Introduction To Global Marketing
According to Dunning and Lundan, (2008), global marketing is when an organisation views all their markets as one and when their decisions are not limited by the borders. In the present era of globalisation, marketing in the global economy plays a vital role for every organisation in order to sustain in the international markets and for capturing a good market share in the global economy as well.
In this report, a study has been done on the global marketing of the Sony Mobile Corporation (SMC), a multinational company which is engaged in the manufacturing of the mobile phones. Further, the competitive advantage and the strategies for SMC to achieve the competitive advantage have also been discussed in this report.
Economic environment of SMC
For the purpose of understanding the economic environment of the SMC, PESTLE analysis of the firm can be conducted. It includes the following:
Political factors: SMC is allowed for being independent in each nation in which it operates because of the deregulated markets like other mobile firms.
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Economic factors: The increasing young population and the increased amount of disposable money have resulted in numerous choices to the people (Grossman and Helpman, 2002). Thus, they strive for more features at a low price. Besides this, the instability of the firm can also result in some issues which can further have huge drawbacks for the firm.
Social factors: By providing the most attractive and innovative mobile phones in the industry, the firm makes an attempt to improve the lifestyle of the people. It fulfils the set mission through providing entertainment with the communication. But, the popularisation of the play station has become a matter of concern for the health of the people (Thompson and et.al., 2008).
Technological factors: The cited firm has been successfully achieving the technological advancements such as touch screen, resolution cameras, etc.
Legal factors: SMC has reserved copyrights for overcoming the privacy.
Environmental factors: The products of SMC have a global declaration. It also ensures recycling of products in eco-friendly way (Ioana, Mirea and Bălescu, 2009).
Marketing analysis of SMC
Product: The products of SMC include accessories and mobile phones. The range of SMC's accessories and mobile phones are a class apart from that of the competitors. Its products are designed as per the range of customers and their usage. There are several types of phones which are offered by the firm like, text & talk phones, camera phones, music phones, designer phones, email & web phones (Marketing Mix Sony Ericson, 2015). Besides this, it also provides different accessories to the customers like, music, imaging, cases, cover, power & connectivity, hands-free/Bluetooth, etc. When the mobile phones were launched initially by SMC, it became very popular because of its innovative and unique features. But now, it has received many criticisms because of the stability issues. Also, customers don’t feel satisfied with the SMC products and as a result, some SMC products are on a declining stage.
Prices: The phones are in such manner that there are designs for various budgets. The firm targets customers ranging to high end customers to low end customers (Achrol and Kotler, 2001). The pricing of the phones starts from Rs.1, 700 to Rs.40, 000 and more. Thus, SMC should focus mainly on the pricing policy. The distributors need to be issued with a retail price and strict controlling should be done to make sure that the brand does not get diluted by selling same products at different prices.
Place: The distribution method which is adopted by the firm is the one channel distribution method, i.e., customers can purchase the products from the retailers recognised by the SMC and these retailers purchase the products from the firm itself. Thus, one of the most essential decisions is selecting the best distribution channel across the world for the purpose of getting popular among the customers.
Promotion: promotional activities are mainly performed through advertising. Brand ambassadors of the firm include several tennis stars like Maria Sharapova, actors and pop stars in various nations. The firm has also adopted methods of promoting sales through offering free gifts or using scratch cards (Oliva, Day and MacMillan, 2000). Thus, the product needs to be promoted in such manner that it makes a positive impression in the mind of the customers. Digital media can also be used for promoting the products through advertisements. The products can also be promoted through some events such as youth oriented programs in order to target the teenagers.
Where we want to be? (Competitive position in 3 years' time)
Porter's generic model
SMC can attain competitive advantage by differentiating its services and products from the competitors and through low cost as well. It can target its product through broad target by covering a large market share, or by focusing on a narrow target in the market (Srdjevic, Bajcetic and Srdjevic, 2012).
Cost leadership: The firms that try to become the lowest cost producer in the industry are referred to as adopting the cost leadership strategy. The firm with the lowest cost can earn higher profits in the cases when the products of competitive firms are differentiated and are being sold at a standard market price (Lusch, Vargo and Malter, 2006). The prices for the products offered by SMC are quite high as compared to the competitors. So, it can reduce its price so that more customers can afford the products of the SMC and can thus create a cost leadership.
Differentiation: When a firm differentiates the products, it becomes capable of charging a premium price for the services or products in the market. Adopting this strategy can result in some extra costs to the company. SMC has already developed a good brand image for its products and services and people purchase its products because of its high quality and features. But, it has less innovation and technological advancements as compared to the competitors, so, it needs to pay focus on that. Innovation and technological advancement would enable the firm to differentiate its product and will help in providing better and innovative products and services as compared to the rivals (Jackson, Joshi and Erhardt, 2003).
Focus: Companies can adopt the focus strategy by emphasizing on a particular niche in the market and providing specialized niche for that niche. It is very essential in attaining the competitive advantage. This strategy will help SMC in charging premium prices for the premium products and reasonable prices for other products. This will assist SMC in gaining competitive advantage over other firms (Manchanda, Rossi and Chintagunta, 2004). Thus, the primary focus of SMC should be resolving the stability issue and pricing it reasonably.
It is a four celled matrix which was developed by the Boston Consulting Group, USA. It is a renowned tool for analysing the corporate portfolio. It offers a graphic representation for the firm for examining various businesses in the portfolio on the basis of the industry growth rates and their relative market share (Dunning and Lundan, 2008). It is also referred as the comparative analysis of the evaluation of the environment and the business potential.
Star: Star product depicts that cash is being generated in the business and is leading the business with high profits and powerful market share as well. The growth rate in this is also very high. But, SMC is no longer a star as it is declining. It was also not accepted by the people because of the different issues that it had with the stability. Thus, for being a star, SMC should increase marketing of the innovative and advanced products and services towards the customers with new and latest technologies.
Question mark: It depicts the worst cash characteristics of the firm. The demand for the products is high, but, due the low market share, the return of the products also becomes low. Presently, financial investment is required for rejuvenating the Sony Ericsson W910i. SMC also need to take corrective steps for bringing W910i out from the declining stage (Grossman and Helpman, 2002). This will help the company in gaining even more customers and a larger market share as well.
Cash cow: This product depicts that market share and profits are high, but, the growth is quite low. When SMC launched the w980 phone, the market growth was very low at that time. So, this phone generated more cash as compared to other firms at that time. This helped SMC in positioning itself as the market leader in music as it provided 8 GB memory card in the phones. Some SMC products like W910i did not make adequate profits and became unsuccessful in establishing an image in the market. SMC is a leader in the markets of mobile phones with a very good stand in the market. Thus, for making W910i a cash cow, it should take proper decisions.
Dog: It depicts that the product has become dog in the market due to its low growth and low market share. Some SMC products like W910i are a part of this category as neither is they incurring losses nor they are producing losses. Because of the slow growth rate, the market share of these SMC products is quite low (Manchanda, Rossi and Chintagunta, 2004).
The SMC products can divert to cash cow from the dog if adequate amount is invested in their promotion with additional functions and added features. Also, if proper finance is invested in keeping the proper stand of SMC in the market, the firm can also move to the question mark slot. Good marketing research and decision making skills can help the company in being a star.
How do we get there? (Recommendations)
It is a strategic planning tool which provides a framework for helping senior managers, marketers and executives for devising strategies for the future growth. This model provides a company with five strategic business options, viz.
Market penetration: It is the least risky strategy as it leverages many capabilities and existing resources of the firm. Maintaining the market share in a growing market will result in growth and there can be some opportunities for increasing the market share if the competitors reach at the capacity limits.
Product development: This strategy is appropriate if the strengths of the company are related to the particular customers rather than the particular product itself. In this situation, the leverage can be strengthened through developing a new product which is targeted to the existing customers. Just like the new market development, new product development also involves more risk as compared to the risk involved in increasing the market share. According to this strategy, SMC can develop new and innovative products with advanced features that can be launched in the existing markets.
Market development: Developing new market for the products can be a can be a good strategy if the core competencies of SMC are related more to the particular product than to the experience with a particular market segment. As the firm expands into new markets, this strategy involves more risk as compared to the market penetration strategy (Watts, Cope and Hulme, 2001). SMC can enter into the untapped markets and can increase its geographical existence by introducing its products in the new markets. This will help the firm in gaining higher market share.
Diversification: It is the most risky strategy among the four strategies as it requires product as well as market development that may be outside the firm's core competencies. It helps in gaining a good market share in the industry and in sustaining the competitive markets as well. Diversifying the products will help in differentiating the products with that of the competitors. The firm can adopt this strategy by developing new, advanced and innovative products as per the needs and demands of the customers and can launch them in the new and untapped markets.
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Consolidation: In this strategy, the firm withdraws its products from certain markets and scale back on the operations and concentrates on the existing products in the existing markets.
Besides this, in order to achieve be a leader in the mobile market and for gaining high profits and market share, SMC is also recommended for the following:
- It need to focus on controlling and establishing the distribution channels and should build better relations with the operators of mobile networks.
- It needs to consider ion providing better customer services in order to provide customer satisfaction.
- SMC should also increase its product area by introducing products at low prices with a simpler feature product line that can compete with the low-end mobile phone manufacturers in the industry. This will also help the firm in gaining huge market share.
- In order to discover huge profit margins, SMC should focus on the optimum use of the research and development department and should not delay for the technology adaptation and price cutting for the purpose of meeting the needs of the customers. This will also help in reducing the dependency of the company (Srdjevic, Bajcetic and Srdjevic, 2012).
- SMC needs to reduce its prices due to the competitive advantage from the rival firms.
It can also provide services like insurance and warranty for attracting the customers and can provide after sale services to the customers for differentiating itself and being better from the competitors.
From the above report, it can be concluded that SMC is a leader in the market of mobile phones. But, some of its products are declining in the market as the customers are very selective and select the most popular and the best phone in the market. The growing popularity of the mobile phones of the competitive firms has resulted in a considerable decrease in the charm of the SMC products. Besides this, the high price of the SMC products compels the customers to prefer the phone of rival companies over its own phones. The SWOT analysis and Porter generic model clearly depict that some SMC products are at the declining stage. Thus, in order to attain a good market share and to sustain in the market, SMC needs to come up with innovation and better features with advanced technologies so that more customers can be attracted towards its products.
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