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Cardiff Business School

COURSEWORK COVER SHEET 2015/2016

Section 1 (to be completed by the student)

Student Number: 1305975- WASIMKHAN MANJI
Module Code: BS3725
Module Title: Advertising and Marketing

Coursework Title:
IMC CAMPAIGN

Submission Date
date: 03.11.2016
5/2/2016 document last (Updated Lecturer: Dr. Amanda Spry
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Number of words: 2650

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1305975 Advertising and Marketing BS3725

Integrated Marketing Communications

campaign – Sony Handset Division

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Executive Summary
The Sony Xperia range is a smartphone with cutting edge technology from a well -
known brand, however the handset has suffered intense competition in the worldwide
smartphone market and has only been able to capture a 3.1% market share (Weiss, T.
2015). Through the proposed IMC campaign, the Xperia range will see increased
market penetration and the capturing of a greater market share (estimated 5%
increase) as consumer brand knowledg e and awareness are increased. Advertising and
sales promotion efforts help capture specific target segments such as the younger
generation who reciprocate promotional efforts through the offering of brand loyalty
towards Sony. The Xperia is targeted at ad ults between the ages of 20 and 45, being
photography lovers and an appreciation for innovation and creativity. The Xperia’s
current brand positioning is functionally based, promoting the products technical
features. The IMC campaign involves additional br and positioning, where the effective
element of the brand are depicted. This elements allows Sony to command a premium
price for the phone as consumers associate the brand with one of the best
smartphones in the world. Through the release of a single cohes ive message across all
advertising platforms, the IMC campaign maximises brand equity and shareholder
value.

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Situation Analysis
The situational analysis section seeks to analyse Sony’s Handset divisions’ internal and
external environment. The section will first present a SWOT analysis, followed by the
consideration of differential advantage and market attractiveness in Sony’s case.

SWOT chart for Sony’s Xperia Range of mobile devices

Strengths Weaknesses

Strong Brand Image Downward revenues in multiple divisions

of the Sony Company
Growth in the world smartphone market
Xperia range currently priced as a mid –
Strong brand presence within emerging range device
economies (e.g. China, India etc.)
Wealth of tools and technology (e.g.
Image sensors, Camera lenses etc.)
Innovative and creative company with an
abundance of resources

Opportunities Threats

New markets where Sony doesn’t have a Continued economic crisis

major presence such as the USA or EU.
Vulnerability
Transferability of resources between
Sony divisions Fluctuations in the Japanese Yen

Late majority and laggard segments of the Impact of the black market
business cycle are yet to begin using Strong competition
smartphones

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An in-depth look at Sony’s SWOT

Sony Corporation designs, develops and manufactures electronics equipment for

consumers, professional and industrial markets worldwide (Bloomberg, 2016). The
company is split into several divisions such as Electronics, Mobile, Game, Movie, Music,
Network, Financial and Professional . The company’s mission statement states that it
seeks to inspire and fulfil curiosity, with a passion for technology and a pur suit for
innovation (Sony, 2016). In terms of strengths, Sony has a powerful brand image , being
a world renowned brand for quality and innovation ranking 58 t h on Interbrands’ ‘Best
Brands of 2015’ list (Interbrand, 2015) . The world smartphone market has gr own by 15%
in 2015 in terms of sales revenue, and further growth allows Sony’s Handset division
scope for development and market share growth (Davidson, L. 2015). Sony have a strong
brand presence in China and India, two of the world’s largest smartphone m arkets.
These markets are projected to grow between 2013 and 2019, offering Sony the
opportunity to capture more market share (See Chart 1).

Chart 1, (Jones, C. 2014)

The company also have access to critical resources for their smartphone division through
the integration of components used in the consumer electronics segment. This
integration allows Sony Xperia mobiles to possess high quality camera optics capable of
shooting in 4K video recording and taking pictures in up to 24 megapixels (The Xperia
Z5 has the world’s best smartphone camera according to Sony). Sony also benefits from
opportunities to grow, through the penetration into new markets where the company
has previously had a low presence. Such markets include the Unite d States, where Apple
dominates with a 41.8% market share (Jones, C. 2014). The smartphone market is not
fully saturated yet in the countries where Sony has a strong presence such as India and
China, as the late majority and laggard segments of consumers a re yet to overcome
scepticism over the use of smartphones. This opportunity is not present in the US
smartphone market, which is greatly saturated and is likely entering a plateau stage
(Blodget, H. 2013). Sony have suffered losses over the last few years, with CEO Hirai
reporting a £1.3 billion loss.

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This coupled with the Japanese firms’ weak market share (See figure 1) in the
smartphone market has forced the company head to forego paying dividends for the
first time since 1958 (Knight, S. and Murai, R. 2 014).

Figure 1 (Jones, C. 2014)

In addition to deep losses, Sony’s Xperia mobile is priced as a mid -range smartphone,
categorically placing it with low cost Chinese manufacturers Xiaomi and Huawei which
dominate China’s smartphone market, collectively owning 31.6% market share (Clover,
C. 2015). The Xperia range needs to be priced as a premium handset, allowing it to
compete with market leaders Apple and Samsung.

Internal Brand analysis

The creation of differential adv antage comes with the marrying of skills and resources
with choice criteria that the customer is looking for in a product. Sony can either
compete on cost (offering same level of benefits of competing products at a lower cost)
or benefit (offering a greater level of benefits as competing products at the same cost)
in order to achieve a sustainable differential advantage. Sony’s mobile division saw a
change in strategy in 2012, as the company head told Reuters that it saw cheaper phones
as the key to differential advantage for the company (Boxall, A. 2013). Through this
decision, the range of Xperia Handsets have offered a similar level of benefits to
customers in comparison with competitors within a similar price bracket such as Xiaomi ,
and have done so at a lower cost. This pricing strategy has brought success for the
company in the past, with Sony coming second in 2013 with a 9.1% market share in the
Indian market, behind Samsung’s staggering 41% share. Although 2013 was promising,
Apple’s re-launch of the iPhone 4 and the emergence of low cost Chinese alternatives
have caused increased pressure for innovation at Sony (XB, 2014). Sony should look to
sell the Xperia handsets at a premium price, allowing it to directly compete with Apple’s
iPhone. A 2015 study showed Sony in tenth position in smartphone market share (3.1%),
behind Xiaomi, LG, Lenovo and several others. For Sony to gain traction with its
customers again, it needs to invent a new technology, such as 5G connectivity or
drastically improved battery life. Competition is severe and according to CEO Totoki, it
will only take one large innovation to change the entire competitive landscape of the
industry, something in which Sony are capable of doing with the resources and capital
at hand (Weiss, T. 2015).

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External Brand analysis

The external macroeconomic environment consists of the opportunities and threats the
company faces, as well as the attractiveness of the market. An analysis of this will be
conducted, followed by an evaluation of the level of competition within the market
(through the use of Porter’s five competitive forces). The world smartphone market
grew by 13% in 2015 with over 340 million shipments, and is expected to grow further
as emerging markets boost sales (IDC, 2016). In terms of c onsumer base, the market is
very large with approximately 114 million American using smartphones in 2012 (Blodget,
H. 2012). Michael Porter stated that competition was not a ‘tug of war’ between
companies, but rather a combination of forces that the compan y faces (Porter, M. 2008).
Sony face a high level of competition in the smartphone industry, as low cost
alternatives produce immense pressures on Sony’s Xperia mobiles. Industry leaders
Samsung and Apple both have an immense following of loyal customers, and it is this
strong brand loyalty that allows these companies to thrive.
Buyer power is moderate, as consumers cannot dictate mobile phone pricing ranges.
However, consumers have access to perfect information through the internet and can
therefore judge products and their respect ive prices based upon hardware and software
capabilities. In this sense, Sony Xperia handsets must have the necessary hardware and
software capabilities of direct competitors, as well as additional features to entice
customers into buying the product. The threat of new entrants into the industry is
moderately high, as low cost Chinese alternatives have been able to capture large
market shares in the worldwide market. However, Sony’s favourable brand image and
customer loyalty helps keep the threat of new en trants fairly low. The Xperia handsets
are priced in line with Huawei and Xiaomi, and hence is categorised as a mi d-range
handset with a direct threat of substitutes. Sony have the resources and expertise to
include cutting edge technology in their Xperia devices, and should look into pricing the
handset as a high-end premium device, being able to compete against Samsung and
Apple. The power of suppliers within the industry is low, with Sony having several
manufacturing plants within Japan. Overall, the sma rtphone market is attractive, and
profitability can be very favourable if Sony is able to capture more market share and
become a force to be reckoned with within this market. Competition is saturated and
most markets (like the USA) are reaching maturation, however emerging markets hold
promise for future cash flow.

Identification of target segments

Market segmentation refers to subdividing the market along some commonalities or
similarities. The purpose of doing so is in the concentration of marketing en ergy in that
segment in order to gain competitive advantage (Thomas, J. 2007). Sony’s current
pricing strategy has been successful in countries such as India, but Sony is losing out on
market share to the industry leaders. Sony has been urged to price its top of the line
handsets as premium devices, and the latest Xperia Z5 premium is Sony’s bold statement
for the world, showing what the company is capable of. The Z5 is the world’s first 4K
smartphone, with a 23 megapixel camera and waterproofing abilities. The phone is
Sony’s first handset to be priced at £600, in line with Apple’s iPhone 6. This new handset
signifies a shift in Sony’s target customer segment, from the average consumer looking
for a capable smartphone at great value to the upper class e ducated segment aged
between 20 and 45 years old (Brunning, R. 2013).
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Profiling Sony’s new target segment

- Upper class
- Ages 20-45
- Photography lover
- Looking for a durable waterproof phone for daily use
- Appreciate premium phone build and design
- Willing to pay over £600 for a smartphone that is capable of handling their day
to day activities.

IMC Objectives
The DAGMAR model was created by Colley in 1961 and measures advertising’s
effectiveness through defining advertising goals and measuring results. In consideration
with both the sales and communications schools of thought, the following objectives
have been considered for Sony’s IMC campaign.
1.) Increase in market share by 5% within 3 years – Sony’s handset division currently
holds 3.1% market share (Weiss, T. 2015), earning the tenth spot in terms of
market share value. Sony must look to increase their market share for the Xperia
range through manipulation of their pricing strategy on premium handsets.
2.) Brand awareness – Increased advertising through ce lebrity endorsements aswell
as football league sponsorships can help get the Xperia mobile onto the global
platform, becoming a serious contender for the market leaders.
3.) Brand loyalty – Within the intense competitive climate of the smartphone market,
brand loyalty ensures sales revenue regardless of tough economic climates. It is
this loyalty that ensures long term survival and Sony must look at ways to
maintain and monetize customers for as long as possible.

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Brand positioning strategy

A brand is an intangible asset that differentiates a product from its competitors
(Whitwell. et al. 2003) and Positioning strategy directly impacts key marketing
objectives such as market share value ( Blankson, C. et al. 2008). Sony currently positions
the Xperia phone as a product of innovation, creativity and imaginatio n (Image 1).

Image 1

The Xperia handset is known for its technical specifications, having a strong functional
positioning.

Current brand positioning statement:

Our unlimited passion for technology, content and services,

and relentless pursuit of innovation, drives us to deliver

ground-breaking new excitement and entertainment in ways that only Sony

can.

Creating unique new cultures and experiences.

Everything we do, is to move you emotionally.

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It is the expressive positioning element of the marketing campaign that requires

adjustment. Sony’s Xperia need to be positioned as the top smartphone of the market,
commanding a premium price. Furthermore, the brands im age can be enhanced through
further exposure in markets where is it not very well known such as Europe and America.
This exposure can be in the form of popular celebrity endorsements and brand
ambassadors. Sony have effectively captured the Indian market t hrough the use of such
tools, with several celebrities such as Amitabh B hachan and Katrina Kaif (Image 2)
effectively carrying the brand and influencing thousands of people through their views
as opinion leaders.

Image 2

Through expressive positioning, the Xperia range needs to be associated high quality
and premium pricing in order to feed hedonic attributes of consumers within the target
segment. The Xperia brand needs to be perceptually mapped onto the desired position
which places the brand in a category of high price and exciting design, appealing to
consumers who appreciate cutting edge technology through a company that invests in
innovation for the future.

Perceptual mapping – Brand positioning

Desired position

Current position

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IMC Mix
Advertising
Advertising is needed to increase sales and hence market share through the creation
of brand awareness amongst key consumer groups. TV advertising is the first form of
media which may be used to creatively depict the Xperia handset as a powerful phone
for camera lovers, music lovers and technology fanatics. TV advertising allows Sony to
vividly demonstrate the Xperia’s key features whi ch competitor products do not
possess, and the advert can be shown during half times of football matches, appealing
to a wide range of potential consumers. In addition to TV advertising, word of mouth
is another important tool which may be used to place th e Xperia handset as a viable
option for young adults looking for a powerful, reliable and beautifully designed phone
that will turn heads within their social circle. Through key opinion leaders, brand
awareness for the Xperia can be increased rapidly. Soci al media has become the most
cost effective method of promotion, allowing adverts to reach millions of consumers
who are directly targeted. Key opinion leaders within the social media community can
have a powerful impact on people’s perceptions of certain products and their will to
purchase. Youtuber’s serve as opinion leaders to a large community of technology
fanatics, and their reviews of the Xperia handsets can directly influence the consumer
decision making process.
Message
In terms of the general message for the IMC campaign, Sony’s Xperia will be depicted
through a unique selling proposition. The phone is the world’s first 4K smartphone,
and with Sony’s image sensors and camera optics it also has one of the best camera’s
ever on a mobile phone. Sony should also utilise sponsorships as a method for creating
additional brand awareness. Sponsoring the Wimbledon tennis or the UEFA Champions
league helps get the Xperia name onto the global scale, and allows consumers to
create secondary brand associations between the sponsor and sponsee.

Sales Promotion
Through the growth of digital marketing, online sales promotion via social media has
the ability to instigate brand loyalty, improve efficiency and reach new customers (Fill,
2013). An online giveaway of fifty Sony Xperia mobile phones via a Facebook and
Twitter promotion can help stimulate rapid sales as new consumers become aware
about the product and gain brand knowledge. This helps create an immediate intere st
in the product and catches the attention of thousands of potential customers.
Customer loyalty drives revenue which in turn instigates increases in market share,
helping Sony capture a larger segment of the highly saturated smartphone market.
According to research, 38% of people have recommended a brand they like or follow
via a social network (Roesler, P. 2014). Through social media, Sony can capture the
minds of the younger generation, full of potential consumers who are ready to be
enticed into using a new brand (Cong, A . 2013). Regular online adverts in conjunction
with giveaways can help stimulate purchase and brand loyalty as consumers appreciate
the marketing efforts made by Sony, and reward the company through purchase of the
Xperia handsets.

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Relationship marketing
Relationship marketing involves creating value -laden relationships with consumers for
a long period of time. Such relationships encapsulate trust and loyalty from
consumers, and are mutually beneficial for both parties in the long run. In order to
increase relations with customers and build sustainable partnerships, Sony must offer
value-adding services that their competitors are not offering. Reinartz and Kumar’s
customer lifetime value matrix may be used to determine the right customers to
retain, and how to optimise services offered for this consumer group (De Pelsmacker
et al. 2013). Such services may include regular operating system updates for the Xperia
handsets to keep them up-to-date with the latest features. In addition to this, the
company may look to implement a loyalty schem e. Customers who upgrade their
Xperia handsets for newer models should be entitled to discounts on these, instigating
the formation of value-laden relationships. These relationships can be further
enhanced through exceptional customer service support and information availability
via the internet.

Brand Performance

Brand equity consists of consumer based equity and financial brand equity (De
Pelsmacker et al. 2013). The integration of the IMC campaign ensures the release of a
single, cohesive message for consumers instigating brand equity creation. Through
adverting and sales promotions, brand knowledge is increased amongst a large group
of consumers. With increased brand knowledge, consumers react positively towards
the company’s marketing efforts and this helps increase brand equity. Through the
IMC objectives for this campaign, shareholder value is maximised as the Sony Xperia
handset penetrates the market at a ra pid rate, increasing brand loyalty, commanding a
premium price and forming long term mutually beneficial customer relationships.

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References

Blankson, C. et al. 2008. Positioning strategies in business markets. Journal of

Business & Industrial Marketing 15 (6). pp. 416 -437

Blodget, H. 2013. Actually, The US Smartphone Revolution Has Entered The Late
Innings [Online]. Available at: http://uk.businessinsider.com/us-smartphone-market-
2012-9?r=US&IR=T [As assessed on: 11/01/2016]
Bloomberg, 2016. Company Overview of Sony Corporation [Online]. Available at:
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=23021
[As assessed on: 11/01/2016]
Cong, A. 2013. 5 Steps to increasing brand loyalty: The customer -focused edition.
Available at: https://insightpool.com/5-steps-to-increasing-brand-loyalty/ [As assessed
on: 25/01/2016]
Davidson, L. 2015. Emerging markets will lead smartphone growth next year [Online].
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http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/111
26997/Emerging-markets-will-lead-smartphone-growth-next-year.html [As assessed
on: 11/01/2016]
De Pelsmacker et al. 2013. Marketing Communications: A European perspective.
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http://www.idc.com/prodserv/smartphone -os-market-share.jsp [As assessed on:
17/01/2016]
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Image 2. Nudd, T. 2012. The Spot: Sony's Inner Child How McCann's new glob al Xperia
ad, directed by Wes Anderson, sprang from the mind of an 8 -year-old By Tim Nudd.
Available at: http://www.adweek.com/news/advertising-branding/spot-sonys-inner-
child-139199 [As assessed on: 25/01/2016]
Interbrand, 2015. Rankings [Online]. Available at: http://interbrand.com/best-
brands/best-global-brands/2015/ranking/ [As assessed on: 11/01/2016]
Jones, C. 2014. Apple's U.S. iPhone Market Share Holding Steady [Online] . Available at:
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Knight, S. and Murai, R. 2014. Sony heads for deeper loss as it shrinks struggling
smartphone business [Online]. Available at: http://uk.reuters.com/article/uk -sony-
outlook-idUKKBN0HC0HC20140917 [As assessed on: 15/01/2016]
Porter, M. 2008. The Five competitive forces that shape strategy [Online]. Available at:
https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 [As
assessed on: 19/01/2016]
Roesler, P. 2014. Why and How You Should Use Internet Marketing to Improve Brand
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use-internet-marketing-to-improve-brand-awareness.html [As assessed on:
25/01/2016]
Sony, 2016. About [Online]. Available at: http://www.sony.net/SonyInfo/ [As assessed
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Thomas, J. 2007. Market Segmentation [Online]. Available at:

http://www.decisionanalyst.com/publ_art/marketsegmentation.dai [As assessed on:
19/01/2016]
Weiss, T. 2015. Sony’s CEO aims to continue Sony’s mobile business [Online]. Available
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business.html [As assessed on: 19/01/2016]
XB, 2014. Sony passes Apple to become second largest smartphone brand in India .
Available at: Sony passes Apple to become se cond largest smartphone brand in India
[As assessed on: 15/01/2016]

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