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Sony Case Study

Introduction

The company Sony Corporation was formed in the year 1945 in Tokyo, with the name of Tokyo Telecommunications Engineering Corporation. The company holds to its credit the building of first recorder of Japan, and later insisted Bell Laboratories to license its new technology of transistor. During that time, transistors were mainly used for military purposes, and by applying this technology to radios, Sony became the first company to provide it for consumer use. This caused the company to become the world's largest manufacturer of radios. The company later started to produce stereo systems, televisions and other home-based entertainment products (Wesley, pp. 2)

Issues with Marketing of Sony products

The advertising campaign initiated to support the launch of Sony's PlayStation 3 had cost the company $150 million. This campaign was targeted at convincing potential buyers to buy the new product after the holiday season, instead of purchasing an Xbox or Wii. Its slogan was 'Play Beyond', which the company used during the period before its launch. Even though it was extensively marketed, it still received immense criticism from potential buyers because of the console's high price. Spoofs emerged on the internet that mocked the slogan by calling it 'Pay Beyond' (Wesley, pp. 6).

In order to make consumers feel they are buying the deserved value for high price, it was important to make them appreciate the value of PS3. There was a lack of PS3 games and the consumers considered a 1% increase in game titles as equivalent to 2.3% of price cut in the market prices. The PS3 was ineffectively branded and poorly marketed, which did not focus on the PS3 as being a powerful game console and having an affordable Blu-Ray player. Even though it was the most of gaming consoles, it still failed to provide an engaging experience that was overall entertaining (Cheng et.al, pp. 5).

The dilemma that the company faced at the time of PS3's launch in the year 2007 was that was no demand for the product. This caused the retailers in the United Kingdom to cancel order worth more than 20 million. This had a negative impact on the launch of the gaming console. The most important reason for lack of demand would have to the pricing of PS3. The company sold it with a price tag of $500 to $600, and this resulted in a loss of $240 to $306 on every single console which was sold. There was a significant difference in price of PS3 compared to its competitor Xbox, which sold for $200 less. This caused the customers to shift towards buying the Xbox. The customers also complained that Sony had not included video cables with the console, which would have allowed use graphic capabilities of the console. The company also removed rumble from the console (Wesley, pp. 7).

Sony justified the high price of PS3 by saying that it has incorporated Blu-ray technology into it which was too expensive. But the situation turned out to be negative ...