19Marketing strategies for Sony Ericsson UKExecutive summary.docx

19
Marketing strategies for Sony Ericsson UK
Executive summary
Sony Ericsson mobile communications is the third largest
mobile phone manufacturer in the world. It has widespread
stores in various countries in Europe with its biggest
concentration being the UK market. Between the years 2004-
2007, the Sony Ericsson brand recorded increased sales due to
the innovative products introduced in the market. However, over
the last two years the company has recorded decreased sales
volume and a reduction in the market share in the UK market.
(Ajasafe, & Gillett, 2011). This has been attributed to
increased competition from Samsung, Nokia and Apple brands.
The paper aims at looking at the current marketing analysis of
the company with a view of suggesting possible marketing
strategies. In this regard, the paper evaluates the current
business environment using SWOT and PESTLE analytical
tools. The report draws conclusion from the issues addressed
and highlights recommendations and marketing strategies for
the company.
41 Introduction
52. Situation analysis
62.1.1 Political aspect
62.1.2 Economic aspect
62.1.3 Social- cultural analysis
72.1.4 Technological aspect
72.1.5 Legal aspect

72.1.6 Environmental aspect
82.2 SWOT analysis
82.2.1 Strengths
82.2.2 Weaknesses
92.2.3 Opportunities
92.2.4 Threats
103 Differential advantage
114. Segmentation, targeting and positioning strategy
114.1 Segmentation
114.2 Targeting
114.3 Positioning
125 Marketing objectives and goals
136. Marketing strategies and programs
136.1 Product
136.2 Price
146.4 Place
146.5 Promotion
156.5 People

156.6 Process
156.7 Physical location
16Conclusion
17References
1 Introduction
The demand for mobile phones handsets has increased gradually
in the UK market. More than three Quarters of the adults own a
mobile phone (Ajasafe & Gillett, 2011). The market is however
becoming competitive as mobile phone brands bring in new
products. In comparison to other European countries, the
consumers are getting a fair deal in terms of pricing level
although there are off-net prices which are fairly high. There
are changing patterns on mobile phone usage as more people
prefer to use a mobile phone to text rather than to call. This has
seen increased advertising of new phones with more texting and
chatting options.
Sony Eriksson Mobile communications AB has recorded
reduced sales as a result of the increasing competition in the
market. In 2011, the company lost considerable market share
because of its inability to successfully launch a Smartphone to
compete favorably with Samsung and Apple brands
(Gelder,2012). They launched Sony Xperia Arc and later a
more improved version of Sony Ericsson Xperia Arch S which
had a secondary camera installed. This was however; a little late
as consumers had switched to other brands which had entered
the market first .Faced with these challenges, this report
presents the marketing strategies which are highlighted in the
first part of the essay. The report uses PESTLE and SWOT to
evaluate the prevailing business environment. The second part
outlines the competitive advantages that the company enjoys as

well as short term and long term strategies that could enable the
brand perform better. 2. Situation analysis
The existing business environment of Sony Ericsson UK can be
analysed using PESTLE and SWOT analysis. SWOT analysis
evaluates the internal business environment that the company
uses realizing its objectives. PESTLE analysis is an analytical
tool used to evaluate the internal business environment.
2.1 PESTLE analysis
2.1.1 Political aspect
The political situation in a certain country helps to determine
the profitability and pricing strategy of a company. Sony
Ericsson brand has been able to set up successfully because of
the stable prevailing political situation in UK and many of
European countries. The concern over ethical marketing has led
to increased boarder regulations and consumer goods. The brand
has however not been affected because of emphasis on quality.
The stability has enabled the functioning of supply chain
arrangements which Sony Ericsson has been able to utilize
successfully (Dunn, 2006) The UK government knows that any
unforeseen political situation could immediately affect trade not
only in the UK but also in the region. Consumer laws targeting
mobile phone tariffs have however, affected sales volume of
Sony Ericsson as people have became more conscious to prices.
2.1.2 Economic aspect
The economic downturn which affected Europe in the year
2009/10 has had a negative impact on the company sales.
Disposable income of most people reduced and hence decreased
consumption on non-essentials such as mobile phones (Sony
Ericsson, Annual Report 2010). The situation has however
improved and the purchasing power has increased. The company
has however increased its strategic promotions methods which

have ended up increasing the cost of doing business. The
potentiality of the market is also decreasing but it is still
favorable to do business. The current rates of interest and
inflation levels are fairly stable at the moment (Steinbock,
2007). Any investments taken by the company looks promising
because of the future prospects of economic stability.
2.1.3 Social- cultural analysis
Increased population growth has led to increased demand for
mobile phones in the country so as to meet the demand. The
dependency on mobile phones in many aspects of life has also
led to increased demand. In business, people prefer to use
branded mobile phones which can help them do business on the
go. These include word processor, email service and fast
internet connectivity (Curwen & Whalley, 2010). UK is a
developed nation and hence people appreciate technological
innovation and its penetration is deep in the economy and this
has had a positive impact on Sony Ericsson since it relies on
constant technology innovation.
2.1.4 Technological aspect
The level of technology in the economy has gradually increased
in the economy. The new technologies on mobile phones are
increasing and this is fuelling a lot of competition in the
market. This has seen introduction by other brands in the last 2
years. Sony Ericsson recognizes the fact that it has to come up
with more technological competitive brand to be able to march
the new innovations.
2.1.5 Legal aspect
There are no stringent mobile phone regulations in UK.
However, there is increased awareness on the usage of mobile
phones by children. Use of mobile phones wile driving has been
banned. This however, has not had any significant decease in

mobile phone sales in the country. Sony Ericsson brand
recognizes the fact that, the company has a safe regulating
environment to operate.
2.1.6 Environmental aspect
There have been increased campaigns targeting Electronics
Company on the issue of environmental pollution.
Environmental activists argue that the mobile phone companies
are among the largest contributors of the carbon gas which leads
to global warming. There are also the recent concerns that
continued use of mobile phone can result to increased radiation
levels and hence can result to cancer (Daniels et al, 2007).The
increased pressure has caused Sony Ericsson brand to incur
extra production costs in terms of pollution rights and increased
taxation.
2.2 SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities and
Threats encountered by a firm.
2.2.1 Strengths
The introduction of the innovative Sony Ericsson Xperia with
resistive touch screen has boosted the Smartphone sales for the
brand. This has been in line with the demand by UK market
which has increased sales in Smart phones (Curwen & Whalley,
2010). The pricing policy of the company is also acceptable to
many of the buyers. The brand name of Sony Ericsson in the UK
market is also strong. In the previous years, the company has
shown capability of producing quality phones and this has
boosted its fortunes as a reliable brand in the market (Brown,
2008). Their phone types are also easily compatible with other
brands. This has enabled the brand to have a competitive edge
over the others in the market.

2.2.2 Weaknesses
The Sony Ericsson brand is not targeted towards business
people hence being seen as incompatible with the corporate
world. Furthermore, the cost conscious consumers may still not
be able to buy the new Sony Ericsson Xperia introduced in the
market because it is still relatively high to low class consumers.
The late launch of Xperia Smartphone in the market has seen
considerable reduction in sales for the company (Gelder,2012).
2.2.3 Opportunities
More technology advancements means that more consumers will
be attracted to its new brand which is favorably cheap than the
rest in the market. The new Xperia phone is also upgradable
hence giving customers limitless opportunities. Various
partnerships with other marketing companies will see the
marketing costs decrease significantly for the company. Smart
phones are expected to be the main attraction in the UK market
in the short run. The company therefore, has an opportunity to
introduce more innovative products to be able to meet the
increasing demand.
2.2.4 Threats
Increased competition for Smartphone sale in the UK market
has been the greatest threat to Sony. This is attributed to the
fact that Smart phones are easier to make than before. With the
fast changing environment, companies are coming up with new
brand on a regular basis. This has forced Sony to introduce
Xperia which could not even match the innovations by Samsung
and Apple Inc (Franchini, 2008). More companies may enter
the market in the long run which will lead to even grater
competition.
Introduction of cheap phones in the market is also a great

thereat to the brand sales. These new brands pose a great threat
especially to cost conscious consumers. In the long run, the
company may be forced to reduce the price level of Sony
Ericsson Xperia to be able to compete favorably with new
entrants into the market. It is also difficult to switch brands for
the older generation who prefer to continue using the brand
he/she has been accustomed with.
Lumia Nokia series has largely been embraced in the market
because of the integration of Windows mobile OS in 2012
(Dunn, 2006).
Sony Ericsson brand will therefore need to introduce other
innovative product to be able to match the ever changing
customer needs.
3 Differential advantage
Sony Ericsson released its first product in the market in the year
2002. With 10 years experience in the telecommunications
industry, the firm has been able to cut down its production costs
over time to give a differential advantage of others in the
market (Evans & Berman, 2007). To start with, the joint venture
partnership between Sony and Ericsson gave the firm the right
pushes towards establishing itself as a global company. The
partnership was a huge boost as it gave the company major
access to the European market. The partnership also helped the
firm to establish strong distributional channels. Sony’s
technology has hugely helped the firm in market design, core
competencies as well as adequate management skills. Sony
brought it the marketing skills while Ericsson brought the
needed technology. This is the reason why immediately after
establishment, the company was able to give others worthwhile
competition in the UK market.
The company can therefore regain considerable market
advantage by pricing it cost effectively and resolving its
stability problems. The company has managed to improve its
efficiency levels. This is possible through its ability to
minimize production costs while maximizing outputs and
profits. The company can also be credited for its innovation. It

was the first company to come up with GSM/GPRS enabled
color screen handset. It later introduced the Bluetooth
technology and high mega pixel mobile camera. These
innovations helped the company establish itself as a strong
brand capable of controlling the market. 4. Segmentation,
targeting and positioning strategy
4.1 Segmentation
The firm uses mainly lifestyle and demographic variables in
segmenting their market (Harris, 2007). The firm should
however lay more emphasis on the changing lifestyles of the
young generation and cater for their ever changing needs. In
order to regain market share, the company can segment the
market into rural and urban people. The rural targets will help
increase the market share. The urban should comprise mainly
the people aged 15-30. This ought to be their main segment in
order to compete favorably with brands in the same market
segment. This target group of people focuses mainly on music,
leisure, sports and has the flair for hip gadgets in the market.
4.2 Targeting
The firm targets the upper middle class professionals. These
usually have busy schedules and hence need to communicate
with their colleagues and families. The secondary targets are the
high school, college and graduate students who need devoices
which are multifunctional and portable. The secondary targets
also include medium sized corporations and they aim to help
managers and employees have crucial data access on the go.
Thus the company has two main segments and this is called
multi segments targeting. The company should however,
enhance its target group to incorporate more teen activities that
are the main targets of main competitors. With the over
emphasize on online chatting, social networking and sharing,
the company could be loosing out on this target group.4.3
Positioning

The positioning strategy that the company uses to market its
new products is the positioning of the new product as a
convenient, value-added device which can be used for personal
and professional use by young professionals (Steinbock, 2007).
There is also the focus on convenience as it incorporates other
features such as music, photo sharing and internet access. This
positioning strategy enhances Sony Ericsson products as
professional and hip.
The firm however needs to enhance its positioning towards a
more relaxed and younger generation who want more apps on
the go. The younger generation would therefore make a better
positioning strategy. In this case, the company can establish a
link between them and the users through more enhanced
features which include video conferencing and social
networking.
High value
Sony Ericsson
Nokia
Samsung, apple
old
Young
Siemens
Sagem

Low value
5 Marketing objectives and goals
The company should aim at becoming the leading
communication and entertainment brand which is preferred by
many people. The firm should therefore aim at increasing the
market share by more than 18% by the 2014 through
introduction of new innovative products (Sony Ericsson, Annual
Report 2010). The company should set its short term goal of
ensuring that it competes favorably with Samsung and Apple. It
plans to be the third leading mobile phone provider by the end
of 2013. They have launched their flagship mobile phone for the
year, Song Ericsson Xperia Z (Krishna, 2012). The
ornainisation should aim at achieving a 10% share based on
sales within the end of the year 2013. In addition, the firm is
aiming is aiming for a 2% share of the UK PDA/Phone market
through unit sales of 500,000 within the next two months
(Krishna, 2012).6. Marketing strategies and programs6.1
Product
The firm should strive to ensure that it maintains product
quality and differentiation while trying to venture into other
world markets not ventured before. When their band was
introduced into the UK market, it was uniquely famous for its
uniqueness and quality. It has however received a lot of
criticism due to lack of stability in the telecommunications
market (Harris, 2007). Customers were feeling that they did
not get the value that they paid for. The new product strategy
which has been adopted by the firm is to produce phones for a
certain market only. The problem with this strategy is that this
kind of market is changeable and hence consumers can easily
shift to other brands when they realize a better deal. The firm
should therefore develop new technologies to help them come
up a robust long term product strategy. With the ever changing
technological advancement, providing high-end phones is not a
sustainable way of ensuring stability in the long term.
6.2 Price

The firm should ensure it follows up on its pricing policy. The
distributors should be monitored so as to ensure that there is
strict monitoring. Top level management should also follow up
to ensure that the brand is not diluted by selling at price which
is different from the company pricing policy. After the
economic recession in 2009, many consumers are not willing to
risk and buy many high end products which do not guarantee
value. The market penetration pricing strategy can also help
increase the economies of scale for the firm. Some of the bulk
can also be passed to the consumers. The current target which
is young professional has higher disposable income hence their
ability to use more money on buying accessories such as mobile
phones. The target group is however not sustainable in the long
term and the firm will have to target the more youthful group.
The firm can therefore diversify its target market in order to
reduce prices. One such policy would be to target low income
buyers especially the aged and those living in rural areas. This
may not generate enough sales but would be a solution in the
long term.
6.4 Place
The joint partnership of Sony and Ericsson groups ensured that
the company had a strong set up base. With the setting up, the
firm established many robust distributional channels across
Europe (Sony Ericsson, Annual Report 2010). This is what has
largely contributed to the initial success of the brand in UK
market. The marketing strategy employed however, should
ensure that they set up in places where they are able to meet the
customer needs. In the rural areas, the organization should
intensify their retail stores so as to ensure that they are able to
cover more people in order to record increased sales (Harris,
2007). The distributional channels should however, be
intensified to ensure that they meet the customer needs and
cover majority of the people in the country.

The organization should also intensify online advertisement
methods since it has a huge customer base. The method can be
linked with other supply chain partners to ensure efficiency and
transparency. Online customers have also be found to have more
appeal.
6.5 Promotion
Initial promotional events of Sony Ericsson brand targeted the
vast majority of the population. The older folk are also more
associated with the product because of its stay in the UK market
(Applegate, 2007). Increased competition however recognizes
that the products should be branded in such a way that they
make a place in the memory of the people. Introduction of
Smart phones has introduced anew era of mobile phone usage
with major time on the phone being spent online chatting and
other social media sites (Helles, 2007). Digital media should
therefore be used to promote the product through
advertisements. The firm should also intensify mass media
marketing and vigorous promotional methods. Other youth
oriented events can also be used to promote the product with the
target group being 15-30 years. The target group is easier to
convince especially when it includes mobile phone gadgets.
6.5 People
As much as many upcoming products target the young people,
the changing market needs may not sustain this idea in the long
term. Sony Ericsson should therefore seek to target many people
in the rural areas to increase its market concentration (Gay &
Charlesworth, 2007). The advantage of the rural areas is that
there requirements are not many and as demanding as the urban
consumers. There are not many means of communication hence
less requirement for internet and other phone apps. The brand
can therefore produce more phones which are less expensive
targeting these people. This will increase the market
concentration of the company in the country.
6.6 Process

Sony Ericsson’s products have managed to maintain their
unique hardware and software for a long period of time (Hill,
2007). The applications, hardware and innovativeness of their
products bring about easiness in use and therefore attract
customers. The organization should therefore maintain their
unique product process.6.7 Physical location
In the past, the physical outlook of a business premise was not a
major consideration. In the current competitive age, the location
and the physical outlook of a business premise have a huge
contribution on the view of a business by the customers
(Gelder,2012). The firm should therefore introduce a focus
other market segments especially in the rural areas which are
less demanding and less covered. Conclusion
One of the solutions that the company could consider is
introduction of low priced phones for the low-end market. This
will reduce competition in the high end market and target the
low-end market which is more populated. This will enable the
company to strengthen its market base as a trusted and know
brand with their customers. With time and as technology and
customer needs change, then the company can produce brands
which can compete more favorably with the high-end market. In
the long-term, the company will have a stronghold in both high-
end and low-end markets.
As outlined above, the company has strong indicators of better
market performance. It therefore needs to ensure stability in the
market and try to regain the market share which it has
considerably lost. The firm should aim at reducing its brand
prices because of the flooding being experienced in the mobile
phone market. The firm should also undertake an extensive
market research to bring in new investments and ensure
monitoring of its activities. The marketing plan should also aim
at new promotional strategies with the aim of capturing the lost
market share. References

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