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
specifications
■ 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)
● A STATISTIC ANALYSIS OF THE clues DATA:
○ 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
