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307LON Regular Assignment 1: Sony
International
Marketing Analysis for
Sony
Robin Lajou
A marketing plan focusing on Sony’s Playstation 3.
Student ID numbers: 4789945
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Executive summary
The topic of this marketing plan is the Sony’s Playstation 3. This powerful console succeeds to the
Playstation 2 and it competes with Nintendo Wii and the Xbox 360. Conceived as a digital
entertainment center, the PlayStation 3 is in the era of high definition television incorporating a Blu-
ray player and HDMI connectivity. The PS3 has been out for a little over five years, and in that time, it
has proved to be a hardcore gamers dream. Sony got into the console gaming market in late 1994,
this group has lot of experiences, but the competition is increasingly difficult. This plan is based on
the strategy of the group, how it faces of the financial crisis, these competitors, at local and
international level. What are his concept and approach? How Sony's targeted his customers? What is
the positioning of the product on the market? All the answers to these questions are in this plan. You
will also see what are the possible threats forthcoming to Sony, the weaknesses and opportunities of
the market in a PESTEL study. Most of information of this plan arises out of web sites that you can
find in the bibliography at the end of the file. These are for the most part of them reliable sources.
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Table of contents
1. The nature of marketing .................................................................................................................... 4
1.1. At a local level ......................................................................................................................... 4
1.2. At an international level.......................................................................................................... 4
2. Marketing concepts and approaches................................................................................................. 4
2.1. At a local level ......................................................................................................................... 4
2.2. At an international level.......................................................................................................... 5
3. The implication on international organizations................................................................................. 6
3.1. Implication of segmentation ................................................................................................... 6
3.2. Implication of targeting........................................................................................................... 6
3.3. Implication of positioning........................................................................................................ 9
4. The implication of customers on the organization’s performance.................................................. 10
4.1. Customer acquisition activities ............................................................................................. 10
4.2. Customer retention activities................................................................................................ 11
5. The implication of future trends on international organizations .................................................... 12
5.1. Innovation on international strategy for products/services................................................. 12
5.2. Future trends on marketing objectives for international organizations............................... 12
5.3. Future trends on marketing strategies for international organizations ............................... 12
6. Environment at international levels for the organization................................................................ 13
6.1. Social...................................................................................................................................... 13
6.2. Political.................................................................................................................................. 13
6.3. Economic ............................................................................................................................... 14
6.4. Legal....................................................................................................................................... 15
Bibliography........................................................................................................................................... 16
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1) The nature of marketing
1.1 At a local level
Local marketing from Sony is that the customers of a country want in term of specific
products.
“Marketing is the process whereby society, to supply its consumption needs, evolves
distributive systems composed of participants, who, interacting under constraints -
technical (economic) and ethical (social) - create the transactions or flows which
resolve market separations and result in exchange and consumption.” (Bartels Robert,
1976)
1.2 At an international level
Cultures of countries are not the same, it's for this reason that a group must adapt at
various constraints. The Internationalization can take different forms, from simple
export to a multinational presence and adapt the language and the culture of the
countries like Sony.
"At its simplest level, international marketing involves the firm in making one or more
marketing mix decisions across national boundaries. At its most complex level, it
involves the firm in establishing manufacturing facilities overseas and coordinating
marketing strategies across the globe." (Doole and Lowe, 2001)
2) Marketing concepts and approaches
2.1 At a local level
For marketing concepts and approaches of Sony Playstation 3, we develop the rule of
4p.
“Marketing mix is the combination of four elements, called the 4 P’s (Product, Price,
Promotion and Place), that every company has the option of adding, subtracting, or
modifying in order to create a desired marketing strategy.” (Larry Steven, 2009)
Product: The Playstation 3 is considered like a top of range product. Sony has created
his product to it become the first on the market (High-definition Blu-ray, Cell
processor, good visuals and audio, two port USB, connection WIFI integrated)
Price: The Playstation 3 is the most expensive consoles on the market, it is normal
when we see his quality.
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Place: The Playstation 3 is distributed in shopping malls, video games stores and
electronic specialized stores.
Promotion: Sony has spent lot of money for the promotion of his product. Lot of
adverts was diffused (TV, magazine specialized, Internet…). Their advertisements are
oriented towards the elegance of the product where we can see lot of design
whereas the Nintendo Wii advert is oriented towards the fun. Sony also uses the
sponsoring and gave a good formation to these sellers.
2.2 At an international level
The approach of Sony on international level is the same that the local level. We can
analyze the Diffusion of innovation of Sony Playstation.
“The Diffusion of innovation is a theory that every market has groups of customers
who differ in their readiness and willingness to adopt a new product. And, that an
innovative product spreads (diffuses) through a market not in one straight course but
in successive, overlapping waves.” (Business Dictionary, 2012)
This graphic represent the sales of Playstation 3 during the two month after this start.
We can see that in the beginning, the curve that represents the number of sales is
increasing to the 16/11/2006 (Biggest day of sales) before descending. Sony has
successfully launched its product on the market.
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3) The implication on international organizations
2.1Segmentation
“Segmentation refers to a process of bifurcating or dividing a large unit into various
small units which have more or less similar or related characteristics.” (Management
study guide, 2012)
“This data come to the Professor Sameer Mathur an expert in Marketing
(www.smathur.com). “
The segmentation of Sony is evaluate by age and by sex. The average game player
age is 34, the most part of game players (49%) have between 18-49 years. 25% of
game players have less than 18 years and 26% have more than 50 years.
60% of game players are man and 40% are woman. This numbers seems unreal but
the women also play to the video games especially in U.S.A.
2.2Targeting
The first customers for the Playstation 3 are the hardcore gaming community. These
persons are usually men who have the ages of 15-30. Sony uses a new and great
technology to attract their customers. To reach that market, they develop games that
are attractive to men of those ages; these games are usually war and action games
like Call of Duty and Medal of Honor. However, Sony develops also products for
children who are usually games with more adventure.
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However, with the Playstation 3’s support for Blu-ray technology, the secondary
customers would be those interested in the highest quality of movie
entertainment; this group could be anyone of any age.
A contrary the explanation of the success of Wii is the Target largest that
Playstation or Xbox. Instead of fighting only the hardcore gamer market with
graphics and realism pushed, Wii also propose to an audience who had never
previously had a console as girl public and inter-generational.
Nintendo have a total budget for advertising over 200 million U.S. dollars for one
year. On these advert we can see all types of person who play to the Wii
(Children, Family or retired person).
“Advert on the TV (2011)”
10%
30%
24%
22%
10%
4%
Playstation 3 owners's age
18-24 years old
25-34 years old
35-44 years old
45-54 years old
55-64 years old
65 and more
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Choice of female “Primary Players” (US)
“This didn’t happen by accident… It’s the result of deliberate attempt to expand the
market” (President of Nintendo, 2009)
The women represented just a little percentage in the field of video game, few years
ago. Today, she play to the Wii, she have become a great audience of this product
(It's possible that in the future she represents 50% of public). Moreover Ann
Hamilton, senior brand manager at Ubisoft is very clear: “Fueling sales of the Wii is
the use of the Wii by women, girls and families… This is really a female console.”
This success has give idea at Playstation and Xbox, who have create a new system
similar at the Wii (Move for the Playstation and Kinect for the Xbox), they use the
follower strategy.
Kinect by Xbox Playstation Move
Product: A “controller-free gaming and
entertainment experience” – Xbox 360
add-on
Price: 139€ with a game
Release date: November, 2010
Product: A Wii-like motion controller
add-on for the Playstation 3
Price: 80€ with a game
Released date: September 17, 2010
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3.1Positioning
The Playstation 3 is a high-end product; it is for this reason that it is more
expensive than other consoles (Xbox 360 and Wii). When a customer buys the
product he is aware that it is a quality product.
Perceptual map:
We can see in this graphic that the Playstation 3 is very oriented towards the
hardcore gamer community; Wii and Xbox are more oriented to the fun. The graphic
also demonstrate that the Playstation 3 is the product the more expensive of this
market.
The Playstation 3 cost 249,00€ while the Xbox 360 cost 199,00€ and the Nintendo Wii
135,00€. ”Official prices 2012”
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This perceptual map demonstrated that Sony want to position his console like a
quality product. The Playstation was created for that the gamers believe in the
reality. We can see that this product is also develop for play alone while the Wii was a
carefully designed to play in group with simplified graphics
4) The implication of customers on the organization’s
performance
4.1Acquisition activities
For attract these customers Sony use the exclusivity. Lot of games are developed
uniquely for Playstation 3 (Uncharted 2, Metal Gear solid 4, God of war...). It's
difficult for a person who loves this type of game to miss them. When customers
must chose a console, the most of time he chose in function of this favorite game.
The Playstation 3 has been designed as a multimedia entertainment center. But its
real strength is its ability to act as a reader because the High Definition console plays
Blu-ray discs. When we know that the price of an HD show starts around € 600, and
that one can now find-and-already the PS3 to 399 €, it is the ability of the console a
definite asset.
The mode of online games for the PS3 is free (unlike) its rival Xbox 360. This allows
confronting its favorite games to players around the world from home.
Sony exist since 1954, this group have a great reputation. It's a leader in the market
of multimedia and sometimes develop new technology, the customer have
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confidence in their product. It’s not obligate to see an advert to know that this is a
great brand. People talk about them, mouth to mouth has been recognition of this
group. In addition, the Japanese have a good image for all that technology which
enhances the reputation of the group.
“Advert of Sony on internet, 2009”
In this advert we can see the totality of strength of the Playstation 3 that Sony has
used for attract consumers.
4.2 Retention activities
To keep these customers the group develops the next edition of the exclusive game.
In fact the war of console has someway a family side. If in the past a person
possessed the Playstation 2 (last generation of consoles), she prefers the Playstation3
rather the Xbox 360. If customers have confidence in this brand it is logical that they
continue to buy these products. More, Sony has kept the same joystick and the
console can read the game of the Playstation 2.
5) The implication of future trends for international
organizations
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5.1Innovation on international strategy for product / Services
The Playstation 3 has good visuals and audio, better than this conmpetitors and most
computers. The community of hardcore gamers wants a visual pleasing for their
games and Sony has developed them. They don’t have change the joystick, they only
have added sensitivity. A person who had the oldest Sony consoles (Playstation 1 and
Playstation 2) don’t having difficulty in a suitable joystick, while the Xbox 360 and the
Wii is completely changed. In addition there are enormously classic downloadable
games with the Playstation Network. Also, later models offered backwards
compatibility with Playstation 1 and Playstation 2 games.
Blu-ray player to potentially buy the Playstation 3 instead since its price is very close
or cheaper than current Blu-ray players.
5.2Future trends on marketing objectives for international organizations
The year of his launch the Product the product was sold a little less than expected.
This may be seemed normal when you look at the price of the console. To approach
this issue, the group has lowered his price in hopes of increasing hardware and
software sales. With demands for the Nintendo Wii not being met, this lowered price
will hopefully steal away some of the market share from Nintendo. Also with the
video format being over, Blu-ray sales should increase and more film companies
should jump onboard with Sony’s Blu-ray format; this should increase PS3 sales since
its’ price is lower than many or comparable to stand-alone Blu-ray players. This will
expand the PS3’s customer reach.
5.3 Future trends on marketing strategies for international organizations
Though it as proved to be less successful than hoped, The first price of the Sony
Playstation 3 was very high (600$ and software at 60-70$). The group wanted to
make profitable the money that was used to develop the console, in a quick time with
those eager enough to play with the new gaming system. However, the numbers
were lower than expected.
The group then lowered the product price hoping to increase sales. Sony seems to be
using the Market Skimming Pricing hoping to get as much as possible from each
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market. Since the group is one of the top name brands, this method was very
interesting.
The Playstation 3 has great graphics and game play but the first selling point of the
product is the Blu-ray because the fact that you have a console and also are able to
watch movie is very interesting. This was the same way with the previous edition;
thousands were sold worldwide just as a DVD player since it was backed by the
group's nice warranty.
“Sony also has the Playstation Network that offers downloadable games. This feature
allows them to sell point cards containing point which can be used to download
classic Playstation 1 titles, custom games, and sometimes downloadable features
such as extra songs for games like Guitar Hero. This same feature also allows players
in two different countries to play a multi-player game against each other via Wi-Fi.
The Playstation also offers many games that have link support for using the PSP
(Playstation Portable) for extra features or as a substitute controller via wireless. Sony
also supports backwards compatibility with Playstation 1 / Playstation 2 games.”
(Moats Brian, 2008)
6) Environment at international levels for the organization
6.1Political
Weaknesses:
Japan’s current transition from single to double party system abstracts resulting
implications for Japan-based multinational corporations, in terms of future
legislation, government & trading policies.
6.2Social
Strengths:
Attuned to what their hardcore gamer wants are.
Weaknesses:
Loss of trust from customers following security attack & failure to notify immediately
has tarnished Sony’s brand image.
Threats:
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The largest market of Sony Playstation is the Japan with 43% of sales (Sony, 2010),
however, the population of this country know an ageing population. The median age
of Japanese is 44,8 years (Central Intelligence Agency, 2011). We can see in the
graphic below the augmentation of ageing in Japan.
6.3Economic
Weaknesses:
Reduction in disposable income resulting from recession has had a negative effect on
consumer electronics sales worldwide, increasing price competition.
As a result of overwhelming public debt of 225.8% (Central Intelligence Agency, 2011)
along with deflation & frail public demand, Japan faces global pressure to cut public
debt over recent months. Ratings agencies have warned Japan of possible reduction
in credit rating (The Economic Times).
The effect of changes in currency exchange rates has been unfavorable for Sony2007
onwards, stripping away billions of yen (Sony, 2010) and such unfavorable currency
exchange rate is deterring investors.
Opportunities:
The firms of video games plan an increase of their turnovers for 2013.
Online games are expected to increase from $2.1 billion in 2009 to $3 billion in 2014,
growing by 7.7 percent on a compound annual basis.
The PC game market will decrease to $514 million in 2014 from $601 million in 2009,
a 3.1 percent compound annual decline.
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Threats:
The economy is hurting the sales to gamers everywhere. Currently, Nintendo is
feeling this in their handheld market, but this could quickly threaten the PS3 sales.
6.4Legal
Weaknesses:
Age and content restrictions from international regulatory bodies (USK & PEGI).
EU warnings over privacy issues following security breach on PSN network & Sony
Online Entertainment properties. (CNET, 2011)
US parties press for legislation of uniform national security and data breach standards
for notification.
