Sony Targets Laptop Consumers in China: Segment Global or Local?

Key Insights

●    Draft in planning: a study on consumer values, qualitative interview data, and a segmentation study

●   Wanted to utilise a corporate study that segments consumers at a global level

About Sony Corporation and VAIO

●    Began in 1946 as the Tokyo Telecommunications Engineering Corporation, a manufacturer of telecommunications and measurement equipment

●    Major player in multiple electronic markets including: video, audio, communications, information technology products for home/professional use

●    More than 171,000 employees worldwide

●   To build on its consumer lines, Sony launched VAIO series of computer products in 1996

●    Strategy for VAIO laptops was to offer a relatively high-end niche product that attached consumers from whom style and design were a top priority

○    Competitors: fairly similar and relatively unexciting designs (monochromatic grays/black,bulky, heavy, boxy)

●   The VAIO 505 line, launched in 1998  was designed to be visibly distinguishable from every other brand/model and positioned as a“statement computer”

●    Design was“sleek”and available in multitude of colours - iconic rich purple hue

●    Particularly popular with image-conscious businesspeople who cared what their computers said about them

●    Brand image developed strong associations with“style and design”

●   VAIO sold computers with software already loaded, one of its distinguishing advantages was the multimedia software (video editing, photo editing, music software)

●    Rather than mass market the VAIO sustained its position as a premium offering

●   VAIO almost always had the higher average selling price (ASP)

○    Disadvantage: consumer associations between the brand and high price kept sony from attracting mass audience

●   With VAIO, Sony focussed almost exclusively on laptop production, marketing and sales

●    It was marketed as a statement computer and was largely seen b y buyers as a  computer for individual consumers and business professionals rather than as an enterprise brand for large or medium sized businesses

●    IT Managers resided paying extra for aesthetic designs and bought laptops that focused on functional benefits

○    Disadvantage: many businesses offered their employees laptops with a

standardised suite of software programs, which did not typically include programs normally offered as part as the VAIO package

●   VAIO’s commitment to a premium position extended into CHina where it was moderately successful

●   VAIO was particularly attractive to a segment of consumers who placed a high value on not just functional attributes but also more intangible benefits

●   Was seen as an advantage in consumers eyes and was reinforced by generally high regard that chinese consumers had for japanese electronics brands

●    Chinese consumers who valued intangible benefits such as status or peace of mind

showed a preference o=for purchasing the genuine brand even if a copycat accurately mimicked it

Market Research on the Chinese Laptop Consumer

●    Lopez had the results of 4 separate market research efforts

○    1. Large scale study of the chinese laptop  consumer

○    2. A more detailed report consisting of interviews with chinese laptop consumers

○    3/4. Two segmentation studies that provided different pictures of the chinese laptop consumer market

The shanghai report: A broad picture of the chinese laptop consumer

●    Conducted research in shanghai to gain understanding of the modern chinese consumer values, consumption behaviour and usage habits

●    Identified 3 key trends as a consequence of the country’s“bullet train economy”

●    First, major education and income gaps among segments of china's population

●    Second, china was awash in low-quality and/or knockoff products as well as free online content

○    Generated differing and sometimes opposing reactions from diff segments

●    Lastly, a growing segment of chinese consumers aspired to enjoy levels of status, money, technology and knowledge similar to those of more developed countries

●   This trend toward status-seeking motivated a significant minority of chinese consumers

●    Chinese citizens were“detail-oriented consumers”who sought comprehensive info about brands, models and products

●   Approx 50% of the country’s working-age population are better educated than previous generations and drove much of the status-seeking behaviour

Customer Interviews: A deeper understanding of chinese laptop users

●    In-depth interviews with 40 chinese VAIo laptop owners and 4 people who owned non- sony laptops

●    Interviewees were 21-35 yrs old (average age of laptop oweners)

●    Questions regarding how they researched, shopped for, set up and used their laptops as well as their general perceptions of laptop brands

●    Interviews revealed 3 Key themes:

○    Brands are an extension of who I am

■   Chinese consumers saw electronic purchase as a strong means of self expression

■    In china laptops could be seen as an extension of a consumers identity as a“multimedia person”, a“tech person”or a“cool person”

■    Respondents easily recognised sony and considered it to be a premium brand

■   They were generally unfamiliar with or indifferent ot the VAIO brand

■   Sony was seen as young and trendy → due to colour choices

■   Apple: cool

■   Thinlpad: trustworthy

■   Asus: mainstream and bland

○   Asking for product advice is one way I connect with others

■    Importance of their roles in society

■   WOM is considered an essential part of the buying process

○   Just give me what I want

■   Electronics market often confused consumers by providing meaningless information → many differed on minor


■    Some consumers depended on their laptops to primarily connect with others online

■    Others viewed primary use as a productivity tool (school/work)

■    Some a relatively light users and relied on computers for everyday tasks

■    Some depended on their laptops to be the key integrators of all the technologies they owned and used

The CLUES Report

●    Early 2010, a project named Chinese Laptop User Survey (CLUES)

●   Conducted 760 surveys of the chinese consumers between 18 and 55 years of age

●    Either owned/interested in purchasing a laptop in the near future

●    Respondents were asked to rate laptops on their specific characteristics (coolness, simplicity and productivity)


○    Entertainment Lover

○   Business Focussed

○    Family User

○   Techn Enthusiast

○    Fashion Oriented

○    Heavy User

Project Compass

●    Project Compass, was intended to provide the most comprehensive view of consumers across a variety of markets, business groups and product categories

●   Almost 2 years to conceptualise, fund, design and im placement

●    Prior to COmpass, Sony’s segmentation efforts were region-specific, product-specific or a combination of both

●    Project Compass was a worldwide segmentation study that included data from more than 30,000 respondents

●    It represented a move to better align cross-divisional and cross-regional thinking

regarding consumer segments while still allowing local regions and different product groups to maximise marketing efforts

●    Project Compass data was collected from 4,000 participants from each of the 8

countries: japan, US, Canada, UK, France, Germany, China and Russia

●    Either F2F interviews or Internet-based interviews seeking quantitative data and led focus groups to capture qualitative information

●    Participants were between 16 and 65 years old and had either use or be interested in: TV, computer, digital camera, DVD player or home audio system

●   A statistic analysis of the Compass data yielded 6 global consumer segments

○   Technosocialisers

○    Performance seekers

○   Status focused

○   Unfussy basics

○    Functional socialisers

○    Quality of lifers

●   Segments in countries were large e.g. Japan 33% were techno socialisers whilst 31% of Russian consumers were categorized as status focused

●    Countries had very large segments of consumers with relatively homogeneous consumer electronics preferences

Comparing CLUES and Compass

●    Lopez asked his research firm to recontact the 760 consumers who responded to the clues study to ask them a series of questions that allowed them to be categorised

according to the project compass segments

A Plan for VAIO

●   The more he and his team members sifted through the data, the more tradeoffs they perceived between the segmentation models and the more uncertain they became   regarding which to use