Manufacturing Process And Production Management Marketing Essay

Sony is a leading corporation primarily operating in electronics. They are leading manufacturers in electronic goods. Sony holds a great quality and technological leadership in the market. Sony products are in the fields of entertainment, communication devices, laptops, video games, motion pictures, music, personal computers, digital cameras, robots and other financial services. This report brings an overview about the principles of marketing and implementation of these principles by the Sony Corporation.

History

Sony found its beginning in 1946 at Nihonbashi, Tokyo by Masaru Ibuka and Akio Morita and they have started as Tokyo Telecommunication Engineering Corporation. They started it as very small company, but the company growth performance is very steep from the beginning. The first product produced by Sony is an electric rice cooker, followed by first Sony tape which uses magnetic paper based recording technology, which is first recording product in the market. In 1955, they have started branding as Sony products. Later, they changed to Sony Corporation from Totsuko. In 1960, Sony entered the global market and started exporting its products and expanded its markets in many countries. Sony continued its consistent improvement in technologies and in many sectors.

Source: http://en.wikipedia.org/wiki/Sony

Current Market of Sony Corporation

The total revenue for Sony in 2011 was US$ 86.65 billion. Their objective is to increase its market share and keep its progress consistent in the market among the competitors. Sony has manufactured products in many areas such as Entertainment – Television, CDs, DVDs etc., and Gaming – PlayStation – PS2, PS3, PSP, gaming CDs and DVDs, Music – digital players, Walkman etc. The Key technologies in television such as LCD, LED and in PlayStation such Motion control, Sensors players gives the marketing edge for the Sony Corporation. Sony captures its professional market by producing the mobile phones as Sony Ericsson and Laptops with brand name as Sony.

Source: http://www.wikinvest.com/stock/Sony_%28SNE%29/Data/Revenue/2011

Organizational Orientation

Organizational orientation provides comprehensive information about an organization [1]. Sony established the profitable organizational orientation by renaming its caption to “quality and competitive” from “economical and reliable” recently. The increased market share helps the company to maintain macro environmental objects.

Sony’s current Market analysis:

Sony Corporation is dominant in the Television Industry and it plans to increase the market in Television Industry by using the liquid fiber technology in the upcoming years. The below chart shows the marketing percentage of the Sony’s over the competitors.

Sony is the major company who produce gaming products apart from the competitor Microsoft Xbox 360.The motion control, sensor players and kinetic technology provides the marketing edge for the Sony Corporation.

The below chart shows the percentage of the market has been caught by Sony in mobile phones market.

Source: http://pro.sony-asia.com/section/articles

Sony’s Orientation:

Corporate Citizenship

The company recognizes its responsibility and involved in many social activities every year. In 2005, Sony Corporation formed a committee to increases its contribution to the social activities and the committee mainly focuses educational institutions and organizes many support programs to improve the society.

Business Planning

Sony plans well for the good business and they investigate the requirement and appreciation of the product in the market before the production .They customizes their products according to the geographical location to cover the maximum market.

Research and Development

Sony’s primary objective is introducing new products, thus can be achieved by research. Sony’s spends a lot every year in research and technology department. Their constant up gradation in the technology gives the corporation a marketing edge over the competitors.

Product Design

The company applies new technology from research and development for each of its products. They design the products in such a way they are very resilient, increases the product life time and its market among the competitors.

Manufacturing Process and Production Management

Sony considers environmental healthiness while product planning and its manufacturing process are designed in a way to minimize the environmental wastes. The company’s manufacturing and production sites are selected in a manner which will not disturb the society and the mankind in any ways.

Distributions, Sales and Marketing

The company plans its marketing based on the quality of the products and its technology. They plan the effective strategy of distributing its products and selling it which will always satisfy the customer .They follow key marketing and sales techniques to sell their products.

Information Disclosure to its Stakeholder

Sony will always disclose the company future plans and products decisions to their stakeholders. The annual revenues, profit and loss, balance sheets and other company’s information are open to the public to helps their decision in investing in the company. They are also open to the opinions about the product designs, technologies and other management techniques provided by the stakeholders.

Safety Measures

Sony considers the health and safety measures for the staff and other members of the corporation during the production of the products. They implemented many safety measures in their manufacturing sites to reduce the risk of any accidents.

Source: http://www.sony-europe.com/article/id/1178278971686

Sony’s Competitive Advantage Analysis

Sony’s Marketing Strategy

Sony is the successful company in planning and implementing those strategies in an effective manner. By its current marketing techniques, the Sony Corporation satisfies its customer needs by its constant up gradation in technology.

Competitive Advantage

The Company survives in the market among the competitors due to the innovation of new products. The markets can be acquired by different strategies and this corporation is mainly achieved by Porter’s generic strategies .This strategy implies gaining more knowledge against the competitors gives a very good marketing edge. The importance of these strategies and its implementations as follows:

Porter’s generic strategies

Michael Porter suggested a firm’s ultimate strength resides in cost advantage and differentiation. The organizations profit is based on the difference between sales and costs. Therefore more profitability can be achieved by less costs or high sales among the competitors. His strategies are as follows:

Cost

Differentiation Focus

Cost Focus

Differentiation

Source: http://www.quickmba.com/strategy/generic.shtml

Sony’s Strategy

The primary strategy for Sony Corporation is Differentiation Focus and Differentiation. The other Sony’s Strategy as follows:

Market Segment

Scope

Target Industry Wide

Product Uniqueness

Competitive Advantage

Product Differentiation

Sony Corporation has great marketing advantage over the competitors through innovation. They spend more cost each year in research and development department to create new products in their Corporation. The maximized return by the product uniqueness will covers the cost spent in research. For Example, Sony Television which they have used many innovated technologies like LCD, LED, 3D TV. The company’s constant technological innovation creates a distinct place for the company in the global market.

Porter’s competitive Forces

Michael porter has illustrated his views in five competitive forces and they are as follows:

Entry Barriers

Buyer Power

Supplier Power

Threat of Substitutes

Rivalry

Source: http://www.quickmba.com/strategy/generic.shtml

New Entrants Threats

Sony Corporation faces great threats over its competitors like Samsung in Television industry, Xbox in Gaming industries etc. The new companies which enter the market with the low cost strategy have to be taken into consideration by Sony while formulating the marketing strategy.

Buyer Power

The customers have less bargaining cost as they looks for the good and reliable products. Sony Corporation focuses on current marketing trend and implements the strategies. The company covers the different age group, different race, and different geographical position with the brand name.

Supplier Power

The suppliers for the Sony Corporation are great and have the good channel for consumption and distribution. The suppliers of its competitors have fewer bargaining power due to the less cost of the products in the market compared with Sony.

Threats of Products Substitute

Sony faced a lot of challenges with the competitors who produce substitute products with cheaper price. The Sony overcame this challenge by investing more money in advertising and product marketing activity. The dell and Lenovo laptops are less expensive compared to the Sony laptops, but still customers prefer Sony due to the display technology and product quality. Similarly, the PS3 – PlayStation is far expensive when compared to the XBOX 360, but still they prefer Sony due to the quality and it supports more games due to the venture with many gaming companies. Thus Sony strives and attained a good marketing edge among its Competitors.

Rivalry

Song Corporation is one of the leading producers in the electronic goods .The Laptop usage in USA is around 80% and Sony has large share in this market compared to its rivals such as Samsung, Hitachi, and Toshiba etc. In Laptop industry, Sony faces threat from competitors such as DELL, HP and the company manages to attract the customers with product quality and leading technology. Similarly in other industries like gaming where XBOX 360 is emerging with rapid technology which is very challenging for Sony Corporation and likewise canon and Samsung in Digital cameras and Home theatre system respectively.

Marketing Mix

The marketing mix is an important business tool in marketing. The marketing mix is the important concept which has to be considered before determining a product. This strategy is essential and influential to attract the consumers towards their services and products. The Marketing mix strategy is synonymous with 4 P’s as follows;

Product

Price

Promotion

Place

Source: http://www.quickmba.com/marketing/mix/

PRODUCT

Product Mix:

A product is referred to any tangible or intangible things that satisfy the needs of the customer. The product is considered as core element in marketing mix as it satisfies the customer needs. Each Product has growth phase, maturity phase and decline phase is called the product Life cycle. Sony Corporation is parent of the Sony’s group and its various products are explained below:

Sony’s Product Mix and Product Line:

Product Mix:

Product mix is the set of total brands marketed by a company. It is the totality of the product lines of an organization. The different categories of Sony’s Product mix as follows:

Electronics

Entertainment

Games

Financial Services and others

Product Line:

Product Line is the total set of products and services in which the company offers .The product line of the Sony Corporation as listed below

Television and Home Cinema

VAIO Computing

Digital Cameras

Printers and Photo frames

Camcorders

Hi-Fi and Home Audio

MP3 Players and Portable Audio

Car Audio

Reader eBook

Sony Ericsson Mobile Phones

PlayStation

Recording Media and Batteries

Accessories and Headphones

Source: http://www.sony.co.uk

Television and Home Cinema:

Sony has produced wide range of Home media products based on purpose, style, model and performance. Sony targeted customers in segmentation strategy and are listed as follows:

LCD, LED, 3D Television

Home Theater

DVD and Blu-ray Disc

Projectors

Compatible Accessories

Source: http://store.sony.com/c/TVs-LED-LCD-3D-TV/en/c/S_Televisions

VAIO Computing:

Sony provides innovative technology in order to attract customers and capture the market. The different sorts of Sony VAIO products as follows

VAIO Laptops

Business/Customized Notebooks

VAIO Accessories

VAIO Software

Brand:

Sony is the brand name for Sony corporation products .The concept of branding has been utilized well by the Sony Corporation in television products, computer peripherals, gaming etc., which helps the Corporation to capture the market easily with less promotion.

Price Mix:

The Product’s price setting plays a vital role in marketing strategy as it tends to earn revenue for the cost spent during the manufacturing of the product. The pricing of the produced product is critical role for the company as it has to consider both customer satisfaction and profit earned by the company. The important pricing strategies and implementation of these strategies by the Sony Corporation as explained below:

The Demand Curve:

C:Documents and SettingsAll UsersDocumentsMy PicturesSample PicturesDemandCurveMovementExample2.png

The demand curve is an important concept in marketing. The relationship between the pricing and the demand are shown in the above graph. It describes that the demand decreases with increase in the product’s price and vice versa [1].

Source: Principles and Practice of Marketing, 5th Edition, Jobber, and Page No: 458

Pricing Methods of Sony Corporation:

The pricing methods are of three types such as based on the Product cost, Competitors product and products marketing [1]. Sony products are mainly based on products cost and Competitors product and rarely on products marketing.

Pricing Strategies of Sony:

There are different strategies for pricing which are premium pricing, economy pricing, product line pricing, psychological pricing, captive product pricing, optional product pricing, value pricing, geographical pricing, product bundle pricing, and promotional pricing [1]. But Sony follows the below pricing strategies:

Premium Pricing

Economy Pricing

Psychological Pricing

Product Line Pricing

Premium Pricing:

Sony’s core products such as Television, Laptops, Home theaters are premium priced. Some of premium prices products as follows:

TVs: Ranges from £250 to £3000 according to the various model and functional capabilities

VAIO Laptops: Ranges from £250 to £2500 depending on various types and performances

Projectors / Home Audio: Ranges between £150 and £1800

Source: http://store.sony.com/webapp/wcs/stores/servlet/StoreCatalogDisplay?langId=-1&storeId=10151&catalogId=10551

Economy Pricing:

Sony Corporation follows economy pricing for some competitive products with less price and great quality, such as:

Digital Cameras / MP3 Players: from £100 to £1800 and for MP3 Players – £35 to £450 with great audio quality

Car Radios

Mobiles (Sony Ericsson)

Source: http://store.sony.com/webapp/wcs/stores/servlet/StoreCatalogDisplay?langId=-1&storeId=10151&catalogId=10551

Product Line Pricing:

Sony released many products and its sub-products based on their performance and style. For Example Sony VAIO and TV has many products based on their types and they prices according to the features such as LED, LCD, 3D etc.

Psychological Pricing:

The Sony Corporation also implements psychological pricing strategy to their products to attract the consumers psychologically. For example, their products – Digital Cameras ranges £199 instead £200, MP3 ranges from £49 instead of £50 and TVs from £279 rather £280 etc.

Source: http://store.sony.com/webapp/wcs/stores/servlet/StoreCatalogDisplay?langId=-1&storeId=10151&catalogId=10551

Penetration Pricing:

While Sony Corporation launching some new products, the prices are kept low in the beginning without decreasing the quality of the product in order to capture the market. For example, some model of VAIO laptops ranges £300 to £500 approximately, the price will be increased later depends on the demand for the product.

Skimming Price:

Sony’s uses skimming price strategy on some products where the customers who will focus on the cost of the product by keeping high prices and later the prices are decreased. For example – MP3 Players prices £450 and digital cameras prices £1800.

Promotion Mix:

The promotion mix includes some key characteristics which helps to promote the products and are as follows [2]:

Advertising

Personal Sales

Direct Sales

Sales Promotion

Public Relations and Publicity

Internet Promotion

Source: Principles of Marketing, 13th Edition, Philip Kotler, Gary Armstrong

Sony’s Promotion Mix:

Advertising:

Sony Corporation spends $3.8 billion every year in advertising in its products to push it to the customers and pull them towards the products. Sony Corporation advertises in many different ways. For example, its core products – TV and laptops are usually advertised through media and they sponsors in football league games to promote their PlayStation etc.

Direct Marketing:

Sony promotes its products directly to the customers by various strategies as follows:

Telemarketing: Sony spends in call centers companies to promote their products throughout bound and in bound call centers.

Direct-Response Advertising: By providing Sony coupon directly to the customers and gets their feedback

Catalogue Marketing: Sony frames the products catalogue and promotes their new products to the customers.

Electronic Marketing: A wide range of advertisement in Internet, E-mails etc.

Inserts: By dropping the Sony leaf lets in magazine and door-to-door.

Sales Promotion:

There are of two types

Consumer Promotions [2]: Sony promotes its products by giving Money off, Seasonal offers during summer time, New Year eve, Christmas offers etc.

Trade Promotions [2]: Sony provides allowances, warranty and other free services for premium products only.

Public Relations and Publicity:

Sony maintains good public relations and publicity by its social and eco activities. Sony have involved in sponsoring the educational institutions and by implementing the activities which helps to attain the healthy ecological environment. The company followed all legal activities and maintains a good relationship with the government. These news which helps to improve the brand image of the company, indirectly advertises and promotes the company products.

Source: http://pro.sony-asia.com/section/articles

Personal Selling:

The products in which are directly sold to the customers are called as personal selling. Sony follows this strategy by selling its products directly to the customers through Sony store, which is in the Sony’s website.

Sony’s Place Mix:

The marketing strategic decisions on distribution of the company products should focus on the competence of the customer needs and products quantity. There are four main types of distribution channels and they are as follows [1]:

Producer – Consumer

Producer – Retailer – Consumer

Producer – Wholesaler – Retailer – Consumer

Producer – Agent – Wholesaler – Retailer – Consumer

Source: Principles and Practice of Marketing, 5th Edition, Jobber and Page No: 682

Sony’s Distribution Channels:

The product is distributed from producer to the retailer directly through online, that allows the customers to place their order in Sony website and home deliver the ordered products.

The products are distributed to the distributers or retailers where the customers approach their show room and directly buy their products.

Sony supplies their products to the wholesalers and they supply it to the retailers and customers approaches the stores such as Sony world. Sony retail outlets, Sony center and will buy the products.

Distribution Intensity:

According to the product’s nature, the distribution intensity is of three types. They are as follows:

Utilize all available outlets by intense distribution

Utilize limited outlets by selective distribution

Limited outlets, one per sales area by exclusive distribution

Sony has the distribution intensity as selective distribution by providing their products to the selective outlets/dealers.

Source: http://pro.sony-asia.com/section/articles

Sony’s Sales Channels:

The sales channels supported by the Sony Corporation are as follows:

Direct Sales channel

Dealership Sales channels

E-Commerce

The direct sales channels are the channel in which the products are directly sold via the Sony’s website, whereas the products are sold to the Sony’s dealers who sell it to the customers is called dealership sales channels. The most commonly used sales channels is E-commerce where the Sony’s products are sold through marketing websites – eBay, Amazon, Flipkart etc.

Sony Corporation’s Success

The Sony Corporation brand message is “make-believe”, as per it the corporation shown the spirit of creativity and ability to turn the ideas to reality by implementing latest technology and innovating new products. The Corporation success can be inferred from the statistics of the company been in the top 15 worldwide brands and leading company in the semiconductor manufacturing. The recent Sony’s success news:

Sony acquired a great market by 3D technology

Sony’s products in motion technology, virtual simulation and innovative sensor controller games

Sony enters into the flow cytometer business.

Sony introduced the world’s first high speed wireless connection supports up to 5gpbs

Produces large high range projectors using laser source module technology

Sony telecasted the first 3d FIFA live sports games

Innovated new products in magnetic resonance and power transfer technology

Sony introduced digital cameras with high frame 3D lens which can handle very high fps.

Source: http://topics.nytimes.com/top/news/business/companies/sony_corporation/index.html

Sony Organization’s Downturn:

The Sony’s total revenue for the last year (2011) is $86.65 billion whereas the current revenue obtained from the first 3 quarters are $78.62 billion in 2012. The company usually earns more revenue at the end of each financial year; even the net loss expected by the company is around 3 to 5 billion US dollars which is very high. Sony says the reason for the downturn is due to legal change in the tax credits and mainly due to natural calmatives – earthquake and tsunami happened in April.

Source: http://www.wikinvest.com/stock/Sony_%28SNE%29/Data/Revenue

Revenue Graph:

Financial Highlights:

The net income for the Sony’s Corporation is started decreasing in the last few years. The capital expenditure stats show the corporation has been started focusing on the cost reduction.

Net Income Graph:

The reason for the company’s downturn is due to the concentration in reducing the production and manufacture costs and some pricing strategies issue which are difficult for the people who are middle-class etc. The suggestions to improve and stabilize the company as followed.

Source: http://www.wikinvest.com/stock/Sony_%28SNE%29/Data/Net_Income/2012

SWOT analysis:

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SWOT is an effective tool to identify and to evaluate the current business entities and strategies. It comprises of internal weakness and strength of a business, external threats and opportunities [2]. Each organization uses this tool for self-estimation and improvement. Sony uses this tool to satisfy the customers and improvise them.

Source: Principles of Marketing, 13th Edition, Philip Kotler, Gary Armstrong

Strengths:

Sony has the very good brand image which poses the great strength for the organization. The Concentration of products in one stream i.e. Electronics and produces the products with the excellent quality. The Sony marketed its products across many countries and increased its market share gradually. The company is improving the products quality and technology constantly from the customer’s feedback. The company maintains very good Research and development department in which they innovate new products with latest technology every year. The Products and services are designed and implemented by its own rather gathering it from the competitors. The products are interlinked with each other which improve the company sales, for example the videos taken from high reflex lens of Sony’s digital cameras are edited and processed in Sony VAIO laptops, and then they are transferred through the Sony’s projectors and casted in the Sony’s 3D TV. By implementation of these strategies, Sony became the top-ranking companies in the global world.

Weakness:

The demand for the Sony’s products is not consistent and depends on various environmental factors. In some sectors, the Communication gap between the functional and management departments is the greater risk. Due to the centralized power, the conflict arises between divisional branches. The company’s lack of knowledge in web based technology , for example the products PS3 is better than XBOX in many functionalities, but due to XBOX live – the online gaming feature lacks in PS3, the XBOX started capturing Sony’s market. Similarly, the companies like IBM, canon, Samsung go beyond by predominant productions.

Source: http://pro.sony-asia.com/section/articles

Opportunities:

The strength and opportunities are gained by uniqueness of the product. Expanding the products to the new market will help to increase the revenue of the company. They need to organize their strategies and provide new strategies for the new market. Growing market can be considered the best opportunity. Sony has the opportunity to go in to the healthcare-imaging sector. The company has the opportunity to capture the booming tablet and smartphone market.

Threats:

The major threats faced by the Sony Corporation are as follows:

Competitor competition such as Microsoft, DELL, HP, Apple, Samsung etc.

Changing customer’s preference and needs such as VCDs to DVDs, DVDs to USBs, USBs to portable HD

Entry of Global business

Sony online networks face threats from hackers and piracy threats for its games and products.

Global Economic Recession

Recommendations to maintain Competitive Advantage:

The Sony Corporation holds a good brand image and brand name for their products. They need to maintain it and retain the customers with them by innovation and product uniqueness. The ultimate aim is the differentiation in the products and this can be achieved by better research and development department. The Strategy of increasing the revenue by reducing the research cost must be avoided by Sony. Now the Sony has reduced about 50% of its marketing cost and it can be increased a little to cover the rural areas. The pricing Strategy should be carefully considered by the Sony, most of its products are premium priced and it can be varied to increase the sales and it actually helped in Playstation3 sales and it increased the sales up to 20 million units globally. Decreasing the quality of the product to decrease the production costs must not be considered by Sony, thus affects the brand image very badly. They can focus on young generation and design their products to attract them. Therefore to maintain competitive advantage and sustain in the market, the Company should release new innovative products in the markets, improvise the marketing investments and promotes the new products to the people’s vision

Conclusion:

Sony is the successful Corporation with noble brand image, constantly working to achieve its goals and missions. The continuous research and production of innovative products helps the company to maintain the electronic leadership in the market. Thus from the analysis of the Sony’s marketing strategies, recommend these ideas and strategies to implement for the better business.