TERM PAPERONMarketing Plan of Sony’s Refrigerators

COURSE: Product & Brand ManagementCOURSE CODE: MGT 532

Submitted To:Anju Sahni

Submitted By:Varun Puri

Reg. No.: 10800464

Lovely School of Business

Lovely Professional University

Table of Contents

Executive Summary ..................................................................................................................1

1 Situation Analysis..........................................................................................................2

1.1 Current marketing environment..................................................................................2

1.2 Product Analysis .......................................................................................................12

1.3 Target Markets ........................................................................................................113

1.4 Product/Market Analysis Tools ..............................................................................114

1.5 SWOT Analysis ........................................................................................................15

2 Objectives.....................................................................................................................17

3 Competition .................................................................................................................17

3.1 Product differentiation ..............................................................................................19

4 Product - Unique selling proposition.........................................................................20

5 Marketing Strategy.....................................................................................................21

5.1 AIDA.........................................................................................................................22

6 Marketing Mix – Strategy of 4 Ps..............................................................................22

6.1 Product ......................................................................................................................22

6.2 Price ..........................................................................................................................23

6.3 Place..........................................................................................................................23

6.4 Promotion..................................................................................................................23

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Executive Summary

The Indian consumer durables industry has witnessed a considerable change in the

past couple of years. Changing lifestyle, higher disposable income coupled with

greater affordability and a surge in advertising has been instrumental in bringing

about a sea change in the consumer behaviour pattern.

This industry consists of durable goods used for domestic purposes such as

televisions, washing machines, refrigerators, microwave ovens, mobile phones etc.

The growth in the consumer durables sector has been driven primarily by factors

such as the boom in the real estate & housing industry, higher disposable income,

emergence of the retail industry in a big way coupled with rising affluence levels of

a considerable section of the population.

As per a survey conducted by FICCI on the Indian consumer durables industry, a

shift in consumer preferences towards higher-end, technologically advanced

branded products has been quite discernable. This shift can be explained by

narrowing differentials between the prices of branded and unbranded products

added with the high quality of after sales service provided by the branded players.

The shift has also been triggered by the availability of foreign branded products in

India owing to lower import duties coupled with other liberal measures as

introduced by the government.

Industry Classification

The consumer durables industry can be broadly classified as consumer electronics

and consumer appliances. The consumer appliances category can be further

segmented as white goods and brown goods.

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1 Situation Analysis

1.1 Current marketing environment

Industry size, growth and trends

India’s consumer market is riding the crest of the country’s economic boom. Driven by a young

population with access to disposable incomes and easy finance options, the consumer market has

been throwing up staggering figures. India officially classifies its population in five groups, based

on annual household income (based on year 1995-96 indices). These groups are: Lower Income;

three subgroups of Middle Income; and Higher Income. However, the rupee income

classifications by themselves do not present a realistic picture of market potential for a foreign

business enterprise, because of significant differences in purchase power parities of various

currencies. In fact, the Indian rupee has a very high purchase power parity compared to its

international exchange value. For instance, while the exchange rate of one US dollar is 48.50i

Rupees, the domestic purchasing power of a US dollar in the US is closer to the purchasing

power of Rs 6 in India, for equivalent needs and services. As a result, India ranks fifth in the

world, on purchase power parity terms, despite being having low per capita national income (US$

340 per capita).

Consumer Classes

Even discounting the purchase power parity factor, income classifications do not serve as an

effective indicator of ownership and consumption trends in the economy. Accordingly, the

National Council for Applied Economic Research (NCAER), India’s premier economic research

institution, has released an alternative classification system based on consumption indicators,

which is more relevant for ascertaining consumption patterns of various classes of goods. There

are five classes of consumer households, ranging from the destitute to the highly affluent, which

differ considerably in their consumption behaviour and ownership patterns across various

categories of goods. These classes exist in urban as well as rural households both, and

consumption trends may differ significantly between similar income households in urban and

rural areas.

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Structure of the Indian Consumer Market

Overview of India’s Consumer Durables Market

The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD

players and audio systems etc.) and consumer appliances (also known as white goods) like

refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and

dishwashers.

Most of the segments in this sector are characterized by intense competition, emergence of new

companies (especially MNCs) and introduction of state-of-the-art models, price discounts and

exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is

apparent from the fact that these companies command more than 65 per cent market share in the

colour television (CTV) segment.

In consonance with the global trend, over the years, demand for consumer durables has increased

with rising income levels, double-income families, changing lifestyles, availability of credit,

increasing consumer awareness and introduction of new models. Products like air conditioners

are no longer perceived as luxury products.

Growth of Consumer Electronics Production in India

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During FY07, volume share of the single largest consumer durable was colour TVs at 30%,

followed by refrigerators and air conditioners at 18% and 13% respectively. Washing machines

and other assorted consumer durables captured a share in the total volume by 5% and 34%

respectively.

Refrigerator: Demand and supply side dynamics

According to CMIE statistics, domestic consumption of refrigerators witnessed a decline between

FY05 and FY08, while exports grew. From 3% of the total consumption in FY05, exports grew

to7% of the total consumption in FY08. On the supply side, domestic production of refrigerators

in the total supply remained at the same levels in the past three years ended FY08. At 99% each

in FY06-08, the share of production reported a mere 100 basis point increase over FY05, as

imports slided. The refrigerator industry posted a sluggish performance since the beginning of

FY09 on the back of volatile steel prices. The first quarter saw a production growth of a mere 50

basis points to 2.18 million units, as per CMIE.

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Industrial Growth

The industrial sector grew in moderation during FY08 at 8.5% on the back of a comparatively

higher growth of 11.5% during the previous fiscal. The country’s real GDP grew by 9% during

FY08; a tad lower than 9.6% in the previous fiscal. The consumer durables segment witnessed a

fall in production particularly for items where consumer preferences have shifted towards newer

products. Shifting in the consumption pattern coupled with rising input costs of steel, iron ore etc,

may further affect the production levels of these goods. On the supply side newer variants of

consumer durables on the back of technological advancements have flooded the market, whereas

on the demand side it is the prospering middle class and consumerism which have led to changing

demand patterns.

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Foreign Direct Investment

The net Foreign Direct Investment (FDI) inflows to India increased from US $ 22 bn in FY07 to

US $ 32.3 bn in the following fiscal. During 2007 and 2008, the share of FDI in the electronic

goods segment remained flat at 0.2%, coming on the back of a 1.5% share in CY06.

SLEPT ANALYSIS

Foreign investment up to 100 per cent is possible in the Indian consumer electronics industry to

set up units exclusively for exports. It is now possible to import duty-free all components and raw

materials, manufacture products and export it. EHTP (Electronic Hardware Technology Park) is

an initiative to provide benefits to companies that are replacing certain imports with local

manufacturing. EHTP benefits include export credits, no duties on imported components or

capital equipment, business tax incentives, and an expedited import-export process.

The government, in an attempt to encourage manufacture of electronics in India has changed the

tariff structure significantly.

Customs duty on Information Technology Agreement (ITA-1) items (217 items) has been

abolished from March 2005. All goods required in the manufacture of ITA-1 items are exempt

from customs duty.

Customs duty on specified raw materials / inputs used for manufacture of electronic components

or optical fibres / cables has been removed. Customs duty on specified capital goods used for

manufacture of electronic goods has been abolished.

Intellectual Property Rights

Protection of Intellectual property rights (IPR) is a prime requisite for development of R&D and

innovation in the consumer electronics sector. The Government of India has developed a robust

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IP act to facilitate innovation, growth and development. Several amendments to the Copyright

Act, creation of a new Trademark Act, a new Designs Act and amendments to the Patents Act

show India’s continued effort to protect IPR.

The country has already made several changes in its IP acts over the years.. Several amendments

to the Copyright Act, creation of a new Trademark Act, a new Designs Act and amendments to

the Patents Act show India’s desire to change and adapt. New acts have also been enacted to

cover semiconductors and layout designs which will be of considerable importance to the

electronic industry.

In the current WTO regime, India is a party to the “Trade Related Aspects of the Intellectual

Properties (TRIPs) Agreement” and has accordingly, amended most of its IPR Acts and Rules to

conform to the said Agreement. The Indian Copyright Act 1957 was amended in 1999; the patent

Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise Marks Act 1959 was

overtaken by a new Trademark Act 1999. The Industrial Design Act 1911 was effectively

replaced by The Design Act 2000, and the Layout Design of Semiconductor integrated Circuit

Act 2000 was enacted.

The agreement on TRIPs takes care of the intellectual property rights by enforcing the patent

rights, copy rights and related rights, and the protection of industrial designs, trademarks,

geographical indications, layout designs of integrated circuits and undisclosed information.

Accordingly, the member nations are asked to modify their existing laws. Once these laws come

into force, unauthorised use of the patented innovations, trademarks, etc. becomes difficult.

Enforcement of the TRIPs agreement makes the production of any product possible either

through internal innovation or through formal transfer of technologies.

The consumer electronics and durables sector is expected to continue to benefit from supportive

policies and become globally competitive.

Regulations

Free Trade Agreement

WTO regime which came in force in 2005, results in zero customs duty on imports of all telecom

equipment. 217 IT/electronic items were covered under the Information Technology Agreement

(ITA) of the WTO for complete customs tariff elimination by 2005.

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Out of these 217 items, several items were already at NIL customs duty. In fact, IT/electronics

was the first sector in India to face complete customs tariff elimination. The ITA-1 would result

in intensifying competition as more imported products will be easily available at lower prices.

Foreign Investment Policy: FDI

Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively

for exports. The units set up under these programmes are bonded factories eligible to import, free

of duty, their entire requirements of capital goods, raw materials and components, spares and

consumables, office equipment etc. Deemed export benefits are available to suppliers of these

goods from the Domestic Tariff Area (DTA).

A part of the production from such units is permitted to be sold in the DTA depending upon the

level of the value addition achieved. The FDI approval for electrical equipment (including

computer software and electronics) from January 1991 to March 2004 was US$ 7.29 billion,

which was 9.94 per cent of the total foreign direct investment (FDI) approved. During the same

period the FDI inflow for electrical equipment (including computer software and electronics) was

US$ 3.32 billion.

Procedure for approval

Once the investment in equity has been approved, the import of capital goods, components and

raw materials or the engagement of foreign technicians for short duration does not require any

additional approvals.

Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid

employment visa.

Approval for setting up units in Export Processing Zones (EPZs) is given by the Board of

Approvals in the Ministry of Commerce.

Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry

of Industry.

Approvals for setting up Electronic Hardware Technology Park (EHTP) and Software

Technology Park (STP) units are cleared by the Inter Ministerial Standing Committee (IMSC)

set-up under the Chairmanship of the Secretary, Department of Information Technology.

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Proposals involving foreign direct investment not covered under the automatic route are

considered by the Foreign Investment Promotion Board (FIPB).

FDI/ Foreign Technology Collaboration Agreement

The government facilitates FDI and investment from Non- Resident Indians (NRIs) including

Overseas Corporate Bodies (OCBs), predominantly owned by them, to complement and

supplement domestic investment. Foreign technology induction is encouraged through FDI and

foreign technology collaboration agreements. FDI and foreign technology collaborations are

approved through automatic route by the Reserve Bank of India

Growth Scenario

Rising disposable income and declining prices of durables have resulted in increased volumes.

An increase in disposable income is aided by an increase n the number of both double-income

and nuclear families.

The market for consumer durables (including entertainment electronics, communitarian and IT

products) is estimated at Rs 32 billion (US $7.1 billion). The market is expected to grow at 10 to

12 per cent annually and is expected to reach Rs 60 billion (US$13.3 billion) by 2008. The urban

consumer durables market is growing at an annual rate of seven to 10 per cent, the rural durables

market is growing at 25 per cent annually. Some high-growth categories within this segment

include mobile phones, TVs and music systems.

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Consumer durables are expected to grow at 10-15 per cent in 2010-11, driven by the growth in

refrigerators and air conditioners. Value growth of durables is expected to be higher than

historical levels as price declines for most of the products are not expected to be very significant.

Though price declines will continue, it will cease to be the primary demand driver. Instead the

continuing strength of income demographics will support volume growth.

The key growth drivers for the Indian consumer durables industry:

Rise in disposable income: The demand for consumer electronics has been rising with

the increase in disposable income coupled with more and more consumers falling under

the double income families. The growing Indian middle class is an attraction for

companies who are out there to woo them.

Availability of newer variants of a product: Consumers are spoilt for choice when it

comes to choosing products. Newer variants of a product will help a company in getting

the attention of consumers who look for innovation in products.

Product pricing: The consumer durables industry is highly price sensitive, making price

the determining factor in increasing volumes, at least for lower range consumers. For

middle and upper range consumers, it is the brand name, technology and product features

that are important.

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Availability of financing schemes: Availability of credit and the structure of the loan

determine the affordability of the product. Sale of a particular product is determined by

the cost of credit as much as the flexibility of the scheme.

Rise in the share of organised retail: Rise in organised retail will set the growth pace of

the Indian consumer durables industry. According to a working paper released by the

Indian Council for Research on International Economic Relations (ICRIER), organised

retail which constituted a mere four percent of the retail sector in FY07 is likely to grow

at 45-50% per annum and quadruple its share in the total retail pie 16% by 2011-2012.

The share will grow with bigger players entering the market.

Innovative advertising and brand promotion: Sales promotion measures such as

discounts, free gifts and exchange offers help a company in distinguishing itself from

others.

Festive season sales: Demand for colour TVs usually pick up during the festive seasons.

As a result most companies come out with offers during this period to cash in on the

festive mood. This period will continue to be the growth driver for consumer durable

companies.

Major hurdles and challenges plaguing the Indian consumer durables sector:

Threat from new entrants, especially global companies: The domestic consumer

durables sector faces threat from newer companies, especially from global ones who have

technologically advanced products to offer.

Rivalry and competition: Presence of a large number of players in the domestic

consumer durables industry leads to competition and rivalry among companies. Threat

from rivalry and competition poses a threat to domestic companies.

Potential markets remaining yet untapped: A large segment of the domestic market,

mostly the rural market is yet to be tapped. Tapping this yet untapped and unorganised

market is a major challenge for the Indian consumer durables sector.

Threat from substitute products/services: The domestic consumer durables industry is

plagued by threats from substitute products. Easy accessibility to theatres/multiplexes,

especially in urban areas has turned off the viewership from TV to a large extent. With the

advent of a horde of FM radio stations, radio sets have now substituted TVs.

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Customer power with respect to availability of choice: The availability of a wide

product line on account of most products being homogeneous, poses a threat for

companies operating in the consumer durables sector. Customers have the choice of both

domestically produced and imported goods, with similar features.

1.2 Product Analysis

Sony is among the leading electronics brands in the world. Sony has always introduced products

with high quality and most innovative but user-friendly technology. Now Sony has introduced a

range of refrigerators. Sony refrigerators are a class apart from others. They are designed with

most advanced technology which makes them unique. Sony has always believed in thing

differently while designing new products. It has manufactured products which are the blend of

style, consumer's expectations and the advanced technology. The Sony refrigerators have unique

energy saving and food preservation technology.

For instance, these refrigerators will have more space because of its unique U-Vacua --vacuum

insulation panel. It results in more space, more energy efficiency, less of material used. In

contrast to conventional refrigerators, these refrigerators will be having very sleek walls. Sony

refrigerators look very sleek and stylish. The design will provide flat door handle. To prevent the

compressor from getting dust, the refrigerators will have full back cover. Besides lending a neat

look, this feature enhances the refrigerator's life and efficiency. You can keep your refrigerator

sparkling clean as the surface of this device is treated with finger print resistant technology.

Sony refrigerators will be equipped with inverter technology which helps it perform better and

also save money in the long term. To make best use of the energy, Sony refrigerators will be

designed to work on five power levels, in contrast of common refrigerators which work on only

one power level. You can set your refrigerator to run on low power at night or at other times

when it is less used. There is automatic system which adjusts power according to the usage. There

is combination of features like inverter compressor, temperature sensor and microprocessor

technology. These refrigerators will provide best cooling at minimum power consumption.

Refrigerators from Sony will have some features which make them adorable for their owner.

They will keep food as fresh as from the garden. There will be vitamin --safe compartment which

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helps preserving vital nutrients in the fruits and vegetables. User can store fruits and vegetable in

the separate compartments according to the temperature they require maintaining their nutrients.

Hygiene active system in these Sony refrigerators will fight odours and prevent the growth

harmful bacteria. If a consumer wants to feel proud at his decision of buying an extremely

efficient and stylish refrigerator for your home, they will so for Sony refrigerators only.

1.3 Target Markets

The following section will provide an overview of Sony’s target market and of its targeted

customers.

1.3.1 Target market approach

In our opinion, Sony should use a segmentation approach as their general strategy to reach

targeted customers. Although mass-marketing would create the largest potential market, which

leads to the lowest costs and results in lower prices or higher margins, we propose segment

marketing because it can create a more fine-tuned product offering and price for the target

segment. Moreover, this approach enables to select more easily the best distribution and

communication channels, and to have a clearer picture of the main competitors.1

1.3.2 Segmenting consumer markets

Cultural distinctions, different needs and demands of individuals, and diversities in customers’

buying behaviours require market segmentation of companies to satisfy their customers

effectively. Thereby, the market can be divided in geographic, demographic, psychographic and

behavioural segmentation variables and the company can focus on target segments which it wants

to attract.2

According to Sony, there will be no segmentation on geographic factors as we know refrigerators

are required in all over country insignificant to the geographic factors.

Furthermore, there will be segmentation of consumers on the income group they belong to.

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Furthermore, Sony concentrates on a strong customer loyalty status in the behavioural segment.

Besides its popular brand and the high reputation of its products. Finally, one of the important

target segments of the Sony refrigerators involves consumers who require high technology. The

company is convinced that its consumers desire and want to get the best out of the best.

1.3.3 Purchasing process

Some customers make their decision which refrigerator they want to buy dependent from the

number of available companies. Not only the functionality and technology, but also the variety of

designs can be important for the decision-making process of customers. Therefore, the company

has to offer information about the refrigerators’ designs which will be available. The primary

channel for providing such information would be the official webpage.

1.4 Product/Market Analysis Tools

1.4.1 Product Life Cycle

The product life-cycle consists of four different stages:

- Introduction: At this stage, the sales growth increase slowly when the product is

introduced to the market.

- Growth: At this period, a market acceptance of the product is recognizable and the

number of sales units increases. First-users report about the product positively and other

consumers are becoming curious.

- Maturity: A slowdown in sales growth will be at this stage because the product has

achieved acceptance by most of the buyers.

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- Decline: Most of the potential buyers have already the product and therewith the number

of sales declines.

Figure 1: Refrigerator Product Life-Cycle

Different marketing strategies are necessary for each stage of the product life-cycle. We will

discuss our recommended strategies in” Marketing Strategy”.

1.5 SWOT Analysis

The SWOT analysis is the overall evaluation of a company’s strengths, weaknesses,

opportunities, and threats.3 It is used as a framework to help an organization develop its

marketing strategy. Thereby, strengths and weaknesses are internal factors which can be

controlled by an organization, whereas opportunities and threats consist of external factors which

are uncontrollable by an organization.

STRENGTHS & WEAKNESSES

Strengths

Presence of established distribution networks in both urban and rural areas.

Presence of Sony as well-known brands.

In recent years, organized sector has increased its share in the market vis a vis the

unorganized sector.

Weaknesses

Demand is seasonal and is high during festive season.

Demand is dependent on good monsoons.

Poor government spending on infrastructure.

Low purchasing power of consumers.

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CHALLENGES AND OPPORTUNITIES

The Challenges

Heavy taxation in the country is one of the challenges for the players. At its present

structure the total tax incidence in India even now stands at around 25-30 per cent,

whereas the corresponding tariffs in other Asian countries are between 7 and 17 per cent.

About 65 per cent of Indian population that lives in its villages still remains relevant for

some consumer durables companies. This India, at least a large proportion of its

constituents, still buys traditional refrigerators being unaware of frost free refrigerators

Also, foraying into these rural markets has a considerable cost component attached to it.

Companies not only have to set up the basic infrastructure in terms of office space,

manpower, but also spend on transportation for moving inventory. Even LG and

Samsung, which are touted as having the largest distribution network in the country, have

a direct presence only in 15,000 to 18,000 of the around 40,000 retail outlets (for

consumer durables) in the country.

Poor infrastructure is another reason that seems to have held back the industry. Regular

power supply is imperative for any consumer electronics product. But that remains a

major hiccup in India.

Opportunities

The rising rate of growth of GDP, rising purchasing power of people with higher

propensity to consume with preference for sophisticated brands would provide constant

impetus to growth of white goods industry segment.

Penetration of consumer durables would be deeper in rural India if banks and financial

institutions come out with liberal incentive schemes for the white goods industry segment,

growth in disposable income, improving lifestyles, power availability, low running cost,

and rise in temperatures.

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While the consumer durables market is facing a slowdown due to saturation in the urban

market, rural consumers should be provided with easily payable consumer finance

schemes and basic services, after sales services to suit the infrastructure and the existing

amenities like electricity, voltage etc.

Currently, rural consumers purchase their durables from the nearest towns, leading to

increased expenses due to transportation. Purchase necessarily done only during the

harvest, festive and wedding seasons — April to June and October to November in North

India and October to February in the South, believed to be months `good for buying’,

should be converted to routine regular feature from the seasonal character.

2 Objectives

Sony’s financial objectives are to:

- Achieve first-year total sales revenue of 25% market share.

Sony’s refrigerators marketing objectives are to:

- Achieve a first-year unit sales volume of 2 million, which represent a projected market

share of 25 percent.

- Increase second-year share to 38 percent and become the market leader.

- Sell more than 5 million units in the long-term.

- Arrange for distribution through the leading consumer durable stores, Exclusive company

authorized showrooms, distributors & Hyper Markets.

3 Competition

Sony refrigerators will face tough completion from market leader LG, who leads market with

34% of market share in India, with wide range of refrigerators & innovative designs &

association of their product through taking common models into there advertisements. A brief

about LG is as follows.

LG Electronics was established on October 1, 1958 (As a private Company) and in 1959, LGE

started manufacturing radios, operating 77 subsidiaries around the world with over 72,000

employees worldwide it is one of the major giants in the consumer durable domain worldwide.

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The company has as many as 27 R & D centres and 5 design centres. Its global leading products

include residential air conditioners, DVD players, CDMA handsets, home theatre systems and

optical storage systems.

Then there is Samsung who follows LG in Market share with half a share from LG, with

only18.1% in 2006.

Samsung India commenced its operations in India in December 1995, today enjoys a sales

turnover of over US$ 1 billion in just a decade of operations in the country. Samsung design

centres are located in London, Los Angeles, San Francisco, Tokyo, Shanghai and Romen.

Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices

located all over the country. The Samsung manufacturing complex housing manufacturing

facilities for Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is

located at Noida, near Delhi. Samsung ‘Made in India’ products like Colour Televisions, Colour

Monitors and Refrigerators are being exported to Middle East, CIS and SAARC countries from

its Noida manufacturing complex. Samsung India currently employs over 1600 employees, with

around 18% of its employees working in Research & Development.

Market share of major players in refrigerator market

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Whirlpool of India

Whirlpool was established in 1911 as first commercial manufacturer of motorized washers to the

current market position of being world's number one manufacturer and marketer of major home

appliances. The parent company is headquartered at Benton Harbor, Michigan, USA with a

global presence in over 170 countries and manufacturing operation in 13 countries with 11 major

brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Laden and Ignis. Today,

Whirlpool is the most recognized brand in home appliances in India and holds a market share of

over 25%. The company owns three state-of-the-art manufacturing facilities at Faridabad,

Pondicherry and Pune. In the year ending in March '06, the annual turnover of the company for

its Indian enterprise was Rs.1,375 crores. According to IMRB surveys Whirlpool enjoys the

status of the single largest refrigerator and second largest washing machine brand in India.

Godrej India

Godrej India was established in 1897, the Company was incorporated with limited liability on

March 3, 1932, under the Indian Companies Act, 1913. The Company is one of the largest

privately-held diversified industrial corporations in India. The combined Sales during the Fiscal

Year ended March 31, 2006, amounted to about Rs. 58,000 million (US$ 1,270 million). The

Company has a network of 38 Company-owned Retail Stores, more than 2,200 Wholesale

Dealers, and more than 18,000 Retail Outlets.

Company has Representative Offices in Sharjah (UAE), Nairobi (Kenya), Colombo (Sri Lanka),

Riyadh (Saudi Arabia) and Guangzhou (China-PRC).

3.1 Direct competitors

The following section compares the direct competitors LG, Samsung and Sony with regard to

their products, prices, sales units and game range.

3.1.1 Product differentiation

First of all, the following table shows the particular specification of each game console:

FEATURES LG Samsung SonyCell Fresh Crisper Yes No Yes

Anti Bacteria Gasket Yes Yes Yes

Deodoriser Catechin Yes Catechin

Star Rating 4 3 5

Humidity Controller Yes No yes

EXTERIOR

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Door Finish VCM PVC 3 VCM

Door Type Flat Door Curved Flat

Handle Type Y Type D type C type

Lock Yes yes Yes

Color Titanium 3- shade

FREEZER COMPARTMENT

Twist Ice Tray Ice@Door no 4 Trays

Freezer Lamp Yes yes YesREFRIGERATORCOMPARTMENT

Temperature Control External Micom internalExternal/ InternalBoth Electrical

Energy Consumption 595 695 497

Anti Bacteria Gasket Yes no Yes

Veg Box Normal small Big

Convertible Veg Box Yes no Yes

Veg Box Cover Glass acrylic Toughened

Deodorizer Catechin yes Catechin

Cell Fresh Crisper Yes yes Yes

Vita Light Yes no Yes

Humidity Controller Yes Low Yes

Shelf Toughened Glass acrylic Toughened Glass

Opti Fresh Yes yes Yes

Lamp Yes yes Yes

4 Product - Unique selling proposition:

The Unique selling proposition for Sony refrigerators will be the lower compartment offreezer in refrigerator, that due to different in culture. As we all know Indian people arenot bending towards ready to cook, or freezed vegetables, they like to store food innormal condition & prepare food on daily basis, & this concept is totally different fromwestern countries where people need bigger freezer compartment in refrigerator.

4 door4door Refrigerators with a unique Hybrid Cooling Technology which

preserve the nutrients of your food and Triple Clean System which ensuresyour Hygiene. Truly a refrigerator designed to suit your lifestyle.

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3 Door RefrigeratorHitachi present 3- Door Refrigerators with a unique vegetable compartmenthaving Humidity Control to ensure that your vegetables remain fresh for long sothat you do not have to go for veggie shopping often. Because you have betterthings to do.

5 Marketing Strategy

The Sony refrigerators have a broad marketing strategy set by Sony. Launched with slogans such

as “LIVE SAFE” and “kitchen safe”, Sony refrigerators aims for a large Customer base.

Thereby, Sony will have to apply a different marketing strategy depending on which level of the

product-life-cycle the product currently placed in. For example, at this initial state of introduction

the most evident need is to market the refrigerator itself, to make sure that it reaches as many

customers as possible. A suitable strategy for the first year is to get the message out about the

capabilities with the refrigerator, and a suitable channel for this message is through television

advertisements,

Brand Ambassador:

For Sony’s refrigerator’s the best brand ambassador would be Juhi Chawla, as she has a home

maker image in the mind of Indian people.

For the second year, there is big need to start marketing the refrigerators more actively, to make

sure the owners recommend our product as much as possible. This stage is characterized by

growth and Sony needs to put a lot of effort into taking advantage of the growth in the

Refrigerator business.

Throughout both years of the product life-cycle, there is a potential growth level, which can be

boosted by getting the message out about the Sony’s refrigerators being for better health.

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5.1 AIDA

By looking at the AIDA model that is suitable for the PS3, we’d expect it to look like this:

A – Attention: Presentation of Sony Refrigerators at exhibitions etc. attracts attention to home

makers.

I – Interest: Demonstration of features on videos in blogs, on the Internet etc.

D – Desire: People are impressed by the features contributing to their health consciousness

creates desire to own the console to play the games.

A – Action: To lead customers toward taking action and buying the refrigerator is an essential

part, but in this case Sony may lag somehow because there are a numerous number of companies

on the market right now.

6 Marketing Mix – Strategy of 4 Ps

The marketing mix is a set of marketing tools a company uses to pursue its marketing objectives

in the target markets. According to McCarthy, these tools are classified in four groups called the

4 Ps of marketing: product, price, place, and promotion.

The following chapter shows, what different marketing tools Sony uses in each group to

influence its buyers.

6.1 Product

Sony’s product strategy is to deliver the best quality and technology. Therefore, the Sony

Refrigerator supports features such as Frost Free, 2 door bottom freezer, Refrigerant – 134a,

Twin Bio attacker, Triple Ice tray, Premium look and Design, Quiet and more reliable

Compressor etc.. Sony has to spend a lot of money in innovation and R&D to use all resources

which are included in its refrigerators. For instance, the company has to focus on the

development of bottom freezer to take advantage of the fact that this new technology is possible

with their refrigerators. Moreover, Sony’s multimedia functionality is another characteristic to

meet the needs of its customers.

Furthermore, Sony holds on to its brand value. The name Sony’s stands for quality, technology,

and market leadership which could be achieved with its previous product mix. Moreover, the

name has a good reputation and is associated with a high customer loyalty.

Additionally, the design of the refrigerators is modern and is available in three neutral colours

black, white, and silver. The sizes are available from 180 liters to 568 liters

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Finally, Sony will offer a one year long warranty for its refrigerators.4

6.2 Price

Sony’s price strategy is adapted to its product. Due to the fact, that the Sony refrigerators offers

the best technology and a plenty of functionalities, the price for it is more expensive as the

product of its competitors. Nevertheless, Sony’s high price is a character for its high product

quality and the company has to proclaim its high price together with its high technology.

Furthermore, Sony tries to adapt its price to the particular environment and region.

Furthermore, Sony pursues a versioning price policy. According to Shapiro and Varian, it

involves offering a product line and let users choose the version of the product most appropriate

them.5 Consumers can decide if they want to pay a higher price for the premium edition with

some extra features, or prefer a lower price with fewer extra features.

Additionally, Sony has to allow credits to its major retailers and to offer discounts according to

the quantity of sales.

6.3 Place

One part of Sony’s place strategy is to be the last one to release its refrigerators on the market.

Sony has pursued this strategy already with its previous products like play stations & other

products and it ensures that the product will be the product with the newest technology on the

market. Furthermore, Sony offers only a limited quantity of products at the beginning of its

rollout. This is a really powerful marketing tool, because it ensures that early adopters really want

to have the product. Following such an approach, such people stand in lines for hours in front of

shops just to get one exemplar of the new refrigerators. It is important to convince and get early

adopters, because the long-term success of a new product can be based on how those feel about it.

A limited of products creates a passion to get one and it results in communication about the

product. Early adopters speak about the product and promote it. They write about the product in

blogs, create web-sites and connect the product to others in a way that other people will follow.

6.4 Promotion

Sony’s most important promotion tool for its refrigerators is the television advertisements &

exhibitions.

Additionally, Sony’s promotion strategy will also include sponsoring. For instance, the TV shows

like home depot, while you were out etc. Thereby, Sony’s refrigerators will be promoted by

perimeter advertising boards and TV spots.

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Chapter “Marketing Strategy” includes more information about Sony’s promotion strategy.

7 Implementation controls

IT systems, most importantly SCM and ERP systems can play an essential role in ensuring that

the sales and distribution channels of the refrigerators are on track. This way, managers at Sony

will be able to monitor the sales on a day-to-day basis, making sure that it meets expectations.

i

References

1 Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p. 279

2 Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p.287

3 Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p.102

4Sony.com, „http://www.sony.co.in/Support/ “, accessed on 28.11.20079

5 Shapiro, Carl and Varian, Hal R, “Information Rules. A Strategic Guide to the NetworkEconomy”, Harvard Business School Press 2000, p.39

http://info.shine.com/Industry-Information/Consumer-Durables/902.aspx

http://whirlpoolindia.com/corp-india.aspx