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U.S based multinationals, Tokyo-based Sony traditionally has marketed itself on a regional rather than a global basis. For example, Sony has almost 50 different country specific websites from which consumers can order products. However, there are signs that strategy may be changing, at least to some degree. Sony launched www.Sonystyle.com, a website that is the company's primary online outlet for selling movies, music, and electronic products. Sony also plans to provide product service and support on the site, and eventually software upgrades as well. The current main website www.sony.com is mainly a source for corporate and investor information. Also, in 1997 Sony embarked on a worldwide ad campaign designed to make itself and its products more relevant in the eyes of younger consumers. Ironically, much of Sony's future growth may come from its own backyard. The primary buyers of electronic and digital products are ages 15 to 40. It is estimated that by 2010, two-thirds of the people in the world in that age bracket will live in Asia. Tokyo is already a powerful influence on Asian culture. Asia's most popular youth magazines are published in Tokyo, and most of the music Asian young people listen to comes from Tokyo. So part of Sony's challenge is to continue to grow on a global scale while paying close attention to the burgeoning market at home.
Immediately following World War II and for some years thereafter, the label "Made in Japan" connoted cheap, shoddy, imitation products. Today, for many people, that same label stands for excellence and innovation. Certainly Sony can take much of the credit for that transformation. Now the question is whether Sony's products an marketing efforts can keep pace or set the pace in the upcoming age of digital convergence.
1) What do you think about Sony's tradition of region-specific or nation-specific marketing? Would Sony be better served by working to create a more uniform global image?
2)What kind of factors do you think Sony considers when deciding how to market its products in various countries?
Sources Fortune May, 2000, Walk Street Journal, May 18 2000, Dealerscope, January 2000, p16
Expert Solution
1) What do you think about Sony's tradition of region-specific or nation-specific marketing? Would Sony be better served by working to create a more uniform global image?
There can be three different kind of global marketing strategies:
1. A global strategy: Treat the wold as a single market. It is applied where forces for global integration are strong and force for national responsiveness is weak. This is true of consumer electronics market.
2. A multinational strategy
It treats the world as a portfolio of national opportunities. It is applied where forces for global integration are weak and force for national responsiveness is strong. This is true of branded packaged goods business for example strategy pursued by Unilever.
3. A Global strategy standardizes certain core elements and localizes other elements. This is applicable where each nation requires some adaptation. This is applicable to telecommunications.
Critical factors determining strategy are:
Global Strategy Multi Domestic
Industry Structure WorldWide Uniform Huge Differences
Competition Globally Regional
Economies of Scale requirement High Low
Nature of Cost Curve Flat Relatively less flat
Customer needs Homogeneous Hetrogeneous
Nature of Customer Global Size Small sized
Regional Culture Little Impact High Impact
Local Responsiveness Low High
Sony should adapt global strategy as it is suiting the characteristics given in the above table of global strategy. That is Sony is operating in the industry which is more or less uniform, facing global competition, homogeneous customer needs etc.
2) What kind of factors do you think Sony considers when deciding how to market its products in various countries?
It should assess the country risk. It can consist of
1. Political risk
- Political risk is one in which the investor privileges are affected by the regime in force. The regime may impose restrictions on repatriation of profits. It has to consider following factors:
* Political climate - amount of government activity
* Political stability and risk
* Government debt
* Budget deficit or surplus
* Corporate and personal tax laws
* Other economic laws
2. Economic risk
This consists of probability of loss due to change in currency rate, economic policies of the country. There can be recession which may impact the demand for Sony.
3. Societal Risk
Attitudes towards:
o materialism, capitalism, free enterprise
o individualism, role of family, role of government, collectivism
o role of church and religion
o consumerism
o environmentalism
o importance of work, pride of accomplishment
There can be adverse attitude of the Society against the organization's products due to above factors.
(www.en.wikipedia.org)
Reference: Philip Kotler (Marketing Management)
Corporate strategy by G Hamel
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