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THE

SONY
AIBO

Presented by :
Group 4 Section A

The Problem
Failure to position the product to appeal to
two different consumer mindsets (Japan
and US)
Unable to categorize the product as
consumer needs vary across societies
The product remains unprofitable for Sony
at current production levels
Possible Causes:

High price tag


American consumer sees robots as dangerous
or threatening and see little value in a robotic
pet that performs no functional tasks

Situational Analysis
Strengths:
Association of Sony brand name
Sony is market leader AIBO is the first
commercially available robot

Weaknesses:
Not part of Sonys core competencies
electronic, games, and entertainment

Price tag of US$1500-$2500


Sony often fails to meet demand

Situational Analysis
Opportunities:
Social: Baby boomers in the US market
Technological: The research holds the
potential of being extremely valuable to
external high tech companies
Political: Government agencies have a
keen interest in how new technology can
improve its operations
Turn the robotic pet into a learning tool at
schools or an automated caretaker at aging
homes

Situational Analysis
Threats:
Competitors: Honda's Asimo uses a
platform recognition and network integration
technologies similar to the AIBO
Technological: A high-tech company such
as Sony and its competitors are always
threatened by a high rate of technological
obsolescence
Economic: By the nature of the product
categories in which they compete, Sony and
its industry offers many high-end, luxury
products

The Two Markets


Japan

US

Positioning

A companion for life

A companion for life

Value
proposition

A robot dog that would


evolve with the
interactions the owner
had with him

An interactive robotic
dog could be used for
emails, notifications

Consumer
Need

The secret need to take


care, be loved and
responded to

Consumers more
functionality driven;

Consumers averse to
technology; AIBO had
failed to convey the
value effectively

Gap

Methodology and Criteria


Four criteria were used to compare
the alternatives
1) Short term to medium-term
profitability (30%)
2) Alliance with Sonys core
competencies (30%)
3) Long term growth potential (20%)
4) Ease of implementation (20%)

Alternatives
Stop Production
Reasons:
Sony AIBO is unprofitable
Does not fit with core product strategy
American market has a history of
associating robots with enemies

Alternatives
Market Penetration

The Innovator market has not be


saturated
Same product, same price
Same Distribution channels
The promotional strategy would
eschew mass advertising and focus on
building word of mouth buzz
Technology trade fairs

Alternatives
Market Development
Attract the early adaptors and lead
towards a mass market
Functional AND emotional positioning
Build primary demand
Market is large and will offer long-term
growth
Short-term profitability because low
R&D

Alternatives
Product Development
Exploit the tech-savvy, innovator market
that it currently targeted
Develop the AIBO to the point of being
less of a continuous innovation and
more like a discontinuous one
Purchase because of the novelty

Alternatives
Diversification
Two diversification strategies
a) diversification towards a highly functional
AIBO which performs duties and is targeted
towards adults
Development of a highly functional product that
answers the question, But what does it do?
American consumer is pragmatic
Low short-term profits
Most aligned with Sonys core competencies of
producing high-tech electronics

Alternatives
b) a primitive-version AIBO that is geared
towards children

Dropping both the price and the functionality


Mass advertising campaign,
Integrated components
Element of luck when attempting to create
mass infatuation

Implementation