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Sony Vaio Case Essay

In China 74% of the people own a desktop and about half the population owns a laptop, considering that half of the country has broadband internet connection, and of the households that own a laptop almost 80% have internet at home, the market for laptop in China is very interesting for Sony. Howeve, in the past years, Sony has been facing only a moderate success with a low market share and low brand awareness in China.

Global image of Sony VAIO

Globally the brand VAIO is known for being a “statement computer” a high-end niche product that attracted consumers for whom style and design were a top priority. Value Proposition The VAIO 505 differentiates itself by being a one of kind portable laptop available in different colors and light in weight. It distinguished itself by having the software already loaded and came with a distinctive advantage of the multimedia software, which allows video and photo edition, and music software.

Target Throughout the globe the brand “VAIO” of Sony is a premium offer, and considered to be higher than the average selling price which consequently attracts certain consumers that are willing to pay more for genuine brand rather than imitations. Hence, most-likely individuals and not business professionals nor enterprises, mainly image-conscious business professionals, who want to create a statement about the brand of computer they buy.

Chinese perception of Sony and VAIO

VAIO is valued mainly by high-end consumers, who typically prefer to buy genuine brands rather than copycats, consequently are willing to pay a premium price for the intangible benefits. However, it is important to highlight that even if Sony brand in China was considered a premium brand, and is seen as “young and trendy” Chinese are generally unfamiliar or indifferent to the VAIO brand, they referred it to as the “Sony laptop” in general. Currently, Sony faces a moderate success in China, with a low market share for laptops, only 6. 1% compared to a benchmark competitor who has 10. 8%.

Therefore, Sony must work hard on creating brand awareness, but the current trend of an increasing status-seeking consumers segment, imply that over the next years Sony could enjoy an increase in brand penetration if the right segment and marketing plan is in place.

CORE ISSUE

Sony has a commitment to achieve a premium position in China, and it needs to define the segment or segments to target and how to position VAIO for this selected segment.

The question is, which study or combination of studies – would lead to the best plan for VAIO in China. Marketing research techniques used In the marketing plan included four various research studies: A large-scale study of Chinese laptop consumer including qualitative and quantitative data, a qualitative detailed report of interviews with Chinese laptop consumers, and segmentation studies that provided different pictures of the Chinese laptop consumer market.

They included face-to-face interviews, Internet and videoconferences, attribute ranking questionnaires (e. g. coolness, simplicity, etc. ) and focus groups. Recommended further research The studies were mainly qualitative whereas a more quantitative research would have been recommended to find out the correlation amongst global and local segments. Other recommended studies would be a volume metric analysis to measure the market potential, a two-step cluster analysis to compare the values of different cluster solutions and determine the optimal number of clusters, and finally a latent class cluster analysis, which would optimize the segmentation and the fit of the highest probability of belonging.

OPTIONS AND RISKS SEGMENTS TO TARGET

Based on the CLUES research the highest percentages of laptop users in China are family users. They could be a potential segment to target considering that they stated that buying a computer implies “I am a cool person” which is aligned to the values of the VAIO value proposition of being “young and trendy”.

However, when compared to the Compass study, family users have a strong correlation to the characteristics of the “Unfussy basics” segment where they look for simple devices; and the “Unfussy basics” segment are likely to buy knockoffs rather than genuine because they agree that knockoffs are as good as the real thing, hence their probability or likelihood to purchase is low. (Exhibit 2) The fact that the VAIO 505 comes with a multimedia-integrated software for video & photo editing and music, it would attract the segment local segment of the Entertainment Lovers.

However, they match the values of the global segment of the Unfussy basics, which are likely to spend less and not buy genuine brands. (Exhibit 2) Superficially, the segments of Fashion Oriented and Entertainment lovers in the local study, seem to be a tempting segment to choose, because they match VAIO’s values, however when calculated the likelihood to buy, the heavy users ranked amongst the highest potential consumers. (Exhibit 2) Therefore, the Fashion oriented does seem to be an ideal segment for VAIO in China, since their values match (Exhibit 4) and they have a high probability of purchasing (Exhibit 3).

Comparing the Fashion Oriented local segment to a global segment they most likely match the Technosocializers who are also a good match segment for VAIO. (Exhibit 2&4)

RECCOMENDATION

The recommended marketing strategy for Sony VAIO to use is to think global, and act local. Meaning, using the global study to understand global perception and pitch a marketing strategy that could attract a global segment and at the same time apply it to the identified Chinese segments, the best recommendation would be for Sony to use a combination of both studies.

Thinking global, Sony would focus on the Compass segment study, however the majority of the sample are the Unfussy Basics and Quality lifers segments (Exhibit 5) which do not match VAIO’s values (Exhibit: 4) Nonetheless, Sony is not interested in bigger segments nor mass markets, since it is more niche-oriented. Therefore, when calculated the likelihood of purchase, it is clearly evident that the Status-focus are most likely to buy, because they rank Sony as a top brand and most-likely do not buy knockoffs.

The second strongest segment, to fit the values of VAIO and with a high probability of being a potential consumer are the Technosocializer segment (Exhibit 2) Acting local, Sony would use the local study of CLUES (Chinese laptop user survey) where there is no visible major segment, since the spread amongst various segments is not significant. (Exhibit 8) However, based on each segments’ values,perceptions and consumer behaviors, it is evident that the Entertainment Lovers, Family users and Fashion oriented are the segments that best match VAIO’s brand values.

The target for VAIO would be Chinese ranging from 18-44 years old, with some education and middle to upper income. (Exhibit:6) The good news for Sony is that the recent trend analysis study found out that there is a big income and education gap among segments, even if there is a segment that is most likely to buy imitations, there is also a growing segment of Chinese consumers whom aspire to enjoy high levels of status, money and technology. Read about Brand imitation

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This new trend toward Status-seeking consumers would favor foreign brands such as VAIO as opposed to Lenovo who is the most established brand in China. Customer interviews studies also concluded that Chinese perceive laptop brands as an extension of who they are, which shows a “good face” to society, in order to stand out or simply show off, since it is a sign of status. Considering that post-1980 generation represents approx. 50% of working population, which is better educated than previous generations, and drive a status-seeking behavior, the Status focused segment globally is the ideal-match.

Hence, the top three segments would be the Techno socializers, Status-focused and the Fashion oriented segments since statistically they prove to have the highest likelihood to purchase and in addition their purchasing behaviors, perceptions and brand values match those of VAIO’s. (Exhibit 7) However, once the segment size is multiplied by the probability of purchase the Status-focused segment out-performs the Techno socializers (Exhibit 7. 1) Therefore, we can conclude that Sony can think global and pitch for the Status-focused segment, and implement the same strategy to the Fashion-Oriented Chinese segment.

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