The SONY Brands. What happened?
By Tom Dougherty
SONY was once the most powerful brand name in consumer electronics. The free-fall from grace, by this venerable brand has lessons for us all. It is a tale of importance and arrogance. Innovation and market ignorance. Retail excellence and benign neglect. Just a short time ago, the SONY replaced its CFO because of an unexpected $1.1billion dollar loss (yes…that’s BILLION with a capital B).
Think for a moment about the SONY brands and the SONY sub-brands under its corporate umbrella. Trinitron. Walkman. Watchman, PlayStation. Betamax. Blu-ray. Vaio. Handicam, 3.5”Floppy disks, memory sticks, Xperia, Bravia, SONY Music Entertainment and on and on. Most of us, at some point of time have owned something made by SONY. Few of their products disappointed the market and yet the power that a brand like SONY is expected to bring to its sub-brands has almost vanished.
SONY recently divested itself from the PC market and the end of the Vaio is within eyesight. Even the SONY brand entertainment group has taken a hit and has fallen into a two way tie with Paramount as Warner Brothers surges past. The Xperia has had disappointing sales and a backlog of sourcing issues. In short, SONY is losing ground everywhere.
There was a time, when the SONY Brands dominated the high-end tube television market with its Trinitron brand that consumers routinely left the little sticker on the bottom left of the screen remain on after the purchase. It quietly proclaimed “It’s a SONY.” Today, the brand is a struggling afterthought as a crowded consumer electronic market has sucked the wind out of SONY sales. There are more than a few marketing pundits around who lump SONY brands in with an unenviable mix of brands that will disappear in 2014. I don’t believe that or predict that. But one thing for sure, SONY will slip even farther from the top in every category excepting game consoles. A category, by the way, that SONY leads by selling the PlayStation 4 for less than the cost of production.
Part of the problem with today’s SONY brands can be found in their portfolio itself. It is simply too large, too diverse in its categories and too focused on the sub-brand names. Divestiture and consolidation must be in SONY’s future. The plethora of electronics and diffused focus meant that SONY has asked customers to choose a sub-brand rather than choose the parent company. Apple, for instance, has sub-brands but the consumer buys APPLE. It’s the Apple iPhone, Apple iPad, Apple Macintosh, Apple iTunes, Apple iPod. I think when you look at the history of SONY, the failures of marketing can be tightly traced to its view of itself as an electronics company rather than a marketing/communications company (every company that markets consumer products should look at itself as a communication company with a manufacturing proof point).
As a manufacturer of electronics, SONY always lacked the style and polish of an Apple, for example. SONY lived by the sword of innovation and a a result has died upon that same blade. They underestimated the market in many instances. BetaMax is a perfect example. SONY marketed a better technology (Beta vs VHS) and yet they were squeezed out of the market by others that did a better job of understanding the consumer. In the BetaMax vs VHS dual, SONY believed an improved picture quality was more important than the ability to record three times the programing on a single tape.
They created the personal music player market with Walkman— they even owned the content of their own record company but failed to fully understand the consumer. In the Book Steve Jobs, Jobs spoke to this major failing of SONY. he said, they owned the market, they owned the content and yet they clung hopelessly to idea that they had to still sell albums rather than individual songs. Steve said SONY was afraid that by selling individual songs digitally they would cannibalize their own record sales. “That ship had already sailed“,quipped Jobs.
Innovation won’t save you
When a company innovates, they need to see that innovation as a support point for their brand promise not as the brand promise itself. SONY believed (and still believes) that they are a manufacturer— and innovator and creator of consumer electronics. Supporting that promise, because it is so meaningless, just means you make stuff.
Again, every company that competes in the consumer goods category is in effect a communications company. Their primary business is in brand building and everything they bring to market should be pegged to that one overarching brand promise. What is SONY’s brands positioning today? It is a question that no one can answer clearly because SONY has not answered it with any clarity. If your only focus is innovation then you live and die on that principle.
Worse still, in the businesses that SONY competes, even an innovator has precious little time to claim exclusivity. Everyone copies everyone else and it is near to impossible to have exclusivity. Create a thin screen TV and in a month you have dozens of copy-cats.
According to SONY the Ultra-HD sales will increase 10 fold in 2014 and they project that they can capture 10% of the LCD TV market. A modest share for such an industry giant. And yet what stands in the way of these less than lofty goals? How about competitors offering Ultra-HD TVs too and curved screen versions on the newest technology which was all the rage at consumer electronic shows.
What the SONY brand has not done is given anyone a real reason to prefer the brand because of the brand. Rather than being all about the customer SONY’s brands messages are all about SONY. This IS the problem and I see no signs of SONY addressing it. A brand’s value (a combination of preference and increased margins) comes from the consumer’s willingness to inconvenience themselves to buy the brand and their willingness to pay more for it. Great brands therefore, tell the customer who the CUSTOMER is that buys the brand. Emotional values like smart, forward thinking, in the know, stylish, pampered, gifted, or privileged are all example of brand attributes that reflect on the customer. Only with careful strategic planning and great research can a company identify the highest emotional intensity in the category and them claim it as a description of the prospect.
What is the answer for the SONY Brands?
What must SONY do if it figures out that they must understand their customer better? They have books of data on the buying habits and psychographics but it is obvious that they have no clue as to the beliefs of the target market that drive those psychographics and demographics. Marketing defines the needs and wants but brand must be defined by beliefs and precepts— not by a category of goods that they make. Electronics is simply too broad a category to have REAL meaning. For most marketers, this focus on consumer beliefs is not even in their tool box. For the SONY brands, it is not found anywhere in the company.
When the market was less crowded and less competitive, saying It’s a SONY implied a more discerning customer (someone who could grasp what was best and felt entitled to own it). However the SONY brands were really not about SONY it was all about the buyer. It said something about the consumer that was far above and beyond the purchased TV or receiver. It said you knew what you were doing and that you were discerning. A cut above. What the SONY brands mean today is much less than that. The SONY brands have confused expensive with best and price point. It is a retail marketing story and not an emotional brand story. It is all about product features and not about BRAND.
It’s a SONY now means it is available on the shelf for purchase. It does not peak to preference or position. The SONY brands cannot regain its prominence as a preferred brand by way of its PlayStation platform. Gamers are a different breed of consumer and the luster of the newest game system does not shed much of a glow on the parent brand in this instance. They are fickle and flock to the newest and latest.
Being out of date with your game system happens long before the average consumer needs a slightly larger TV screen or an improved sound system. That’s because of the way the consumer looks at the PlayStation brand. They bought PlayStation 4 as a singular THING and SONY was only a support brand. There is no emotional branding to suggest that the SONY brands are the hero. It’s not the hero. It’s just the manufacturer. The same PlayStation owners do not necessarily own other SONY products. They see PlayStation as separate.
Apple has tried to makes its brand an integrated solution. iPhone and iPad sales have helped the Macintosh sales. The Macintosh platform supported and was supported by the iPod and iTunes… and Apple got all the credit. As a result, the Apple owners are many times as fanatical over their Apple products as the Mac users were over their Macintosh computers. This did not happen by accident. It was planned. Jobs always knew Apple was more than a product. It was a lifestyle. SONY was as well. It is too bad that they just walked away from it. In many ways, they walked away from us. SONY needs to pare down its offerings and concentrate efforts on defining the parent brand.
What can the SONY brands own?
If Apple owns simplicity and design, the SONY brands could offer individualized. They could speak to the uniqueness of the SONY user and pay that claim off with individualized specialization. This position is defensible because it positions itself against the competition, highlights the underdog status that the SONY brands finds themselves facing, and fans the flame of personal control and personal choice. At the end of the day the SONY brands need to sell the brand for a while and use marketing to support the brand claim as proof of truth.
Will SONY do it? I am not sure. If they still see themselves as merely an electronics company they will stay the course, spin off products and divisions, continue the downward spiral. If they make the BRAND transition to a becoming a communications company the SONY brands will change, grow and win. No one doubts that they have always made great products but that has never been enough.
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