Sony Ericsson case

        Ever since the Japanese electronics company Sony and the Swedish telecom giant Ericsson came together to form Sony Ericsson, big things were expected in terms of technologically advanced wireless phones as well as improved sales and market shares.  However, the first year passed with a lot of disappointment.  Sony Ericsson’s already low market shares began to drop rapidly and the company was losing money.  On the other hand, the much anticipated Sony Ericsson T68i phone was introduced and was a major hit.  It was the first GSM/GPRS (global system for mobile communications/general packet radio service) color screen handset.  Its Bluetooth technology was also the first of its kind, allowing wireless connections to headsets and PC synchronization.  One of the accessories included a snap-on digital camera, which has become quite popular and a must for all new models.  In the past year, Sony Ericsson has seen a revival in the company as they continue to introduce new revolutionary devices such as the P800 and T610 and set new standards.  All this success has contributed to an increase in market shares and has pushed them back into the top five in cell phone manufacturers.  In order to continue this success, a new IMC plan is needed.  The first step will be to analyze the marketing situation and conducting a SWOT analysis.

Situation analysis

External factors:

Consumer behaviour analysis - Buyers tend to be wealthier individuals who are willing to pay more for a better phone.  They have higher expectations than those who are first time buyers.  Sony Ericsson is creating new ways to use multimedia communications, which creates new business opportunities.  Christmas time is usually when sales volumes increase.

Economic trends - According to IDC's Worldwide Handset QView, worldwide handset shipments grew by 19.2% year-over-year in 2Q03 and increased sequentially by 6.7% to 118.3 million units despite world economic uncertainty, the treat of SARS and terrorism.

Market analysis:  Currently the market size for cell phone users in Canada is C$7-billion in 2002 and will grow to C$10.8-billion in 2007.  While in the United States over the next five years the cell phone market will reach US$133 billion.  Currently the market segment for cell phones are, regular cell phone users, colour screen cell phone users, and a new market of cell phone gamers.  

Product analysis:  Market share are at 5.7% currently #5 behind Nokia, Motorola, Samsung and Siemens.  Units shipped in the quarter reached 6.7 million, which is 34% higher year-on-year and 23% higher compared to the first quarter 2003. Net sales for the quarter were Euro 1.125 million, representing year-on-year and sequential increases of 18% and 40%, respectively.

Competitive analysis:

Direct competitors - Nokia, Motorola, Samsung, Siemens

Indirect competitors – walkie-talkies, instant messaging, pagers, PDA’s

SWOT analysis

Strengths: The strengths of this company include its relationships in Japan (Sony) and Europe (Ericsson).  Sony also provides expertise in the consumer electronics field while Ericsson supplies their knowledge in telecommunications.  The handheld devices that they make are the best with all the latest features.  They are currently working on G3 (Third Generation) phones.  Many of the latest Sony Ericsson models have appeared in hit movies because of their stylish designs thus giving it extra exposure.  All of their models are GSM world phones, which can be used all over the world.  There is also a wide selection of accessories that can be used with their phones.

Weaknesses: The costs of most Sony Ericsson phones are quite costly but the phones are classier compared to the Nokia brand.  This issue does not help considering they have very little market shares when compared to the leader Nokia.  While most people are impressed with the design and advanced phones, many have no use for a built-in digital camera and prefer a simpler phone.

Opportunities: Sony Ericsson like all wireless manufacturers is trying to create “Smart phones” which combined the wireless device with the features of a PDA.  This makes it easier for people to stay connected.  In addition, they are trying to extend their Bluetooth technology to other devices such as cars and other electronics since everyone is demanding to be free of wires.  Sony Ericsson is also trying to use Sony’s expertise in gaming to enhanced gaming experience on cell phones.

Threats: Walkie-talkies are becoming more and more popular since it can be used in surprisingly long ranges.  Bell/Telus mobility is a direct threat with their new version of walkie-talkie called the ‘Mike Network’ (can be dubbed as a phone and a walkie-talkie) with an increasing demand in the construction scene to stay connected in more ways than one.

        Segmentation Strategy

        Our segmentation strategy will consist of Geographic, Demographic, Psychographic, and Benefit segmentation.  We plan to use these segmentation’s because it offers us the greatest exposure and it successfully meets the needs of these individuals.  From where you live to how you live to what you want out of a cellular life.  These individuals that fall into this category are existing cell phone users that we will try to take away with our IMC plan as well as new users to the industry that would like or require a cell phone for their daily lives.

Geographic segmentation because Sony Ericsson is a world phone and is used in Canada, United States of America as well as Europe.  These are the largest markets for cell phone users and this is why we will be targeting them.

Demographic segmentation because we will target individuals aged 18 – 40 with a source of income that can cover the cost of this pricy phone and the plan that comes with it for the succeeding months.  The people that fall into this category are the prime consumers of cell phone users.  People that want to stay in touch with their friends and business people that need to stay in touch with their customers or business associates while traveling the world.

Psychographic segmentation because of the lifestyle that these individuals lead, the individual will have an outgoing personality with a hectic lifestyle that wants to keep in touch with family members, friends and/or clients.  Almost everyone now has a cell phone in their pocket.

Benefit segmentation because consumers are trying to satisfy particular needs or wants.  For the younger generation they are trying to satisfy the need for social acceptance, and have increasingly become a cultural norm to have a cell phone in today’s society.  For the older generation it will satisfy the need of staying in touch with their loved ones.  It will also satisfy their need to stay in touch with the business world with the always on the go lifestyle with it being a world phone.  A third benefit is for the ‘techies’ that want the newest technology first, with the first colour cell phone and the first photographic cell phone.


        We will position our product ‘Sony Ericsson Cell Phones’ by price/quality.  Our positioning statement will be ‘stay in colour’.  This positioning suits us because Sony Ericsson is a high end phone that is well priced but has great quality.  They are the fifth largest handset firm in the world with innovative ideas.  One idea is the colour phone; Sony Ericsson developed one of the first colour phones and also was one of the first to add a camera to their phone.  Our positioning statement ‘stay in colour’ makes us seem hip and new looking for those core users of the technology sector that are heavy into new and exciting technology and must have it first.  While all the other cell phone users are stuck in the past era of dull and boring black and white cell phones.  These cell phones are farther advanced than the rest because you can surf the internet, play fun games, and even take pictures in colour.  

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Communication Objectives

        Target Audience - Our target audience will be teenagers and young adults ages 15-35 that like the Sony Ericsson style and design and for those young entrepreneurs and business people who requires our technology to be successful.  We classify this group as the brand loyal customers and other brand switchers.  We feel that the majority of the customers are repeat purchasers and will continue to purchase the Sony Ericsson brand because they appreciate the quality and style of our selection of mobile phones.  We will also target other brand switchers because we want to communicate ...

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