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Management And Performance Of Sony

Paper Type: Free Essay Subject: Marketing
Wordcount: 1875 words Published: 18th Apr 2017

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Strategic marketing management techniques are methods used by the management of a company to evaluate and deploy the marketing strategies that the company requires to maintain a competitive edge against its direct rivals. Seeing as marketing is the use of key information about customers, products and markets to properly assess the suitability of providing a certain service or product it is imperative upon any contemporary business to maintain cutting edge marketing research techniques. This is especially the case when considering the role marketing techniques play in allowing a company to change, evolve or diversify the key directions of their services and/ or products in the market.

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In a similar vein, it is also imperative upon businesses to maintain a tight control on the performance of their marketing strategies. There has been much academic interest in this aspect of performance and with good reason – a faulty marketing strategy, if not addressed swiftly and efficiently by a robust performance management team will result in catastrophic consequences. There are a number of methods that can offer key marketing performance parameters but one of the main methods is the collection and analysis of core data from the market in which the service or product of the company is competing. One could make the case that the entire enterprise of measuring the marketing performance of a product depends on the company’s ability to collect and accurately analyse the appropriate data.

Finally, an accurate picture of the performance of a company can be attained through the use of a business scorecard. This is a method of business performance review that has gained in greater exposure and use over the last few decades and has now become an integral part of the performance management team’s repertoire of business tools to evaluate the the success of the company and its products/ services against its competitors. The business scorecard typically is a tool that provides a single parameter of success succinctly such that an accurate assessment of the position of a product in the market can be accessibly gained without delving into the details. This tool of course does not replace existing performance barometers but provides a different function of a quick and simple success rating.

This report will focus on Sony as an organisation that involves these marketing factors – especially the Sony PS3, a video game console that will provide a microcosm of the larger company at work. Sony is a multinational company that specialises in audio, video and entertainment products. It has an established market reputation and expertise in the video console games entertainment industry. The Sony PlayStation 3 is the third console that Sony has released and with each of its two previous products Sony was able to maintain a staggeringly dominant market share. This position is the backdrop to the release of the Sony PlayStation 3, an eagerly awaited console by a massively loyal fan base, and the marketing strategies deployed, the techniques used, the performance reviews established and the scorecard indicators analysed will be the crux of this report.

Strategic Marketing Techniques deployed

There are a number of techniques used by marketing management teams to ascertain a marketing strategy and direction. One of the most basic and yet most widely used of all marketing techniques is the use of the marketing mix by detailing the four P’s – Price, Product, Placement and Promotion. Each of these four parameters give the company critical information on the best method to market its new product.

The product that Sony wished to market was its PlayStation 3. This product was a continuation of the Sony PlayStation 2 and the original Sony PlayStation. This product was to be released into a well established and mature industry that had three direct competitors – the Nintendo Wii and the Microsoft X-box 360. Both Nintendo and Microsoft had been in direct competition with Sony before and both have fared badly. Nintendo competed against the original Sony PlayStation with its N64 console but didn’t manage to make any headway into Sony’s market share. Microsoft competed against the PS2 with its own X-Box console but again Sony was able to maintain the lion’s share of the market. So much so that the X-Box only sold 24 million consoles to the approximately 120m sold by Sony. [1] These are the market conditions that the PS3 was conceived in and the key aim of the PS3 was to maintain the market share of Sony while delivering the cutting edge in gaming technology above and beyond that which its competitors offered.

Sony marketed the PS3 with a premium pricing strategy and there were a number of reasons to adopt this position. The PS3, when it was released represented the best console in gaming history. In fact the PS3 was released many months later than its direct competition of the 360 and Wii because it was developed to such a high standard. To give a comparison, the 360 has three processing units all running at 3.2 GHz, the PS3 in comparison has seven of the same processing units. [2] This is a vast difference in computing power and thus required far more time to research and develops the console. This extreme power and computing capability was thought to be recoverable through the pricing of the PS3 by Sony and it is easy to see why. The PS3 entered the market to huge expectation and just as huge a fan base loyally waiting to buy the console. The company felt it was a good ploy to price the PS3 at a premium level in direct contrast to both the Wii and the 360. The Wii and the 360 were under-priced by their respective companies so as to attempt to flood the market, so to speak, and gain higher sales through cheaper products. Sony decided to go the opposite way and priced their product highly because they felt they had enough consumers to bank on to buy their console and enough interest from game developers to coerce serious gamers into purchasing the PS3.

The PS3 was first released in Japan and then worldwide. Seeing as Sony is originally a Japanese company and that its biggest customer base was in Japan this made complete sense. The 360 in comparison was first released in the USA where it had its own customer base. These strategies are easy to understand because they both play to the strengths of the respective companies and allow both to develop further commitment amongst their biggest customer repository – if this strategy does well in their respective home markets then they can be certain to do well in foreign and worldwide markets also. Sony is choosing the best marketing strategy available to it in terms of placement of the product.

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Sony is in an enviable position when it comes to promoting their product. Seeing as a console itself is no more than a channel and a conduit of games, all Sony can offer is an exceptional messenger between the game and the gamer. The real promotion of a console occurs in the line up of games and the gaming experience it can offer and in this regard Sony has some of the biggest games producers signed exclusively to produce for its console. Games of the calibre of Gran Turismo 5, Metal Gear Solid 4 and Final Fantasy IV are all signed exclusively to the PS3 and offer a gaming experience that is of the highest quality in their respective genres. This promotion of the PS3 is indirect but highly effective. As an example, serious racing gamers will be hard pressed not to buy a PS3 just to experience Gran Turismo 5 which is undoubtedly one of the best games in the entire genre, if not the best. Apart from this, the PS3 had the success of the previous consoles as indirect promotion as well – seeing as the PS2 commanded upwards of a 70% share of its market, Sony had a great headstart upon its competition in providing the next generation of gaming, it had reputable expertise in the matter. [3] 

Marketing Performance Management and the Business Scorecard

There are many performance tools that can be used by a management team to assess the marketing strategies employed for its product. This report will focus on one such tool – the business scorecard. As mentioned earlier, the business scorecard allows the management team to know quickly and simply the success of a certain product – it is a critical tool in the current business world and if not used by Sony, then certainly should be. The business scorecard allows for instant feedback on the performance of a product and is thus especially useful in a mature and sophisticated industry such as the video game consoling one undoubtedly is.

The Sony PS3 suffered from well documented problems when it first entered the market a year later than its competitors. As with any new console, game developers are often unsure about how to utilise the computing power of a machine and it is not unusual to see the quality of games improve dramatically in the second or third year of the console once it has been through its teething problems. Unfortunately for the PS3 both of its competitors had already been through this stage and real quality games were being developed for them while the PS3 was slow to the market and grossly over-priced in comparison and thus unable to compete with either console because of its inferior games and higher price tag – its greater computing power didn’t mean much until games could be developed to utilise the raw power. In this case, it seemed the marketing strategy of the PS3 was not working and the marketing management team had to find a solution or risk losing their market share. The solution offered and finally implemented was a reduction in the pricing of the PS3 so as to allow the console to compete directly with the other consoles on even ground and to win back its customer base. This was a simple and efficient marketing manoeuvre that could have been made through the use of a business performance tool such as a business scorecard.


In conclusion, it is important to say that there are many factors which contribute to an effective marketing strategy and the marketing team need to be able to use the correct techniques and the correct performance tools to be able to analyse and sell their product successfully. The Sony PS3 was effectively marketed taking into account its high computing power, loyal customer base and the exclusive games it had to offer. However, seeing as the timing of the console lagged behind its competitors an effective performance appraisal tool was required to remedy the situation and that is exactly what occurred – Sony was able to change its marketing strategy and continue to be a world leader in its market.


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