SONY BrandsSONY BRANDS MARKET STUDY
The SONY brands. Like watching an accident happen.
The SONY brands once made up the most powerful 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.
Not long ago, SONY replaced its CFO because of an unexpected $1.1 billion dollar loss (yes…that’s BILLION with a capital B).
Think for a moment about the SONY brands under its corporate umbrella. Trinitron. Walkman. Watchman, PlayStation. Betamax. Blu-ray. Vaio. Handicam, Xperia, Bravia, SONY Music Entertainment and on and on.
Most of us, at some point of time have owned something made by SONY.
”What the SONY brands have not done is given anyone a real reason to prefer the brand because of the brand. ”
SONY brands lack power
Few of the Sony brands disappoint the market. Yet the power of the brand has vanished. Divesting itself from the PC market, the end of the Vaio happens and then returns lamely. Even the SONY brand entertainment group has taken a hit, falling into a two-way tie with Paramount as Warner Brothers surges past. The Xperia sports 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. Consumers routinely left the little sticker on the bottom left of the screen 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 the coming years. We 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. (Update: We were right in this assessment. SONY’s recent financial surge in 2017 is exclusively because of Playstation.)
SONY just means sub-brands today
SONY’s primary problem resides in a too large, too diverse portfolio. It’s almost all about the sub-brands, like Playstation. 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 Macbook, Apple iTunes, Apple iPod.
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 live by the sword of innovation and as a result its brand dies on 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 duel, SONY believed an improved picture quality was more important than the ability to record three times the programing on a single tape.
SONY uses too many old models
They created the personal music player market with Walkman. They even owned the content of their own record company. In Walter Isaacson’s Steve Jobs, Jobs speaks to this major failing of SONY. He said they owned the market, 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. SONY rejected Jobs’ iTunes plan.
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 believes it is 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. 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.
What the SONY brands have not done is given anyone a real reason to prefer the brand because of the brand.
This IS the problem. 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 actionable research can a company identify the highest emotional intensity in the category and then 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). The SONY brand wasn’t really about SONY. It was all about the buyer.
The brand said something about the consumer that was far beyond the purchased TV or receiver. It said you knew what you were doing and that you were discerning. A cut above.
What does the SONY brand mean today?
“It’s a SONY” now means it is available on the shelf for purchase. It does not peak to preference or position. The SONY brand 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.
What can Sony learn from Apple?
Apple creates its brand as an integrated solution. The Macintosh platform supports and is supported by the iPod and iTunes… and Apple gets all the credit. As a result, 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 SONY 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, SONY could offer individualized. It 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 parent brand.
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. And 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.
Look at our Market Study on the TV (including SONY) Manufacturing Industry
Read more on SONY
The hack of SONY
SONY TV Sales
The SONY Experience. It’s a start.
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