Our pricing strategy which is called market skimming will also affect our price; because this type of pricing involves pricing a product at the highest possible price Sony Ericsson will have to make sure that it is reasonable enough for customers to go and buy the CyberWatch.
Packaging
Many customers find that packaging on a product is important, for example a customer wouldn’t to have cheap packaging on an expensive product.
Some customers would want to have recyclable packaging on product; this isn’t a bad idea using recyclable material as using it will give Sony Ericsson a good publicity because they are eco friendly and are caring for the environment; this will help create a good picture of both the CyberWatch and Sony Ericsson.
Having good packaging on the product will help Sony Ericsson convince their customers that they have meet their objective of providing quality products as they have packed their product in an expensive type of packaging material.
Meeting Customer Needs
What respondents wanted was internal memory to come with the phone as buying external memory cards from retailers isn’t convenient; also memory cards are usually five pounds and before buying a memory card a customer has to make sure that it is compatible with the device. This customer need will easily be tended as all Sony Ericsson has to do is increase the memory that comes with CyberWatch.
Also I realise from my research that two colours was highly chosen, they were luminous green and quicksilver black. This need is more difficult to tend but a way to get around this to sell the CyberWatch in velvet blue as the default; if customers want the quick silver black or the luminous green CyberWatch they will have to pay more.
It is very important for Sony Ericsson to meet their customer needs as not meeting them will result in customers abandoning Sony Ericsson as there is no point in buying it; to stop this from happening Sony Ericsson most find out what their target market’s needs are as this way they will be able to cover them.
Competitors
Although there isn’t a similar product like the CyberWatch in the market, it is very likely that Sony Ericcson’s competitors like Nokia who are market leaders will launch products to compete with the CyberWatch. Because there isn’t anything out in the market like the CyberWatch since its concept is a new one, it will take a while for anything like this to launch by competitors. Because Sony Ericsson doesn’t have any products like the CyberWatch it means that existing functions like the Cyber Shot which is in Sony Ericsson’s phones will be supporting the CyberWatch as the CyberWatch will be carrying a much stronger camera.
Competition will not affect the performance of the CyberWatch early on as it is something new and innovating; with the right promotion it will be hard for existing or new products to compete with it.
Life Cycle
The life cycle of this product would not be long as technology is moving on items will quickly go out of date as new items appear which are faster better and cheaper.
To make sure that the CyberWatch doesn’t die out Sony Ericssson can make products which are successors to the CyberWatch; this would make sure that the product wouldn’t die out and hence the sales would continue.
A way Sony Ericsson can expand the CyberWatch’s life cycle is to make it appealing to customers, one way they could do this is by lowering its price; however Sony Ericsson cannot do this as one of the market strategies which is being used to sell the CyberWatch is market skimming as this is used for products with short life cycles and also it involves pricing the product at a high price.
Sony Ericsson portfolio
Sony and Ericsson have a wide range of products and when in their respectable businesses they have different interest.
Sony-
Audio
Video
Television
Entertainment
Ericsson
Broadband
Mobile Networks
As you can see Sony and Ericsson when in their respectable businesses they produce completely different products. This is why they merged; with Sony’s technology and Ericsson’s knowledge on mobile networks they produced mobile phones. The CyberWatch is something which Sony Ericsson hasn’t created yet but it is something original; this is good as there will be little risk of cannibalisation which means that products will be competing for the same customers; cannibalisation has a negative impact on the product as it means that Sony Ericsson won’t be expanding since they are not competing for new customers but their existing customers, this would mean that Sony Ericsson would fall short of their objective which is to gain a higher market share than their rivals.
Making the product will have a big impact on the Sony Ericsson and also it will be stretched to its limits as first off all Sony Ericsson’s supplier off pon chips has had a shortage because a fire had contaminated the sterile facility. Nokia has already begun getting their parts from other sources but Sony Ericsson is held up; this could delay and hold up the launch of the CyberWatch. Most respondents wanted to have recyclable packaging on their CyberWatch; this may be a problem as recyclable material is expensive and this will drive up the cost.
Functional
Research and Development
Research and Development should carry out research to make sure that the CyberWatch doesn’t end up to be a big flop; for example the K800i which is produced by Sony Ericsson caused disappointment as it had start up failures and also it had data corruption, this can be stopped by the R&D team by making sure that the CyberWatch doesn’t have any defections, for example for each hundred CyberWatches that are made they can test one.
Finance
Finance will need to create a cashflow forecast for Sony Ericsson; this will be useful as Sony Ericsson will be able to see whether they need a loan from their bank or not.
Finance should also create a profit and loss account as this will show whether the product is actually making profit or not, this will help ultimately decide whether the product is making a loss or a profit.
Sony Ericsson should also make a break-even chart as this will show how many CyberWatch products that will need to be sold in order to break even; Break even is the point or level of financial activity at which expenditure equals income or the value of an investment equals its cost, with the result that there is neither a profit nor a loss.
Marketing
Marketing will be playing an important role for the CyberWatch as it depends on them how much Sony Ericsson makes on the CyberWatch. To make sure that the CyberWatch’s sales flourish, marketing must carry out extensive promotion as this will increase customer awareness.
Human Resources
There will be a big strain on Human Resources as they will need to employ more workers to work for Sony Ericsson; HR must also make sure that the people employed are right for the job and to do this they will need to interview them and process them to make sure that they suit the jobs available. Also because of the increased workload Human Resources will need to make sure that they are following laws otherwise they can be fined by the law which would give them bad publicity and therefore may decrease their sales. They should also be making sure that their workers are happy and that nothing wrong is being made against them as the workers can contact their Trade Unions who may organise a strike which would have a knock on effect on Sony Ericsson as they will not be able to produce the CyberWatch.
Operations
Operations will need to make sure that suppliers have enough supplies to keep them going; it is also wise for operations to have more than one supplier just in case one of them was to have a shortage or even have a fire. Operations should also make sure that they are producing enough products to meet demands otherwise customers will get disappointed when they are told by their retailers that there are no CyberWatches in stock.
SWOT
Strength- Sony Ericsson’s sales greatly been increasing due to the launch of the Walkman series and the Cyber shot series. The cyber shot series was huge success for Sony Ericsson because unlike the walkman series it had a good camera and a good media package whereas the walkman series had a poor camera and good media package. Sony Ericsson has stopped Nokia from buying Symbian ltd and instead they have bought it.
Sony Ericsson has become the world leaders in imaging and they are also the fourth largest phone manufacturer.
Because of the success of previous
Weakness
Sony Ericsson sources their chips from one supplier; this has caused them problems has the supplier had a shortage and Sony Ericsson was forced to hold up both production of current models and newer models which were going to be launched.
Opportunity
There is still a lot of room for Sony Ericsson to catch up with Market Leaders; a new product which Sony Ericsson can launch is a smart phone which most other phone manufacturers are creating.
Threat
Sony Ericsson announced a profit warning in 2008 which created fears that it is on the verge decline along with Motorola.
Nokia is the market leader and therefore it means they are a real threat to Sony Ericsson’s sales.
The presence of Nokia will affect the chances of success which Sony Ericsson has because Nokia wants to attract the same customers which Sony Ericsson wants to attract; Nokia also has an advantage over Sony Ericsson because it is the market leader it will mean that it will have more sales and also a better reputation among customers so for Sony Ericsson to compete with Nokia it needs to entice the target market.
Conclusion
Surveys reveal that in terms of ownership in compact camera is by far the most common camera in use in the market. However, while compact cameras remain the most popular format for ownership, the percentage of respondents owning such a camera has fallen significantly between 1997 and 2001 by 4.3%. It is clear from this that compact cameras, while remaining popular, are under threat from other formats, notably the disposable format, as well as the APS camera and the digital camera.
Those with families have much higher levels of ownership for all formats than those without families. This reinforces views expressed in the market Drivers section, that cameras are important to families in recording life stage events. Yet, despite this, single persons, as opposed to those married or living as married, are more likely to own a disposable SUC. While this contradicts data placing high levels of ownership among families, it is no doubt linked with high ownership rates for those in the 15-34 age band, more of whom are likely to be single than other groups. Additionally this age group is more likely to be attending social events where disposable cameras are ideal, such as parties and nightclubs.
A forecast by Mintel reveals that expenditure on cameras will show relatively healthy year on year growth, with the market increasing by 33% to 2006 at current prices. Due to price deflation in the leisure goods sector (which includes cameras), in real terms there will be higher growth of 45%. Volume sales will increase faster than value sales and by 2006 over 27 million cameras will be purchased, which represents an increase of 61% on 2002. The average price paid for camera will fall from £31.27 in 2002 to £25.76 in 2006, largely due to the increasing popularity of low-cost SUCs.
Aside from some consumers preferring a camera that is relatively uncomplicated to use, three other views are widely held. These are first that a sizeable number of owners of cameras (20%) only use them for special occasions such as weddings or holidays. Second, that 19% prefer auto focus models and third 17% use their camera throughout the year. The fact that a fifth of camera owners use their camera only for special occasions is perhaps not surprising, given the importance of holidays and special occasions.
From 1999-2001, UK retailers made £497.0 million; Multiple/department stores made the most profit with their profit at £208.7 million and also having around 44% of the market shares.
CTNs and grocery multiples are one of the larger emerging outlets in this market. Much of their growth has been on the back of the compact camera, APS units and SUCs. They were estimated to hold %4 of retail sales in 2001, equivalent to £20.8 million.
The internet has seen strong growth since 1999, taking %3 of sales in 2001. Significant impact has been made as a result of the growth of internet sites and improvements in the range of cameras on offer. Further growth is likely from this sector in the long term.
This market proposal is possible to accomplish as Sony Ericsson has the technology to make the CyberWatch; the only difficulty for the product is for the product to catch on as there are no similar products on the market, this means that customers think that they have no use of it. This can be overcome by making sure that good advertisement is made so the market target can see that having this product would benefit them.
