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Sony Vaio China Essay Sample

Sony Vaio China Pages
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Which segments of population should Mr. Richard Lopez, the product manager for Sony corporation target for positioning of its new brand of laptops “VAIO” in the Chinese market.

CONCERNS AND OBJECTIVE

Mr. Lopez had too much data to analyze and draft his marketing plan. He was working on three market research reports, a study on consumer values, qualitative interview data, a segmentation study completed recently and a new corporate study that segmented consumers at a global level. The Objective for Mr. Lopez was to draft out a marketing plan based on these studies individually or in combination to launch VAIO in China.

SONY HISTORY & BACKGROUND

[1]It was in 1946 that Masaru Ibuka and Akio Morita together with a small team of passionate and committed group of employees started to build Tokyo Tsushin Kenkyujo´ (Totsuko), or Tokyo Telecommunications Research Institute´ to the billion dollar global conglomerate that it is today. The main objective of the company was to design and create innovative products, which would benefit the people. The name “Sony” was chosen for the brand as a mix of two words. One was the Latin word “Sonus, which is the root of sonic and sound, and the other was “Sonny “ a familiar term used in 1950s America to call a boy.

At the time of the change, it was extremely unusual for a Japanese company to use Roman letters to spell its name instead of writing it in kanji. The move was not without opposition: TTK’s principal bank at the time, Mitsui, had strong feelings about the name. They pushed for a name such as Sony Electronic Industries, or Sony Teletech. Akio Morita was firm, however, as he did not want the company name tied to any particular industry. Eventually, both Ibuka and Mitsui Bank’s chairman gave their approval. The first Sony-branded product, the TR-55 transistor radio, appeared in 1955 but the company name did not change to Sony until January 1958.[1] sony.com

THE GLOBAL IMAGE OF SONY

Although Sony made computers in the 1980s exclusively for the Japanese market, the company withdrew from the computer business around the beginning of the 1990s. Sony’s re-entry into the global computer market, under the new Vaio brand, began in 1996 with the PCV series of desktops the PCV-90 was designed with a 3D graphical interface as a novelty for new users. [2] Wikipedia, Sony

The first generation of Vaio laptop computers was released in 1997 and the US$2,000 PCG-505 model was designed to be “Super Slim,” and was housed in a four-panel magnesium body. The 505 were designed to be visibly distinguishable from every other brand and model on the market, and was therefore positioned as the statement computer. The most iconic was the purple color out of the range of new colors other than the conventional grey and black present in the market those days. The 505 were particularly popular with the image conscious business people who cared about what their computer said about them. As a result the VAIO brand established strong associations with attributes of “style” and “design”, a brand image that Sony continued to foster in subsequent years by emphasizing design clues and reducing laptop weight and size.

HOW DO CHINESE CONSUMERS SEE SONY

The new laptop brand, VAIO was considered to be a powerful statement by Sony. Vaio represents innovation, style, premium quality and Avant-garde trends. Sony’s revolutionary, customizable laptops were created to revive Sony’s market aspirations. Vaio computers were loaded with multimedia software that a lot of other computers didn’t have. They positioned VIAO as a breakthrough computer. They also gave people a sense of style and belonging. The Chinese consumers see Vaio as a premium product for which they are willing to pay extra, even though pirated copycat products are available for a cheaper price.

SEGMENTATION DATA ANALYSIS

Let us try to analyze the data that Mr. Lopez had with him and help him select the best data for drafting out a marketing plan for VAIO in China.

1) The Shanghai report: In early 2010, with the help of a external market research firm, Sony conducted research in shanghai to gain a deeper understanding of the modern Chinese Consumers, who represented citizens of the “bullet train economy”, their consumption behavior and usage habits, including for laptop computers such as VAIO. Following were the significant findings out of this data. Exhibit1: demographic segmentationexhibit2: incomes segmentation

Exhibit 3: sexes segmentationexhibit4: age wise segmentation

Exhibit5: market share of Sony vs. competition

2) Customer Interviews: A deeper understanding of Chinese laptop users. To understand the laptop related perceptions and preferences in more detail, Sony conducted interviews with 40 Chinese VAIO owners and 04 people who owned a non-Sony laptop. As a result of these interviews, three key themes were interpreted. a) Brands are an extension of individual personalities.

b) Asking for a product advice was a way a buyer connected with the product. c) Basic users comprising of buyers who would buy a laptop to stay in touch on e-mail, blogging, VOIP etc.

3) The CLUES report: This report provided Lopez with what were the key similarities and differences among consumers in China, and what were the different groups of consumers in china with different product preferences. How big or small were these group and what were the market opportunities they represented. A statistical analysis of the CLUES data yielded six
Chinese laptop user segments.

Heavy users13%
Entertainment lovers18%
Business focused16%
Family users22%
Tech enthusiasts16%
Fashion oriented15%

4) The COMPASS report: Project COMPASS was a massive worldwide segmentation study that included data from more than 30000 respondents. It represented a move to better align cross-divisional and cross regional groups to customize marketing efforts. This report would help product managers build a cross category cluster value by focusing on the same consumer target. The analysis of the COMPASS yielded another six global consumer segments.

Techno socializers16%
Performance seekers17%
Status focused12%
Unfussy basics24%
Functional socializer9%
Quality of lifers22%

RESULTS OF THE ANALYSIS: THE BEST OPTION

Mr. Lopez should interpret the test results according to the goals the company is trying to achieve. If Sony wants to control the Chinese market, and grow in their market share significantly, they have to create a product that everyone would need or be accepted by majority of the Chinese consumers. Our suggestion would be that Mr. Lopez should use both the CLUES and COMPASS studies in comparison to one another and use the best of both these studies to draft a marketing plan for sale of Vaio in china. However, these studies should not be taken as the only parameter for preparing a plan. The Chinese market needs are completely different from those of the rest of the world and therefor market segmentation by continent and/or by country is a reasonable and logical approach.

Sony being a global firm as the expertise to create a homogenous product that fulfills consumer’s needs and expectations, taking in to account the useful marketing research studies that were conducted to come up with a strong strategy to enter the markets of China.

TARGET SEGMENTS TO BE CONSIDERED FOR LAUNCH OF VAIO

After analyzing the studies what we have, we can suggest Mr. Lopez to draw out his marketing plan based on the combination of the results of both the studies, the outcome of which is given below. He should target the following two segments for introducing VAIO in China.

1) FAMILY USERS- Laptops being a niche market for Sony, VIAO china should target the family users with unfussy basics. This is the largest segment combination of the CLUES and the COMPASS study.12% of this segment rank Sony as their top brand. Mr. Lopez should aim at marketing Vaio as a “family” laptop, as family & cultural values are a significant feature in the Chinese cultures. We also consider this segment, as these are users who are not interested in what technology can offer and are contented with a stylish & a good looking laptop. This segment comprises of mostly women who seek stylish and colorful laptops who use laptops for staying in touch with their family and friends.

The downside of this segment is that only 38% of people plan to purchase a laptop in the next twelve months.

2) FASHION CONSCIOUS – Sony through their VIAO brand should target fashion-oriented consumers, who look for stylish products and image reflecting or an expression of individual’s personality products. 92% of these consumers are planning to buy a laptop in the next 12 months.

The downside of this category however is that only 7% consider buying a Sony as their preferred brand. Also it is difficult to compete with Apple who is a style and design statement in the laptop industry.

MAJOR TAKEWAYS OF THE CASE AND METHODOLOGY USED

The various factors for segmentation that have been used in conducting the research were demographic, Psychographic, Behavioral as well as benefit of what consumers see in a product. The tools for segmentation like the market size, addressable market, current market share and share of wallet all play a vital role when we assess any data for coming up with a strategy for brand positioning and drafting a marketing plan for the same.

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