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Assignment On Strategic Marketing Strategies Of Sony

Submitted to DrParulTandonSubmitted by SwapnaraniSamal

SONY
Sony Corporation commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Knan, Minato, Tokyo, Japan. Sony is one of the leading manufacturers of electronics products for the consumer and professional markets. Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its six operating segments Consumer Products & Services Group (consumer electronics, game & network services), Professional, Device & Solutions Group (B2B products & services), Pictures, Music, Financial Services and Sony Ericsson. These make Sony one of the most comprehensive entertainment companies in the world. Sony's principal business operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson, and Sony Financial. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. The Sony Group is a Japan-based corporate group primarily focused on the Electronics (such as AV/IT products & components), Game (such as PlayStation), Entertainment (such as motion pictures and music), and Financial Services (such as insurance and banking) sectors. The group consists of Sony Corporation (holding & electronics), Sony Computer Entertainment (game), Sony Pictures Entertainment (motion pictures), Sony Music Entertainment (music), Sony Financial Holdings (financial services) and others.

Its founders Akio Morita and Masaru Ibuka derived the name from sonus, the Latin word for sound, and also from the English slang word "sonny", since they considered themselves to be "sonny boys", a loan word into Japanese which in the early 1950s connoted smart and presentable young men.

The name "Sony" was chosen for the brand as a mix of two words. One was the Latin word "Sonus", which is the root of sonic and sound, and the other was "Sonny", a familiar term used in 1950s America to call a boy. The first Sonybranded product, the TR-55 transistor radio, appeared in 1955 but the company name did not change to Sony until January 1958.

Formats and technologies

Sony has historically been notable for creating its own in-house standards for new recording and storage technologies, instead of adopting those of other manufacturers and standards bodies. The most infamous of these was the videotape format war of the early 1980s, when Sony marketed the Betamax system for video cassette recorders against the VHS format developed by JVC. In the end, VHS gained critical mass in the marketbase and became the worldwide standard for consumer VCRs and Sony adopted the format. While Betamax is for all practical purposes an obsolete format, a professional-oriented component video format called Betacam that was derived from Betamax is still used today, especially in the television industry, although far less so in recent years with the introduction of digital and high definition.

In 1968 Sony introduced the Trinitron brand name for its lines of aperture grille cathode ray tube televisions and (later) computer monitors. Trinitron displays are still produced, but only for markets such as Pakistan, Bangladesh and China. Sony discontinued the last Trinitron-based television set in the USA in early 2007. Trinitron computer monitors were discontinued in 2005.

Sony launched the Betamax videocassette recording format in 1975. In 1979 the Walkman brand was introduced, in the form of the world's first portable music player.

1982 saw the launch of Sony's professional Betacam videotape format and the collaborative Compact Disc (CD) format. In 1983 Sony introduced 90 mm micro diskettes (better known as 3.5-inch (89 mm) floppy disks), which it had developed at a time when there were 4" floppy disks and a lot of variations from different companies to replace the then on-going 5.25" floppy disks. Sony had great success and the format became dominant; 3.5" floppy disks gradually became obsolete as they were replaced by current media formats. In 1983 Sony launched the MSX, a home computer system, and introduced the world (with their counterpart Philips) to the Compact Disc (CD). In 1984 Sony launched the Discman series which extended their Walkman brand to portable CD products. In 1985 Sony launched their Handycam products and the Video8 format. Video8 and the follow-on hi-band Hi8 format became popular in the consumer camcorder market. In 1987 Sony launched the 4 mm DAT or Digital Audio Tape as a new digital audio tape standard.

In addition to developing consumer-based recording media, after the launch of the CD Sony began development of commercially based recording media. In 1986 they launched Write-Once optical discs (WO) and in 1988 launched Magnetooptical discs which were around 125MB size for the specific use of archival data storage.[16]

In the early 1990s two high-density optical storage standards were being developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips and Sony, and the other was the Super Density disc (SD), supported by Toshiba and many others. Philips and Sony abandoned their MMCD format and agreed upon Toshiba's SD format with only one modification based on MMCD technology, vizEFMPlus. The unified disc format was called DVD which was marketed in 1997.

Sony introduced the MiniDisc format in 1993 as an alternative to Philips DCC or Digital Compact Cassette. Since the introduction of MiniDisc, Sony has attempted to promote its own audio compression technologies under the ATRAC brand, against the more widely used MP3. Until late 2004, Sony's Network Walkman line of digital portable music players did not support the MP3 de facto standard natively, although the provided software SonicStage would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound format with a newer and more advanced proprietary motion picture digital audio format called SDDS (Sony Dynamic Digital Sound). This format employed eight channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time. Unlike Dolby Digital, SDDS utilized a method of backup by having mirrored arrays of bits on both sides of the film which acted as a measure of reliability in case the film was partially damaged. Ultimately, SDDS has been vastly overshadowed by the preferred DTS (Digital Theatre System) and Dolby Digital standards in the motion picture industry. SDDS was solely developed for use in the theatre circuit; Sony never intended to develop a home theatre version of SDDS.

In 1998, Sony launched their Memory Stick format; flash memory cards for use in Sony lines of digital cameras and portable music players. It has seen little support outside of Sony's own products with Secure Digital cards (SD) commanding considerably greater popularity. This is due in part to the SD format's greater throughput (which allows faster recording and access), higher capacities, and significantly lower price per unit capacity compared to Memory Sticks available at the same time. Sony has made updates to the Memory Stick format with Memory Stick Duo and Memory Stick Micro.

Sony and Philips jointly developed the Sony-Philips digital interface format (S/PDIF) and the high-fidelity audio system SACD. The latter has since been

entrenched in a format war with DVD-Audio. At present, neither has gained a major foothold with the general public. CDs are preferred by consumers because of ubiquitous presence of CD drives in consumer devices.

In 2004, Sony built upon the MiniDisc format by releasing Hi-MD. Hi-MD allows the playback and recording of audio on newly-introduced 1 GB Hi-MD discs in addition to playback and recording on regular MiniDiscs. Recordings on the Hi-MD Walkmans can be transferred to and from the computer virtually unrestricted, unlike earlier NetMD. In addition to saving audio on the discs, Hi-MD allows the storage of computer files such as documents, videos and photos. Hi-MD introduced the ability to record CD-quality audio with a linear PCM recording feature. It was the first time since MiniDisc's introduction in 1992 that the ATRAC codec could be bypassed and lossless CD-quality audio could be recorded on the small discs.

Sony was one of the leading developers and remains one of the strongest proponents of the Blu-ray Disc optical disc format, which eventually emerged as the market leader over the competing standard, Toshiba's HD DVD, after a 2 yearlong format war. The first Blu-ray players became commercially available in June 2006, and Sony's first Blu-ray player, the Sony BDP-S1, debuted in December 2006 with an MSRP of US $999.95. By the end of 2007 the format had the backing of every major motion picture studio except Universal, Paramount, and DreamWorks.The Blu-ray format's popularity continued to increase, solidifying its position as the dominant HD media format, and Toshiba announced its decision to stop supporting HD DVD on 19 February 2008.

PRODUCTS OF SONY
Sony offers a number of products in a variety of product lines around the world. Sony has developed a music playing robot called Rolly, dog-shaped robots called AIBO, humanoids, and QRIO.

PlayStation

In late 1994 Sony launched the PlayStation to compete with other consoles. This successful console was succeeded by the PlayStation 2 in 2000. The PlayStation 2 has become the most successful video game console of all time, selling over 150 million units as of 2011. The PlayStation brand was extended to the portable games market in 2005 by the PlayStation Portable (PSP). Sony developed the Universal Media Disc (UMD) optical disc medium for use on the PlayStation Portable. Although Sony tried to push the UMD format for movies, major-studio support for the format was cut back in spring 2006, though as of 2009 some major-studio titles continue to be released on UMD.

Sony released the PlayStation 3, a high-definition console, in 2006. It later introduced the PlayStation Move, an accessory that allows players to control video games using motion controllers. Sony announced that on 1 April 2010 it was electronically removing Linux functionality from the first generation PS3. A class action has been taken out in California challenging the legality of "the disablement of valuable functionality originally advertised". Sony admitted in late 2005 to hiring graffiti artists to spray paint advertisements for their PlayStation Portable game system in seven major cities including New York City, Philadelphia, San Francisco, and Sydney, Australia. The mayor of Philadelphia filed a cease and desist order. According to Sony, they paid businesses and building owners for the

right to graffiti their walls. As of early January 2006, Sony had no plans to keep or withdraw them.

In November 2006, a marketing company employed by Sony created a website entitled "All I want for Xmas is a PSP", designed to promote the PSP through viral marketing. The site contained a blog, which was purportedly written by "Charlie", a teenager attempting to get his friend "Jeremy"'s parents to buy him a PSP, providing links to t-shirt iron-ons, Christmas cards, and a "music video" of either Charlie or Jeremy "rapping". However, visitors to the website soon discovered that the website was registered to a marketing company, exposing the site on sites such as YouTube and digg, and Sony was forced to admit the site's true origin in a post on the blog, stating that they would from then on "stick to making cool products" and that they would use the website for "the facts on the PSP". The site has since been taken down. In an interview with next-gen.biz, Sony admitted that the idea was "poorly executed".

In 2003, Sony Computer Entertainment America, marketer of the popular PlayStation game consoles, was sued by Immersion Corporation of San Jose, California which claimed that Sony's PlayStation "Dual Shock" controllers infringed on Immersion's patents. In 2004, a federal jury agreed with Immersion, awarding the company US$82 million in damages. A U.S. district court judge ruled on the matter in March 2005 and not only agreed with the federal jury's ruling but also added another US$8.7 million in damages. This is likely the reason that the Sixaxis controller for the PlayStation 3 had no rumble feature. The DualShock 3 has since been made available for the PlayStation 3, reintroducing rumble capabilities. Microsoft Corp. was also sued for its Xbox controller, however, unlike Sony, they settled out of court so they could continue using the technology for the follow-up Xbox 360. A California judge ordered Sony to pay Immersion a licensing fee of 1.37 percent per quarter based on the sales of PlayStation units, Dual Shock controllers, and a selection of PlayStation 2 games that use Immersion's technology.

VAIO

Sony offers a line up laptops branded as VAIO. Previously Sony has disabled hardware virtualization on their high end VAIO laptops, citing concern for users running malicious code. However, most new VAIO laptops can utilize virtualization.

Laptop batteries dysfunction

In April 2006, a Sony laptop battery exploded in Japan and caught fire. A Japanese couple in Tokyo sued both Sony and Apple Japan for over 2 million (US$16,700) regarding the incident. The suit argues that the man suffered burns on his finger when the battery burst into flames while being used, and his wife had to be treated for mental distress due to the incident.

On 14 August 2006, Sony and Dell admitted to major flaws in several Sony batteries that could result in the battery overheating and catching fire. As a result they recalled over 4.1 million laptop batteries in the largest computer-related recall to that point in history. The cost of this recall was shared between Dell and Sony. Dell also confirmed that one of its laptops caught fire in Illinois. This recall also prompted Japan's Ministry of Economy, Trade and Industry to order the companies to investigate the troubles with the batteries. The ministry said that Sony must have reported on their findings and drawn up a plan to prevent future problems by the end of August, or face a fine under consumer safety laws. On 23 September 2006, Sony announced its investigation of a Lenovo ThinkPad T43 laptop which overheated and caught fire in the Los Angeles International Airport on 16 September, an incident that was confirmed by Lenovo.

On 28 September 2006, Sony announced a global battery exchange program in response to growing consumer concerns. Acer, Apple Computer, Dell, Fujitsu, IBM, Lenovo, Hewlett-Packard, and Toshiba all recalled Sony laptop batteries.It was also reported that Fujitsu, Toshiba, and Hitachi were considering the possibility of seeking compensation from Sony over the battery recalls.

Sony Pictures Entertainment

In July 2000, a marketing executive working for Sony Corporation created a fictitious film critic, David Manning, who gave consistently good reviews for releases from Sony subsidiary Columbia Pictures that generally received poor reviews amongst real critics. When the scandal was revealed, Sony apologised to Ridgefield Press, the newspaper Manning was claimed to be from. Sony claimed it was unaware of the marketing ploy, and pulled the ads and suspended Manning's creator and his supervisor. In 2003, Sony paid the state of Connecticut $325,000 in fines following the Connecticut Attorney General's investigation into Sony's alleged fraudulent marketing practices. In August 2005, Sony finalized a settlement to pay $1.5m to fans who saw the reviewed films in the US.

In 2006 Sony started using ARccOS Protection on some of their film DVDs, which caused compatibility problems with some DVD players including models manufactured by Sony. After complaints, Sony was forced to issue a recall.

Sony BMG

In October 2005, it was revealed by Mark Russinovich of Sysinternals that Sony BMG's music CDs had installed a rootkit on the user's computer as a DRM measure (called Extended Copy Protection by its creator, British company First 4 Internet), which was difficult to detect or remove. This constitutes a crime in many countries, and poses a major security risk to affected users. The uninstaller Sony initially provided removed the rootkit, but in turn installed a dial-home program that posed an even greater security risk. Sony eventually provided an actual uninstaller that removed all of Sony's DRM program from the user's computer. Sony BMG faced several class action lawsuits regarding this matter. On 31 January 2007, the U.S. Federal Trade Commission issued a news release announcing that Sony BMG had agreed to settle Federal Trade Commission charges that Sony BMG committed several offenses against United States federal law. This settlement required that Sony BMG allow consumers to exchange the CDs through 30 June 2007, and to reimburse consumers for up to $150 for the repair of damage to their computers that they may have incurred while removing the software.

In September 2009 Sony had its Mexican office raided by police to recover over 6000 CDs, masters and artwork, by the popular Latin American artist Alejandro Fernndez. Fernndez's lawyers claimed that Sony was in breach of contract as Fernndez had been contracted to Sony for seven albums and the recordings were an eighth album made after the contract had expired.

Digital photography
Sony offers a range of digital cameras, ranging from point-and-shoot models to digital SLRs.Initially, in October 2005, it was reported by Sony that there were problems with the charge-coupled devices (CCD) in 20 models of digital still cameras. The problems can prevent the cameras from taking clear pictures, and in

some cases, possibly prevent a picture being taken at all. In late November 2006, the recall was broadened to eight additional models of digital cameras sold between 2003 and 2005. The problem appears to manifest itself mostly when the camera is used in areas with hot weather. The eight models affected are the following: DSC-F88, DSC-M1, DSC-T1, DSC-T11, DSC-T3, DSC-T33, DSC-U40 and DSC-U50. Sony indicated that they would repair or replace the affected camera at no charge. Since Sony is one of the largest producers of CCD chips, this recall may affect other manufacturers and models of cameras, possibly as many as 100 models or more. Other manufacturers of digital cameras, including Canon, Minolta, Nikon, Olympus or Fuji have indicated they will replace faulty CCDs in their respective models of cameras if necessary.

STRATEGIES OF SONY
"To be the leading global provider of networked consumer electronics and entertainment" Sony today presented a series of new initiatives designed to build on its previous three-year revitalization plan and to position the company as the leading global provider of networked consumer electronics and entertainment. In particular, the company will focus on strengthening core businesses, enhancing network initiatives and leveraging international growth opportunities to build for the future and drive further growth and profits. In addition, Sony announced the following key mid-term goals: Expand PC, Blu-ray Disc-related products and component/semiconductor businesses into "trillion yen businesses**," joining LCD TVs, digital imaging (digital cameras and camcorders), game and mobile phones and raising the total number of "trillion yen businesses" to seven. Ensure that 90% of our electronics product categories are network-enabled and wireless-capable by the fiscal year ending March 31, 2011 ("FY2010"). Roll out video services across key Sony products by FY2010, starting with the summer 2008 launch on the PLAYSTATIONNetwork.

Double annual revenue from BRIC (Brazil, Russia, India, China) countries to 2 trillion yen*** by FY2010. Sony has identified a 5% operating margin as a baseline of profitability to generate cash to continue to lead and innovate. Furthermore we will target an annual return on equity of 10% by FY2010. Sony is also planning to allocate a total of 1.8 trillion yen to invest in and build key businesses and technologies over the next three years. Highlights are as follows: Further Strengthen Our Core Businesses Sony intends to maintain a leading position in its "trillion yen businesses" (LCD TVs, digital imaging, game and mobile phones) and will focus on expanding its PC, Blu-ray Disc-related products, and component/semiconductor businesses into "trillion yen businesses" by the end of FY2010. At the same time, we expect to improve the operations of our TV business significantly and implement a variety of cost reduction measures to restore that business to profitability in the fiscal year ending March 31, 2009*, and strive for the global No. 1 position in LCD TVs by FY2010. Of the planned 1.8 trillion yen investment over the next three years, approximately 900 billion yen will be allocated towards strengthening core focus areas within components and semiconductors, such as image sensors, batteries, display devices and Blu-ray Disc-related components.

Sony is also promoting the concept of "open innovation", whereby we are looking not only inside the company, but outside for technologies that foster innovation. By combining Sony's inherent technological strengths with external expertise, we aim to accelerate R&D efficiency and enable the company to effectively respond to rapidly changing customer needs and preferences in the network era. Through the creation of new user experiences, strengthening core businesses, driving innovation, and minimizing the environmental impact of its operations, Sony will strive to achieve not only sales volume, but also sustainable and profitable growth.

In the Game segment, the two key drivers of new growth are non-game content and services in tandem with enhanced network capability. Sony also expects to achieve profitability in this segment in the fiscal year ending March 31, 2009*, a significant year-on-year improvement due to hardware cost reductions and an enhanced line-up of software titles for PLAYSTATION3 ("PS3"). Key Game initiatives are: 1. Expand content and services available on the network platform

2. Continue to expand the PS3 customer base through the strength of Blu-ray Disc 3. 4. Accelerate PS3 sales through upcoming key franchise software titles Continue PS3 cost reduction initiatives

Network Initiatives Sony will increase network and wireless connectivity across its family of devices and build a service platform to provide a seamless user experience across our key hardware devices and content. We are planning to expand services that will enable our customers to enjoy content such as motion pictures and television programming through the network on a variety of Sony products such as BRAVIA LCD TVs, PS3, PSP (PlayStationPortable) and Walkman video music players. Sony's unique position in electronics and entertainment allows us to offer compelling network services. As an example of our potential, this November, Sony Pictures Entertainment will offer one of the most highly anticipated films of the summer, "Hancock", exclusively to all internet connected BRAVIA LCD TVs in the U.S. before it is available on DVD. This film will be distributed to Sony customers directly to their televisions outside conventional distributors and without the need for any set-top box. This is an industry first. Capitalize on Growth in BRIC Countries and Other Emerging Markets

Because Sony believes that the largest growth opportunities exist outside its traditional markets of Japan, North America and Europe, expanding Sony's business into new markets is a key area of focus. New markets in regions including the BRIC countries - Brazil, Russia, India and China - are developing quickly, and Sony's business in these countries is growing rapidly. Going forward, Sony plans to accelerate business expansion through collaboration and integration, not just within each of the Electronics, Game and Pictures segments, but across the entire Sony Group. Sony will target annual sales of 2 trillion yen in the BRIC countries (including revenues from Sony Ericsson Mobile Communications and SONY BMG) by FY2010, doubling FY2007 sales with annual Electronics segment sales alone slated to grow from 600 billion yen to 1.2 trillion yen during this period. Environmental Initiatives - Green Management 2010 "Green Management 2010" is a series of mid-term environmental targets that are guiding the Sony Group in its efforts to help prevent global warming, recycle resources, ensure appropriate management of chemical substances and address a broad range of other environmental issues. Through these initiatives, Sony is striving to achieve an absolute reduction in greenhouse gas emissions, specifically a 7% or greater reduction in CO2 emissions by FY2010 compared to the level of FY2000. Financial Strategies for the Mid-Term In order to generate funds to continue to grow and innovate, Sony has identified a 5 percent operating margin as a baseline of profitability. Sony is also establishing return on investment capital as a fundamental framework for evaluating capital investments and potential acquisitions across the Sony Group to ensure the optimum use of resources. Our targeted investment (an aggregate of 1.8 trillion yen by the end of FY2010) will put Sony in a position to drive further growth and innovation over the next three years and beyond. Sony will also target an annual return on equity of 10% by FY2010. Going forward, we will work to deliver a stable, high level of profitability while enhancing shareholder value.

The business environment in which Sony operates is changing rapidly and, with the advance in digital technology and broadband networks, technological innovation is moving at a pace never experienced before. In order to be a leading company in the digital age, Sony aims to leverage its unique advantage of producing both hardware and content, continuing to offer cutting-edge products together with superior content and services to meet the needs and expectations of our customers.

PRODUCT INNOVATION
To ensure the ongoing vitality of a company's product offerings, R&D professionals must play a daunting array of roles. The already rapid, yet still accelerating, pace of technological change may lead some companies to devote more resources to intensive internal research efforts. However, the shift toward global competition demands a more market-oriented focus from R&D; clear understanding of current and potential markets must drive R&D efforts. And efficient, cost-effective manufacturing of new products requires an R&D organization that understands and interacts effectively with the production department

- Engineered to pioneer Thinner, lighter VAIO notebooks require less energy and reduce consumption and depletion of materials. Most VAIO computer models are ENERGY STAR 5.0 compliant and have received either EPEAT Gold or Silver rankings. This means they use less power, reducing both energy bills and greenhouse gas emissions.

- More picture quality, less energy wasted

Sony BRAVIA TVs and LCDs are developed with the environment in mind. This includes reduced costs throughout the product lifecycle -- from buying to maintaining to running your Sony TVs and LCD displays. All BRAVIA HDTVs are designed to meet or exceed ENERGY STAR specifications, saving you money on energy costs while still delivering stunning images. The BRAVIA EX700 and LX900, for example, features a Presence Sensor that turns off the backlight when no motion in the room is detected, and the Energy Saving Switch eliminates stand-by power consumption without having to unplug your unit. Also, Edge LED backlight LCD panels reduce operational power consumption compared to conventional CCFL backlit televisions.

Sony BRAVIA HDTVs also feature innovative technology that self adjusts backlight to save power. Light sensors automatically adjust the brightness of the screen to maximize viewing quality and minimize energy usage, all to support the conservation of valuable resources and limit green house gas emissions.

Sony Ericsson is an industry leader in terms of no-load power consumption and offers some of the most efficient chargers in the world. All phones sold globally since 2003 have chargers that meet the EU voluntary CoC, requiring no-load power usage of less than 0.3 watts, for power supplies. Also, for all newly developed chargers the minimum requirement for energy efficiency is Energy Star 2.0.

Sony Tablet S, revealed at IFA today, shows true innovation in hardware design. Its slightly smaller than the iPad, but it feels completely different to hold, with its folded-magazine wraparound design. It has high-tech features that set it apart from the iPad and other Android Honeycomb tablets, including DLNA support, an IR blaster, and what Sony calls quick view/quick touch, which makes the screen and Web browser extremely responsive and fast-loading.

TECHNOLOGY Sony harnesses new technologies to contribute to the realization of sustainable lifestyles and address key issues of importance to society. SOLUTION In addition to taking steps to lower greenhouse gas emissions from its operations, Sony is developing energy-saving products and IT technologies that help reduce CO2 emissions from Sony products during use by customers. MARKETING Sony offers programs that enable consumers to make their own contribution toward solving environmental problems. DESIGN Sony offers programs that enable consumers to make their own contribution toward solving environmental problems.