annual income of $100,000 and above. These customers prefer classier products that could reflect their wealth (Elkin, 2012). The products for such customers are plasma screens, vaio laptops, handy cams and cameras that are popular as premium products.

CE Alphas – This segment comprises of customers that are early adopters and are willing to try new products. These customers prefer innovative products with new features and company meet their needs through incorporating new features in its product lines. Sony, to some extent is unable to satisfy this segment because the features in the electronics products lack innovation at large.

SoHo – This segment comprises of customers that are small business owners such as photography professionals. These customers require reliable and quality products of premium brand and Sony meets their expectations through its excellent quality products with extended warranty and after-sale service (Elkin, 2012).

Young Professionals – These are high income customers that have double income and no kids. These customers opt for trendy products that would elevate their living standard and prefer stylish and premium quality products. Sony captures this customer segment through its premium products that speaks style and trend.

Gen Y – These customers are young and under the age of 25, with the preference for brands at affordable range. Sony launches the affordable products in its premium range to capture these customers. However, the company significantly lacks in attracting this segment because of lack of range of products in price-effective range.

Competitive Positioning

The three major competitors of Sony electronics are Apple, Samsung and Dell. Apple competes with Sony electronics on laptops and mp3 players specifically. The quality of Apple products is comparable to Sony whereas Samsung and Dell are comparatively lower in terms of product quality. Sony differentiates its products from other three competitors on the basis of product features and functionality along with maintaining the premium price range (Elkin, 2012). Also, Sony is market leader for cameras and camcorders because of its fine lens resolutions. The image of Sony is also of premium products that are only next to Apple. Brand-conscious customers prefer Sony because of the brand name representing quality and expensive products.

The competitive advantage of Sony electronics is driven by its innovative features, premium quality and affordable prices for upper-middle income group. Sony electronics offers convenience and availability to its customers with an excellent after-sales service. This competitive advantage is sustainable in long-term as well because company continuously innovate its products to retain its leadership position in market and is also retaining customers through excellent customer service.

5 P’s of Marketing Mix

The 5 P’s of marketing mix for Sony electronics are;

Product – The product range of Sony in its electronics portfolio is extensive and has innovative features. The products such as Vaio laptops have unique features such as color range, face detection and hardware that provide the users with increased satisfaction. The products have stylish accessories that complement the products.

Price – Sony electronics has prices that are affordable for upper middle income group and high income group. Customers at lower middle and middle income group are not able to afford the products of Sony electronics. The company targets the customers with high or upper middle income group based on its product positioning strategy.

Position – The Company positions its products in market as premium with excellent quality and innovative features. The market positioning of the company is to maintain its brand status and to attract the brand-conscious customers that are willing to pay a higher price for premium products.

Place – Sony electronics has a wide network of manufacturers, wholesalers and distributers. The company also has direct selling stores, Sony World where all the products of Sony are available. The companies attempt to reduce the distribution costs by adopting an efficient supply chain.

People – Sony electronics across its stores creates an excellent selling experience for its customers. The after sales customer service is also excellent that justifies the premium brand status of the company.

Conclusion

With the changing dynamics of business and companies competing at aggressive rate, it’s essential to ensure that the customers are the focus of an organization while designing, promoting and selling the product. Sony is able to maintain its leadership position in consumer electronics market because it segments its customers based on their needs and wants and satisfies them.

References

Elkin, T. (2012, march 18). New Approach: Sony marketing aims at lifestyle segments. Retrieved from Advertising Age: http://adage.com/article/news/approach-sony-marketing-aims-lifestyle-segments/52579/

Gary Armstrong, Michael Harker, Philip Kotler & Ross Brennan. (2009). Marketing: An Introduction. Financial Times Prentice Hall.

Ovitez, L. (2010, March 10). Sony Corporation of America Product Markets. Retrieved from InfoBarrel: http://www.infobarrel.com/Sony_Corporation_of_America_Product_Markets

Voola, R., & O'Cass, A. (2010). Implementing competitive strategies: The role of responsive and proactive market orientations. European Journal of Marketing, 44(1/2), 245-266.

Appendix A

Annotated Summaries of Interviews

Interview with James McCenna, Store Manager at Sony World

James McCenna specifies that the walk-in customers in the Sony World are aware about the whole range of the Sony electronics and have done prior research using internet. Usually, the customers have made their decision regarding the product they want to buy and want to see the product physically before buying it. McCenna also states that the customers are willing to spend more money if they are told about new features in the product. Most of the customers are brand loyal and prefer Sony over other brands because of its durability and stylish designs.

Interview with Ronald Anderson, Product In-charge for Vaio Series

Ronald Anderson states that Vaio series of Sony laptops offers premium laptops that are preferred by customers for not only its unique features but also for the brand image. Vaio is comparable to Mac and offers an enhanced user experience to customers. He specifies that the customers want to buy Vaio because they know that they would receive excellent after sales service. However, 99 percent of the customers never return to the showroom because of any defects or complaints on the laptop. The laptops are known to be of high quality and require minimal maintenance. The USP of the Vaio laptops are their excellent features, low maintenance and good quality.

Interview with Anna Cleveland, Associate Manager at Sony Electronics

Anna Cleveland specifies that the Sony products are rightly placed in the market to face the competition. The company adopts proactive approach to ascertain the changing needs of the customers with the changes in their demographics such as age, income and lifestyle. The company conducts customer surveys and marketing research to identify the gaps in customer needs and product offerings and continuously work on the identified changes to create better products. The company has launched series of products such as handy cams and plasma screens to meet the extended needs of young professionals. The higher prices of the products are based on the product positioning and the company wants to retain its premium status in the market.

Appendix B

Market Position Analysis: Product Position versus Competitor Product Position

* On the scale of 0–2: 0 indicates “need not met,” 1 “indicates need partially met”, and 2 indicates “need fully met.”