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Marketing – Sony Bravia 3DTV Essay

Introduction

Throughout the course of the year 2011, Australia embraced the 3DTV technology that could revolutionise the telecommunications industry. This report addresses two key externalities, the macro-environment and micro-environment, which influences the 3DTV industry with a focus on the Sony Bravia 55” 3DTV. The macro-environment section sets the context of the Australian environment with references to the dynamic economic, technological and legislative circumstances as well as addressing the ongoing socio-cultural and environmental developments. The micro-environment component of the report hones in on the importance of managing long term relationships with relevant stakeholders and highlighting the importance of customer satisfaction.

Macro-Environment

1. Economic
The challenges that Sony face in the current economic environment are comparable to that of the Great Recession of 2007-08. Bohen et al. (2010) predicted that discretionary thrift habits adopted by consumers during the recession would continue through the post-recession period. This was evident from a large fall in consumer confidence of 4.3% in December 2012 (Evans, 2012) as consumers were reminded of the potential volatility of the economy. The US fiscal crisis (Janda, 2013) and the European debt crisis (Liu, 2011)
may force Sony to adopt “value for money” marketing schemes.

2. Technological
Emerging media platforms, such as mobile and internet TV (Noam, 2009), threatens to affect sales of Sony’s Bravia 3DTV. However, Elinav and Carey (2009) note that with the plethora of media viewing devices, TV has been utilised to the same extent as before but viewing patterns have changed. For example, it is reported that viewers are watching and listening to multiple media devices simultaneously. Consequently, advancing technology threatens to dampen demand for Bravia 3DTV. Therefore, it is crucial that Sony constantly monitor the media viewing environment to ensure that its 3DTV gains acceptance in the presence of other media devices.

3. Legislative/Political
The availability of content on Sony’s 3DTV remains limited due to tight broadcast regulations, enforced by the Australian Communications and Media Authority (ACMA, 2012). Currently, transmissions of 3DTV are not permitted due to the intensity of radio traffic, so potential consumers of 3DTV may be deterred as they are unable to enjoy 3DTV to the extent that is possible. However, in January 1st 2014 analogue TV transmissions will cease (ACMA, 2012) and this will spur broadcasting networks to increase Digital and 3D broadcasts to meet demand.

4. Socio-cultural
Sony faces a changing consumer demographic due to Australia’s ageing population. The number of consumers over the age of 65 increased from 11.5% to 14.2% over the last 10 years (ABS, 2012). As maturing consumers becoming increasingly dominant in the marketplace Sony’s 3DTV must adopt a marketing strategy which does not alienate older consumers (Wolfe, 2004), rather aligning their product with socio-cultural values that provide consumers autonomy and a desire for personal growth (Levanthal, 1997).

5. Environmental
Increasing consumer concerns about the natural environment have the potential to drive Sony to incorporate green marketing into their brand image. With a
larger availability of information available, society has become increasingly aware of the deterioration of the environment. Gungor and Gupta (1999) suggest that firms can no longer ignore worldwide shortages of raw materials, increased levels of pollution and overflowing waste sites. Hence, it is imperative that Sony consider the materials, design, manufacturing, delivery and the end of life management of its products.

Micro-Environment

1. Competitors
Sony has faced direct competition from alternative tech-giants, such as Samsung, Panasonic, Toshiba and LG, who produce similar 3D TV products (Moses, 2011). Despite Sony’s initial monopoly on 3D technology, these multinational corporations have similar marketing goals of redefining TV quality and providing unprecedented choice to consumers (Stinziano, 2011). The intensity of the competition from these multinational corporations, as Weitz (1985) theorises, has diluted the market with comparative 3D products backed by billion dollar R&D budgets further reducing the advantage of Sony’s market leading R&D position.

2. Suppliers
Sony’s relationships with its suppliers have been uneasy due to ongoing overhauls of operations in order to cut costs (Izumi, 2009). Kim and Takenaka (2010) note that Sony was forced to halve the number of its suppliers over the past two years owing to rising procurement costs. As a result, rising TV panel supply costs have forced Sony to increase prices which have harmed its 3D sales volume. Carr and Pearson (1999) provide evidence that strategically managed long term relationships with suppliers are positively correlated with financial performance.

3. Distributors
Sony strictly controls the supply of their 3D TV’s to reputable retailers giving them equal merit to supply its products (Stevens, 2010). By doing so Sony advances the premium nature of their brand image as Faircloth, Capella, Alford (2001) mentions that retailers continue to build manufacturer and
customer relationships based on mutual trust. Anderson and Sethuraman (1988) note that the high level of mutual respect and dependence between distributor and manufacturer creates a partnership advantage, thus advancing Sony’s brand image.

4. Industry
The 3D TV industry is a new and rapidly expanding element of the entertainment experience. Originally the industry was monopolised by Samsung who released the first 3D TV (Noam, 2009). Consequently, Sony was forced to respond offering focusing on bundling services and warranties with products to segment the industry (Lovelock, 1983). Additionally, Sony

5. Customers
Sony’s 3D TV supply chain is designed to provide value delivery and relationship satisfaction for customers. The Bravia range of 3D TV’s is targeted for mass market appeal, initial sales to be fuelled by customers seeking unprecedented TV quality, primarily at young to middle age adults. Lim, Tracey & Vonderembse. (1999) examined the relationship between firms with a high level of advanced manufacturing technology and greater customer satisfaction.

6. Partners
Sony has partnered with Hollywood producers providing valuable insights into the advancements offered by 3D technology to cinematography. Sony provided animators and with the skills to produce 3D films. The larger quantity of 3D films being produced has led to an increased demand for 3D TV’s. It is proposed by Cheon, Grover & Teng. (1996) that this integrated marketing approach establishes long-term interactive relationship profiting both stakeholders.

Current Target Market

Sony’s Bravia 3D TV is primarily targeted at the single male, aged between 25 and 35, with disposable income, is quite knowledgeable with technological developments and is in possession of the latest gadgets. Another potential
market would be that of married couples between the age of 35 and 50, with disposable income along with children and are keeping up with the latest technological devices as part of their children’s growth. Other common characteristics between both the groups mentioned would be that they would generally be in possession of a complimentary gaming console such as the PlayStation and/or entertainment systems such as Blu-ray disc players.

Marketing Mix
Product
BRAVIA is a brand of high definition electronic appliances owned by Sony, a leading manufacturer of electronic products. The name is an acronym for “Best Resolution Audio Visual Integrated Architecture”. The new 55 inch HX850 Series BRAVIA HD 3DTV comes with many features including that of accurate and clear colours and pictures along with a stylish, energy efficient frame. A subscription to the Sony Entertainment Network offers channels with an extensive list of the current music and movies. In addition to the range of applications, customers can access more than 50 content channels which are inclusive of sports, art, YouTube, Twitter and Facebook. Considering that the target market is inclusive of single makes aged between 25 and 35 along with married couples with children, it is important that the product is technologically advanced with the latest features and applications. While on face value, it can be seen that the Sony Bravia HX850 can satisfy the needs of its target market, Sony will be required to conduct further R&D to keep up with technological advancements and changing consumer needs.

Price

At present, the Sony 3D TV is priced at AUD$2499 which is inclusive of GST. On face value, this price is slightly more expensive than that of the Vizio M3D550KD which is marked at AUD$1430. Despite this, the Sony 3D TV is still cheaper than the same-sized LG’s 55LM9600 by around AUD$900 and outperforms it in most areas. On top of the pricing options of the actual product, Sony aims to compliment the price and sales of the 3D TV product with that of products within the 3D movies and gaming consoles range including that of
the PlayStation 3. The target markets share a common characteristic of having disposable income. This is required as the 3D TV market is still considered to be relatively new and the product is viewed as a luxury good with higher costs of production which are passed down to consumers. These prices are required to be reviewed on an ongoing basis whilst comparing it to the prices set by competitors as well as the changing nature of consumer sentiment.

http://www.sony.com.au/tvp-lcd-tv/feature/3D-Brilliance/498088 http://www.sony.com.au/product/kdl-55hx850
http://www.pcmag.com/article2/0,2817,2405868,00.asp
http://www.scribd.com/doc/31683168/Sony-Bravia-Marketing-Plan

Place
Sony’s marketing logistics network for its Bravia 3D televisions are outsourced to a third-party supply chain management company. Manufacturing of televisions are manufactured in Japan and are assembled with imported parts from Brazil, Spain, China and Malaysia (Wikipedia, 2012), then they are transported to its 20000 square metre warehouse in Ersine Park, Sydney owned by the Excel Supply Chain (Austrade, 2010). They are responsible for the storage, transportation and delivery of Sony goods in the Australian market. Sony employs a selective distribution strategy in its sale of the Bravia 3D television. Among the various types of retailers are (Sony, 2013): Electronics specialty stores such as Harvey Norman, Bing lee, and the Good Guys Department Stores such as David Jones.

Discount retail stores such as Costco.
Online retailers which include many of Sony Australia.
The prominence of Sony’s 3D TV in electronic specialty and online -retailers is crucial in attracting tech-savvy consumers as trust and consumer satisfaction are of importance in the sale of an emerging technology. However, the product is not exactly align with the target market with the sale of televisions in discount retail stores such as Costco. Although, the product is at the decline stage of its life cycle and becoming more like a commodity product. Hence, more accessible markets are being utilised to sell
3D televisions. Promotion

The past two years has seen the excitement and hype over Sony’s Bravia 3DTVs quieten down along with its promotion. Advertising for the product, is almost non-existent in mass-media such as television and newspapers. Sony has resorted to promotion tactics predominately consistent throughout its range of Bravia TV as the 3D feature of televisions is not a strong selling point anymore. For example, a recent sales promotion entitled Sony customers to a $300 cash refund (in the form of an EFPTOS Cash Card), once they had bought a selected Sony TV and spent $AUS99 on Sony products. This tactic aims to attract new-users to purchase a Sony Bravia TV (possibly with 3D features.) Hence, the 3D TV may not be perceived as a high-end good or a must-have electronic and thus may alienate the target market of tech-savvy males. However, Sony’s actions are in response to the slower than expected uptake and negative perception of 3DTV technology in Australia. Though, it must be noted that Sony has shown, through the various setbacks in the technology’s uptake that it is able to respond to public concerns which limit the damage of negative publicity.

Alignment of marketing mix and Target market

You should discuss whether the current marketing mix matches the needs of the current target market

Swot Analysis
Strengths- Company Resources, competitive adv

Weaknesses – What don’t have relative to competitors
Opportunities – Positive elements of macro and micro environment Threats- Negative elements of macro an micro

Strengths
One of Sony’s major strengths is the value of its brand name. Sony’s growth and establishment as a multi-national corporation has been fuelled by its brand equity. (Aaker, 1992) In a 2012 marketing survey Sony was identified
as Asia’s most valued brand. (Wexler, 2012) Sony has established itself as synonymous with technological excellence with a rich heritage of technological expertise. (Sony, 2011) This has been evident due to Sony’s initial monopoly on development of the colour television, VCR, compact disc, high-definition television and the 3DTV. Sony has supported its brand image with strong partnerships in the entertainment industry. Sony Pictures and Music has been beneficial in strategically providing optional products to be used in conjunction to Sony electronics. Therefore Sony’s products, including the Bravia 3DTV, have a competitive advantage over alternative tech-brands due to consumer’s preference of Sony’s brand image. Weakness

Sony has recently been faced rising TV procurement costs due to uneasy supplier relationships. Therefore Sony’s pricing strategy has been compromised as increasing prices have reduced sales volumes by 15% .(REF) Sony has also experienced a weakening in its market share as competitors, such as Samsung and LG, have had increasingly dominant marketing strategies. The intensity of the competition from these multinational corporations, as Weitz (1985) theorises, has diluted the market with comparative 3D products backed by billion dollar R&D budgets further reducing the advantage of Sony’s market leading R&D position. Sony’s strategy of increasing diversification into more business segments has shifted its core competency away from technological excellence.. This has resulted in a distortion in Sony’s brand image and marketing strategy. Opportunities

Sony has an opportunity to take advantage of its movie, music and gaming operations by extending their 3D services and delivering value-added content to support and integrate its product line. (Fatakia, 2012) Increasing consumer concerns about the natural environment have the potential to drive Sony to incorporate green marketing into their brand image. With a larger availability of information available, society has become increasingly aware of the deterioration of the environment. (Gungor & Gupta, 1999) Sony has significant opportunities to enter alternative markets due to recent acquisition of the entirety of the Sony-Ericson joint venture. This should give Sony the opportunity to act independently and innovate in the booming smartphone and tablet market. This area has experienced significant growth
with smartphones expected to account for 80% of those sold by 2016. Sony has the opportunity to combine its 3DTV technology with its planned smartphone and tablet product offerings. to enter the healthcare-imaging sector in a significant way through a possible acquisition of a 30% stake in Olympus. Threats

The challenges that Sony face in the current economic environment are comparable to that of the Great Recession of 2007-08. Bohen et al. (2010) predicted that discretionary thrift habits adopted by consumers during the recession would continue through the post-recession period. This was evident from a large fall in consumer confidence of 4.3% in December 2012 (Evans, 2012) as consumers were reminded of the potential volatility of the economy. Emerging media platforms, such as mobile and internet TV (Noam, 2009), threatens to dampen demand and affect sales of Sony’s Bravia 3DTV. The availability of content on Sony’s 3DTV remains limited due to tight broadcast regulations, enforced by the Australian Communications and Media Authority (ACMA, 2012). Currently, transmissions of 3DTV are not permitted due to the intensity of radio traffic, so potential consumers of 3DTV may be deterred as they are unable to enjoy 3DTV to the extent that is possible. Sony faces a changing consumer demographic due to Australia’s ageing population. The number of consumers over the age of 65 increased from 11.5% to 14.2% over the last 10 years (ABS, 2012).

Recommendations

Target Market

In the short term, it would be worthwhile to not change the target market. As the 3D TV is considered a luxury good, there is the element of prestige as only those with sufficient disposable income are able to afford it. Extending the target market in the short term could cause potential negative impacts on the product image as prices would need to be decreased in order to broaden the target market. At this point in time, any decreases in price could potentially compromise the actual or perceived quality of the product as well as tarnishing the reputation of the 3D TV as a luxury good. An
example of this is that of luxury cars such as the BMW or Mercedes Benz, where demand decreased in correlation with a decrease in price due to consumers perceiving the lowered value a detriment to the prestige of the products.

In the longer term, as technology progresses and the cost of production decreases for the 3D TV, the target market can be expanded upon as the product would tend to be more affordable. Just like the first black and white television which was initially considered a luxury good, it became readily available and cheaper over time. This is a trend that can be perceived with the 3D TV.

Product and Price

As the current target market is quite specific due largely to the price limitation, Sony must prepare to accommodate and facilitate for the longer term where prices will decrease and the 3D TV will be more accessible to everyday consumers. In order to do so, Sony must start to embed the 3D technology into the lives of consumers in order to gradually develop a reliance on the technology especially once it has been popularised. Such a strategy may have already been derived by Sony but it would be more feasible if there was greater collaboration with social media such as Facebook and Twitter which is quite popular today for the younger generation. Also, there is a push towards the integration of gaming consoles to heighten the gaming experience especially through consoles such as the PlayStation 3 along with any potential future models of the console.

http://www.variety.com/article/VR1118043091/

Conclusion

Sony is faced with numerous obstacles in the context of the Australian macro-environment. Whilst attempting to adapt under challenging economic conditions with lower consumer confidence and dynamic demographic changes, they will be expected to abide by restrictive legislations on broadcasting
along with growing environmental concerns. However, Sony has addressed this through strategies implemented within their respective micro-environment. There is a prominent focus on developing long term relationships with suppliers, distribution channels and beneficial partnerships along with being ahead of competitors through continual development and a strong focus on customer satisfaction. Overall, Sony continues to innovate and differentiate in order to ensure longer term success of the Bravia 3D TV.

References

ABS;. (2012). Population by age and sex, Australia, States and Territories,

ACMA;. (2012). Australian trials of 3D TV,
ACMA;. (2012). Digital television,

Anderson, J. and Sethuraman, R. (1988). Partnership advantage and its determinants in distributor and manufacturer working relationships. Journal of Business Research. 17 (4), p327-347.

Agudo, J. Gutierrez, H. and Rodriguez, I. (2006). Determinants of economic and social satisfaction in manufacturer–distributor relationships. Industrial Marketing Management

Need essay sample on "Marketing – Sony Bravia 3DTV"? We will write a custom essay sample specifically for you for only $ 13.90/page

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Bohen, B., Carlotti, S., and Mikas, L. (2010). How the recession has changed US consumer behaviour. McKinsey Quarterly. 1, p17-20.

Carey, J. and Einav, G. (2009). Is TV dead? Consumer behaviour in the digital TV environment and beyond. The Economics of Information, Communication and Entertainment, 1, p115-129.

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Cheon, M.J., Grover,V. and Teng, J. (1996). The Effect of Service Quality and
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Evans, B;. (2012). Consumer Sentiment disappoints, http://www.westpac.com.au/docs/pdf/aw/economics research/er20121212BullConsumerSentiment.pdf

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Liu, H. C.K;. (2011). A Currency Union Not Backed by Political Union,

Lovelock, C. (1983). Classifying Services to Gain Strategic Marketing Insights. Journal of Marketing. 47 (3), p9-20.

Moses, A;. (2011). 3D TV falls Flat as broadcasters tune out, .

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