TERM PAPER

ON

Marketing Plan of Sony’s Refrigerators

COURSE: Product & Brand Management

COURSE CODE: MGT 532

Submitted To:

Anju Sahni

Submitted By:

Varun Puri

Reg. No.: 10800464

Lovely School of Business

Lovely Professional University

Table of Contents

Executive Summary ..................................................................................................................1

1 Situation Analysis..........................................................................................................2
1.1 Current marketing environment..................................................................................2
1.2 Product Analysis .......................................................................................................12
1.3 Target Markets ........................................................................................................113
1.4 Product/Market Analysis Tools ..............................................................................114
1.5 SWOT Analysis ........................................................................................................15
2 Objectives.....................................................................................................................17
3 Competition .................................................................................................................17
3.1 Product differentiation ..............................................................................................19
4 Product - Unique selling proposition.........................................................................20
5 Marketing Strategy.....................................................................................................21
5.1 AIDA.........................................................................................................................22
6 Marketing Mix – Strategy of 4 Ps..............................................................................22
6.1 Product ......................................................................................................................22
6.2 Price ..........................................................................................................................23
6.3 Place..........................................................................................................................23
6.4 Promotion..................................................................................................................23
Executive Summary
The Indian consumer durables industry has witnessed a considerable change in the
past couple of years. Changing lifestyle, higher disposable income coupled with
greater affordability and a surge in advertising has been instrumental in bringing
about a sea change in the consumer behaviour pattern.
This industry consists of durable goods used for domestic purposes such as
televisions, washing machines, refrigerators, microwave ovens, mobile phones etc.
The growth in the consumer durables sector has been driven primarily by factors
such as the boom in the real estate & housing industry, higher disposable income,
emergence of the retail industry in a big way coupled with rising affluence levels of
a considerable section of the population.
As per a survey conducted by FICCI on the Indian consumer durables industry, a
shift in consumer preferences towards higher-end, technologically advanced
branded products has been quite discernable. This shift can be explained by
narrowing differentials between the prices of branded and unbranded products
added with the high quality of after sales service provided by the branded players.
The shift has also been triggered by the availability of foreign branded products in
India owing to lower import duties coupled with other liberal measures as
introduced by the government.
Industry Classification
The consumer durables industry can be broadly classified as consumer electronics
and consumer appliances. The consumer appliances category can be further
segmented as white goods and brown goods.

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1 Situation Analysis

1.1 Current marketing environment

Industry size, growth and trends
India’s consumer market is riding the crest of the country’s economic boom. Driven by a young
population with access to disposable incomes and easy finance options, the consumer market has
been throwing up staggering figures. India officially classifies its population in five groups, based
on annual household income (based on year 1995-96 indices). These groups are: Lower Income;
three subgroups of Middle Income; and Higher Income. However, the rupee income
classifications by themselves do not present a realistic picture of market potential for a foreign
business enterprise, because of significant differences in purchase power parities of various
currencies. In fact, the Indian rupee has a very high purchase power parity compared to its
international exchange value. For instance, while the exchange rate of one US dollar is 48.50i
Rupees, the domestic purchasing power of a US dollar in the US is closer to the purchasing
power of Rs 6 in India, for equivalent needs and services. As a result, India ranks fifth in the
world, on purchase power parity terms, despite being having low per capita national income (US$
340 per capita).

Consumer Classes
Even discounting the purchase power parity factor, income classifications do not serve as an
effective indicator of ownership and consumption trends in the economy. Accordingly, the
National Council for Applied Economic Research (NCAER), India’s premier economic research
institution, has released an alternative classification system based on consumption indicators,
which is more relevant for ascertaining consumption patterns of various classes of goods. There
are five classes of consumer households, ranging from the destitute to the highly affluent, which
differ considerably in their consumption behaviour and ownership patterns across various
categories of goods. These classes exist in urban as well as rural households both, and
consumption trends may differ significantly between similar income households in urban and
rural areas.

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 Structure of the Indian Consumer Market

Overview of India’s Consumer Durables Market

The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD
players and audio systems etc.) and consumer appliances (also known as white goods) like
refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and
dishwashers.

Most of the segments in this sector are characterized by intense competition, emergence of new
companies (especially MNCs) and introduction of state-of-the-art models, price discounts and
exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is
apparent from the fact that these companies command more than 65 per cent market share in the
colour television (CTV) segment.

In consonance with the global trend, over the years, demand for consumer durables has increased
with rising income levels, double-income families, changing lifestyles, availability of credit,
increasing consumer awareness and introduction of new models. Products like air conditioners
are no longer perceived as luxury products.
Growth of Consumer Electronics Production in India

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During FY07, volume share of the single largest consumer durable was colour TVs at 30%,
followed by refrigerators and air conditioners at 18% and 13% respectively. Washing machines
and other assorted consumer durables captured a share in the total volume by 5% and 34%
respectively.

Refrigerator: Demand and supply side dynamics

According to CMIE statistics, domestic consumption of refrigerators witnessed a decline between
FY05 and FY08, while exports grew. From 3% of the total consumption in FY05, exports grew
to7% of the total consumption in FY08. On the supply side, domestic production of refrigerators
in the total supply remained at the same levels in the past three years ended FY08. At 99% each
in FY06-08, the share of production reported a mere 100 basis point increase over FY05, as
imports slided. The refrigerator industry posted a sluggish performance since the beginning of
FY09 on the back of volatile steel prices. The first quarter saw a production growth of a mere 50
basis points to 2.18 million units, as per CMIE.

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Industrial Growth
The industrial sector grew in moderation during FY08 at 8.5% on the back of a comparatively
higher growth of 11.5% during the previous fiscal. The country’s real GDP grew by 9% during
FY08; a tad lower than 9.6% in the previous fiscal. The consumer durables segment witnessed a
fall in production particularly for items where consumer preferences have shifted towards newer
products. Shifting in the consumption pattern coupled with rising input costs of steel, iron ore etc,
may further affect the production levels of these goods. On the supply side newer variants of
consumer durables on the back of technological advancements have flooded the market, whereas
on the demand side it is the prospering middle class and consumerism which have led to changing
demand patterns.

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Foreign Direct Investment
The net Foreign Direct Investment (FDI) inflows to India increased from US $ 22 bn in FY07 to
US $ 32.3 bn in the following fiscal. During 2007 and 2008, the share of FDI in the electronic
goods segment remained flat at 0.2%, coming on the back of a 1.5% share in CY06.

SLEPT ANALYSIS
Foreign investment up to 100 per cent is possible in the Indian consumer electronics industry to
set up units exclusively for exports. It is now possible to import duty-free all components and raw
materials, manufacture products and export it. EHTP (Electronic Hardware Technology Park) is
an initiative to provide benefits to companies that are replacing certain imports with local
manufacturing. EHTP benefits include export credits, no duties on imported components or
capital equipment, business tax incentives, and an expedited import-export process.

The government, in an attempt to encourage manufacture of electronics in India has changed the
tariff structure significantly.
Customs duty on Information Technology Agreement (ITA-1) items (217 items) has been
abolished from March 2005. All goods required in the manufacture of ITA-1 items are exempt
from customs duty.

Customs duty on specified raw materials / inputs used for manufacture of electronic components
or optical fibres / cables has been removed. Customs duty on specified capital goods used for
manufacture of electronic goods has been abolished.

Intellectual Property Rights

Protection of Intellectual property rights (IPR) is a prime requisite for development of R&D and
innovation in the consumer electronics sector. The Government of India has developed a robust
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IP act to facilitate innovation, growth and development. Several amendments to the Copyright
Act, creation of a new Trademark Act, a new Designs Act and amendments to the Patents Act
show India’s continued effort to protect IPR.

The country has already made several changes in its IP acts over the years.. Several amendments
to the Copyright Act, creation of a new Trademark Act, a new Designs Act and amendments to
the Patents Act show India’s desire to change and adapt. New acts have also been enacted to
cover semiconductors and layout designs which will be of considerable importance to the
electronic industry.

In the current WTO regime, India is a party to the “Trade Related Aspects of the Intellectual
Properties (TRIPs) Agreement” and has accordingly, amended most of its IPR Acts and Rules to
conform to the said Agreement. The Indian Copyright Act 1957 was amended in 1999; the patent
Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise Marks Act 1959 was
overtaken by a new Trademark Act 1999. The Industrial Design Act 1911 was effectively
replaced by The Design Act 2000, and the Layout Design of Semiconductor integrated Circuit
Act 2000 was enacted.

The agreement on TRIPs takes care of the intellectual property rights by enforcing the patent
rights, copy rights and related rights, and the protection of industrial designs, trademarks,
geographical indications, layout designs of integrated circuits and undisclosed information.
Accordingly, the member nations are asked to modify their existing laws. Once these laws come
into force, unauthorised use of the patented innovations, trademarks, etc. becomes difficult.
Enforcement of the TRIPs agreement makes the production of any product possible either
through internal innovation or through formal transfer of technologies.

The consumer electronics and durables sector is expected to continue to benefit from supportive
policies and become globally competitive.

Regulations
Free Trade Agreement
WTO regime which came in force in 2005, results in zero customs duty on imports of all telecom
equipment. 217 IT/electronic items were covered under the Information Technology Agreement
(ITA) of the WTO for complete customs tariff elimination by 2005.

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Out of these 217 items, several items were already at NIL customs duty. In fact, IT/electronics
was the first sector in India to face complete customs tariff elimination. The ITA-1 would result
in intensifying competition as more imported products will be easily available at lower prices.

Foreign Investment Policy: FDI

Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively
for exports. The units set up under these programmes are bonded factories eligible to import, free
of duty, their entire requirements of capital goods, raw materials and components, spares and
consumables, office equipment etc. Deemed export benefits are available to suppliers of these
goods from the Domestic Tariff Area (DTA).

A part of the production from such units is permitted to be sold in the DTA depending upon the
level of the value addition achieved. The FDI approval for electrical equipment (including
computer software and electronics) from January 1991 to March 2004 was US$ 7.29 billion,
which was 9.94 per cent of the total foreign direct investment (FDI) approved. During the same
period the FDI inflow for electrical equipment (including computer software and electronics) was
US$ 3.32 billion.

Procedure for approval

Once the investment in equity has been approved, the import of capital goods, components and
raw materials or the engagement of foreign technicians for short duration does not require any
additional approvals.

Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid
employment visa.
Approval for setting up units in Export Processing Zones (EPZs) is given by the Board of
Approvals in the Ministry of Commerce.

Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry
of Industry.

Approvals for setting up Electronic Hardware Technology Park (EHTP) and Software
Technology Park (STP) units are cleared by the Inter Ministerial Standing Committee (IMSC)
set-up under the Chairmanship of the Secretary, Department of Information Technology.

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Proposals involving foreign direct investment not covered under the automatic route are
considered by the Foreign Investment Promotion Board (FIPB).

FDI/ Foreign Technology Collaboration Agreement

The government facilitates FDI and investment from Non- Resident Indians (NRIs) including
Overseas Corporate Bodies (OCBs), predominantly owned by them, to complement and
supplement domestic investment. Foreign technology induction is encouraged through FDI and
foreign technology collaboration agreements. FDI and foreign technology collaborations are
approved through automatic route by the Reserve Bank of India

Growth Scenario
Rising disposable income and declining prices of durables have resulted in increased volumes.
An increase in disposable income is aided by an increase n the number of both double-income
and nuclear families.

The market for consumer durables (including entertainment electronics, communitarian and IT
products) is estimated at Rs 32 billion (US $7.1 billion). The market is expected to grow at 10 to
12 per cent annually and is expected to reach Rs 60 billion (US$13.3 billion) by 2008. The urban
consumer durables market is growing at an annual rate of seven to 10 per cent, the rural durables
market is growing at 25 per cent annually. Some high-growth categories within this segment
include mobile phones, TVs and music systems.

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Consumer durables are expected to grow at 10-15 per cent in 2010-11, driven by the growth in
refrigerators and air conditioners. Value growth of durables is expected to be higher than
historical levels as price declines for most of the products are not expected to be very significant.
Though price declines will continue, it will cease to be the primary demand driver. Instead the
continuing strength of income demographics will support volume growth.

The key growth drivers for the Indian consumer durables industry:
 Rise in disposable income: The demand for consumer electronics has been rising with
the increase in disposable income coupled with more and more consumers falling under
the double income families. The growing Indian middle class is an attraction for
companies who are out there to woo them.

 Availability of newer variants of a product: Consumers are spoilt for choice when it
comes to choosing products. Newer variants of a product will help a company in getting
the attention of consumers who look for innovation in products.

 Product pricing: The consumer durables industry is highly price sensitive, making price
the determining factor in increasing volumes, at least for lower range consumers. For
middle and upper range consumers, it is the brand name, technology and product features
that are important.

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  Availability of financing schemes: Availability of credit and the structure of the loan
determine the affordability of the product. Sale of a particular product is determined by
the cost of credit as much as the flexibility of the scheme.

 Rise in the share of organised retail: Rise in organised retail will set the growth pace of
the Indian consumer durables industry. According to a working paper released by the
Indian Council for Research on International Economic Relations (ICRIER), organised
retail which constituted a mere four percent of the retail sector in FY07 is likely to grow
at 45-50% per annum and quadruple its share in the total retail pie 16% by 2011-2012.
The share will grow with bigger players entering the market.

 Innovative advertising and brand promotion: Sales promotion measures such as

discounts, free gifts and exchange offers help a company in distinguishing itself from
others.

 Festive season sales: Demand for colour TVs usually pick up during the festive seasons.
As a result most companies come out with offers during this period to cash in on the
festive mood. This period will continue to be the growth driver for consumer durable
companies.

Major hurdles and challenges plaguing the Indian consumer durables sector:
 Threat from new entrants, especially global companies: The domestic consumer
durables sector faces threat from newer companies, especially from global ones who have
technologically advanced products to offer.

 Rivalry and competition: Presence of a large number of players in the domestic

consumer durables industry leads to competition and rivalry among companies. Threat
from rivalry and competition poses a threat to domestic companies.

 Potential markets remaining yet untapped: A large segment of the domestic market,
mostly the rural market is yet to be tapped. Tapping this yet untapped and unorganised
market is a major challenge for the Indian consumer durables sector.

 Threat from substitute products/services: The domestic consumer durables industry is

plagued by threats from substitute products. Easy accessibility to theatres/multiplexes,
especially in urban areas has turned off the viewership from TV to a large extent. With the
advent of a horde of FM radio stations, radio sets have now substituted TVs.

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  Customer power with respect to availability of choice: The availability of a wide
product line on account of most products being homogeneous, poses a threat for
companies operating in the consumer durables sector. Customers have the choice of both
domestically produced and imported goods, with similar features.

1.2 Product Analysis

Sony is among the leading electronics brands in the world. Sony has always introduced products
with high quality and most innovative but user-friendly technology. Now Sony has introduced a
range of refrigerators. Sony refrigerators are a class apart from others. They are designed with
most advanced technology which makes them unique. Sony has always believed in thing
differently while designing new products. It has manufactured products which are the blend of
style, consumer's expectations and the advanced technology. The Sony refrigerators have unique
energy saving and food preservation technology.

For instance, these refrigerators will have more space because of its unique U-Vacua --vacuum
insulation panel. It results in more space, more energy efficiency, less of material used. In
contrast to conventional refrigerators, these refrigerators will be having very sleek walls. Sony
refrigerators look very sleek and stylish. The design will provide flat door handle. To prevent the
compressor from getting dust, the refrigerators will have full back cover. Besides lending a neat
look, this feature enhances the refrigerator's life and efficiency. You can keep your refrigerator
sparkling clean as the surface of this device is treated with finger print resistant technology.

Sony refrigerators will be equipped with inverter technology which helps it perform better and
also save money in the long term. To make best use of the energy, Sony refrigerators will be
designed to work on five power levels, in contrast of common refrigerators which work on only
one power level. You can set your refrigerator to run on low power at night or at other times
when it is less used. There is automatic system which adjusts power according to the usage. There
is combination of features like inverter compressor, temperature sensor and microprocessor
technology. These refrigerators will provide best cooling at minimum power consumption.

Refrigerators from Sony will have some features which make them adorable for their owner.
They will keep food as fresh as from the garden. There will be vitamin --safe compartment which

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helps preserving vital nutrients in the fruits and vegetables. User can store fruits and vegetable in
the separate compartments according to the temperature they require maintaining their nutrients.
Hygiene active system in these Sony refrigerators will fight odours and prevent the growth
harmful bacteria. If a consumer wants to feel proud at his decision of buying an extremely
efficient and stylish refrigerator for your home, they will so for Sony refrigerators only.

1.3 Target Markets

The following section will provide an overview of Sony’s target market and of its targeted
customers.

1.3.1 Target market approach

In our opinion, Sony should use a segmentation approach as their general strategy to reach
targeted customers. Although mass-marketing would create the largest potential market, which
leads to the lowest costs and results in lower prices or higher margins, we propose segment
marketing because it can create a more fine-tuned product offering and price for the target
segment. Moreover, this approach enables to select more easily the best distribution and
communication channels, and to have a clearer picture of the main competitors.1

1.3.2 Segmenting consumer markets

Cultural distinctions, different needs and demands of individuals, and diversities in customers’
buying behaviours require market segmentation of companies to satisfy their customers
effectively. Thereby, the market can be divided in geographic, demographic, psychographic and
behavioural segmentation variables and the company can focus on target segments which it wants
to attract.2

According to Sony, there will be no segmentation on geographic factors as we know refrigerators

are required in all over country insignificant to the geographic factors.

Furthermore, there will be segmentation of consumers on the income group they belong to.

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Furthermore, Sony concentrates on a strong customer loyalty status in the behavioural segment.
Besides its popular brand and the high reputation of its products. Finally, one of the important
target segments of the Sony refrigerators involves consumers who require high technology. The
company is convinced that its consumers desire and want to get the best out of the best.

1.3.3 Purchasing process

Some customers make their decision which refrigerator they want to buy dependent from the
number of available companies. Not only the functionality and technology, but also the variety of
designs can be important for the decision-making process of customers. Therefore, the company
has to offer information about the refrigerators’ designs which will be available. The primary
channel for providing such information would be the official webpage.

1.4 Product/Market Analysis Tools

1.4.1 Product Life Cycle

The product life-cycle consists of four different stages:

- Introduction: At this stage, the sales growth increase slowly when the product is
introduced to the market.
- Growth: At this period, a market acceptance of the product is recognizable and the
number of sales units increases. First-users report about the product positively and other
consumers are becoming curious.
- Maturity: A slowdown in sales growth will be at this stage because the product has
achieved acceptance by most of the buyers.

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 - Decline: Most of the potential buyers have already the product and therewith the number
of sales declines.

Figure 1: Refrigerator Product Life-Cycle

Different marketing strategies are necessary for each stage of the product life-cycle. We will
discuss our recommended strategies in” Marketing Strategy”.

1.5 SWOT Analysis

The SWOT analysis is the overall evaluation of a company’s strengths, weaknesses,
opportunities, and threats.3 It is used as a framework to help an organization develop its
marketing strategy. Thereby, strengths and weaknesses are internal factors which can be
controlled by an organization, whereas opportunities and threats consist of external factors which
are uncontrollable by an organization.

STRENGTHS & WEAKNESSES

Strengths
 Presence of established distribution networks in both urban and rural areas.
 Presence of Sony as well-known brands.
 In recent years, organized sector has increased its share in the market vis a vis the
unorganized sector.
Weaknesses
 Demand is seasonal and is high during festive season.
 Demand is dependent on good monsoons.
 Poor government spending on infrastructure.
 Low purchasing power of consumers.
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CHALLENGES AND OPPORTUNITIES
The Challenges
 Heavy taxation in the country is one of the challenges for the players. At its present
structure the total tax incidence in India even now stands at around 25-30 per cent,
whereas the corresponding tariffs in other Asian countries are between 7 and 17 per cent.

 About 65 per cent of Indian population that lives in its villages still remains relevant for
some consumer durables companies. This India, at least a large proportion of its
constituents, still buys traditional refrigerators being unaware of frost free refrigerators

 Also, foraying into these rural markets has a considerable cost component attached to it.
Companies not only have to set up the basic infrastructure in terms of office space,
manpower, but also spend on transportation for moving inventory. Even LG and
Samsung, which are touted as having the largest distribution network in the country, have
a direct presence only in 15,000 to 18,000 of the around 40,000 retail outlets (for
consumer durables) in the country.

 Poor infrastructure is another reason that seems to have held back the industry. Regular
power supply is imperative for any consumer electronics product. But that remains a
major hiccup in India.

Opportunities
 The rising rate of growth of GDP, rising purchasing power of people with higher
propensity to consume with preference for sophisticated brands would provide constant
impetus to growth of white goods industry segment.

 Penetration of consumer durables would be deeper in rural India if banks and financial
institutions come out with liberal incentive schemes for the white goods industry segment,
growth in disposable income, improving lifestyles, power availability, low running cost,
and rise in temperatures.

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  While the consumer durables market is facing a slowdown due to saturation in the urban
market, rural consumers should be provided with easily payable consumer finance
schemes and basic services, after sales services to suit the infrastructure and the existing
amenities like electricity, voltage etc.

 Currently, rural consumers purchase their durables from the nearest towns, leading to
increased expenses due to transportation. Purchase necessarily done only during the
harvest, festive and wedding seasons — April to June and October to November in North
India and October to February in the South, believed to be months `good for buying’,
should be converted to routine regular feature from the seasonal character.

2 Objectives
Sony’s financial objectives are to:
- Achieve first-year total sales revenue of 25% market share.

Sony’s refrigerators marketing objectives are to:

- Achieve a first-year unit sales volume of 2 million, which represent a projected market
share of 25 percent.
- Increase second-year share to 38 percent and become the market leader.
- Sell more than 5 million units in the long-term.
- Arrange for distribution through the leading consumer durable stores, Exclusive company
authorized showrooms, distributors & Hyper Markets.

3 Competition
Sony refrigerators will face tough completion from market leader LG, who leads market with
34% of market share in India, with wide range of refrigerators & innovative designs &
association of their product through taking common models into there advertisements. A brief
about LG is as follows.

LG Electronics was established on October 1, 1958 (As a private Company) and in 1959, LGE
started manufacturing radios, operating 77 subsidiaries around the world with over 72,000
employees worldwide it is one of the major giants in the consumer durable domain worldwide.

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The company has as many as 27 R & D centres and 5 design centres. Its global leading products
include residential air conditioners, DVD players, CDMA handsets, home theatre systems and
optical storage systems.

Then there is Samsung who follows LG in Market share with half a share from LG, with
only18.1% in 2006.

Samsung India commenced its operations in India in December 1995, today enjoys a sales
turnover of over US$ 1 billion in just a decade of operations in the country. Samsung design
centres are located in London, Los Angeles, San Francisco, Tokyo, Shanghai and Romen.
Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices
located all over the country. The Samsung manufacturing complex housing manufacturing
facilities for Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is
located at Noida, near Delhi. Samsung ‘Made in India’ products like Colour Televisions, Colour
Monitors and Refrigerators are being exported to Middle East, CIS and SAARC countries from
its Noida manufacturing complex. Samsung India currently employs over 1600 employees, with
around 18% of its employees working in Research & Development.

Market share of major players in refrigerator market

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Whirlpool of India
Whirlpool was established in 1911 as first commercial manufacturer of motorized washers to the
current market position of being world's number one manufacturer and marketer of major home
appliances. The parent company is headquartered at Benton Harbor, Michigan, USA with a
global presence in over 170 countries and manufacturing operation in 13 countries with 11 major
brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Laden and Ignis. Today,
Whirlpool is the most recognized brand in home appliances in India and holds a market share of
over 25%. The company owns three state-of-the-art manufacturing facilities at Faridabad,
Pondicherry and Pune. In the year ending in March '06, the annual turnover of the company for
its Indian enterprise was Rs.1,375 crores. According to IMRB surveys Whirlpool enjoys the
status of the single largest refrigerator and second largest washing machine brand in India.

Godrej India
Godrej India was established in 1897, the Company was incorporated with limited liability on
March 3, 1932, under the Indian Companies Act, 1913. The Company is one of the largest
privately-held diversified industrial corporations in India. The combined Sales during the Fiscal
Year ended March 31, 2006, amounted to about Rs. 58,000 million (US$ 1,270 million). The
Company has a network of 38 Company-owned Retail Stores, more than 2,200 Wholesale
Dealers, and more than 18,000 Retail Outlets.
Company has Representative Offices in Sharjah (UAE), Nairobi (Kenya), Colombo (Sri Lanka),
Riyadh (Saudi Arabia) and Guangzhou (China-PRC).

3.1 Direct competitors

The following section compares the direct competitors LG, Samsung and Sony with regard to
their products, prices, sales units and game range.

3.1.1 Product differentiation

First of all, the following table shows the particular specification of each game console:

FEATURES LG Samsung Sony

Cell Fresh Crisper Yes No Yes
Anti Bacteria Gasket Yes Yes Yes
Deodoriser Catechin Yes Catechin
Star Rating 4 3 5
Humidity Controller Yes No yes
EXTERIOR

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Door Finish VCM PVC 3 VCM
Door Type Flat Door Curved Flat
Handle Type Y Type D type C type
Lock Yes yes Yes
Color Titanium 3- shade
FREEZER COMPARTMENT
Twist Ice Tray Ice@Door no 4 Trays
Freezer Lamp Yes yes Yes
REFRIGERATOR
COMPARTMENT
External/ Internal
Temperature Control External Micom internal Both Electrical
Energy Consumption 595 695 497
Anti Bacteria Gasket Yes no Yes
Veg Box Normal small Big
Convertible Veg Box Yes no Yes
Veg Box Cover Glass acrylic Toughened
Deodorizer Catechin yes Catechin
Cell Fresh Crisper Yes yes Yes
Vita Light Yes no Yes
Humidity Controller Yes Low Yes
Shelf Toughened Glass acrylic Toughened Glass
Opti Fresh Yes yes Yes
Lamp Yes yes Yes

4 Product - Unique selling proposition:

The Unique selling proposition for Sony refrigerators will be the lower compartment of
freezer in refrigerator, that due to different in culture. As we all know Indian people are
not bending towards ready to cook, or freezed vegetables, they like to store food in
normal condition & prepare food on daily basis, & this concept is totally different from
western countries where people need bigger freezer compartment in refrigerator.

4 door
4door Refrigerators with a unique Hybrid Cooling Technology which
preserve the nutrients of your food and Triple Clean System which ensures
your Hygiene. Truly a refrigerator designed to suit your lifestyle.

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 3 Door Refrigerator
Hitachi present 3- Door Refrigerators with a unique vegetable compartment
having Humidity Control to ensure that your vegetables remain fresh for long so
that you do not have to go for veggie shopping often. Because you have better
things to do.

5 Marketing Strategy
The Sony refrigerators have a broad marketing strategy set by Sony. Launched with slogans such
as “LIVE SAFE” and “kitchen safe”, Sony refrigerators aims for a large Customer base.

Thereby, Sony will have to apply a different marketing strategy depending on which level of the
product-life-cycle the product currently placed in. For example, at this initial state of introduction
the most evident need is to market the refrigerator itself, to make sure that it reaches as many
customers as possible. A suitable strategy for the first year is to get the message out about the
capabilities with the refrigerator, and a suitable channel for this message is through television
advertisements,

Brand Ambassador:
For Sony’s refrigerator’s the best brand ambassador would be Juhi Chawla, as she has a home
maker image in the mind of Indian people.

For the second year, there is big need to start marketing the refrigerators more actively, to make
sure the owners recommend our product as much as possible. This stage is characterized by
growth and Sony needs to put a lot of effort into taking advantage of the growth in the
Refrigerator business.

Throughout both years of the product life-cycle, there is a potential growth level, which can be
boosted by getting the message out about the Sony’s refrigerators being for better health.

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5.1 AIDA
By looking at the AIDA model that is suitable for the PS3, we’d expect it to look like this:
A – Attention: Presentation of Sony Refrigerators at exhibitions etc. attracts attention to home
makers.
I – Interest: Demonstration of features on videos in blogs, on the Internet etc.
D – Desire: People are impressed by the features contributing to their health consciousness
creates desire to own the console to play the games.
A – Action: To lead customers toward taking action and buying the refrigerator is an essential
part, but in this case Sony may lag somehow because there are a numerous number of companies
on the market right now.

6 Marketing Mix – Strategy of 4 Ps

The marketing mix is a set of marketing tools a company uses to pursue its marketing objectives
in the target markets. According to McCarthy, these tools are classified in four groups called the
4 Ps of marketing: product, price, place, and promotion.
The following chapter shows, what different marketing tools Sony uses in each group to
influence its buyers.

6.1 Product
Sony’s product strategy is to deliver the best quality and technology. Therefore, the Sony
Refrigerator supports features such as Frost Free, 2 door bottom freezer, Refrigerant – 134a,
Twin Bio attacker, Triple Ice tray, Premium look and Design, Quiet and more reliable
Compressor etc.. Sony has to spend a lot of money in innovation and R&D to use all resources
which are included in its refrigerators. For instance, the company has to focus on the
development of bottom freezer to take advantage of the fact that this new technology is possible
with their refrigerators. Moreover, Sony’s multimedia functionality is another characteristic to
meet the needs of its customers.
Furthermore, Sony holds on to its brand value. The name Sony’s stands for quality, technology,
and market leadership which could be achieved with its previous product mix. Moreover, the
name has a good reputation and is associated with a high customer loyalty.
Additionally, the design of the refrigerators is modern and is available in three neutral colours
black, white, and silver. The sizes are available from 180 liters to 568 liters

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Finally, Sony will offer a one year long warranty for its refrigerators.4

6.2 Price
Sony’s price strategy is adapted to its product. Due to the fact, that the Sony refrigerators offers
the best technology and a plenty of functionalities, the price for it is more expensive as the
product of its competitors. Nevertheless, Sony’s high price is a character for its high product
quality and the company has to proclaim its high price together with its high technology.
Furthermore, Sony tries to adapt its price to the particular environment and region.
Furthermore, Sony pursues a versioning price policy. According to Shapiro and Varian, it
involves offering a product line and let users choose the version of the product most appropriate
them.5 Consumers can decide if they want to pay a higher price for the premium edition with
some extra features, or prefer a lower price with fewer extra features.
Additionally, Sony has to allow credits to its major retailers and to offer discounts according to
the quantity of sales.

6.3 Place
One part of Sony’s place strategy is to be the last one to release its refrigerators on the market.
Sony has pursued this strategy already with its previous products like play stations & other
products and it ensures that the product will be the product with the newest technology on the
market. Furthermore, Sony offers only a limited quantity of products at the beginning of its
rollout. This is a really powerful marketing tool, because it ensures that early adopters really want
to have the product. Following such an approach, such people stand in lines for hours in front of
shops just to get one exemplar of the new refrigerators. It is important to convince and get early
adopters, because the long-term success of a new product can be based on how those feel about it.
A limited of products creates a passion to get one and it results in communication about the
product. Early adopters speak about the product and promote it. They write about the product in
blogs, create web-sites and connect the product to others in a way that other people will follow.

6.4 Promotion
Sony’s most important promotion tool for its refrigerators is the television advertisements &
exhibitions.
Additionally, Sony’s promotion strategy will also include sponsoring. For instance, the TV shows
like home depot, while you were out etc. Thereby, Sony’s refrigerators will be promoted by
perimeter advertising boards and TV spots.

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Chapter “Marketing Strategy” includes more information about Sony’s promotion strategy.

7 Implementation controls

IT systems, most importantly SCM and ERP systems can play an essential role in ensuring that
the sales and distribution channels of the refrigerators are on track. This way, managers at Sony
will be able to monitor the sales on a day-to-day basis, making sure that it meets expectations.

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References

1 Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p. 279
2 Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p.287
3
Kotler, Philip, “Marketing Management 11 ed.”, Pearson Education Int. 2003, p.102
4 Sony.com, „http://www.sony.co.in/Support/ “, accessed on 28.11.20079
5Shapiro, Carl and Varian, Hal R, “Information Rules. A Strategic Guide to the Network
Economy”, Harvard Business School Press 2000, p.39

http://info.shine.com/Industry-Information/Consumer-Durables/902.aspx

http://whirlpoolindia.com/corp-india.aspx