Sony Ericsson Mobile Communications is a global provider of mobile multimedia devices, including feature-rich phones, accessories and PC cards. The products combine powerful technology with innovative applications for mobile imaging, music, communications and entertainment. The net result is that Sony Ericsson is an enticing brand that creates compelling business opportunities for mobile operators and desirable, fun products for end users. Sony Ericsson Mobile Communications was established in 2001 by telecommunications leader Ericsson and consumer electronics powerhouse Sony Corporation. The company is owned equally by Ericsson and Sony and announced its first joint products in March 2002.
Sony Ericsson products have universal appeal and are different in the key areas of imaging, music, design and applications. The company has launched products that make best use of the major mobile communications technologies, such as the 2G and 3G platforms, while enhancing its offerings to entry level markets.
The Sony Ericsson XPERIA targets consumers who need to store information and communicate, or people who want entertainment on the go. Sony Ericsson target segments consist of professionals, students, corporate users, entrepreneurs, and health care workers. Currently, the market for high-end phones like the Sony Ericsson XPERIA is small. Few people want Internet, video, and PDA features in one device because of the high price. The smart phone market is still relatively small compared with general phone market. The market will rapidly increase in coming years due to lower prices and greater power.
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Marketing is defined by the Institute of marketing as the management of process responsible for identifying, anticipating and satisfying customer requirements profitability (Gerry Finnegan, 1985). It was on this definition that in December 2006, Martin Blomkvist, Director Head and of Content Acquisition and Partner Management at Sony Ericsson stated that music has become one of the main drivers for 3G and large data entertainment services for the mobile phone end-user and will continue to gain in importance. Sony Ericsson is committed to maximizing the value and experience for the end-user and to increasing revenue for operators, and the Walkman family of mobile phones do this through music. Music-related services, content and applications are fundamental parts of our overall content strategy. (www.sonyericsson.com)
Sony Ericsson is committed to continuously improving our impact on the environment and society, and striving to follow the holistic approach to business with the triple bottom line thinking or the three dimensions of sustainability: economic, environmental and social aspects of the company. Sony Ericsson is one of the top, global, mobile phone manufacturers which serve the worldwide communications market with innovative and feature-rich mobile technology. (www.sonyericsson.com)
1.1 PRODUCT BACKGROUND
Sony Ericsson XPERIA is a GSM 850 / 900 / 1800 / 1900 phone, with the capabilities of 3G HSDPA 900 / 1900 / 2100, HSDPA 850 / 1900 / 2100 – XPERIA X2a. It has different features like: TFT resistive touch screen, 65K colors, Full QWERTY keyboard, Optical track pad, XPERIA panel user interface, and Accelerometer sensor.
Memory: 110 MB storage, 256 MB RAM 512 MB ROM, microSD (TransFlash) up to 16GB
Data Transfer and Connectivity: GPRS, HSCSD, EDGE, 3G, WLAN(Wi-Fi 802.11b/g, DLNA), Bluetooth, USB.
Camera: 8 MP, 3264×2448 pixels, autofocus, LED flash, Touch focus, geo-tagging, face detection, image stabilizer, smart contrast, WVGA@30fps.
Other Features include: Microsoft Windows Mobile 6.5 Professional, Qualcomm MSM 7200 528 MHz processor, SMS (threaded view), MMS, Email, Push email, IM, WAP 2.0/HTML (IE), RSS feeds, MP3/WAV/eAAC+/WMA player, TV Out, YouTube application, Pocket Office (Word, Excel, PowerPoint, OneNote, PDF viewer), Picture editor/blogging.(www.gsmarena.com)
1.2 THE OBJECTIVE
We are faced with the choice of PC and the multifunctional mobile phone which can be used on the go. Technology has evolved exponentially leaving us with a huge appetite for more, because
2.0 SITUATIONAL ANALYSIS
The complexity of the macro-environment can be scrutinized using a technique known as PEST analysis which will aim to list all the macro-environmental factors impacting upon an organization. (Pergamon Flexible Learning, 2005)
- Taxation is something that governments put and Sony Ericsson should study this as it is observed in the UK case to anticipate profitability, and pricing strategy.
- Countries are very variable in stability of prices so it is in the UK.
- Economic recession of the past one year has crippled a lot of cooperation, Sony Ericsson must be strategic in their promotions.
- Potentiality of the market is decreasing but it is higher than any others in the Telecom sector.
- Population growth has led to the expansion of the cell phones to meet up with demands.
- People depend more and more on mobile communication everywhere.
- There is educational growth in the world.
- Over the years, cultural perception of the technological devices has become positive.
- Acceptance of imported products in some countries is less if there is a local provider
- There are different social views that may affect product should be considered.
- There is a technological increase in the world.
- Internet level of awareness & usage for individuals & industrial aspect are increasing worldwide
- New technologies in the cell phones are increasing.
- Future plans for technological linkage between cities, universities, colleges, hospitals and other institutes are increasing and can be connected to cell phones
- Level of usage of the E- Technology (online bidding, billing, complaints, blogging etc) is massively high and trendy.
- There are 19260 cell phone producers in the world (http://www.gsmarena.com/makers.php3), but there are more than 15 big companies competing at the world level Market. To mention few:
- The global concern of the Global Warming issue & other pollution effects concerning the packaging material and radiation of the cell phones
- The demand of the international environmental approvals is compulsory.
Cell phones industries are one of the most profitable industries everywhere and the market is increasing
The internal analysis will be looking at our performance, our internal organization and our customers in order to identify our strengths and weaknesses.
Sony Ericsson is committed to continuously improving our impact on the environment and society, and striving to follow the holistic approach to business with the triple bottom line thinking or the three dimensions of sustainability: economic, environmental and social aspects of the company (http://www.sonyericsson.com/cws/corporate/company/sustainability/overview)
This sustainability report is actually a first by any mobile phone maker; they hope to achieve this by improving their manufacturing, products, logistic and supply chain.
Sony Ericsson has recently employed the precautionary principle defined in the United Nations’ Rio Declaration on Environment and Development. Sony Ericsson strictly follows the laws and regulations such as the EU RoHS directive, (the restriction of the use of certain hazardous substances in electrical and electronic equipment) (http://www.rohs.gov.uk/Default.aspx) also having instigated actions against a number of their substances that we consider unwanted in our products for environmental reasons.
Sony Ericsson, in June 2009 also initiated the GreenHeartTM portfolio. This is an innovation to bring you phones that offer you a greener choice. The green innovation is aimed at reducing the overall environmental impact of the phone without compromising on style or features. The GreenHeartTM phones are built on our goal of reducing carbon dioxide emissions across the company by 20% by 2015 in absolute terms. As part of the strategy, Sony Ericsson launched its new GreenHeart products: C901 GreenHeart and Naite, and the MH300 headset. (Datamonitor.com)
Innovative – The Sony Ericsson XPERIA has an innovative TFT resistive touch screen. It also has many functions of other mobile products all in one device.
Compatibility -The phone will work with any mobile network software which means limitless potential for upgradeability.
Ease-of-Use – The all-new TFT resistive touch screen interface recognizes multi-finger gestures, just as the human hand normally behaves.
Brand awareness – Sony Ericsson is well known for cool essential gadgets like PDAs Music and Video phones along great technological innovations.
Price – Sony Ericsson XPERIA would be sold at a reasonable price for its value.
Quality – Scratch resistant screen – durable and light metallic finish – software suite resistance to computer viruses.
Increasing demand and expansion to a new target segment –
As technology advances and smart phones get cheaper Sony Ericsson will attract consumers and get ordinary Mp3 player users to upgrade to a Sony Ericsson XPERIA
Upgradeable – Sony Ericsson XPERIA software allows new exciting features to be brought in which take advantage of the touch screen ability. Future versions will also be hardware upgradeable.
Partnerships – Sony Ericsson can collaborate with many powerful global mobile phone companies to flood the market with Sony Ericsson XPERIA, which reduces costs in marketing and increases revenue through long-term agreement deals.
Image – The Sony Ericsson brand is not targeted towards business people and does not have a reputation as being compatible with the corporate world.
Price – Sony Ericsson does not yet offer lower priced models for more cost conscious consumers.
User Interface – Touch screen interfaces suffer from the problem of “gorilla arm”
Gorilla arm is a side-effect that humans face when using touch screens for long times as humans are not built to hold their arms at waist or head-height, making small and precise motions. After a short period of time, cramp may begin to set in, and arm movement becomes painful and clumsy. This is now considered a classic cautionary tale to human-factors designers.
Increased competition – Smart phones are easier to make now more than ever. More companies may enter the market, and competitors or even Sony Ericsson contractors can maneuver around patents to create similar devices. An example is the imitation of various brand products in the Chinese market, which offers more options and features at cheaper prices.
Downward pricing pressure – The Sony Ericsson XPERIA is marketed as a high-end phone, but phone prices are almost certainly going to fall when other companies undercut the price of Sony Ericsson XPERIA.
Difficulty expanding into Asian market – There is less hype and interest in Asia since smart phones are better known and already widely used.
Competition (Blackberry) – Blackberry has the longest history in PDA market after Palm and has experience-developing software for mobile devices. It is also a well-known brand for business people. Existing software is well established and compatible with many products for this market. The market is familiar with Blackberry products; significant switching costs are involved in going to a Sony Ericsson XPERIA. Blackberry can add many similar capabilities to their products that match the Sony Ericsson XPERIA and expand to a wider market through lower cost and higher-power products.
- Set an aggressive buy achievable objective for the first few months of market:
- First-2months Objectives – We are aiming for a 2 percent share of the U.K. PDA/Phone market through unit sales volume of 500,000.
- First-year Objectives – are to achieve a 10 percent share based on sales.
- Extend on the Sony Ericsson brand name and link to the established meaningful positioning.
- Extend on Sony Ericsson image of innovation, quality, and value.
- Measure the awareness and response in order to make adjustments to the marketing campaigns as necessary.
- Differentiate the Sony Ericsson XPERIA from other PDA’s on the market.
- Primary customer targets are the middle-upper income professional to coordinate their busy schedules and communicate with colleagues, friends and family.
- Secondary consumer targets are high school, college and graduate students who need one portable multifunction device.
- Large enterprise software firms where information is critical to the end user.
- Secondary business target is mid-to mid-size corporations that want to help managers and employees stay in communication or access critical data on the go.
- Market segment will consist of companies with £? million in annual sales.
- Using product differentiation, positioning the Sony Ericsson XPERIA as the versatile, convenient, value-added device for personal and professional use.
- Focus on the convenience of having one device for communication, but also music, pictures, and video, and full Internet access.
- The Sony Ericsson XPERIA will be promoted as both professional and hip
Marketing Mix Strategy
- Full year warranty along with an optional three-year Sony Ericsson Care warranty
- Same taste as all other Sony Ericsson products
- Launching a cheaper version after 6months of release with less advanced features along with a more advanced version for professional use
- Adding the following features to the Sony Ericsson XPERIA (large disk storage capacity, lower weight, thinner device, long battery life, 4G wireless, GPS and improved camera)
Marketing Mix Strategy
- Set the base model at a cheap price of £
- A more advanced model for £
- Special limited edition Sony Ericsson XPERIA (advanced version for professional use) for special prices
- Generally lower our prices to ensure we establish market dominance in as short of time as possible
Marketing Mix Strategy
- Massive rollout worldwide at all reputable major retailers
- Massive rollout Online, Showrooms and in all cell phone providers
- All Sony Ericsson Stores, the Sony Ericsson website will dedicate themselves to the
Sony Ericsson XPERIA
- Eye catching displays will be found at all physical stores featuring the Sony Ericsson XPERIA to make the product stand out from the pack
- Sony Ericsson Stores will have the Sony Ericsson XPERIA on display a full month before its worldwide release
Free DIY tutorials/ application installed to ease users operating problems
- Integrate Sony Ericsson XPERIA message of revolutionary communications and audio/visual experience together in all media advertisements.
- Differentiate the Sony Ericsson XPERIA against others is the innovative TFT touch screen functionality
- Emphasize Sony Ericsson brand prominently and associate the XPERIA with the Sony Ericsson Xpress music phone lineage
- Original but tasteful advertisements at the same time
- A massive TV campaign is planned before launching the Sony Ericsson XPERIA featuring a soon to be legendary ad to be the talk of the country
- Advertising will be appearing on a regular basis to maintain general public awareness using the target market’s various accessible media such as social networking sites e.g. Facebook.
- Four age groups will be targeted: 15-20 years, 20-25 years, 25-45 years, and 45 years and up
- High School and College aged people will demonstrate social uses
- The 25-45 years group will be used to determine business application and social/personal use
- The 45 years and above will give us a plan to market to more senior well-refined group
- This research will be done through surveys (via email campaign through portals such as, Facebook and other on-line application developed for the Sony Ericsson XPERIA) and interviews (in Sony Ericsson stores) with the same age groups listed before
- To bring the XPERIA to the front of the business world, it is important to research different ways to grow the 15-25 year old group into business uses of the product
- Brand awareness will be an important tool in taking the Apple brand from “social cool” to “business cool”.
- We will ask for feedback on Sony Ericsson XPERIA features, and implement those changes most important to the end user in the next generation Sony Ericsson XPERIA
- We will allow users themselves to design their own ideal Sony Ericsson XPERIA online and use any useful ideas to further refine future Sony Ericsson XPERIA models
- We will continuously scour the Sony Ericsson fan websites to understand what the Sony Ericsson faithful are saying, as they are our best customers.
- workers £ incentive pay for every non reject phone they produce
- £ per phone six sigma quality program
- each worker £ each year for best practice training
Use control measures to closely monitor quality and customer service satisfaction consumers can contact the main headquarters about any possible technical problems – by using Sony Ericsson Customer Service Bar and a customer service phone number stored in the phone book.
In case of slow sales
- Offer Sony Ericsson XPERIA to customers who have purchased or used other Sony Ericsson products £ per phone six sigma quality program, which will lead to:
- demonstrate the product for consumers, it will promote synergy and lure buyers.
- develop deep relationships with two very different segments: those who have it and those who aspire
- Our break-even analysis assumes wholesale revenue of £ per unit variable cost of £ per unit and estimated fixed cost of £. Based on these assumptions the break-even calculation is £ divided by £ minus £ equals 200,000 units sold.
- Break-even calculations indicate that Sony Ericsson will become profitable after the sales volume exceeds 200,000. After the first year Sony Ericsson will make a profit of £ minus £ in fixed costs.
- Recommended price is £. The markup is 40 percent.
- It is predicted that sales volume will increase at least 60 percent from this change; this will decrease the impact of fixed costs and improve opportunities to increase our production scale, which will further improve profits in the long run
To plan further marketing strategy, meeting monthly with the board of Sony Ericsson, present our information, and make a proposal for continued marketing efforts. Before each meeting with the board, feedbacks from every sales executive person will be presenting their own proposal based on the information they have learnt. After the initial proposals, we will vote on the best one or come to a compromise. The final proposal sent before Sony Ericsson is the result of our feedbacks.
(All phone properties and specimen model, comparison with other phones, users view and feedbacks)
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