This assignment is based on the comprehensive study of the core subject of Marketing Management. In this assignment, I have described a marketing plan of Sony Ericsson mobile phone Company. Sony Ericsson Company is a joint venture of Japanese Sony Corporation and Swedish Organization Ericsson in respect to manufacture mobile phones. Sony Ericsson Company was established on 1st Oct, 2001. The main theme for this venture was to combine Ericsson’s technological knowledge with the Sony’s consumer electronics expertise in the communication sector. After the merger both companies have stopped making their own mobile phones.
In the coursework I discuss a complete marketing strategy with respect to SWOT and PEST analysis and describe Ansoff Matrix Theory as well as I mentioned Marketing Mix of Sony Ericsson.
Introduction
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Sony Ericsson is a joint venture owned equally by the telecommunications leader Ericsson and Sony corporation- the consumer electronics powerhouse. It was established in the year 2001 with a capital of 100,000,000 Euro and released its first product in the year March 2002.The management team of Sony Ericsson is based in Hammersmith in London. It is the fourth largest manufacturer of phones in the world as of 2009. It has around 8450 employees with over 2500 contractors worldwide. It has € 6.788 billion revenue and with the profit of € 836 million in last year. Globally, its market share dropped from 9.4% to 7.9% in Q1 2008.
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Sony Ericsson is a global provider of multimedia devices such as phones, PC cards and accessories. The products with its powerful technology and innovative applications result in mobile imaging, entertainment, communications and music. In areas of music, design and applications the products from Sony Ericsson have a universal appeal. It uses communication technologies such as 2G and 3G platforms in its products, increasing the offerings to the market.
PRODUCT RANGE VS USER GROUPS
Sony Ericsson is always doing focus on their customer needs and tries to serve them in every possible way. There is huge range of its products which they launch for the different group of users. Such as:
Symbian Phones:
These ranges of mobile phones are made especially for the new users.
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Walkman Phones:
This ranges of mobile phones made for especially for the music lovers.
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High Resolution Mobile Phones:
These types of phones are made for those users who are fond of photography. This mobile phone has a high resolution camera so users can enjoy while using other mobile functions.
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Market Orientation
Today maximum successful businesses or companies take market oriented approach. A marketing orientated method means a company responds to what its customer want. Marketing orientated company is completely based around customer needs and wants information rather than what a company thinks is good for the customers.
We can say a company is a market oriented when that company or a business philosophy is thoroughly and systematically dedicated to the constant formation of superior customer value. Indeed, this includes collecting and gathering information data on competitors, customers and other important market influencers for example controllers and contractors to use that value in building.
There are three key components of a market orientation:
Customer Orientation
Market oriented businesses employees spend considerable time with the customers. Supervisors and workforces throughout the industry call on their clients or convey them into their personal services in a continuous exploration for many new ways to fulfil their needs.
Competitor Focus
Customer focus is a heart of a market orientation business. Generating superior consumer value requires more than just concentrating on customers. The strategic questions are those on which technologies, competitors and target clients identify them as different satisfiers. Greater value involves the supplier recognise and realise the principal opponents’ short term weaknesses and strengths and also long term abilities and approaches.
Cross-Functional Coordination
Coordination of personnel and former resources through the company or a business to generate value for customers is the third part of the market orientation core components. One point in the customer’s value chain is an opportunity for a retailer to produce value for the consumer firm. IT means that any individual in any occupation in a retailer firm can theoretically contribute to value creation.
Strategic Management Model Analysis
Macro-Environmental Scanning
Macro-Environmental scanning is the monitoring, evaluating and discriminating of information from the external and internal environment to keep people within the corporation. The company scans the environment in the following way:
General Forces:
It includes:
Political & Legal Forces:
Sony Ericsson Company is very much conscious about the political and legal environment of the country. The company changes its labour wages which is registered whenever a govt. changes the labour laws.
Technological Forces:
Sony Ericsson tries to adopt the future technology for using in the product. They always keep in view the technology for increasing the quality of the product for their customers. On the basis of modern technology, company is the market leader regarding the appliances.
Economic Forces:
Economic forces mean change in disposable Income, flections in the market, inflation, change in rate of interest etc…Company always keep in mind the economic conditions of the country and sets its prices accordingly.
Social Cultural Forces:
It includes environmental concerns, work life quality attitudes and also work force diversity etc… Sony Ericsson keeps in view the social culture changes of the country and sets its target accordingly.
Task Environment:
It Includes:
Customers:
Today Sony Ericsson is one of the big organizations of market. It has customers all over the world who love Sony Ericson mobile phones. Company has also internal and external customer.
Internal customers are those who are the employees of the company which don’t makes big affect on the sales. External customers are those which are the outsides the company such as general pubic except employees.
Supplier Diversity:
Diversity within company’s supply base is dominant to Sony Ericsson in struggle to mirror the varied marketplaces in which company operates. Within Supplier Diversity, company’s greatest goal to provide sourcing opportunities throughout organization to a wide-ranging of diverse business types, to include:
Facility Disabled Expert Owned Business.
Handicapped Owned Business.
In turn, diverse suppliers efficiently support Sony Ericsson various dealings and day-to-day operations.
Sony Ericsson Supplier Diversity Initiative offers a prime opportunity for mutual growth.
Competitors:
Sony Ericsson Company has very big competitors in telecommunication field so it has to work harder and harder to get the top position. Competitors of Sony Ericsson’s are
NOKIA
SAMSUNG etc…
Public Pressure Groups:
There is no public pressure group which affect the working of the company because Sony Ericsson makes product by viewing all its aspects which don’t affect the societal environment.
Internal Environment
Structure:
Company has very systematic structure; the information flows from top to low bottom and from bottom to top mean mechanistic style have rigid chain of command.
Culture:
The company has strong culture. Employees work in teams and have set great expectation and values for the incoming employees.
Resources:
It includes:
Assets
Labour skills, employee skill etc…
Competences
Quickly responsible to competitors
Knowledge
Half and annually based training.
Strategy Formulation
Mission:
Sony Ericsson: MAKE. BELIEVE
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Objective:
Company has its objective regarding mobile phones to be number 1 in the market in the coming years. Company also set the objective to make such type of phones which offers the combination of PC’s and Camera’s.
Strategy:
Company has a comprehensive master plan to achieve its mission and objectives. Company is trying to stabilize its market share regarding its Mobile phones also want its growth in the future.
Policies:
Company has its policy to maintain the quality of its products at lower cost and provides the consistent value satisfaction to the customer.
Situational Analysis of Sony Ericsson (SWOT)swot_img2.gif
Strengths
Major strength is Sony as a brand name. Sony Ericsson has diversity in its products. Sony Ericsson is widely known for their interest to detail and their ability to bring something new to the environment. Sony Ericsson really takes care of each and every step regarding the development of their Windows Mobile Phones and this thing gives them a clear cut benefit over their competitors.
Weakness
No doubt Sony Ericsson is the first in the arena of high quality camera phones but like every new product its has some weaknesses such as W910i is not a 3G devise due to which it can’t work in technologically advanced countries like Japan and Korea. Both used the 3G compliant phones. There are also some weaknesses in Sony Ericsson Company which makes their mobile phones less popular than Nokia and Samsung. Such as
Lack in customer preferences understanding, user cantered designs and brand awareness globally.
Less technology advancement.
Other issues included system freezing and button input failures.
Opportunities
There are a lot of opportunities for Sony Ericsson Company to get bigger in the field of telecom. Some of them are listed below:
Every year population growth rate is increasing; this is a big opportunity for Sony Ericsson Company to attract new customers.
Sony Ericsson is best in music field and young generation today is mad about music so it is a big opportunity for the Company to manufacture more music phones like W910i.
Network capabilities and low tariffs are some of the opportunities for Sony Ericsson.
Threats
There are many competitions around, the biggest threat to IT companies. No doubt the market of smart phone is growing rapidly but popularity of competitor’s product can affect the demand of Sony Ericsson Mobile Phones. Intense competition, introduction of phones for rural areas and customer bargaining are some of the threats to Sony Ericsson.
PESTLE Analysis
Political
Political or legal forces means law and order situation in the country. It includes Country policies for trading companies. Due to the deregulating markets, like other mobile phone companies; Sony Ericsson is has the authority to be independent in every country it operates.
Political and legal situation regarding Sony Ericsson Company is stated as:
Registered Labours
Increase wages when govt. changes Labour policies
No political affects
Economical
Mean economic condition of the country such as change in dispose bale income, fluctuation in market, inflation rate etc… The increasing young population and the increase in the amount of disposable money demand a lot of choices to the people. People demand more features at a reasonable rate.
Company sets the prices according to the economic situation of Country.
Middle and upper class buyer
Generally in inflation situation buying power decreases
Reduction of prices
Social
Sony Ericsson brings about a change in the peoples social life by offering the most attractive and innovative handsets in the industry. It stands by its mission to offer communication with entertainment.
Employees Work in Shifts.
Employees are well settled according to the culture.
Technological
Advancement in the field of technology by other mobile phone companies leaves behind Sony Ericsson. The advancements include touch screen, high resolution cameras etc…
Technology Affects The Working OF A Company.
Company Adopts Modern Technology.
Receives Feedback.
Legal
Sony Ericsson is unique in its design offering the sense motion technology.
Environment
All products of Sony Ericsson have a global declaration. Sony Ericsson is also participating to spread green environment issue among people. Company is also making recyclable mobile phones with 50% of recycle plastic housing.
Porter’s Five Forces
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Competitive Rivalry
Today telecommunication market is really huge as there are a lot of telecom companies like Nokia and Apple. Sony Ericsson rivals are
Nokia
Samsung
Apple
LG
Motorola
These companies constantly bring out new phones into the market which have many new features and are priced at a low price. This is a tough competition for Sony Ericsson Company.
Threats of New Entrants
Many new phones are entering the market and grabbing the attention of the people. As a result these new entrants will harm Sony Ericsson Mobile Phones posing a threat from the new entrants.
Threat of Substitute products
The threat of substitute products will further limit the use of Sony Ericsson. These products include landline phones and technology through the internet such as voice chat and video conferencing.
Bargaining power of Consumers
Due to the demand for low cost phones many mobile phone companies are bringing out phones with many features and at a reasonable price. Thus, customers have the option of switching phones from the competitors as Sony Ericsson is highly priced when compared to other phones.
ANSOFF’S MATRIX:
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Market Share
Market Growth
Star:
Sony Ericsson high definition camera products are very popular.
Sony Ericsson SATIO with 12.1 MP Camera resolutions Mobile Phone is a star of a company.
Question Mark:
Sony Ericsson has to take steps to bring out investment from their declining product such as W910i which is on its declining stage
Cash Cow:
Sony Ericsson Xperia Mobile range is a cash cow for the company as they are getting popularity day by day.
Dog:
Sony Ericsson W910i falls in this category because it is not producing profits nor is it producing losses.
Due to slow growth rate it has very low market share.
The BCG MatrixAnsoff.gif
Sony Ericsson W901i can divert from the dog to cash cow, if it invests some amount on its promotion with innovative features and additional functions. Investing finance to keep its stand in the market Sony Ericsson can move to the question mark slot. Good decision- making skills and market research will make Sony Ericsson W910i a star.
GAP Analysis
The innovative features of Sony Ericsson W910i attracted a lot of customers and it recorded high sale immediately after its launch, but not now the product is at a declining stage due to less sales leading to sales gap. This sales gap is ultimately leading to a profit gap. The key factors that will lead to rejuvenate Sony EricssonW910i should be identified and documented. For meeting the current requirement of the market the factors should then be approved for the variance between its capabilities.
Competitive Strategy
Cost Leadership:
Sony Ericsson can gain market stand by pricing it cost effectively and resolving its stability issue. Sony Ericsson with its innovative thinking, success passionate and responsiveness to its customers have an advantage over other companies.
Differentiation:
The innovative features in the phone such as the shake control feature which allows track change by just a shake of the phone, java based application and games and its brand as walkman phone differentiate it from other phones of other companies.
Focus:
Sony Ericson’s primary focus should be to resolve its stability issue and to price it reasonably. The people have a variety of phones with enhances feature and cost affordable.
TACTICS Marketing MIX:
PRODUCT
PRICE
PLACE
PROMOTION
Product:
Sony Ericsson when launched initially was very famous due to its unique innovative features. Nut has now received a lot of criticism due to stability issues. Customers did not get what they had paid for and eventually the product is in a declining stage.
Price:
Sony Ericsson should focus primarily on its pricing policy. The distributors should be issues with a retail price and strict monitoring should be implemented to ensure that the brand is not diluted by selling at price different from the future tech price.
Place:
One of the most important decisions is to choose the best distribution across the world to get more popular among the consumers.
Promotion:
The product should be branded in such a way that it instantly makes a place in the memory of the people. Digital media should be used to promote the product through advertisements. The product can also be publicized in certain events such as the youth oriented programs to target teenagers.
People:
Sony Ericsson should focus on people of different ages and genders. It should focus on people with limited buying power such as in the rural areas where there are not many means of communication such as internet, magazines etc.
Process:
Sony Ericsson’s sophisticated processes such as hardware, applications and innovative solutions brings about easiness in use and attracts customers.
Physical Process:
Sony Ericsson should be introduces within a focused market segment such as rural areas with not much means of communication.
Conclusion
Sony Ericsson is a leader in the mobile phone market knows for its innovative and stylish mobile phones. Earlier, people with a lot of disposable income used to change their handsets every three years, but now with slow down in economy this is not a trend anymore. Moreover, the higher price of Sony Ericsson phone leads to customers making a choice over to the phones by the rival companies.
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A detailed analysis of opportunities for Sony Ericsson has been presented so as it operates efficiently and expands its business situation in the long term. Strategies such as marketing segmentation, marketing communication mix will have to be incorporated so as the business move on and become competitive on the market which in turn will bring more customers for business. Thus, this will increase the reputation of the business on the market and also the loyalty of customers.
Recommendations
Sony Ericsson should do extensive market research and bring out new strategies, invest considerably and control and monitor activities.
Due to competitive advantage from rival mobile phone companies, Sony Ericsson should reduce the price of its mobile phones.
Sony Ericsson should come up with innovative promotional strategies and employ people with fresh ideas.
Sony Ericsson should use technology advancements and come up with more creative looks, features and user friendly options
Sony Ericsson should provide services such as Warranty and Insurance to attract customers. It should also provide after sale services to further differentiate it from rival mobile companies.
It should set up 24/7 toll free line with professional staff to help customers to solves their issues with phone and answer any queries.
In order to increase sales volume and capture a market share it should focus on a particular market segment such as rural areas with not much communication means.
Appendix 1
Price
Product
Focus on satisfying customers’ needs profitably
People Promotion
Physical Evidence Place
Process
Palmer (2004)
Appendix 2
Advertising
Promotional Mix
Sales promotion Personal selling
Direct Marketing Public relations
[Brassigngton and Pettitt (2003)]
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