Sony: A Psychological Analysis of the 2009 Annual Loss
Company Overview
Sony Corporation first began as an electronics store in Japan in 1946 after World War II (Sony, 2015b). Masaru Ibuka and Akio Morita created the store under the name “Tokyo Tsushin Kogyo,” or “Tokyo Telecommunications Engineering Corporation” in English (Sony, 2015b). Ibuka’s primary intent for the electronic store was to be a telecommunications and measuring company (Sony, 2015b). In order to raise funds for the newly created electronics store, the store focused on repairing radios for consumers, as there was a demand for news reports after the events of World War II (Sony, 2015e). During this time of repairing many radios, “Tokyo Tsushin Kogyo” or Totsuko for short, eventually came to the discovery and creation of Japan’s first magnetic tape recorder in 1950, called the “G-type” (Sony, 2015b). After the creation of the “G-type,” Ibuka and Morita travelled to the United States to research the potential use of their tape recorder for American consumers (Sony, 2015f). It was during this trip that Totsuko acquired a patent from “Western Electric” for the transistor, which Totsuko ultimately utilized in the creation of a transistor radio (Sony, 2015f). While there were other versions of the transistor radio at this time, the lightweight and compact design of Totsuko’s model quickly became popular throughout the U.S. (Sony, 2015d).
Figure 1. “G-Type” Magnetic Tape Recorder (Sony, 2015)
It was at this point in January 1958 that Ibuka decided that the Totsuko Company needed a name that would be easy to pronounce in all languages (Sony, 2015a). The founder ultimately decided on using the name Sony, which now was labeled on every product (Sony, 2015a). The years that followed led to many more innovations from the Sony firm for music players, cameras, and televisions (Sony, 2015b). Some of the firm’s most iconic products were the Walkman Cassette Player in 1979, Portable CD Player called the “Discman” in 1984, the 8mm camcorder in 1985, and the world’s first direct-view portable television called the “TV8-301” (Sony, 2015b). Beyond these core electronics, Sony expanded their business even further through other ventures, such as beginning a life insurance company in 1979 and acquiring both CBS records and Columbia Pictures in the late 1980s (Sony, 2015b). Today Sony primarily offers consumer electronics ranging from cameras, mobile tablets, smart phones, televisions, music players, video cameras, and video games (Sony, 2015c). Sony also owns an array of record labels, makes and distributes many movies and television shows, and still offers financial services under the name of “Sony Financial Holdings” (Sony, 2015c).
Figure 2. “TR-55” Japan’s first transistor radio (Sony,2015)
Masaru Ibuka (2015e) established Sony’s mission statement in 1946 stating that the purpose of the company was to “establish an ideal factory that stresses a spirit of freedom and open mindedness that will, through technology, contribute to Japanese culture” (Sony, para. 9). Over the years the company has remained true to this statement, as they have successfully created many innovative and world’s first products in the realm of consumer electronics (Sony, 2015c). Today, Sony’s mission statement (2015c) echoes that of Ibuka’s rationale for the firm in 1946 and states that the company’s mission is “to be a company that inspires and fulfills your curiosity,” and that the firm’s “…unlimited passion for technology, content, services, and relentless pursuit of innovation…to deliver ground-breaking new excitement and entertainment in ways that only Sony can” (Sony, para. 1). The critical incident that Sony had to contend with that will be analyzed in greater detail is the annual loss of $1.03 billion that Sony experienced in 2009, which marked the first loss for the company in 14 years (Tabuchi, 2009).
Figure 3. Sony logos through the years (Eckstein, 2013)
Brand Identity
The Sony name itself is a combination of two elements, the Latin word “sonus,” which is the root of words such as “sound” and “sonic,” and the phrase “sonny boy,” which is an expression used to describe a young individual with a free spirit (Sony, 2015d). While this explains the literal meaning of “Sony,” the overall brand image conveys more than just these two elements. I will analyze Sony’s brand identity according to several different psychological aspects in order to determine the extent with which the firm’s brand identity aligns with the mission statement stated previously. I will then evaluate the effectiveness of Sony’s brand identity in the minds of consumers.
Perception is defined as the process of an individual determining what the characteristics of a stimulus are through the utilization of the five senses (Hoyer, MacInnis and Pieters, 2013). Sony conveys their sense of innovativeness through the design of many of their electronics products (Sony, 2015a). As stated by a former chairman of Sony, Norio Ohga on the company’s website, Sony attempts to only label products with their brand name if the design is sufficiently unique and attractive enough (Sony, 2015a). This rationale of Sony’s also relates to the concept of presenting a stimulus to consumers that is above the absolute threshold, or the level of stimulus intensity necessary for an individual to detect it (Hoyer et. al, 2013). In other words, the Sony product being sold is purposely attempting to have a design that is sufficiently unique so that consumers will be able to consciously perceive this product (Hoyer et. al, 2013). Sony’s logo also utilizes principles of visual perception due to its use of distinctive lettering (Sony, 2015a). The slightly modified version of the Clarendon typeface font used for the Sony logo is visually distinctive so that the consumer will notice this logo when they encounter a Sony product (Eckstein, 2013). While this type of font alone helps to increase the odds of an individual perceiving the logo, classical conditioning theory helps to explain why the Sony logo over time becomes associated with Sony’s products. Classical conditioning states that through the pairing of an unconditioned stimulus with a conditioned one an individual will over time elicit the same response to the conditioned stimulus alone as they originally did with the unconditioned stimulus (Hoyer et. al, 2013). The combination of Sony’s unique product designs (unconditioned stimulus) as well as the fact that the company’s logo is embossed on the packaging of the company’s different product lines leads consumers to associate the firm’s tenacity for unique designs by witnessing the logo by itself (the conditioned stimulus) (Hoyer et. al, 2013).
Figure 4. Maslow’s Hierarch of Needs (Research History, 2012)
The psychological concept of motivation also is relevant to Sony’s brand identity as the premium price tag of Sony’s products typically makes consumers have more motivation when considering the purchase of a Sony product (Hoyer et. al, 2013). Motivation is defined as an inner state of arousal that provides an individual with the energy needed to achieve a particular goal (Hoyer et. al, 2013). This high level of motivation for consumers as a result of the price tag of the products would deem the purchase of a Sony product as a high effort decision that utilizes central-route processing, or a careful evaluation of the brand’s attributes when forming an attitude about the brand (Hoyer et. al, 2013). A consumer’s motivation to purchase a Sony product would be influenced by what needs the individual currently feels have not been satisfied. According to Maslow’s Hierarchy of Needs, there are five different categories of needs called physiological, safety, social, egoistic, and self-actualization needs, which Maslow contends must be satisfied in a particular order in order for the individual to feel as though all of their needs are satisfied (Hoyer et. al, 2013). Consumers would primarily utilize Sony’s products in order to satisfy the egoistic need, or the need for self-esteem typically through a strong reputation, high level of achievement, or a certain level of respect from peers (Hoyer et. al, 2013). In addition to the egoistic need, the consumption of Sony products would also satisfy both the symbolic and functional needs of the individual (Hoyer et. al, 2013). Symbolic needs relate to the desire for individuals to perceive themselves a certain way while a functional need is the desire to solve a specific practical problem through the utilization of a particular product (Hoyer et. al, 2013). The purchase of a Sony product could satisfy a symbolic need by portraying to the rest of the world that the individual is financially successful and able to afford a premium electronic device, such as one manufactured by Sony. Additionally, Sony’s efforts to provide products that are simple to use and the world’s first of its kind, also associates the Sony brand with being capable of satisfying functional needs of consumers (Sony, 2015a).
Figure 5. Playstation 20th Anniversary, (The Drum, 2014)
Consumer memory is defined as learning through the retrieval and storage of information either in a conscious or unconscious manner (Hoyer et. al, 2013). A component of memory that is relevant to a brand’s identity is a schema, which is essentially a set of associations on a semantic, emotional, or behavioral level that is linked to a particular concept (Hoyer et. al, 2013). Sony’s product offerings are related to many different types of electronics such as cameras, music players, and video games (Sony, 2015c). These various product lines create a schema for Sony on a semantic level that the firm is readily associated with many different types of consumer electronics (Hoyer et. al, 2013; Sony, 2015c). Many consumers are generally aware of Sony’s long history of technological innovations as well as the fact that the company originated in Japan, which is another component of semantic information for the schema of Sony (Hoyer et. al, 2013; Sony, 2015a). Sony’s history may also relate to a consumer’s emotional schema for the brand, as older consumers will have a sense of nostalgia when they think of how prideful they may have felt to own such a unique product in the past (Hoyer et. al, 2013). Additionally, the brand utilizes behavioral scripts through the naming of many of their products such as the “Walkman” the “PlayStation,” and describing a camcorder as “passport sized” (Sony, 2015a). These descriptions allow the consumer to know how to best utilize the product and quickly ascertain what benefit they will be provided by purchasing this product (Sony, 2015a). This translates to the individual being exposed to a product such as the Walkman, and readily associating this with the behavior of being mobile while they use this product (Hoyer et. al, 2013).
Figure 6. Sony Walkman, (Sony, 2015)
While the brand identity that Sony attempted to portray was once effective in the minds of consumers, Sony's dwindling sales appear to indicate that this is no longer the case. Other brands, such as Apple and Samsung are more readily associated with unique designs, such as Samsung’s curved televisions and Apple’s increasingly portable computers (Ranasinghe, 2015). This means that Sony’s product designs are no longer the most unique among several product categories, and as a result the products are not noticeably perceived, as they do not exceed the absolute threshold for consumers (Hoyer et. al, 2013). Additionally, Sony is no longer as capable of satisfying a consumer’s symbolic and egoistic needs, as there are other consumer electronics brands that are considered more innovative and therefore as more prestigious (Ranasinghe, 2015). This means that if a consumer were to purchase a Sony television, this may no longer symbolize the same level of prestige as the brand did in the past due to the company’s lack of an innovative product in the most recent years (Ranasinghe, 2015). As a result, a consumer would be more likely to satisfy symbolic needs for prestige through the purchase of brands such as Apple or Samsung. The schema of the Sony brand also does not align with what the brand claims to be in its mission statement (Hoyer et. al, 2013; Sony, 2015c). While the company boasts about being committed to providing consumers with unique products to satisfy their curiosity, according to the recent lack of innovative products, most consumers are likely to link the firm with semantic information regarding past innovations and will have difficulty associating the firm with anything new (Hoyer et. al, 2013; Ranasinghe, 2015). This causes the brand personality of Sony to seem as though it’s a firm past its prime that is no longer relevant for consumers across several product lines (Hoyer et. al, 2013; Ranasinghe, 2015). In other words, today the brand personality derived from the consumer’s schema is not in line with what Sony is positioning itself to be (Hoyer et. al, 2013).
Marketing Campaign Analysis
In response to Sony’s annual loss in 2009, the company attempted to rebrand itself through a marketing campaign that utilized the tagline of make.believe, which is pronounced as “make dot believe” (Sony, 2009b). The primary goal of the campaign was to offer a campaign that would unify all of Sony’s different product lines, while also emphasizing the brand’s spirit of innovation and creativity (Harris, 2009). Sony’s CEO at the time, Howard Stringer (2009), stated that the campaign would “…differentiate us from countless competitors and inspire consumers around the world to embrace all that is Sony” (Sony, para. 2). In order to evaluate the overall effectiveness of the make.believe campaign from a psychologically informed perspective, I will apply psychological concepts to the campaign, starting with the premiere TV spot for the campaign and then analyze subsequent print ads and commercials, as well as the firm’s activity on social media for this campaign.
On November of 2009 Sony launched its first ad for the make.believe campaign, by placing the ad at movie theaters in the United Kingdom (Ramsay, 2009). The same ad eventually aired in the United States by January of 2010 (Ramsay, 2009). The ad portrays a boy travelling across different worlds that Sony offers in the form of Sony’s products, music, films, and games (Ramsay, 2009). Attention is defined as the amount of mental activity a consumer devotes to a particular stimulus after being exposed to this stimulus (Hoyer et. al, 2013). This ad utilizes several tactics, which are often utilized by marketers in order to maximize the chances of gaining a consumer’s attention (Hoyer et. al, 2013). The ad makes the stimulus, or the Sony brand in the case of this commercial; seem personally relevant through the use of the narration at the end of the ad stating, “Believe that anything you can imagine, you can make real” (axnbrasil, 2010; Hoyer et. al, 2013). According to attention theory, the use of the word “you” in this statement will make the message of the ad seem personally relevant to the consumer and as a result this will increase the likelihood that the consumer will pay attention to the ad (Hoyer et. al, 2013). The ad further attempts to gain the viewers attention through the use of presenting novel and surprising stimuli (Hoyer et. al, 2013). The novel way in which the scenery changes such as the boy being enclosed in a box that materializes from the floor, which then finds him speeding in a car is unexpected and therefore is likely to persuade a consumer to devote more attention to the stimulus presented to them (axnbrasil, 2010; Hoyer et. al, 2013). The ad also utilizes metaphors and presents each scene in a cryptic manner in an attempt to gain the attention of the consumer (axnbrasil, 2010; Hoyer et. al, 2013). According to attitude theory, the consumer is likely to find each scene as unexpected, but is left wanting the answer to the question of how are these seemingly disparate sequences related, leading the consumer to devote more attention to the ad in the hope of finding the answer to this puzzle by the time the commercial is over (Hoyer et. al, 2013). The advertisement also makes the stimuli easy to process by presenting the brand logo at the end of the ad on a black background (axnbrasil, 2010). This use of prominent stimuli in the form of the brand logo presented at the end of the commercial minimizes the amount of competing stimuli and better ensures that the consumer is able to pay attention to the fact that the advertisement is for the Sony brand (Hoyer et. al, 2013).
This new logo presented at the end of the premiere ad as well as the tagline of “make.believe” was then attached to all of Sony’s subsequent marketing materials (Ramsay, 2009). The animated logo flashes across the screen with blue light on the left and yellow light on the right before fading away with the period mark separating the words “make” and “believe” remaining illuminated afterwards. This logo appears to be designed with the intent of arousing the consumer’s visual perception through the use of color (Hoyer et. al, 2013). Colors can be classified as either warm, such as red, orange, and yellow, or cool, such as blue, green, or violet (Hoyer et. al, 2013). The Sony logo’s utilization of both a warm color and a cool color enables the consumer to notice the contrast between the two words and focus on the period mark that is unifying these two concepts (Hoyer et. al, 2013). This contrast relates to Sony’s rationale for the make.believe campaign, in which the period mark in the tagline is meant to symbolize Sony’s role in making imagination become a reality through the use of their products (Sony, 2009b). The new Sony logo featured in the make.believe campaign also attempts to arouse the consumer’s perception through their sense of hearing (Hoyer et. al, 2013). This is done by adding a musical jingle during the animated logo that is meant to symbolize the sound of light according to Sony’s senior designer Junichi Nagahara (Macmanus, 2010). The frequent presentation of this musical sound with the Sony logo makes this sound serve as a sonic identity for the company (Hoyer et. al, 2013). This means that whenever a consumer hears this sound the intent is that they will automatically associate this with the Sony brand (Hoyer et. al, 2013). As was previously stated regarding the Sony logo, classical conditioning helps to explain why this sound is able to take on an identity that is synonymous with the Sony brand (Hoyer et. al, 2013). By treating the “sound of light” as a conditioned stimulus, and pairing this with the Sony logo during commercials, consumers will begin to associate only the sound with their overall impression of Sony (Hoyer et. al, 2013).
Figure 7. Sony make.believe, (Sony, 2015)
Sony’s make.believe campaign also attempted to alter consumers’ attitudes, or overall evaluations about the brand (Hoyer et. al, 2013). The ads featured during the campaign primarily tried to appeal to the consumer’s attitude based on affect, or the consumer’s feelings and emotions at the high effort level (Hoyer et. al, 2013). The source in many of Sony’s make.believe advertisements, defined as the individual in the ad who is engaging with the product, are all composed of attractive individuals, resembling the younger age group the campaign was targeting (Hoyer et. al, 2013; Voight, 2012). As research in the past has indicated, favorable attitudes are more likely to be formed when attractive people are the source of the advertisement (Hoyer et. al, 2013). The message, or what the ad is attempting to communicate to the consumer, is a strong example of when an ad attempts to influence a consumer’s attitude through the use of a phenomenon known as emotional contagion (Hoyer et. al, 2013). Emotional contagion occurs when an individual experiences an emotion vicariously through viewing another person experiencing this emotion, typically in the form of the actors in an advertisement (Hoyer et. al, 2013). Several ads in the campaign demonstrate this principle through having the actors using Sony products experience a strong sense of joy and wonderment at the use of these products and the brand in general (Hoyer et. al, 2013). In other words, ads for Sony’s make.believe campaign showed individuals experiencing a particular emotion with the intention that the consumer witnessing this emotion would also feel this emotion towards Sony simply from viewing the ad (Hoyer et. al, 2013). Once the consumer forms a favorable attitude from the ad, the company hopes that this will translate to the consumer making the decision to purchase the product or products being offered by the brand (Hoyer et. al, 2013). Several ads in the make.believe campaign also attempt to influence the consumer’s decision making based on high effort and affect, or emotion, by having imagery present in many of their ads (Hoyer et. al, 2013). Imagery is defined as an image presented that induces an individual to imagine themselves consuming a particular product (Hoyer et. al, 2013). The ad’s portrayal of human actors interacting with characters from PlayStation games is an attempt to make the consumer yearn for that level of interaction with a game world, and thus they may be more likely to make the decision to purchase a PlayStation console and possibly several games to play as well (Hoyer et. al, 2013; Sony Electronics Asia Pacific, 2013).
Sony’s make.believe campaign also had a notable presence on various social media channels such as Facebook, YouTube, as well as many of Sony’s other platforms such as MyPlay and Fearnet (Sony, 2010b). One of the most central components of the campaign’s online presence is presented on Crackle, a premium online video network, which is a subsidiary of Sony Pictures Entertainment (Sony, 2010b). A channel was created on Crackle devoted entirely to consumers who were invited to create 90 second videos to describe ways in which the Sony brand has helped to make their dreams a reality (Sony, 2010b). In order to analyze how effectively Sony is utilizing their online presence for the make.believe campaign, I will apply the honeycomb framework of the seven social media building blocks (Kietzman, Hermkens, Mccarthy, and Silvestre, 2011). This framework is a way for Sony to better understand why their consumers may utilize social media in relation to their product (Kietzman, 2011). The identity building block relates to the extent to which online users reveal their identities in a social media setting (Kietzman, 2011). Sony’s online presence with the video submissions takes this concept into account due to the fact that the individual submitting their video is free to disclose as much information as they would like (Sony, 2010b). In other words, the user is able to mold the specific identity they present to others online through this video, without being forced to share more information than they would prefer (Sony, 2010b). Another component of the honeycomb model that is relevant to Sony’s social media efforts is the concept of sharing, which represents the degree to which users exchange and distribute content with others (Kietzman, 2011). Sony’s invitation to invite others to explain how Sony helped make their dreams come true is a way for individuals to share content related to Sony with others (Sony, 2010b). If another individual were to share this with someone else via YouTube, this allows users to feel as though they are bonding with other people over a similar passion for the inspirational story or possibly even the Sony products featured in the video (Sony, 2010b). Finally, the building block of groups, or the extent to which users can form communities online is also relevant to the make.believe campaign’s online presence. By becoming a fan of the make.believe Facebook page, Sony is offering consumers the chance to feel as though they belong to a community where they are free to discuss aspects of Sony with other fans (Sony, 2010b).
Response to Change
The critical incident with which Sony had to contend that will now be analyzed in greater detail is the annual loss of revenue that Sony experienced in 2009, marking the first loss for the company in 14 years (LeClaire, 2009). Sony contends in its annual report that this loss can be attributed primarily to the combination of the global economic crisis occurring at the time combined with the increased strength of the yen (Sony, 2009a). However, many critics contend that Sony’s annual loss of $1.03 billion in 2009 was due to problems that extend beyond the economic climate in 2009 (Tabuchi, 2009). Some of the issues that analysts claim contributed to Sony’s annual loss are the fact that the company has lost its market share to other companies in almost every product category in which Sony was once dominant (LeClaire, 2009). In response to these numerous competitive issues, the firm made new changes to operational efficiency as well as to the firm’s brand strategy (Sony, 2009a). Sony focused on cutting costs by taking actions such as reducing headcount and closing many of their manufacturing sites around the world (Sony, 2010a). Additionally, as previously stated, the firm created the “make.believe” marketing campaign, which was the first unified brand message across all of Sony’s product lines (Sony, 2010b).
In order to analyze Sony’s response to this annual loss in 2009, I will apply Porter’s model to evaluate how effective Sony’s actions were during this time period as well as why the firm was experiencing their financial loss in 2009 (Tabuchi, 2009). Porter’s model is comprised of three different characteristics that are fundamental to a company’s strategic positioning (Porter, 1996). The first principle is that strategy is dependent on creating a unique and valuable position through a distinct set of activities (Porter, 1996). Porter elaborates on this concept and states that firms must first define their market, or in other words determine which type of consumers the firm will target and how broad or narrow their products or services will be (Porter, 1996). Of the three different types of positioning Porter mentions, Sony’s positioning is considered variety-based, as the company serves a wide array of customers, but specifically focuses on the needs relating to electronics (Porter, 1996). In the past Sony was able to create a unique position as the firm offered the highest quality electronics across several product categories, however as time progressed, other firms were able to imitate or even surpass this quality of electronics (Tabuchi, 2009). This fact is evident by the state of the company’s market share in each of its different product lines in 2009 (Tabuchi, 2009). Sony claims to be offering the most innovative products across several product lines, however this activity is not unique, as competitors such as Samsung, Apple, and Nintendo also perform these activities (Tabuchi, 2009).
Figure 8. Porter’s 5 Forces Model, (Interaction Design Foundation)
The second principle of strategy according to Porter’s model is that strategy requires a company to make suitable trade-offs when competing with other firms (Porter, 1996). Sony once was known for creating the most innovative cameras, televisions, and music players, but as time went on, the company expanded and became involved with practically every type of electronic device (Takayama, 2005). According to Porter’s model, this lack of focus made it possible for other companies to successfully imitate the firm and surpass them (Porter, 1996). A good example of this is how other firms in 2009, such as Nintendo, remained focused on their core business of video games, and as a result the firm was able to offer an arguably more unique product that rendered Sony’s PlayStation 3 console as less unique (Peckham, 2009). This is supported by the implied preference by consumers as seen by the sales of Nintendo’s Wii console surpassing those of the PlayStation 3 in 2009 (Peckham, 2009).
Porter’s final principle of business strategy is that a firm must create a strong fit between a company’s activities in a way that each component reinforces the other (Porter, 1996). In other words, a firm should have a unique collection of assets that reinforce one another in ways that make it difficult for competitors to imitate this interlocking fit (Porter, 1996). On the surface it appears as though Sony is strongly exemplifying this concept as the firm manufactures many different electronics devices, which seemingly require similar materials and knowledge from manufacturers in order to create. However, the firm has some subsidiaries that appear to have no relationship with the firm’s core expertise of consumer electronics (Sony, 2015b). Sony’s financial services as well as the many peripheral businesses abroad, ranging from Parisian restaurants to skin care products in Japan, are examples of the firm not making use of the concept of fit (Fackler, 2006). While these businesses may be successful, they have nothing to do with the way consumers know the brand, and thus this confuses consumers as to what the brand is about. Sony lacks a strong fit among its teams of engineers as well (Walters, 2011). Analysts contend that Sony was once well positioned to create a product similar to the iPod, however many of the firm’s engineering teams had never met in person, which led to the iPod being released before the proposed MP3 version of the Walkman could be (Walters, 2011). Additionally, the firm’s ownership of record labels, which theoretically could have been a way to strengthen fit if the MP3 version of the Walkman had been created before Apple’s iPod, ended up leading to further delays as the firm struggled with worries about copyrights and free music downloads (Sadauskas, 2015).
Figure 9. What is Strategy, (Harvard Business Review)
Porter’s model also emphasizes the importance of leadership to strategy and how it is essential that a company have a leader who is capable of guiding the business strategy and is willing to make choices (Porter, 1996). In response to Sony’s 2009 woes, Howard Stringer was appointed as chairman of the company on April 1, 2009 (Suzuki and Kondo, 2009). Stringer was initially chosen to be CEO in 2006 due to his talent for making tough decisions regarding corporate restructuring (Stahl, 2006). In response to the financial losses in 2009, Stringer made the decision to close down eight factories worldwide and planned layoffs of approximately 16,000 workers at Sony (Kelly, 2009). According to Sony’s 2010 annual report, Stringer was successful in cutting costs for the firm (Sony, 2010a). Porter would cite this as a leader making an improvement in operational efficiency or the company’s utilization of its inputs, however this is not the same as making an improvement in brand strategy (Porter, 1996). According to the Porter model, a manager must distinguish between operational effectiveness and strategy and should not consider the two as synonymous (Porter, 1996). Stringer did understand this principle to an extent as he realized the importance of creating the make.believe campaign at this time in an attempt to distinguish Sony from competitors, however most of his strategy choices did not follow the other three principles such as the concept of fit and making trade-offs. Stringer started moving the business strategy in the right direction by cutting many of Sony’s peripheral business abroad, however many, such as the financial services branch, still remained (Fackler, 2006). Additionally, Stringer did not make any trade-offs with consumer electronics as Sony was still attempting to be the best in all of its product lines. Stringer (2006) made the following statement in reference to Apple’s iPod, before Sony experienced its first annual loss in 2009, “You can take iPod and beat us over the head with it, but it’s only one product. And we have a thousand products. Apple has two or three” (Stahl, p. 2). This statement confirms Howard Stringer’s oblivious nature to Porter’s model and how in his attempts to make Sony unique by being the best at everything, it ended up being a firm that was merely good and therefore not unique (Stahl, 2006). This also explains Apple’s success today while Sony has failed to recover after its 2009 loss.
Recommendations
Based upon my previous analysis of Sony’s make.believe campaign I recommend that the firm modify their marketing strategy and focus more on the functional benefits of Sony’s products, which will distinguish the firm from its competitors. Sony’s make.believe campaign overall strongly utilized many psychological principles that would maximize the chances of the consumer taking notice of the ad through attention and perception as well as the likelihood that the consumer would form a positive attitude about the firm on an affective level (Hoyer et. al, 2013). The campaign’s message of unifying the Sony brand and inspiring other people to make their dreams come true through creativity was also consistent across every marketing channel. However, based upon my assessment, Sony was unable to convey what is unique about the brand through the make.believe campaign. The campaign attempts to distinguish Sony from its competitors by presenting the plethora of products that Sony creates; however the attributes of the products are not emphasized. I believe that the ads should have used more concrete language and provided attributes of the products that would lead to the consumer choosing to buy this product based upon the cognitive decision-making model (Hoyer et. al, 2013). The cognitive decision-making model is the process in which consumers reach a decision based upon information they have about attributes of the product or brand (Hoyer et. al, 2013). It would be to Sony’s benefit if more of the firm’s attributes were made more salient in the consumer’s mind so that when using either compensatory or noncompensatory models of cognitive decision-making, the consumer is more likely to choose a Sony product over a competitor’s (Hoyer et. al, 2013). Some attributes the firm should consider emphasizing are the firm’s history in the electronics industry, the PlayStation 4’s unprecedented power, and the NEX line of cameras that offer the unique benefit of using DSLR lenses with the body of pocket-sized mirrorless camera (Shimpi, 2013; Sony, 2012). By emphasizing these unique attributes of the firm’s products, Sony increases the probability that consumers will perceive their products and gain their attention. Over time, through classical conditioning, the Sony logo may be able to elicit the same response of awe and wonderment that it once did.
Figure 10. Sony NEX-7 Camera, (Sony, 2015)
In addition to this change in marketing, it is recommended that a new leader be appointed as the chairman of Sony who has a greater focus on strategy in addition to operational effectiveness. Of particular importance is that the leader be willing to make trade-offs regarding many of Sony’s sources of income. In order for Sony’s recommended marketing strategy to be effective, the firm must adhere to Porter’s concept of trade-offs and not attempt to compete in every consumer electronics category (Porter, 1996). To accomplish this, the new leader must be willing to cut many of Sony’s less successful product lines and unrelated peripheral products such as their cell phones, e-readers and financial services, and instead focus on the product lines that currently are selling well and are consistent with what the Sony brand is historically associated with, such as video games and cameras (Adner, 2012; Spence, 2015). The leader must also make changes in the company’s culture in order to strengthen the fit between the different firm’s departments. Additionally, the new leader should make better use of Sony’s movie and music studios and create a system in which certain movie titles and new albums that are produced by Sony are available early or at a deep discount on certain Sony devices, such as PlayStation or Walkman. By successfully incorporating Sony’s ownership of a movie studio and record labels into the overall fit of the company’s other devices and operations, the firm would then have a more complex assortment of assets that would make it more difficult for competitors to successfully replicate. By focusing on fewer products and strengthening the synergy between Sony’s different electronics departments, the firm will be able to once again create more innovations, which consumers will perceive as valuable and worth investing in the Sony brand to obtain (Hoyer et. al, 2013).
References
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