INTERNATIONAL BUSINESS

MARKETING MIX
SONY

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 TABLE OF CONTENTS

PAGE

Executive Summary ……………………………………………………………….3

Introduction …………………………………………………………………………4

International Marketing …………………………………………………………...5

Globalization………………………………………………………………………...5

Sony Corporation…………………………………………………………………..6

Sony Competitors ………………………………………………………………….6

International Modes of Entry …………………………………………………….7

Environmental Analysis – PESTLE ……………………………………………..8 – 9

Cost Leadership Strategy ………………………………………………………..10

MARKETING MIX

 Product ………………………………………………………………………11
 Promotion …………………………………………………………………...12
 Place (Distribution) ………………………………………………………..12
 Price ………………………………………………………………………….13
 People ………………………………………………………………………..13
 Process ……………………………………………………………………....13
 Physical Evidence ………………………………………………………….14

Suggestions to improve Sony’s Marketing Mix …………………………..15

Comparison between Sony and another MNC…………………………….15

Conclusion …………………………………………………………………........16

Bibliography ……………………………………………………………………..17-18

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EXECUTIVE SUMMARY

This assignment shows in detail, the concept of ‘international marketing mix’ applied to
the Sony Corporation as an aid and the source of information was found through
secondary research i.e. books, company websites and government websites.

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INTRODUCTION

Marketing Mix is a major concept in International Marketing and involves everything that
a company can use to influence perception favorably towards its products or services. It
is referred to as “the set of controllable tools that the firm blends to produce the
response it wants on the target market” (Kotler and Armstrong, 2004). In the marketing
mix four P’s are used for tangible products, these are:

1. Product
2. Price
3. Place (Distribution)
4. Promotion

For services three extra P’s are added, these are called the extended P’s and include:

1. People
2. Process
3. Physical Evidence

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INTERNATIONAL MARKETING

International marketing refers to marketing carried out by companies overseas or across

national borderlines. This strategy uses an extension of the techniques used in the
home country of a firm. It is the process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organizational objectives.

GLOBALIZATION
People around the world are more connected to each other than ever before.
Information and money flow quicker than ever. Products produced in one part of a
country are available to the rest of the world. This is why Sony decided to globalize. It is
much easier for people to travel, communicate and do business internationally. This
whole phenomenon has been called globalization. Globalization offers a higher
standard of living for people in rich countries and is the only realistic route out of poverty
for the world's poor. Also, due to globalization, there can be international co-operation to
solve environmental and social problems. “Given the vast expanse of globalization
theory, it would be impossible, in a single essay to address the full range of
perspectives that it encompasses” (Lechner and Boli 2000).

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SONY CORPORATION

Sony is a multinational corporation with its headquarters in Tokyo, Japan and is one of
the world’s largest conglomerates, with revenue of $78.9 billion (as of March 31, 2009).
Sony’s name was derived from the word ‘Sonus’, who is the Greek goddess of sound.

Sony’s principal business operations include Sony Corporation, Sony Pictures

Entertainment, Sony BMG Music Entertainment, Sony Ericson and Sony Financial
Holdings. Sony is one of the leading manufacturers of electronics, video
communications, video game consoles and information technology products. The
company’s slogan is “Sony. Like no other.”

SONY’S COMPETITORS
Sony’s main competitors are LG and Panasonic who like Sony also produces consumer
electronics like home electronics, Televisions, Videos, Audio, cameras & Camcorders,
phones, computers & networking, home appliances etc. LG has 13% of the market
share, Sony has 7.7% and Panasonic has 6%.

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INTERNATIONAL MODES OF ENTRY
A mode of entry into an international market is the channel which an organization
employs to gain entry to a new international market. Selecting a mode for entering or
expanding in a foreign market is a crucial strategic decision for Sony. Sony’s modes of
entry into the UK market are:
 Internet – Sony markets their product through internet channels.
 Strategic Alliances -Sony’s has entered a strategic alliance with Venue Solutions
in the UK. Venue Solutions, a specialist provider of venue management
technologies, has entered into key associations with Sony Professional Solutions
Europe and Pivotal Corporation.
 Joint Venture - Ericsson and Sony Microelectronics have formed a joint venture
to sell semiconductors and platforms to mobile manufacturers. The deal was
announced in August 2008.
 Foreign Direct Investment – Sony owns facilities in the UK. They have their own
resources including capital, technology and personnel. Direct ownership provides
Sony with a high degree of control in the operations and the ability to better know
the consumers and competitive environment.

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ENVIRONMENTAL ANALYSIS

PESTLE analysis is a useful tool for understanding the “big picture” of the environment,
in which you are operating, and the opportunities and threats that lie within it. By
understanding the environment in which you operate, you can take advantage of the
opportunities and minimize the threats.

Political factors effecting Sony in the UK can include the government laws such as the
introduction to the minimum wage affects the employees of Sony as the hourly rate
increases each year. Every time the minimum wage increase Sony will have to pay
taxes. This means less profit for Sony, unless they increase prices of products.

Economical factors - Interests rates has decreased drastically overall over the years,
leaving the average rate of 5.4%. When Sony has to pay interest on loans, the fall in
interest rates reduces interest costs for Sony. Alternatively a rise in interest rates will
increase interest costs for the business. On the contrary High interest rates can make
the pound an attractive currency for foreign investors, who can invest in the pound and
raise its value relative to other currencies. Statistics shows that unemployment rates
have decreased. From the rates in 1998 it can be identified judging from the average
rate it has decreased by 1.1%. The fall in unemployment rates may cause Sony some
problems in the process of recruiting new employees in to the business.

Social factors include the demographic and cultural aspects of the external
environment. In the UK these social factors that affect Sony include health
consciousness of customers. Health rates may be decreasing, meaning that there are
lesser customers within Sony. The population of growth can affect Sony as the most
increasing ages begin from 50+. The older population may not be interested in the latest
Sony products due to technological advancement. They tend to be interested in the
simplicity of products.

Technological factors of Sony include mechanization and automation, processes,

invention & innovation and the Internet. New technologies create new products and new
processes. MP3 players, computer games, online gambling and high definition TVs are
all new markets created by technological advances. Online shopping, bar coding and
computer aided design are all improvements to the way business is done as a result of
better technology. Technology can reduce costs, improve quality and lead to innovation.
These developments can benefit consumers as well as Sony.

Environmental factors include the weather and climate change. Changes in

temperature can have an impact on tourism which will in turn affect Sony. With major
climate changes occurring due to global warming and with greater environmental
awareness this external factor is becoming a significant issue for Sony to consider. The
growing desire to protect the environment is having an impact on many industries such

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as the travel and transportation industries and the general move towards more
environmentally friendly products and processes is affecting demand patterns and
creating business opportunities.

Legal factors - In recent years in the UK there have been many significant legal
changes that have affected Sony’s behavior. The introduction of age discrimination and
disability discrimination legislation, an increase in the minimum wage and greater
requirements for firms to recycle are examples of relatively recent laws that affect
Sony’s actions. Legal changes can also affect Sony's costs and demand.

Different categories of law which will affect Sony include:

 Consumer laws- these are designed to protect customers against unfair practices
such as misleading descriptions of the product
 Competition laws- these are aimed at protecting small firms against bullying by
larger firms and ensuring customers are not exploited by firms with monopoly
power
 Employment laws- these cover areas such as redundancy, dismissal, working
hours and minimum wages. They aim to protect employees against the abuse of
power by managers
 Health and safety legislation-these laws are aimed at ensuring the workplace is
as safe as is reasonably practical. They cover issues such as training, reporting
accidents and the appropriate provision of safety equipment.

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COST LEADERSHIP STRATEGY
Sony’s strategy is cost leadership and they are entering a country where the cost for
products like theirs is high because the market in that country is in the growth stage.
Therefore with Sony being experienced in this field, the cost leadership strategy can
capture a huge chunk of the UK’s market. This generic strategy calls for being the low
cost producer in an industry for a given level of quality. Sony sells their products either
at average industry prices to earn a profit higher than that of rivals, or below the
average industry prices to gain market share. In the event of a price war, Sony can
maintain some profitability while the competition suffers losses.

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MARKETING MIX

SONY Products
A product is anything that can be offered to a market for use or consumption that may
satisfy a want or need. Product attributes like functionality, styling, quality, safety,
packaging, can be manipulated depending on what the target market wants. Also
customers always look for new and improved things, which is why marketers should
improve existing products, develop new ones and discontinue products that are no
longer wanted or needed by the customer. Sony has a variety of products ranging from
electronic devices, games and entertainment which fall under the following categories:
 Computer Peripheral
 Television & Projectors
 Game
 Home Audio & Video
 Home Theatre System
 Digital Photography
 Hand cam video camera
 Portable Audio
 Mobile Phones

Televisions & Projectors

In the category of television & projector, Sony has further sub divided its products in
different models, style and performance. These are:
 OLED TV
 Bravia LCD TV
 CRT TV
 Home Theatre Projector
 Business Projector
 Public Display Panel

As it is shown, Sony has tried to cover many areas where the need for displaying
devices is needed. The OLED (organic light emitting diode) TV compared with today's
LCDs, displays is ultrathin, suck up less power, and offer better contrast and colors. The
technology is already used by cell phones, MP3 players, and other mobile gadgets.
These TVs however are ridiculously expensive

Compared to Sony, who is about ready to give up on the OLED TV, Panasonic is
moving ahead with the production and marketing of OLED TVs.

However, I would suggest that Sony continue with the production of the OLED TV,
improve their technology and be more cost effective in order for them to continue within
this competitive market because OLED’s beautiful picture ably shows the promise of the
new technology.

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Promotion

Promotional strategies include all means through which a company communicates the
benefits and values of its products and persuades targeted customers to buy them
(Kotler and Armstrong, 2004).

Sony’s promotional efforts are the only controllable mean to create awareness among
the public about themselves, the products and services they offer and influence their
attitudes favorably. Sony Corporation uses the following international marketing
communication mix elements:

 Advertising
 Sales Promotion
 Public Relations and Publicity

So far, Sony has advertised its products through many different ways and media.
Through television we have advertisements of its products such as Bravia or Sony wega
TVs. Sony also advertise its products by targeting favorable television programs, like
sports, series and also it has its own channel called ‘Sony TV channel’. Sony also uses
big events like the Miss Universe to promote its products.

Place (Distribution)

Place, under marketing mix involves all company activities that make the product
available to the targeted customer (Kotler and Armstrong, 2004).

Decisions with respect to distribution channel focus on making the product available in
adequate quantities at places where customers are normally expected to shop. Sony
being the company which positions itself as a seller of durable and high-end products, it
is practicing selective distribution of its products from selective dealers i.e. SONY World.
Sony distributes its products in three channels, zero level, one level and two-level
channels.
In the UK, Sony has used the method of one-level channel. This means that customers
buy their Sony product from the retailers recognized by Sony and these retailers buy the
products directly from Sony.

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Price

Pricing is basically setting a specific price for a product or service offered. In a simplistic
way, Kotler and Armstrong (2004) refer to the concept of price as the amount of money
that customers have to pay to obtain the product.

Price is the only marketing mix variable that can be altered quickly. Price variables such
as dealer price, retail price, discounts, allowances etc. influence the development of
international marketing strategy, as price a major factor that influences the assessment
of value obtained by customers. Sony being a company which emphasizes product
quality, tends to sell its products with price range from moderately-high to high prices,
depending on the use and the target customers. For example, Sony has tried to
categorize its series of VAIO laptops according to style, user, purpose, mobility and
performance, with a corresponding price for each. VAIO SR, boast on excellence in
mobility and perfection in performance and was designed for businessmen and cost
range from £849 - £999 in the UK.

People
People are the most important component of a service marketing mix. At Sony there are
a number of employee programs and policies in place designed to make employees feel
valued and appreciated which in turn, amount to happy and motivated employees. Sony
offers a stimulating, challenging and highly supportive work environment – exactly the
kind of environment you would expect from a company with an outstanding reputation
for exceptional quality and services. Sony offers employee benefits such as pension
plans, flexible health and dental benefits, development opportunities and competitive
salary.

Process

The key mechanisms that Sony use to foster product innovation is a combination of
external and internal networking mechanisms that identify and acquire key technologies
and related skills, gain market knowledge, improve the results of internal R&D efforts,
and ensure the successful transfer of these results to efficient production processes.

Four key mechanisms underlying successful product innovation at Sony are strategic
training & job rotation for engineers, application-driven R&D, direct transfer of
development teams from R&D to production, and extensive networking with external
centers of excellence and key suppliers. Sony's new researchers and development
engineers spend one month in production. Sony also give their new R&D professionals
three months of training in sales and marketing.

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Physical evidence
Sony's activities, centering on further improving product quality and reinforcing quality
management activities, reflect their commitment to quality.  On a continuing basis, Sony
introduces new product quality improvement measures into all processes, from
development, planning, design and manufacturing to sales and service activities. Such
recent measures include:

 ensuring senior management oversight and attention to improving product and

service quality and safety, as well as timely responses to problems
 holding regular Quality Strategy Meetings, attended by Sony's president and top
management from each business group, including manufacturing and marketing
executives from the Electronics business, to discuss and set policies, strategies
and key measures relating to product quality
 formulating corporate quality standards applicable to Sony's electronics products,
focusing on such criteria as product safety and performance, labeling and
services. These standards are updated continuously to reflect technological
advances, changes in applicable legal and regulatory requirements and social
changes.

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SUGGESTIONS TO IMPROVE SONY MARKETING MIX
Apart from the fact that Sony has targeted its market mainly to urban customers, as they
are the only customers than can probably afford their products, I think that Sony should
create some low-end products with low prices which will be affordable to low income
users. Also Sony should continue improving its OLED TVs. Sony’s current marketing
mix which Sony Corporation has, is mostly satisfactory to customer needs otherwise. As
shown, Sony as a company has expanded and provides a wide range of products and
services. With high quality, Sony has influenced most of its customer perception
favorably towards its products. Sony’s products have constantly been improving from
the time the company had been created until now. Sony has more than four different
distributors, like Sony World and they also have Sony service centers. So, for
customers in urban areas the supply seems to be satisfactory, though most rural areas
are left out.

COMPARISON BETWEEN SONY AND ANOTHER MULTINATIONAL COMPANY

Like Coca Cola, Sony is a well known, well loved brand name all over the world due to
the fact that they produce quality products and services. Although technologically wise,
Sony is always improving, Coke is a standardized product all around the world. Also,
whereas coke is affordable wherever you go Sony may not be.

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CONCLUSION
For Sony certain strengths, weaknesses, opportunities and threats were
detected. Strong brand presence being one of Sony’s strengths, they have a reputation
of being a leading electronics company driven by superior quality products and knew
that their brand would transcend geographically this is why they decided to expand to
the UK. Sony had the opportunity to expand their consumer electronics market and was
functioning in a mature market, so the UK was a great place for them to grab the
opportunity and extend the life of their products.

Due to the fact that Sony produces so many varieties of digital products and
provide other services to the customer, I decided to narrow the field discussing in brief
each tool of the marketing mix for Sony Corporation with a sample list of marketing
components which I have discussed in more detail.

I have also given my opinion on the current marketing mix for Sony Corporation in which
to some extents seems to satisfy the needs of the customers.

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 BIBLIOGRAPHY

Books

Wall, S., Minocha, S. and Rees, B (2010) International Business, 3 rd edition, Financial
Times/Prentice Hall

Wall, S., and Rees, B (2004) International Business, 2nd edition, Financial
Times/Prentice Hall.

Websites

www.invest.uk.com

[cited 13 Nov 2009]

www.competition-commission.org.uk

[cited 13 Nov 2009]

www.economist.co.uk

[cited 18 Nov 2009]

www.ft.com

[cited 18 Nov 2009]

www.telegraph.co.uk

[cited 25 Nov 2009]

www.timesonline.co.uk

[cited 27 Nov 2009]

www.guardian.co.uk

[cited 28 Nov 2009]

www.independent.co.uk

[cited 30 Nov 2009]

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http://hstalks.com/go

[cited 2 Dec 2009]

http://www.telegraph.co.uk/technology/sony/

[cited 3 Dec 2009]

http://www.zdnet.co.uk/tsearch/joint+venture.htm

[cited 5 Dec 2009]

http://reviews.cnet.com/oled/sony-xel-1-oled

[cited 8 Dec 2009]

http://www.sony.net/SonyInfo

[cited 10 Dec 2009]

http://www.economics4development.com/index.htm

[cited 12 Dec 2009]

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