Reasons to choose this topic
LCD TV is a product that has captured the attention of customers in an era of continuous development of technology, repeated competition among different manufactures By developing ranges of appealing designs, LCD TV has become more attractive than other TV products, satisfying the increasing demands of the market Faced with consumer demands and integration into the global technology revolution, such famous brand names as Samsung, Sony, Panasonic, LG, etc have introduced exclusive lines of products besides traditional ones, for example, a Full-
HD TV with multi-function, super-slim, super-connection, super-fast and environmentally-friendly features
Acknowledging this fact, Sony Vietnam introduced its Bravia LCD TV series and considered this to be the strategic product line of the Company
However, for Bravia LCD TV series to compete with TV products of other major manufacturers in Vietnam market such as Samsung, LG, etc., it is necessary for the company to have an overall vision of the marketing environment for its Bravia LCD
TV series, on the basis of which, solutions can be made to direct its Marketing strategy and enhance business performance of this strategic product line This is also the reason why the author decide to carry out the dissertation: "Some solutions to complete the Marketing-mix for Bravia LCD TV series of Sony Vietnam in 2012".
Objectives of the Study
- To conduct a comprehensive study of the theories on Marketing, Marketing mix and methods to develop Marketing mix strategy for a product;
- To research about TV market in general and LCD TV market in particular, both globally and in Vietnam;
- To analyze current situation and evaluate Marketing strategy of Bravia LCD TV series of Sony Electronics Vietnam;
- To suggest some solutions to complete the strategy of marketing mix for Bravia LCD TV series of Sony Electronics Vietnam.
Subjects and Scope of the Study
Bravia LCD TV Series and Marketing environments (internal and external of Sony Vietnam).
Methods of study and process of data
- Methods of study: quantitative and qualitative study in combination with expert method, summary, statistics, comparison method, etc
- Interview method: direct interview over 300 respondents with a questionnaire by selective sampling method to identify consumers' opinions on factors that affect on Marketing mix strategy (product, price, place, and promotion)
- Data processing tool: SPSS 13.0 software
- Base on data collected from quantitative and qualitative study, solutions shall be suggested to complete Marketing mix strategy for Bravia LCD
TV Series of Sony Electronics Vietnam.
Significance of the Topic
- Help the managers to see clearly Marketing operation of Bravia LCD
TV Series of the Company, its ability to cope with internal and external influencing factors, and its competitive status compared to other rivals in the market;
- Research about consumers' knowledge about various types of TVs and assess their opinion on factors affecting on Marketing mix for Bravia LCD TV Series of the Company;
- The conclusions of the dissertation shall serve as reference materials for marketing managers to know and understand better about current situation of LCD TV market as well as the positioning of Bravia LCD Series of Sony Vietnam
In addition, strategies of product, price, place and promotion for Bravia LCD TV
Series as suggested are practical for business situation that of Bravia LCD TV Series now occupies.
Structure of the Thesis
In addition to the Introduction and Conclusion parts, the Thesis is consisted of three parts:
Chapter 2: Analysis of Marketing environment and current situation of Marketing-mix for Bravia LCD TV Series of Sony Vietnam
Chapter 3: Some solutions to the Marketing-mix for Bravia LCD TV Series of Sony Vietnam in 2012
LITERATURE REVIEW
Overview of Marketing
1.1.1 The Formation and Development of Marketing
Marketing literally means, "doing the market" The concept of Marketing first appeared in America in the beginning of 20th century but was not widely developed and popular until after World War II, then, it spreads to Western Europe and Japan during 1950-1960 Since its first appearance and for a long time, the term
"Marketing" was limited to only commercial business It was recognized as getting the ready-made products/services to be consumed quickly in order to achieve the best efficiency At that time, it was called "traditional marketing"
During 1960 - 1970, from the most complex matters in production and consumption of goods as well as tough competition within capitalist market, the role and significance of Marketing in capitalist economic management was heightened During this period, a number of scientific research institutions, Marketing research centers, and advisory offices within enterprises were established and Marketing became the decisive factor in management and competition among capitalists The term was not limited to only sale and purchase contracts or ready- made products/services, but expanded to embrace the mass market That was the era of modern Marketing, inclusive of every calculation regarding the objectives and strategic ideas before production, to sales and consumption, and until after-sale services
From 1960, Marketing started to gain acceptance in East European socialist countries such as: Hungary, Poland, Romania, and Czechoslovakia In 11/1976, the international conference - "Marketing Application in Foreign Trade Activities and Socialist Nations" was held in Berlin In 1977, it was affirmed by members at this conference that marketing activities applied not only to capitalist countries but to socialist countries as well
The concept of Marketing, as an activity to generate economic benefits on many aspects, has been continuously applied, developed and completed since its first appearance, in 1905 at the University of Pennsylvania (U.S.), when Mr W E
Kreussi gave a series of lectures on Marketing
Marketing, in the view of economists, is the business approach that orientates production towards satisfying consumer needs Hence, it has been a decisive influence on the development of capitalist economies They assign to Marketing such names as "New business philosophy", "The secret of success in business", etc And Marketing is considered a science, an art of business It never ceases to be useful and has been supplemented and developed constantly; therefore, there have been a number of definitions of Marketing by various authors and scientists:
- Definition by Hamilton College (U.S.): “Marketing is the performance of business activities that direct the flow of goods and services to customers or users.” [1]
- Definition by American Marketing Association (AMA), Board of Directors: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” [2]
- Definition by Philip Kotler (U.S.) - President of World Marketing Association: “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit Marketing identifies unfulfilled needs and desires It defines measures and quantifies the size of the identified market and the profit potential It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.” [3]
- Definition by British Institute of Marketing (U.K.):“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.” [4]
- Definition by John H Crighton (Australia): “Marketing is getting the right goods and services to the right people at the right place at the right time at the right price with the right communication and promotion” [5]
- Definition by Peter Drucker – the American modern economists:
“Marketing is the distinguishing, the unique function of the business It encompasses the entire business It is the whole business seen from the point of view of its final result that is from the customer's point of view Concern and responsibility for marketing must therefore permeate all areas of the enterprise.” [6]
From above definitions, it can be seen that there are many diversified ways of understanding about Marketing Two first definitions are suitable for traditional marketing while other definitions are suitable for modern marketing However, each definition is correct for its point in time only Therefore, it is not necessary to have a common definition of Marketing A single definition may limit the diversity and dynamics of marketing activities in practice
The differences between traditional and modern Marketing are shown in the following diagram:
Traditional Marketing Product Sales & Advertising Generate profit by selling many products
Generate profit by satisfying customer needs
During the development of Marketing, there have been 5 fundamental concepts of how to organize Marketing activities, specifically as follows:
It is considered that customers will feel attracted to those products that are popularly sold at reasonable prices Therefore, management should focus efforts on improving effective production and distribution
It is considered that customers like to use products that have the highest quality and the best utilities Therefore, enterprises should frequently innovate their products
It is considered that customers will not buy many products of an enterprise if it doesn't spend regular efforts on sales and promotion
It is considered that the key to achieve objectives of an enterprise is to identify the needs of target market and satisfy customer’s needs to the maximum extent and more effectively than those of rivals
It is considered that activities of an enterprise is to identify the needs, desire and preferences of target market and take measures to satisfy such customer’s needs more effectively than the rivals do and in such a manner to maintain and promote benefits for consumers and society
In my opinion, currently, most enterprises, even small-scale ones, have considered the change of Marketing concepts Therefore, to various extents, they have applied the concepts of modern Marketing to their business, trying to understand and listen to customer’s needs to modify their products for sales
However, in order to survive and develop in a sustainable and long-lasting manner, enterprises should apply social Marketing concept in their business process while considering supported activities to help maintain and promote benefits for consumers and society For example, companies may research technologies to create products that are better for users' health, make commitments regarding the use of parts, chemicals or technologies that are harmful to living environment, and carry out activities to preserve and build up a green and clean environment, etc
Marketing Environment
Marketing environment is the total of "uncontrollable" forces that a company should pay attention to in developing its marketing-mix Marketing environment is understood as follows:
The set of active entities and external forces of the company that affect on the control of marketing unit, establishment and maintenance of good cooperative relationships with target customers
Given the uncertain climate, Marketing can have a deep influence on operations of a company Because the changes of current environment are rapid and unforeseeable, they may cause sudden impact and result in severe consequences
Therefore, a company should monitor and anticipate every change of this environment by applying marketing research and collecting marketing information from current external environment of the company
Marketing environment consists of micro and macro-environment Micro- environment includes forces that are directly related to a company and its ability to serve the customers, including suppliers, marketing agencies, customers, competitors and direct public Macro-environment is external forces on social, much broader scale that have influences, including demography, economy, natural condition, technology, politics and culture
The Marketing environment may be analyzed under PEST model, which comprises the following factors: Political-legal, Economic, Social, Technological and Natural factors (or environments) In order to succeed, enterprises must be able to adapt to the changing Marketing environment while not resisting those trends [4]
Government, interested parties (in some other countries), public interest protection groups, etc are those affecting the political environment, which, in turn, cause policy makers to enact new laws and regulations impacting on consumers and enterprises These enacted laws, directly or indirectly, influence the practical implementation of marketing policies of a company, such as: anti-monopoly law, environment law, consumer protection law, etc
Enterprises pay attention to legal and political environment of not only a single country but also on global scale, such as: multilateral/bilateral agreements between organizations, regions and nations, international treaties such as WTO agreement, free trade area agreements, trade and investment agreements, etc
Factors of economic environment affecting Marketing activities include income and distribution of income, price, consumption and savings-investment, debt and borrowing capacity, debt payment, and expenditure pattern
Development level and model of the economy are fundamental factors of the economic environment In developed economies, people have high incomes; wider income distribution may assure living standards for the consumers; and many people need high-quality goods and services On the contrary, in underdeveloped economies, consumption trend focuses on essential goods and low-end services However, in such economies, the needs of high-end products/services are increasing rapidly thanks to the industrialization and development of the economy In developed countries, consumers tend to spend more since they can easily borrow money But during recessions, they cut back their expenditure and reduce borrowing, which in turn cause a negative effect on the growth of needs of goods and services
In addition, population scale, structure and growth rate are having considerable influence on the marketers Population together with economic growth is the measurement of market scale
In the demographic environment, age structure, race, education level and others are factors to divide the market into segments of different scales and characteristics Expenditure pattern of families of two or more generations as well as type of products/services that they choose tends to be decided on basis of people community preferences The movement of living places and among people groups will also affect the changes of needs; therefore, marketing policy should also adapt
The society where people grew up defines the basic believes, values and standards There are three aspects that should be considered in cultural - social environment:
Core values: it is necessary to define the belief or core values that tend to last for long and identify which are vulnerable to change
Cultural branches: a group of people share values acquired from certain living experience and conditions Religions have influence on the consumption of goods and services defined by religious rules and social traditions
Values that are vulnerable to change over time and social trends are both opportunities and threats to marketing activities They can be the trends and preferences among young people about music, fashion or career ambitions, such social trends will then affect on consumers' attitude to themselves, surrounding people and organizations
Natural environment results in changing trends of production materials, energy cost, environmental pollution level and attitude of governments toward environmental protection Technological environment is always the most important force to improve the quality of life for humans, as it becomes more effective at harnessing the natural environment’s resources
Technological trends are developing and changing at fast pace while product life cycle is shortening; therefore, Marketing-implementing tools are also changing
Opportunities for innovation of products and services are unlimited, which causes prices to drop and enable consumers to access products more easily Budgets for Research and Development activities should be increased, especially for enterprises that aim to be market leaders Regulations to control technology are being tightened and tightened to protect the consumers and ensure their privacy.
Target Market Identification
Under marketing concept, a market is the actual and potential buyer of a certain product/service A market consists of buyers while an industry consists of sellers
Phillip Kotler’s definition: “A market is the set of actual and potential buyers of a product These buyers share a particular need or want that can be satisfied thought the exchange.” [7]
1.3.2.1 Reasons of market segmentation and market targeting
A market consists of buyers that are different in single or many aspects; for example, they may be different from each other by their desire, purchasing power, location, purchasing attitude and pattern No company has the capacity to satisfy the needs of all of its potential customers In addition, there are many other rival companies in the market so, it has to face the challenges posed by competitors
Anyway, each company has strengths in certain aspects so that it can use such strengths to satisfy part of market needs
Consumers in the market are homogeneous and can be divided into segments by various manners A group of consumer can be segmented on basis of geographical factor (region, city), demographic factors (gender, age, education level), psychological factor (social class, life style), and behavioral factor (purchasing opportunity, consumption rate, benefit-oriented) The segmentation of customer base into groups to highlight the differences of needs, characteristics, or behavior is called market segmentation Each market is constituted of many market segments
Market segmentation is defined: “Dividing a market into instinct groups of buyers with different needs, characteristics or behavior, who might require separate products or marketing mix” [8]
Requirements of an effective market segmentation [9]
- It is internally homogeneous (potential customers in the same segment prefer the same product qualities)
- It is externally heterogeneous (potential customers from different segments have basically different quality preferences)
- It responds similarly to a market stimulus
- It can be cost-effectively reached by market intervention
Geography Region (North, South), area (urban, rural, etc.), town, district, commune, etc
Demography Age, gender, family generation, family life cycle, income, profession, education level, religion, ethnicity, etc
Psychology Attitude, motivation, social class, life style, personality
Purchasing reason, desired benefit, consumer status, loyalty level, readiness stage, and attitude toward products
“Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.” [10]
Coverage of the whole market:
- May not be able to satisfy the best needs of a customer group since trying to satisfy too many segments
- Suitable to multinational and transnational corporations
- Scale and development potential of the segment
- Attractiveness of the segment: large number of customers, diversified and abundant needs, changing consumption style, few competitive threats, high profit, favorable macro-environment
- Suitable to resources of the organization.
Positioning
In Marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand , or organization and what adds value to the customers
Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective mind of the target market
De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market
The original work on Positioning was consumer marketing oriented, and was not as much focused on the question relative to competitive products as much as it was focused on cutting through the ambient "noise" and establishing a moment of real contact with the intended recipient In the classic example of AVIS claiming
"No.2, We Try Harder", the point was to say something so shocking (it was by the standards of the day) that it cleared space in your brain and made you forget who was number one, and not to make some philosophical point about being "hungry" for business
Although there are different definitions of positioning, probably the most common is: “Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers Formulating competitive positioning for a product and a detailed marketing mix” [11]
Also positioning is defined as the way by which the marketers create impression in the customers mind
Positioning is a concept in marketing which was first introduced by Jack Trout (“Industrial Marketing" Magazine- June/1969): "Positioning" as a game people play in today's me-too market place" in the publication Industrial Marketing, stating that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumers mind
Al Ries and Jack Trout developed this theme in their bestseller book
"Positioning - The Battle for Your Mind” They saw it as a creative exercise done with an existing product:
“Positioning starts with a product, a piece of merchandise, a service, a company, an institution or even a person… But positioning is not about what you do to a product Positioning is what you do to the mind of the prospect That is, you position products in the mind of prospect.” [12]
Also, positioning as "an organized system for finding a window in the mind
It is based on the concept that communication can only take place at the right time and under the right circumstances" [13]
Positioning is therefore a perception that builds up in the minds of the target market It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category It will happen whether or not a company's management is proactive, reactive or passive about the on-going process of evolving a position But a company can positively influence the perceptions through enlightened strategic actions
A company, a brand or a product must have positioning concept in order to survive in the competitive marketplace According to the book: “Marketing concepts that win!” (2011 by Martha Guidry, Live Oak Book Company): Many individuals confuse a core idea concept with a positioning concept A Core Idea Concept simply describes the product or service Its purpose is merely to determine whether the idea has any interest to the end buyer In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer
The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service A successful positioning concept must be developed and qualified before a "positioning statement" can be created The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is the articulation of the target audience’s qualified idea that is used to develop a creative brief for an agency to develop advertising or communications strategy
Positioning Statement “For (target customer) Who (statement of the need or opportunity) The (product name) is a (product category) That (statement of key benefit – that is, compelling reason to buy) Unlike (primary competitive alternative) Our product (statement of primary differentiation).” [14]
- By benefits offered to the customers by products
- Summarize brands and attributes of products (important attributes to consumers)
- Find out about consumers' awareness of such attributes
- Analyze current status of such attributes of products compared to those of competitors and products of the organization
- Identify a unique selling proposition (USP)
Once a company has made its decision regarding market positioning, it may start preparing detailed promotion and marketing plans If a company targets premium market segment, it should implement plan that builds the appropriate perception in the minds of those customers For examples, by communicating the high quality attributes of the products through advertising or PR activities, selecting prestigious distribution channels, considering offering discounts to stimulate the market, etc
Market positioning should also identify a company’s competitors In devising a positioning strategy, a company must understand the weaknesses of its competitors so that its own positioning can become a competitive advantages.
Marketing-mix
Source: “Quan tri Marketing” – Prof Dr Vu The Phu
“Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need It includes physical objects, services, persons, places, organizations and ideas.” [16]
Source: Marketing management, Philip Kohler
- The 1 st level is the core benefit: the service or benefit the customer is really buying
- At the second level, the marketer must turn the core benefit into a basic product
- At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product
- At the fourth level, the marketer prepares an augmented product that exceeds customer’s expectations
- At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future
Marketers traditionally classify products on the basis of different attributes of those products For each classification of products, there should be a suitable Marketing-mix plan The definition and tools of Marketing presents basic product classification methods by consumers, materials that include ideas of quality of their marketing With these basic ideas in mind, we are ready to consider information on product portfolio, product types and product categories
"Price is an important factor of Marketing-mix It plays an important role in the purchase of certain product by consumers For a company, price plays a decisive role in determining its competitiveness in the market.” [17]
Product pricing is a crucial matter to a company since it directly affects revenue and profit
- Marketing objectives: survival, maximization of profit, market leader, market share expansion, etc
- Marketing-mix plan: price is one of tools of marketing-mix that a company uses to achieve its objectives Pricing decisions must be coordinated with other decisions on products; place and promotion for marketing-mix to be unified and effective
- Production cost: fixed cost, variable cost, total cost
- Market and needs: Costs establish the basis of pricing while market and needs set the height for pricing Both consumers and traders consider buying a product or service on basis of balancing between its price and potential benefit received from it Thus, prior to pricing, the marketer must understand the relationship between selling price and demand for his products
- Competition: the decisive factor influencing the pricing strategy of a company is price set by its competitors and their possible response toward the pricing strategy of the company
- Other external factors include legal and political environments The economic situation may significantly impact on the effectiveness of different pricing strategies These economic factors as inflation, growth or recession, and interest rates affect the decision of price since they impact production cost of a product and consumers' attitude toward the value of that product
G = Z + M G: selling price of the product
Z: cost price of the product
To determine the price on basis of perceived value, it is necessary to consider various factors such as reputation of the product, quality of service, completion level of the product/service, and customers' satisfaction A company deciding its pricing strategy using this method must try to increase its value in customers' mind in relation to competitor offerings
In mark-to-market pricing, a company will base on prices of competitors while not less paying attention to its own demand It may set price at higher, equal, or lower level than that of its competitors Mark-to-market pricing is a very common method
Adopting this method, companies will feel that their prices are marked to and following market prices that are common in the whole industry
Competition-based pricing is also the method dominating factories bidding for contracts In this method, a company will set its price on basis of expecting how much its competitors will set their prices instead of relying on the strict relationship between cost and demand of products However, price should not be set below a certain level, which, if it is the case, may endanger the sustainability of the company
Pricing strategy is mostly decided by target market segments and positioning objectives of the company Pricing will affect and be influenced by decisions on products, place, and promotion Therefore, pricing decisions should be considered carefully and coordinated with other factors within Marketing-mix in developing a marketing strategy
“Place (distribution) involves activities related to the organization, operation and distribution of goods and services from manufacturers to consumers.” [18]
Product/service distribution channel strategy is the method by which a company delivers its products and services to the customers in its targeted markets
It contributes significantly to the supply of the right products to customers at the right time and place, through the right channel and flows It can help with strengthen the coherence of the business, reduce competition, and ensure smooth and fast flows of goods
Direct Channel Channel Lv 1 Channel Lv 2 Channel Lv 3
Direct Channel: With no intermediary, the manufacturer directly sells products to the consumers There are various ways of direct sales: Door-to-door direct sales, at-store sales, online and telephone sales
Channel Lv.1: There is only one sale intermediary as retail-sale agent in the market In industrial goods B2B market, this intermediary is a broker or sales representative
Channel Lv.2: There are two intermediaries who are wholesale and retail-sale agents
Channel Lv.3: There are three distribution intermediaries
This strategy involves various activities including: Advertisement, promotion, offer, dissemination, and public relation to satisfy and promote the needs of customers
According to the American Marketing Association (AMA): “The placement of announcements and persuasive messages in time or space purchased in any of the mass media by business firms, non-profit organizations, government agencies, and individuals who seek to inform and/ or persuade members of a particular target market or audience about their products, services, organizations, or ideas.” [19]
Components of an advertising campaign:
- Advertiser: the individual or organization that tries to sell the products or influence on customers purchasing behaviors by means of advertisements
- Advertising agent or firm: an independent and specialized firm in developing and carrying out advertising campaigns for the advertiser
- Communication media: used to communicate the advertising messages
- Advertising services: individuals or organizations that supply specialized services such as print ads, photocopy, TV Commercials, etc
Roles and effects of advertising
Roles: In commercial markets, advertisements play the role of a guide, informer, and salesman to sell more products and satisfy the needs of purchasers:
- Development and promotion of product demands
- Introduction to matters in relation to the products, support for sales activities
Help the manufacturers to generate more demand for products, increase sales and market share
Provide updated information to any change of products and services to be distributed;
Build up a competitive environment for companies to improve their quality, innovate their design, and enhance their services
Provide information on products; equip the consumers with necessary knowledge for them to select suitable products at their demands
Help consumers save time buying products
Encourage consumers to improve their living standards and use new products instead of old ones
A decision on advertising is made on basis of 5 "M" of advertising strategy, which is Mission, Message, Media, Money, and Measurement
“Promotion is a marketing activity that distinct from direct sales, advertisement and dissemination, which is conducted to motivate the consumers to buy the products and enhance efficiency of agents.” [20]
While the range of promotion activities is diverse, it can be classified into two main categories by target customers and specific objectives, specifically:
- To motivate and promote the efforts of sales force
- To motivate intermediaries to push the sale of products to consumers for trial purpose or for ongoing consumption
Public relation (PR) is a broad and diversified area involving many activities in addition to communicating information to potential customers and factors affecting the purchase of products PR is also used to demonstrate that the behavior of the company benefits the society in which it is operating This concept implies that the company has a clear accountability to increase social welfare
To develop and improve a positive image of the company in the opinion of related parties, to persuade related parties that the company is an ethical organization, that they should do a transaction with the company This role of PR is different from the roles of other marketing factors that it tries to establish and enhance the brand image of products by which, persuading the customers to buy the products Certainly, a positive image of the company in customers' opinion will be very helpful at a greater level in affecting their final purchase decision-making In fact, this is clearly one of the ultimate objectives of any relation campaign
Dissemination is the communication activity carried out to make public aware of the positive effects of company activities by publishing news or images on newspapers, local news or television
The relationships between product and other remaining factors of Marketing- mix
Product plays an especially important role because it must meet the needs and perceptions of the customers, if it does not deliver the expected benefits then the entire Marketing strategy would be undermined Therefore, product is the sharpest weapon of competition in the market
Factors deciding the position of a company in the market:
- Can products of that company surpass other competitive products?
- What does that company do to persuade its customers to buy?
These questions can only be answered if a company has developed a suitable product strategy and invent a product of appropriate quality The decisive factor to the success of a company is its products Therefore, deciding the right product strategy has a crucial role to the survival and development of that company
It is only when the company is able to develop a product strategy that it attracts funding for investment, design, research and mass production If a product strategy is weak and ineffective without any target market for consumption of the products, those activities will appear too risky and easily vulnerable to failure
Once a product strategy is developed well and appropriately, other strategies of price, place and promotion may be facilitated and implemented effectively For example, when a company introduces a new high-quality product with outstanding attributes, it may easily deliver the product into consumption channels (place/distribution strategy), increase selling price but customers still accept to buy (pricing strategy), and offer advertising and promotion campaigns that go deeply into consumers' mind (promotion strategy)
Product strategy ensures to allow the company to carry out some fundamental objectives of a Marketing strategy:
Quality and quantity of a product; expansion or narrowing its product line, production cost and possible selling price of each type of product are factors that have relationships with each other and determine the profitability of a company
Whether or not a company may increase its turnover or expand the market share depends largely on its market penetration ability and product line expansion Whether or not a company may attract customers relies largely on the quality of its brand, reliability of its products and reputation of the company itself in customers' eyes
Product strategy may ensure that the company has a stable and predictable base demand in a loyal market segment thus helping reduce certain consumption level to risk of losses in business, which help to ensure the safety of the business objectives.
ANALYSIS OF MARKETING ENVIRONMENT AND CURRENT
General introduction of Sony Vietnam
Established on November 01, 1994, Sony Vietnam is a joint venture between Viettronic Tan Binh and Sony Corporation, which specializes in assembling and trading in home electronic devices and providing products to the domestic market
The joint-venture period has been more than 10 years and Vietnamese Party contributed 30% and foreign party contributed 70% of the capital Charter capital:
US$2,000,000 and total initial investment capital: US$6,666,000, which was increased to $16.6 million USD in November 1996 The Company has legal status, its own seal and bank account in VIETCOMBANK
2.1.2 Objectives and Purposes of the Company
- To enhance productivity, reduce waste products, and take full advantages of human resources
- To promote marketing and market research activities, understand the competitors in order to expand into Vietnam market in particular and ASEAN market in general
- To supply the markets with a diversity of high quality products while ensuring profit margin and accumulated value for the Company
- To assemble and manufacture home electronic devices of the best quality
2.1.3 Main products of the Company
Main products of the Company include: WEGA absolute flat color TV Series (from 14" to 43"), Bravia LCD TV Series (from 15" to 40"), Radio Cassette CD player, Hi-fi studio, Walkman CD, DVD/VCD player, computer, camcorder, digital camera, camera, Projector, Plasma TVs and other devices Moreover, the Company also manufactures electric parts mainly for export such as Deflection coils
2.1.4 Activities and Sale performance of Bravia LCD TV Series
Market share by production of Sony Vietnam:
To ensure the confidentiality of data, this dissertation will only present figures of percentage of production of each manufacturer in Vietnam market but not provide details of production value
According to the data of GFK market research firm, as at the end of March
2007, Samsung Vietnam held the leading position in term of production percentage in Vietnam (20.7%) then LG Vietnam, second position, (18.8%) and Sony Vietnam, third position, (17.4%) Followed by Panasonic, JVC, TCL, Toshiba, VTB, etc
In general, in the past years, Samsung Vietnam and LG Vietnam managed to hold on to the 1 st and 2 nd positions in term of production percentage in TV market of Vietnam thanks to their highly competitive prices and eye-catching designs that are attractive to medium-income consumers For Sony Vietnam, price always goes together with quality under its guideline: Product quality is the leading factor and Sony's products are the most exclusive products; therefore, selling price of its products is somewhat higher than those of Samsung's and LG's
However, looking at Figure 2.1, it can be seen that in recent years since
2009, Sony Vietnam has been trying to narrow the distance of market share compared to these two leading manufactures and by March 2010, Sony Vietnam was only 1.4% behind LG Vietnam and 3.3% behind Samsung Vietnam Therefore, the 1 st position of TV market share by production is not an unattainable objective to Sony Vietnam
Figure 2.1: MARKET SHARE BY PRODUCTION OF SOME TV
Market share by revenue of Sony Vietnam:
In contrast to the production market share, according to the data of GFK market research firm, as at the end of March 2007, Sony Vietnam hold the 1 st position in term of revenue percentage in Vietnam (25.9%) Next manufactures in the list were Samsung Vietnam (18.0%) and LG (16.9%) Followed by Panasonic, JVC, Toshiba, TCL and VTB, etc
Figure 2.2 demonstrates that during the period from 2007 until now, Sony Vietnam has comfortably maintained its 1 st position in term of revenue market share in TV market of Vietnam The reason is that the company has established its guideline to position its products as high quality ones at higher price than average price of products in TV market This helped Sony Vietnam increase its revenue higher than other manufactures
Since the end of 2009, the distance between Sony Vietnam and other manufactures has been increasing This, once again, indicates the leading status of Sony in TV market of Vietnam in recent years and even in the future
Figure 2 Figure 2.2: MARKET SHARE BY REVENUE OF SOME TV
Target markets of Sony Vietnam
Over 10 years of operation, until now, Sony Vietnam has established a sale network of over 250 agents and stores spreading all over provinces from Northern to Southern regions to ensure its products to cover a broad market and facilitate for the supply of the best products and services to customers
Looking at Figure 2.3, as at March 2010, it can be seen that Ho Chi Minh City market accounted for the largest market share, 13.01% Second place was Hanoi with a market share of 9.18% Next in the line were Northeastern provinces (8.31%), North Middle region provinces (7.64%) and Mekong River Delta region (7.45%)
Figure 3FIGURE 2.3: CONSUMPTION MARKETS OF SONY IN VIETNAM
Among above regions, two regions that have the most number of agents: Ho Chi Minh City (with over 63 sale points) and Hanoi (with 43 sale points) They are the largest consumption markets of Sony Vietnam thanks to their economy, high population, higher living standards and higher average income compared to other provinces in the country For that reason, Sony Vietnam has considered Ho Chi Minh City and Hanoi as its key markets to develop a correct and effective Marketing strategy.
Analysis of Marketing environment of Sony Vietnam
The Macro-environment has a close relationship with business operations of every company It is crucial to identify and evaluate the opportunities of environment and its challenges to enable an organization to clarify its objectives and develop strategic plans to achieve long-term objectives
According to Mr Klaus Rohland, Director of World Bank in Vietnam, though economic growth rate is maintained at a high pace and macro-economic management of Vietnam is considered more systematically than in the past, there are still many outstanding issues relating to the problems of economic environment because of frequently increased interest rate of VND and high inflation rate These factors also significantly impact on the business of the company, especially with such high-value electronic devices as Bravia LCD TV Series When VND interest rate is increased, saving trend will be also increased, while consumption is reduced
Then, customers will only be motivated to purchase a product by advertising activities, attractive promotional materials and incentives
In addition, high inflation will cause raw material costs to increase, resulting in increased selling price of products This, in turn, makes selling price of LCD TV products in general and of Bravia LCD TV Series in particular less attractive to some extent
However, there are also positive factors in economic environment of Vietnam One of those is the sustainable increase of average income per capital thanks to the sustained and rapid growth rate of the economy Therefore, consumption of high-quality products will likely rise due to the increase in disposable income available for discretionary spending
Political, governmental and legal environments are factors that may offer opportunities or pose certain challenges to business For Sony Vietnam, the political and legal environment that the Company pays attention to concern the laws and regulations on environment protection, equality of employment, labor use, export/import procedures, and change of tax regulations, etc
- For laws on environment protection: Sony Vietnam always complies well with them to protect the environment since this is also one of the commitments of Sony Group in the whole world through Global Environment Management System (GEMS) Sony Vietnam has taken measures in response to four fundamental environmental problems as follows:
+ Global warming: The company will take effort to reduce energy consumption and green house gas emissions
+ Natural resources: improve the effectiveness of natural resource use:
Chemicals management: manage strictly the use of special chemicals
By such measures and with latest inventions in the area of environment protection, Sony Vietnam will be able to reduce negative impact on the environment in consuming energy and natural resources, and ensure compliance with laws and regulations on environment protection
- For laws and regulations on equality of employment, labor use: As a subsidiary of Japanese Group, Sony Vietnam maintains the values of an organizational culture of a Japanese firm Not only complying seriously with laws and regulations on employment equality and labor use, the Company also offers high compensation and personal benefit policies to its workforce, such as: treating equally with respect; adequate and reasonable compensation scales; annual leave regime that exceeds statutory minimums; summer holiday and benefit regime, etc
- For changes related to export/import and tax rate: This is a factor of the external environment that Sony Vietnam can only control by supervising, forecasting any possible change and developing a suitable strategy for its business to try to limit the impact of such changes as well as Marketing strategy but ultimately Sony Vietnam cannot control it
Recognizing the importance of technological influence, Sony Vietnam always researches the most advanced technologies to apply to its production processes:
- When consumers started paying attention to environment protection, Sony tried to research modern technologies and processes to apply latest inventions of the industry to protect the environment, reduce negative impacts on environment from the use of energy and resources
- In competition process, each firm will seek for a specific technology to create unique features for its products For example, Samsung uses DNIe (Digital Natural Image Engine) as its fundamental technology to optimize image quality; the most notable technology of LG is XD Engine For Toshiba, such a technology is Meta Brain technology, etc In manufacturing Bravia LCD TV Series, Sony Vietnam adopts the most optimum technology of Bravia Engine to offer viewers images of the highest quality and reality
Suppliers are critical external factors to the business production process of a company Accessories and parts provided to the company by suppliers’ play decisive roles on the output and product quality, reliability of production line, and timely delivery of goods to the market, etc
At Sony Vietnam, its accessories and parts for assembly of a TV are supplied from two sources:
Imported parts from foreign countries:
For LCD TVs, content of imported parts was nearly 100% in the past The reason to this fact was that LCD TV is a high-end product requiring highly delicate parts and technologies that were not possible to be produced in Vietnam Moreover, the production of Bravia TVs was very low while it would require a large investment of high-value production line for parts, if any Thus, domestic parts would become much more expensive than imported ones and most suppliers would not invest in machines and equipments to ensure the supply to Sony Vietnam if the ordered quantity was low For that reason, in the first years, the Company made it a policy to import accessories and parts to manufacture Bravia TVs while trying to gradually increase domestic content as the market developed
Currently, most of domestically manufactured parts are packing (carton boxes, polystyrene, sponge, user's manuals, labels) plus some types of electric cables, capacitors, speakers, etc
- Quality of parts: Suppliers are required to satisfy technical specifications before they can be eligible to supply material parts to Sony Vietnam
However, during the supply, quality of these parts may be not alike and inconsistent due to the instability of production line of the suppliers Therefore, to ensure output quality, the Company has regulated that all domestically manufactured parts to be delivered into the warehouse and inspected by quality inspection units on probability basis and only be accepted for use if they pass the inspection This measure has helped reduce the number of defective products of the Company
- Delivery quantity: Aside from the major suppliers, there is a series of minor suppliers operating on small-scale that deliver just sufficient quantity of parts to the production process This can affect he flexibility of production of the Company and results in significant economic losses: not only increasing cost due to delay of production line, waste of labor costs, but also losing other opportunities
Therefore, it is necessary for the Company to establish relationship with major suppliers to ensure sufficient standard supply for it to be more dynamic in its business operations
Analysis of product positioning strategy of Bravia LCD TV
LCD manufactures Image Technique Durability Service Reasonable
According to the survey on strengths of Bravia LCD TVs compared to products of the same type of the two largest competitors in LCD TV market, it can be seen that the most strength of Sony's LCD TV in the opinion of respondents is its sharp image and color (120 respondents selected this choice compared to 94 respondents for Samsung's LCD TV and 57 respondents for LG's LCD TV) Based on comparison of each company’s technology, it can be said that Sony's LCD TV compared to products of other manufactures deliver more outstanding images and colors
The 2 nd strength of Sony's TV according to the survey is its durability with
130 respondents while the ratio for Samsung’s product is only 90 respondents It is true that durability is well-known as the strength of Sony's TV products since many of them have been used for decades by many households but continue to display high quality images, colors and sounds
Of the respondents, 120 selected Sony's Bravia LCD TV for its reliable brand since Sony is a popular electronics brand with a long history, which is always the leader in the areas of research and application of new technologies These respondents selected Sony's products for their belief in the quality and reliability of products of a long-reputable brand
The final factor to be surveyed is reasonable price Most of the respondents considered that price of Sony's TV is relatively high, however, in turn, its price is indicative of high quality and that is the best reason to the response of "reasonable" price
Outstanding attributes of Bravia LCD TV Series:
- High-resolution screen: both V and S-series use LCD screen of high resolution up to 1,366 x 768 pixels
- Improvement of color refresh rate: The attribute helping Sony position its V-series as a high-end one is Wide Color Gamut Cold Cathode Fluorescent Lamp technology that creates wide, various color lines of red and green making the image more realistic This is the key functionality to help Sony's products compete with other products
- Picture and Picture mode (PA): Only in V-series This functionality enables displaying television signals from two receivers simultaneously Thus, viewers can watch both TV channels at the same time with images of the same size In addition, all of current Bravia LCD TV series have another interesting feature - PIP (Picture in Picture or image pause), which is very convenient to watch cooking channel, record a formula or phone call
Customer characteristics and purchase preferences for Bravia TV series:
- Gender: Most customers are male since they tend to be more interested in hi-tech products such as the Bravia LCD TV series and find it interesting to research the specifications and technical features of a TV than a female customer does Moreover, for products intended for long-term use and of high value, male customers tend to be the ones to select and make purchase decisions
Therefore, when introducing Bravia TVs to the customers, the Company should pay more attention to potential male customers than female to enhance its advertising effectiveness For example, when posting an advertisement on newspapers, it should be more effective to book a space in such popular pages for men as Saigon Giai Phong, Tuoi Tre, Thanh Nien, Bong Da, The Thao, etc
- Profession, Status, and Financial capacity: Since Bravia LCD TVs have a high price; they are more dependent on the financial capacity of the customers
Therefore, potential customers are normally those with high income and savings, who are capable of buying these products
- Consumption attitude: Hi-tech products have high prices and therefore, consumers tend to consider and research much about the prices, quality, brand name, functions, technical specifications and compare among products of various brands Thus, to attract the consumers to select its products, Sony Vietnam should take measures to supply them with information on the products, distribution locations, display stores, and so on, in the most convenient, diversified and effective manner such as: advertisements on newspapers, television, by brochures, leaflets, or on the Internet, etc Information content must be clear, sufficient, and easy-to- understand-and-remember with details to readers
In addition, since the purchase-decision makers normally tend to be male customers, sales of Bravia LCD TVs in particular and of LCD TVs in general will be increased during sporting events as: Olympics, SEA Games, European Football Cup, World Cup
To assess product positioning strategy for Sony's Bravia LCD TV Series in LCD TV market, the following factors may be considered:
- Market share: Market share of a company represents its status in the market Strategies of the market leader will have a great influence on strategies of other companies Therefore, Sony Vietnam should not only seek market share data of its competitors as stated above but also identify their business and marketing strategies to develop timely responsive solutions and strategies to reduce any loss caused by competitors' strategies
- Innovative capacity: Since consumers' preferences are diverse and changeable, it is necessary for a company to research to innovate its products to adapt to the needs and preferences of customers, making its products highly competitive As Sony is originated in Japan, innovation and continuous changing are traditional values of the company
- Distinctiveness creation: In the modern era, when science and technology development has reached certain level, most products meet basic functional demands of their users The factor enhancing a product's competitiveness is its distinctiveness compared to products of a similar type and its added value thanks to after-sales service and promotional offers
In this regard, among the three leading manufacturers of LCD TVs in the market of Vietnam, it can be said that Samsung Vietnam is able to set its products apart by emphasizing their eye-catching design, and attractive styling
- Quality: during researching and selecting a product to purchase, the consumers always consider quality Quality of a product cannot be replaced by other factors such as: package, trademark, brand, design or after-sale service, etc if the most fundamental requirements of quality and usefulness are not met
Bravia LCD TV series of Sony Vietnam has the advantage of image quality compared to products of other manufactures: more realistic, dynamic and colorful
Analysis of current situation of Marketing-mix for Bravia LCD TV Series of
To assess its product positioning strategy as well as current situation of Marketing-mix for Bravia LCD TV of Sony Vietnam, the author of the dissertation conducted a survey on opinions of 300 respondents who are customers of Sony Vietnam or visitors at Sony shop/agents by selective sampling method with the questionnaire as presented in the Appendix The author of this dissertation based on Yamane’s formula to determine the sample size as below: where N is 1200 customers/visitors at Sony shops/agents and e is 5%
Accordingly, analysis of the current situation of this Marketing-mix plan will be based on survey results leading to insights into the manufacturer’s strengths and weaknesses with suggested solutions for improving Marketing-mix plan for Bravia LCD TV in 2012
The author only emphasized on Marketing mixes 4Ps for Bravia LCD Bravia
TV instead of 7Ps because of the existing weaknesses of its 4Ps: Product, Place, Promotion and Price The other three elements in 7Ps: People, Physical Evidences and Processes belong to the business operation of the company for all products, not n is sample size
N is population size e is the level of precision or error limit separately for LCD TV item In fact, Sony Vietnam has been performing effectively these three elements:
- Sony employs an umbrella branding strategy by placing the product name along with corporate name This strategy lets the product to assume its own identity and positioning, but also draws strength of the corporate brand The goal is to bolster consumer confidence in the product Sony has used this strategy to launch new products
- The company’s focus on its research and development (R&D) activities is evident in its expenditure The strong focus on R&D helped the company to launch technologically innovative products in the market The strong focus on R&D would thus enable the group to revive its product base as needs are indicated by customers
Examples of this strategy include the introduction of BRAVIA, ZX1, a thin, lightest LCD TV featuring LED edge lighting
- Sony operates from a philosophy it labels “uniquely Sony” The company seeks to facilitate the development of its staff but spurs employees to manage their own career and but to avoid pigeonholing This is a microcosm of the company’s desire to foster adaptability The company’s broad outlook extends to its corporate responsibility
- The desire to make its hardware and interfaces that are easy to use was a catalyst behind recent reorganization of electronics into “Personal” and “Home categories The company has reaffirmed its commitment to make the “Home” category user-friendlier
- Sony has adopted a “Company of Committees” governance system in order to go beyond minimum compliance with legal requirements and to add additional transparency To accomplish this, the company has revised some Directors’ functions to facilitate the proper functions of statutory committees
- Sony has a recently reorganized in order to further improve responsiveness and customer service It has established a network of services tailored to the needs of local customers The move acknowledges the growing complexity of its products The company formed Sony Customer Services, Inc and has intiated special employee training to enhance its ability to respond to customers inquiries and requests
- Sony seeks to instill corporate social responsibility policies throughout its supply chain For example Sony established the Green Partner Environmental Quality Approval Program for Sony suppliers Sony maintains a common global quality standard for parts by purchasing electronic parts only from suppliers who have passed an audit and have been certified as Green Partners
- Mr Yuzo Otsuki is the current Chairman of Sony Vietnam
- Sony Vietnam employs approximately 2000 staffs nationwide
- Sony Vietnam encourages applications from qualified women, men, visible minorities, aboriginal peoples and persons with disabilities In filling vacancies, Sony chooses the best person for the job by measuring a candidate's ability to perform the essential duties of the position All Sony managers are responsible and held accountable for ensuring opportunities within their departments are offered equitably
In term of Physical evidences
- Sony Vietnam headquarter is located at 248A No Trang Long, Binh Thanh Dis, Hochiminh City
- Other location of branch office in Hanoi: 5 th floor, BIDV Tower, Hoan Kiem Dis, Hanoi
- Distribution networks with 18 Sony Centers and 250 agents nationwide
- Sony’s main company website provides helpful information ranging from service and support, music, electronics and gaming as well as a range of shopping alternatives
The current situations of Marketing mix 4Ps of Sony Vietnam
According to the questionnaire survey, 54 out of 300 respondents (18%) expect the design to be more eye-catching and luxurious; 22 respondents (7.3%) expect more models of Bravia TVs; and 12 respondents (4%) expect Bravia LCD TVs to be slimmer to prove their class and uniqueness that are suitable to the interior design of their residence
Introduction to Bravia LCD TV Series:
Bravia is shorted for Best Resolution Audio Visual Integrated Architecture, consisting of three series: High-end V-series, medium-class S-series and Standard B-series (with computer connection input)
Bravia LCD TV Series was first introduced with 9 models of various sizes from 15" to 40" Until now, Sony Vietnam has introduced additionally 9 Bravia LCD models of larger size (46-50") These models continue to develop on the basis of previous product lines with the application of latest technologies to further improve Bravia LCD
TV Series while the market for previous models has become saturated
Since the Sony Bravia LCD TV introduced at the end of 2005, this product is in the growth stage of the product life cycle Being in this growth stage means that Sony Bravia LCD TVs are past the point of introduction and now are starting to develop a larger customer base Since the Sony Bravia LCD TV is in the growth stage of the product life cycle, it impacts strategy because there is more of a need to advertise and market these TVs The fact that there are Bravia LCD TVs still needs to reach a lot of people and influence them to buy one
Product strategy for Bravia LCD TV Series of Sony Vietnam:
In the period of introducing Bravia LCD TV products to the market, Sony Vietnam designed a Bravia LCD product line of 9 models of various sizes from 15" to 40" for three segments (High-end, Medium-Class, and Standard) The range of this product line aims to increase profit, offering more products for both salespersons and consumers, take advantages of excessive resources of the company, filling up the gaps in the market to prevent competitors from entering
SOME SOLUTIONS TO THE MARKETING MIX PLAN FOR
Development orientations and objectives of Sony Vietnam
Upon consideration of current business situation as well as the opportunities and difficulties of economic environment, Sony Vietnam has proposed following development orientations:
- Growth: To expand its market share, Sony Vietnam decides to introduce to the market a product line, which becomes the current consumption trend-that line is LCD TV By competing in LCD TV market, Sony Vietnam is not only able to increase its production consumption but also maintain a fairly stable status preliminarily in this market
- Development: In the course of developing products, the Company has decided that it is necessary to ensure a sustainable development by enhancing the quality of management of production, operation and distribution processes
- Profitability: The objective of any business is to generate profit Sony Vietnam also establishes a profit objective for its marketing strategy for Bravia LCD TV Series that profit performance must be ensured reasonably by means of improving management quality, saving costs, reducing waste, promoting intensive investment, investing to create value, and enhancing the quality of customers' perception to ensure long-term profitability
3.1.2 Marketing objectives of Sony Vietnam
To supply products to enhance the quality of life, satisfy customers' needs to the maximum extent, protect the environment, continuously innovate to increase production efficiency and quality of products, and build up a solid organizational structure for interest of every one
The first objective of Sony Vietnam is to achieve a market share of about 30% in LCD TV market of Vietnam in the beginning of 2012, with an annual growth rate of 200% This is a challenging objective for the production and sales forces of the Company, but not an unfeasible one if the Company develops a complete and effective marketing strategy for this product line to penetrate successfully in the market
The second objective is to diversify models and ranges of products to offer suitable products to customers' needs, actively seek output sources in markets, and train employees about sales skills to ensure the achievement of the ultimate objective of building up perception of product design and quality in consumer minds.
Some solutions of Marketing-mix plan for Bravia LCD TV Series of Sony
By analyzing factors of internal and external environments that affect on marketing activities of the Company and upon consideration of results of a survey on 300 respondents about their knowledge and preferences of Bravia LCD TV Series and relevant factors such as: Price, Distribution, and Promotion, the author shall recommend some main solutions to improve the targeting of various markets and of the Marketing-mix plan for Bravia LCD TV Series, as well as some secondary recommendations to help support main ones more effectively
Among 4 factors of Marketing-mix, product seems to be the most important factor that we should pay attention to
Since its first introduction to the market (11/2005) until now, Bravia LCD
TV series has improved the quality of its display thanks to a new Bravia Engine that helps enhance movement, filter the image, optimize contrast to give more colorful images, and especially, with High-Definition standards, the sharpness of images has been enhanced by three times This improvement has been very helpful in satisfying constantly changing needs and strict demands of customers, enabling them to quickly reach their purchase decisions after understanding the product upgrades of Bravia LCD TV
- When technology quality has been perfected, the next step should be to focus on updating appearance of the Bravia LCD TVs by researching and offering new, unique designs that satisfy consumers' preferences
The trend of personal and unique designs: e.g., a TV with a sharp sport design; super-slim product or personalizing dynamic colors such as yellow, orange, green, red, etc that suit a colorfully decorated interior design are possibilities Since there are more young families with high incomes or single and successful people who like to add personal touches to their home interior space, these people will tend to choose a Bravia LCD TVs that meet their personal style
Given the declining economic situation since 2011, the Company should try to set itself apart by offering uniqueness for its products by outstanding and specific features It should continue investing in researching new technologies to add more functions for Bravia LCD TV Series while timely responding to continuous and changing needs of the customers According to the survey, 48 out of 300 respondents (16%) expected the products have more convenient functions Though in the interview, they were not able to identify which functions they expected, however, as a technology leader, Sony should have the ability to identify those For example, a Bravia LCD TV may consider adding a combination of the following features: an LCD TV integrated with D-VCD, karaoke players or a more hi-tech digital karaoke function Then, audiences can freely watch interesting movies in HD quality as well as engage in other entertaining activities with rental movies or digital karaoke songs all with their Bravia LCD TVs In this scenario, the TV shelf in the living room or sleeping room would be very simple, uncluttered while still equipped with full entertainment functions
In 2011, with LCD TV being popular in the market, the Company should explore how to manufacture Bravia LCD TVs at lower price to take over the future market This is also the prospect most expected by respondents (44 out of 300, or 14.7%) to purchase an LCD TV of Sony Vietnam
To do this, the Company should introduce other LCD TV lines to satisfy the needs of lower-income customers by developing new designs of boards, microprocessor, and other components to reduce costs and lower the prices For these models, it would be unnecessary to offer multi or complex functions but the quality of image and sound should still be maintained since quality perfection is expected attribute of Sony's TVs
Although Sony Vietnam has developed a detailed strategy for its Bravia LCD TV Series, it is a core requirement that the company strictly follow its policies of "continuous innovation" and "unique and impressive products" to maintain the leading position of its products compared to those of other manufactures in the market
However, in carrying out innovative strategies and improvement of products, it should be noted that production lines and equipment must be suitable to their development; workers and employees also need to be trained continuously so that they may produce hi-tech products; as well as the Company code of ethics In this way, product innovation, discount and continued high quality would retain customer loyalty in the long run
To be able to survive and compete in a sustainable manner, Sony Vietnam should establish a defined price strategy and long-term orientations for Bravia LCD TVs
In my opinion, to develop and carry out a price strategy, Sony Vietnam must:
Change its pricing and price list development methods
As analyzed above, the weakness of Sony Vietnam in its price strategy is that the pricing method is more enterprise-oriented but not market-oriented This strategy may help the Company ensure its profit margin, however, it may put Sony’s products out of reach from less affluent but still high potential consumer market segment
In order to change the concept and perception of pricing, it requires a reform of pricing concept so that a new pricing method can be applied in the long-term To do that, Sony Vietnam should tackle to the following issues:
- Forecast factors of external environment that may change from time to time to develop a suitable price strategy E.g., an increase in oil price may increase the cost of transport and indirectly affect prices of imported and locally- manufactured parts; while a change of LCD TV manufacturing technology or electronic parts technology may reduce cost price of products
- Relationships of supply/demand, prices of competitors, and potential new market should be considered to develop a reasonable price strategy For instance, for a high-end product, high pricing method should be adopted since it is exclusive, has unique features and high quality; on the contrary, flexible-marked-to-market pricing should be applied to medium-end product line
- Part of the price strategy of the company is never to participate in price war with competitors Selling price is always determined by taking into consideration
This builds up customers' belief that "Price is indicative of Quality" For most Vietnamese consumers, purchasing a high-end product is a mean to show that they have high income, and have the preference to use exclusive, high-end, modern and unique products
The following measures will help product price of the company be more competitive while still maintain a reasonable profit margin
At the same time as developing and changing pricing method, Sony Vietnam should reduce production cost
Reducing cost price can be achieved by either of the following two measures:
Reducing costs of electronic components:
At the moment, except for LCD screen, which is manufactured by S-LCD, joint-venture, most of electronic components of a Bravia LCD TV are imported from Japan through several internal procurement teams of Sony Group in Malaysia
This fact causes some disadvantages as follows:
- Production cost of LCD screen by S-LCD joint-venture is still very high
- Costs of electronic components and parts made in Japan are high since production and transport costs in Japan are very high
To compensate for these disadvantages, Sony Vietnam may take the following measures:
Marketing Action Plan from June to December, 2012
- To improve awareness of target customers of the products;
- To promote sales during the key season in 2012;
- To enhance brand value for Bravia LCD TVs of Sony VN
The months from October to December are the key months for promoting
TV products The Marketing action plan to promote the products will focus its activities on October and November with repeated appearance on public media such as television, newspapers and magazine, thus, creating a higher effectiveness than individual, unfocused advertisements, and motivating customers more strongly to increase sales in the following months
During this period, it is very important to prepare the sales force at promotional sites and agents to provide such services as: giving advice, helping distributors to promote the products
June: Salespeople are assigned to various locations to prepare sales activities for distributors and regional agents, including the following tasks:
- Research the performance of distributors, agents; forecast the quantity to be ordered by them; their desire and sales potential; and growth potential of their region
- Provide care services for old customers: research the business, operations, difficulties and desires of these distributors in relation to the products or the company (based on result of market research); inform distributors of promotional activities, price trends and future actions of the company for its TV products for them to clearly understand and actively develop their sales strategy accordingly; Cooperate with distributors to plan and estimate the consumption;
- Provide full price lists, catalogs and pricing method, discount method, deduction method, and specific payment method to the distributors, to facilitate the optimal conditions for them to sell products of the Company;
- Report the result of market research: summarize feedback of the distributors, statistics of their sales and proactively feed this information to the production line in order to watch supply to demand
Marketing activities will be completed in all of these regions prior to 15/05/2011 To prepare for the next plan to deliver products to distributors;
- To make plans to deliver products to distributors in the next months
Jul, Aug, Sep: Regional employees will carry out their tasks: inform distributors of promotional programs, provide customer care service, supervise the performance of distributors, collect statistics and make monthly and quarterly reports
Conduct weekly and monthly survey on sales performance of distributors and competitors’ activities
- 15/08-31/8/2012, prepare TVC content design plan
- 15-25/09/2012, select TV channel: Hanoi: 'In HCM: HTV 3/7/9/ Cable Channels, Da Nang DRT/DVTV
Salesperson, head of unit to conduct survey on public opinion and feedback, actual performance of the programs, revenue, and consumers' support
Details of broadcasting time on TV channels are as follows:
From 1/10-31/11/2012 post advertisements on the following newspapers and magazines:
Details of issuing date and edition issues are as follows:
To provide reviews on outstanding features of the technologies of Sony's Bravia LCD TVs compared to product of other competitors in the market
- Pre-seed Sony LCD Bravia TV to targeted mass
- Provide support materials (user's manual, technical specifications )
- Identify 4-6 communication channels on target technology on basis of the coverage, number of readers, and popularity in the technology sector:
To introduce to and re-affirm the quality of Sony's Bravia LCD TVs so that consumers are aware of the outstanding features of this product line compared to those of other competitors in the market
- Provide information on the products, script, etc to MCs;
- Provide support materials such as user' manual, review on the products, specifications of the TVs ;
- Select 2-3 popular and reputable target TV channels in technology sector, which are highly acknowledged and have wide coverage to implement TV reportage;
- To invite famous characters to be the ambassador of the brand to advertise Bravia LCD TVs to the public;
- To introduce about rewards granted to Bravia LCD TVs;
Targeted customer: Consumer Media/Tech Media/
- Interview experts or celebrities on their experience and review in using Sony's Bravia LCD TVs
- Organize Q&A events with experts about technologies adopted by Sony Vietnam to manufacture LCD TVs: allow questions to be posed by consumers
- Select one celebrity to be the ambassador of Bravia LCD TV brand
Website is now a useful tool to advertise a product with low costs and high effectiveness Nowadays, consumers usually surf on the Internet to search for the related information, specification, price and promotion of the product with their comparison to its competitors before making the final decision to purchase a product
Re-design current web page of the Company:
- Design microsite update of latest news on Bravia LCD TVs on official website for visitors to quickly review every details in relation to Bravia LCD TVs;
- Update promotional programs in quick manner on the website, making them more attractive to visitors
=> Seed locations on popular web pages to advertise the products by considering the popularity of keywords such as: TV, TV LCD, Bravia, and Sony…
Join in affiliates with other web pages about advertisements and sales: By seeding advertising places and agreeing on advertisements on Bravia LCD TVs on other websites of traders, retailers and distributors, Sony Vietnam may generate more opportunities to sell its products to the customers Post links and ads on popular websites such as: thegioidienlanh.com, vidic.com, vatgia.com…in addition to providing sufficient information on these websites
- From 10-25/09/2011: design and seek affiliated websites to place banners, ads;
- Then, the employees in charge of these websites and other salespersons will frequently research about consumers' influence on these websites to actively resolve any problems Moreover, they will be responsible to update these websites with new information (price, promotion )
Free uniforms for all of employees of distributors, technicians and repairmen of the distributors: Uniform is designed with 2 colors, of which black is main, and a print tag of Sony LCD Bravia TV in the front Uniforms are designed not much different from the old ones to maintain the unity Details of Sony's logo and slogan are embedded on the uniform with larger sizes on sleeves, pockets and on the back for clearer recognition
- From 15-30/09/2012: complete the design and decide specific quantity of uniform to order prior to 15/09/2012
- From 01-15/10/2012: all of uniforms are delivered to distributors and agents
A 15 - day promotion program from 01-15/11/2012 to promote sales and demands In this period, customers will be directly given one free DVD player of Sony for each Bravia LCD TV purchased
- Coverage: All over the country
+ A gift of DVD Sony DVP-NS648PBMSP6, Progre DivX /
USB worth 980,000 VND for purchasing a Bravia LCD TV at 10,000,000 - 20,000,000 VND
+ A gift of DVD Sony DVPNS758HPBMSP6, HDMI, USB worth 1,800,000 VND for purchasing a Bravia LCD TV at 25,000,000 VND or higher
+ From 1/10 - 15/10/2012: complete sales forecast report for promotion period
+ From 15/10 to 29/10/2012: deliver DVD players under the promotion program as estimated to distributors, agents of Sony Vietnam to prepare for the first day of the program, 1/11/2012
Cost of advertisements on newspapers and magazines
Unit Cost VAT included (VND)
Net Cost VAT included (VND)
Total Net VAT included (VND)
Full Page - beginning QC Mon-Sun 54,000,000 12% 15% 49,680,000 9 447,120,000
QC/end TTN Mon-Sun 54,000,000 12% 10% 47,520,000 10 475,200,000
Full Page - page A (2011) Mon - Sun 30,000,000 28% 19,636,364 14 274,909,091
Full Page- PAGE WITHIN COTENT
LISTENING Full color page 25th 42,042,000 30% 26,754,000 2 53,508,000
Costs of advertisements on Television
Total Rated TV Budget in US$ (without VAT and with discount) $258,044
Total TV Budget in USD (without VAT and with discount) $258,044
Activity Channels Creative Execution Total Net
Total Sony Bravia LCD TV $361,535
In Chapter 4, the author has summarized a number of solutions to improve Marketing-mix plan for Bravia LCD TVs of the Company, emphasizing on the follows:
- Firstly, develop a detailed product strategy, in which, it is required that products delivered to consumers must be really high-end, unique, and impressive to be more outstanding than products of other firms
- For price, main strategy is "not to participate in price war", instead, adopt the strategy of "skimming price" that is suitable to high quality of the products
With its reputation and a consumption notion of Vietnamese that "Quality is indicative of Price", it is sure that Bravia LCD TVs will lead the market not only in term of sales but also in term of production volumes
- For distribution, maintain selective distribution strategy while paying attention to enhance the performance and effectiveness of distribution channels of the Company: build up new sales channels, reduce the number of intermediary distributors and develop channels to address new customer segment - corporate customers
- For promotion, it should be carried out more strongly and broadly to help reinforce the image of Sony Vietnam, especially Bravia LCD TV series, to increase sales and profit for the company