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Unformatted text preview: K 140 4 PART 2 } CAPTURING MARKETlNG INSIGHTS H Marketing Debate What is the Best Type of Marketing Research? the only legitimate and defensible form ofmarketing research involves quantitative measures. Many market researchers have their favorite research approaches or techniques, although different researchers often have different preferences. Some researchers maintain that the only way to really learn about consumers or brands is through in—depth,qualitative research.0thers contend that Marketing Discussion When was the last time you participated in a survey? How helpful do you think was the information you provided? How Take a position: Marketing research should be quantitative versus Marketing research should be qualitative. could the research have been done differently to make it more effective? Sony started as a radio repair shop, founded by Masuru lkura and Akio Morita after World War ll. Sony started producing compact consumer electronics in l957,when it introduced the world's first pocket—sized all—transistor radio.The company’s name was taken from sonus, the Latin word for'sound.‘ Sony went on to invent a series oftransistor—based TVs and increasingly smaller audiocassette recordersln 1979,the Sony Walkman introduced the world to a new way of listening to music in public. Sony became a world leader in consumer electronics and was the first Japanese company to list on the New York Stock Exchange. in the late 19805, Sony began expanding into media, purchasing a US. record company (CBS Records for $22 billion in 1988) and a major Hollywood studio (Columbia Pictures for $4.9 billion in 1989},The purchases made Sony a major force in the entertainment industry. The importance of marketing at Sony started with Akio Morita, who said that for a company to be successful, it must have three kinds of creativity: creativity to make inventions, creativity in product planning and production,and creativity in marketing. _ Creativity in marketing at Sony means notjust clever ads, but deep insight into its customers. For example, Sonyknows its PlayStation customers like to find clues and to decode things. So Sony's ads for PlayStation 2,like'Signs,'feature a ydung man ' walking the streets of a city where he encounters various signs foreshadowing the events. Mannequins appear in a store window, arms outstretched, and point enigmatically to something that‘s a bout to happen.'The lead character is almost in the midst of his own role—playing game. He needs to follow clues to save the heroine,'said Andrew House, Sony's executive vice president of marketing. In the ads,‘we were essentially trying to tap into a range of emotions that we think we deliver in the games—intrigue, foreboding, excitement, panic, relief and achievement at the end.’ Sony's marketing also includes careful measurement ofeach campaign’s effectiveness. For example, Sony runs 30—second commercials for its PlayStation as part ofthe previews in more than 1,800 theaters and on 8,000 movie screens.The ads appear before such films as “The Cat in the Hat.“ Sony Computer Entertainment America has been running movie ads for six years. 'Cinerna advertising has been very effective for us,“ said Ami Blaire,director of product ma rketing.‘The reason why we have committed to cinema every year is the tremendous unaided recall shown by our own research and Communicus- commissioned ad tracking.” Another example of measurement is Sony's Generation Y youth marketing efforts. 'The online program promoting the NetMD, ATRAC CD Walkman and Cybershot U30 ran July I through September 30, 2003,and we found that more than 70 percent of the click—throughs were spurred by rich media ads via Eyeblaster, versus static banners," said Serge Del Grosso, Director of Media and lnternet Strategy, Sony Electronics. Sony has even developed a direct marketing solution which it sells to other companies who want to measure marketing effectiveness.The product, called eBridgeT'“, allows marketers to use video, measure the effectiveness of the campaign, and gain - insight into the target audienceall in one package. Sony expects that the next big breakthrough will not come from a single new electronic device. Rather, the future lies in making a whole range of devices more useful by linking them in a networked homeentertainrnent system. Sony believes that its clout in consumer electronics, combined with its media content, will allow it to steer that convergence in a way that suits it. Whether the future of convergence resides in TVs or PCs or devices, $72-billion Sony makes every one of themawith a strong brand name that gives them an extra push off retail shelves worldwide. However,Sony experienced its lowest revenues in five years in 2005. It appointed Sir Howard Stringer, a non-Japa nese, non- engineecas its CEO.Severa| reasons accounted for Sony's reversal. Sony's floundering hardware business, once the heart of the company, is dragging down earnings. It lost to Apple when the H Conducting Marketing Research and Forecasting Demand Q CHAPTER 4 } 141 H latter created a new market for portable digital music players. Rival makers from Japan, Korea,Taiwan,and China were quicker in entering the flat—panel plasma and LCD market, while Sony still focused an outdated cathode ray tube TVs.it was also slow in its plans to buy Apple and Palm Computing. Its Sony Connect music downloading site also paled in comparison with Apple‘s iTune Music Store.Whiie downloadable songs were offered for as little as 99 cents and customers could customize their own home page, the site’s content was thin. It was also hard to use and consumers could not sample all the songs before they bought. Software was dense and buggy and the site charged higher prices for longer songs. The far-flung operations of Sony have also shown little unity and corporate loyaltyWhen Sony tried to sell off its life insurance division in 2002,executives in the division rebelled,leaked stories to the Japanese press about then CEO Nobuyuki Idei,and forced Sony to cave in. Each business unit at Sony also often decides on its own products. Factionalism still rules the day. The company’s music, movie, and gadget business have conflicting agendas. In one famous example,Sony's music divisionfearing piracy,kept the consumer electronics side from making digital-music players that would let consumers play the popular MP3 format. Yet. there is no sense of real crisis at Sony. However, Stringer‘s appointment of House to oversee global branding could help Sony tie its content and hardware assets together by offering free hit movies and music with purchases of everything from PCs to cellular phones. “Nearly every devise will come with __ content.'Stringer saysSony will also collaborate more with other industry leaders to regain its edge and boost profits. It tied up with Samsung in a state—of—theart factory to produce seventh- generation LCD panels. 1. Martha Rogers, “LG Telecom Digs Deep into Customer Data,"1toi (Peppers 8: Rogers Group, August 22, 2005). 2. 1994 Survey of Market Research, eds.Thomas Kinnear and Ann Root (Los AngeleszAmerican Marketing Association 1994). 3. Prasad Sangameshwaran and Shweta Jain, "Where is Research Headedi'Business Standard (January 28, 2003). 4. Kate Maddox,"The ROI of Research,"8 to 8 (April 5, 2004): 25, 28. 5. For some background information on in-flight Internet service. see “in—Flight Dogfight,“ 8asinessZ.Con1 (January 9,2001 ):84—91,'John Blau,”ln-Flight lnternet Service Ready forTakeoff,”iDG News Service {June 14, 2002);“Boeing In- Flight Internet Plan Goes Airborne,” The Associated Press (April 18,2004). 6. For a discussion of the decisiOn-theory approach to the As part of its efforts to fix its core TV business, Sony plans to rebrand its longstanding Wega LCD line which it has deemed "too old—fashioned."To lower production costs, the new Bravia line will buy the LCD panels from its Samsung joint venture.Sony also intends to promote its high-definition TVs with a $140 million campaign which includes setting up special tents housing its products at 1,000 US. stores, and by sponsoring high— definition broadcasts of National Football League and Nascar EVEHES. Discussion Questions 1. What have been the key success factors for Sony? 2. Where is Sony vulnerable? What should it watch out for? 3. What recommendations would you make to senior marketing executives going forward? What should the company be sure to do with its marketing? Sources: John Teresko,'ASlA:Yesterday‘s Fast Followers Today's Global l.eaders,'indu5try Week (February 2004): 22—28;Gregory Solman,'Sony‘s Got Game on Movie, TV Screens,'Adweek (November 26, 2003l:'Sony Launches Holiday Ad Blitz.‘ Technology Advertising & Branding Report (December 1, 2003); Tobi Elkin,'Sony Rolls Cinematic P52 Push,“ Advertising Age (September 2. 2002):4;'Digital Player: Serge Del Grosso.‘ AdvertisingAge (October 27,2003):44;'The Complete Home Entertainer?” The Economist (March 1, 2003): <www.sony.com>; Brent Schlender, 'Inside the Shakeup at Sony.’ Fortune (April 4, 2005): 46~S 1; Edward C. Ba ig.'Sony's New Music Downloading Site's a Fiop.'U5A Today (May 13, 2004): 58;Cliff Edwardsflhe Lessons for Sony at Samsung.'8usinessWeek (October 10, 2005): 35—36; Brian Bremmer,'Sony's Sudden Samurai,“ Business Week (March 2 l, 2005): 40—44; Ken Beison,'Samsung. Sony Get Cosy'Business iimes (Singapore) (July 26,2005):20;Phred Dvorak'Sony’s Bravia Tu rn,’ The Asian Wail Street Journal (August 29, 2005): A8. ' 'Wa'. . Apr-Linnaeus-,.n-.i.-A,syi~iwm'"""M‘“ riser-6W". ‘.' .I_ value of research, see Donald R. Lehmann, Sunil Gupta, a nd Joel Steckel,Madret Research (Reading, MA: Addison- Wesley, 1997). I 7. Allison Stein Wellner,“LookWho's Watching,"Continentai (April 2003): 39—4 1 ; Linda fischlen‘Every Move You Make," Fast Company (April 2004): 73—75. 8. Bruce Nussbaum, ‘The Power of Design,” BusinessWeek (May 17, 2004}:86—94. 9. Roger D.B|ackwe|l,James S.Hensel,Michael B.Philiips,and Brian Sternthal, Laboratory Equipment for Marketing Research (Dubuque, IA: Kenda llfHunt, 1970); Wally Wood, “The Race to Replace Memory,“ Marketing and Media Decisions (July 1986): 166—167.See also Gerald Zaltman, “Rethinking Market Research: Putting People Back in," Journal of Marketing Research 34(4) (November 1997): 424—437; Andy Raskin,‘A Face Any Business Can Trust.“ ...
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