sony ericson mobile

NAME: Roshni Rathor

ENROLMENT NO: 13BSPHH010532

COURSE TITLE: Marketing Management I

SECTION: I

PRODUCT NAME: Sony Ericsson

INDEX

SERIAL NO. PARTICULARS PAGE NUMBERS
1. PRODUCT HISTORY 1
2. MAJOR COMPETITIORS 2-3
3. COMPARITIVE STUDY 4-6
4. COMPARITIVE STUDY 4P’S 7-9
5. COMPETITIVE ADVANTAGES 10-12
6. SOURCES

PRODUCT HISTORY

Sony Mobile Communications (formerly Sony Ericsson Mobile Communications AB) is a multinational mobile phone manufacturing company headquartered in Tokyo, Japan, and a wholly owned subsidiary of Sony Corporation. It was founded on October 1, 2001 as a joint venture between Sony and the Swedish telecommunications equipment company Ericsson, under the name Sony Ericsson. Sony acquired Ericsson's share in the venture on February 16, 2012.
Sony Mobile Communications has research and development facilities in Tokyo, Japan; Lund, Sweden and Beijing, China Sony Mobile is the fourth-largest Smartphone manufacturer by market share in the fourth quarter of 2012.The current flagship device of Sony is the Sony Xperia Z, the first high-end waterproof smart phone.

In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition. This joint venture was named Ericsson GE Mobile Communications, later renamed Ericsson Mobile Communications as GE left the cooperation.
Ericsson had decided to obtain chips for its phones from a single source—a Philips facility in New Mexico. In March 2000, a fire at the Philips factory contaminated the sterile facility. Philips assured Ericsson and Nokia (their other major customer) that production would be delayed for no more than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage. Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as production of current models and the launch of new ones was held up.
Ericsson, which had been in the mobile phone market for decades, and was the world's third largest cellular telephone handset maker, was struggling with huge losses. This was mainly due to this fire and its inability to produce cheaper phones like Nokia. To curtail the losses, it considered outsourcing production to Asian companies that could produce the handsets for lower costs.
Speculation began about a possible sale by Ericsson of its mobile phone division, but the company's president said it had no plans to do so. "Mobile phones are really a core business for Ericsson. We wouldn't be as successful (in networks) if we didn't have phones", he said.
Sony was a marginal player in the worldwide mobile phone market with a share of less than 1 percent in 2000. By August 2001, the two companies had finalised the terms of the merger announced in April. The company was to have an initial workforce of 3,500 employees.

MAJOR COMPETITORS OF SONY ERICSSON

Sony Ericsson being manufactured by one of the giant company, Sony, faced a cut throat competition by many stable players of the market specifically Nokia and Motorola.

Market Leader: NOKIA

• The vertical axis represents the total amount of Net Income earned by each mobile phone The horizontal axis represents the market capital each company has worldwide.
• The circles represent the total assets each mobile phone maker has. The figure represents financial position of each company.

Nokia Ericsson Motorola Industry
Market Capital 94.06B 56.82B 56.34B 179.33M
Employees 58,874 56,055 69,000 260
Qtrly Rev Growth (yoy) 28.50% 15.80% 22.70% 15.90%
Revenue (ttm) 46.23B 20.78B 38.70B 81.02M
Gross Margin (ttm) 34.34% 45.75% 31.48% 37.72%
Oper Margins (ttm) 13.24% 20.21% 11.23% 1.69%
Net Income (ttm) 4.80B 3.33B 4.59B 729.70K
EPS (ttm) 1.12 2.09 1.797 0.07
P/E (ttm) 20.54 17.14 12.54 27.85
PEG (5 yr expected) 1.76 1.78 1.68 1.57
P/S (ttm) 2.03 2.77 1.44 1.99
• Source: http://finance.yahoo.com/q/co?s=NOK

• Among the four major cell phone makers, Nokia has the most market capital and net income, which makes Nokia the largest cell phone maker in the world.
• Motorola comes into second in net income.
• Nokia has the best Price/Earning ratio, which means Nokia’s stock has the relative high earning per share.
• Ericsson has the highest gross margin. Gross margin (gross profit / sales revenue) is a measure of a company's efficiency in turning raw materials into income. In other words, Ericsson is most efficiency in turning raw materials into income.

Earnings
Per Share Profit Margin Return on Shareholder’s
Equity Return
On Assets
Nokia 1.12 10.38% 29.8% 16.2%
Motorola 1.812 12.43% 27.6% 12.8%
Ericsson 2.09 16.02% 22.1% 11.0%

COMPARATIVE STUDY OF ALL THE MAJOR COMPETITORS

Nokia
Nokia, a Finnish cell phone giant, has become the world's No.1 maker of cell phones, ahead of rivals such as Motorola, Samsung and others. The company's products are divided primarily between four divisions: mobile phones (wireless voice and data devices for personal and business uses), multimedia (home satellite systems, and mobile gaming devices), networks (wireless switching and transmission equipment used in carrier networks), and enterprise solutions (wireless systems for businesses).
Nokia wants to be the leader in third-generation (3G) wireless network equipment. The company has slowly becoming the supplier to half of the world's commercial 3G networks. By doing so, Nokia swims to the top of the wireless network infrastructure market led by Ericsson. To capture the international market, Nokia rolled out new business and consumer models with color screens worldwide. The company also gained a piece of the Chinese market by delivering a unit of models capable of English and Chinese text recognition to be sold by vendors in China.

Key Numbers
Company Type Public (NYSE: NOK; Helsinki: NOK1V)
Fiscal Year-End December
2005 Sales (mil.) $40,465.0
1-Year Sales Growth 2.1%
2005 Net Income (mil.) $4,280.0
1-Year Net Income Growth (1.5%)
2005 Employees 58,874
1-Year Employee Growth 6.1%
Source: Hoover’s Company Records. http://hoovers.com/nokia/--ID__41820--/free-co-factsheet.xhtml

Motorola
Motorola is the No. 2 manufacturer of wireless handsets after global leader Nokia. After a previous reorganization, its remaining operations have been focused in four business segments: connected home solutions; government and enterprise mobility solutions; mobile devices; and networks. The company generates nearly 60% of sales through the manufacture and sales of wireless handsets and related products.

Key Numbers
Company Type Public (NYSE: MOT)
Fiscal Year-End December
2005 Sales (mil.) $36,843.0
1-Year Sales Growth 17.6%
2005 Net Income (mil.) $4,578.0
1-Year Net Income Growth 198.8%
2004 Employees 68,000
1-Year Employee Growth (22.7%)
Source: Hoover’s Company Records. http://hoovers.com/motorola/--ID__11023--/free-co-factsheet.xhtml

Ericsson
Ericsson, a company base in Stockholm, Sweden, is the world’s leading maker of wireless telecom infrastructure equipment. Ericsson is also a top cell phone maker and seller through its joint venture with Sony, Sony Ericsson. The company's other products include corporate networking gear, cable, defense electronics, and software for mobile messaging and commerce.
Key Numbers
Company Type Public (NASDAQ: ERICY [ADR]; Stockholm: ERIC)
Fiscal Year-End December
2005 Sales (mil.) $19,099.0
1-Year Sales Growth (4.3%)
2005 Net Income (mil.) $3,059.0
1-Year Net Income Growth 6.4%
2004 Employees 50,534
1-Year Employee Growth (2.0%)
Source: Hoover’s Company Records. http://hoovers.com/ericsson-inc./--ID__43838--/free-co-factsheet.xhtml

COMPARITIVE STUDY ON THE BASIS OF 4P’S

NOKIA :
1. PRODUCT
Variety: In every series of Nokia there are large numbers of sets thus large variety
Quality: Nokia gain brand personality and market shares of 35% because of its quality.
Design: Nokia sets are of various designs such as flip sets, Flat sets, Slide sets, Sets with rotating Camera etc
Features: Each set of Nokia has its own features.
2. Price
Prices start from mere Rs.1200 to more than Rs.50, 000 to suit all class of people.
Nokia also offer cash allowances
It uses skimming price strategy
3. Promotion
Advertising – Through TV, Sign boards, Bill boards, Radio and Newspaper, Broachers, Posters Dummies and display stands
Personal selling – By product training to Distributer (what is product) Sale promotion – Gift like Yamaha bike, Philips TV, Mitsubishi split AC, watches and digital diary, With N73 mobile offer 2500Rs original Blue tooth free With 6220 offer leather Wallet, With 6300 offer caps and shirts
Public relation – Nokia spot light
Road shows – N-gage.com for game lovers, Nokia football crazy.
4. Place
Nokia products are available at Nokia gallery
Established mobile phone dealership such as Car phone warehouse & Link
Retailers like Dixon & other electrical products suppliers

MOTOROLA:

PRODUCT
In creating products, Motorola concentrates on: attractive design
• excellent call-quality
• ease of use
• value-added features including music player, games, camera, and video features
• high quality, reliable products.
In order to remain competitive, the company continually seeks to innovate - for example by building phones that are slim and well designed. This is particularly important for one group or segment of the mobile market. An example of this is the Motorola RAZR phone.

PRICE

The costs to the users of Motorola mobile phones are kept down because they are subsidised by the network providers such as Vodafone. Network providers want as many people as possible to subscribe to their network. They therefore like to link with the producers of the best designed phones which feature the most exciting and effective technologies. Phone retailers will often supply free accessories with a mobile phone to make it more useful to phone users and to encourage them to buy.

PLACE:

There are a number of ways in which Motorola distributes its phones. If you want to buy a Motorola mobile phone there are a number of distribution channels that you can use. Many people like to buy phones from independent retailers such as Carphone Warehouse. These can offer advice about a variety of different phones and suggest the one best suited to your needs. A second source is a retail outlet belonging to a network provider such as Vodafone.
The place where you are able to buy sometimes depends on the product. Some companies like Motorola often give exclusive offers to certain retailers. For example, when Motorola first introduced the pink RAZR in the UK, it was exclusively available through Carphone Warehouse. In contrast, 3G phones are mainly sold through retail outlets of 3G networks. The reason for this is that the product fits closely with the distribution channel.

PROMOTION:

Promotion includes all of the techniques that a company uses to communicate with other individuals and organisations. Companies like Motorola send communications and consumers receive them.
An important avenue for communication is advertising. Advertising is referred to as 'above the line' promotion. Other types of promotion such as special offers and discounts are referred to as being 'below the line'.

ERICSSON:
Product
The products of Sony Ericsson include Mobile Phones and Accessories. The range of Sony Ericsson’s Phones & Accessories is class apart from others. The mobiles are designed keeping in mind wide range of customers and usage.
Phones:
Talk & Text Phones: F305, K330 etc
Camera Phones: Satio, C510, C903etc.
Music Phones: W705, W995, Aino etc.
Design Phones: T700, Z555i, etc.
Web & Email phones: X1, P1i etc.

Price:The phones are in such a way that there are designs for different budgets. The company targets all the customers ranging from low-end customers to high end customers. The Pricing of phones start fromRs.1700/- and it goes up to Rs. 40000/-

Promotion
The Promotional activities are mainly done through advertising. Sony Ericsson has been sponsoring WTA tours. The Brand Ambassadors of the company include many tennis stars such as Maria Sharapova, pop stars and actors in different countries. The company has also adopted the method of Sales Promotion by giving free gifts or use of “Scratch Card”.

Place
The distribution method adopted by the company is One Channel distribution. This means that the customers buy their products from the retailers recognized by the Sony Ericsson, and these retailers buy the product from the company itself. The company does not sell its product online through its website.

COMPETITIVE ADVANTAGES

NOKIA

As broadband systems become more popular, the share of data in all network traffic will increase. New product possibilities include the Internet whose rapid expansion is stunning the world. The Internet will generate a new demand for broadband services, thereby offering new challenges, as well as business potential, to Nokia.
The highly entangled Internet web-sites provide neither sure access to the data required nor guarantees as to their accuracy. In the future, there will be many opportunities for companies who can offer a professionally managed Internet network to operators. Nokia is currently developing circuit switched and packet switched data traffic which will vastly speed up the transfer of large volumes of data in a quickly and easily accessed way through the Internet.
The telecommunications market is highly competitive. In the future, telecommunications and information technology, as well as different media technology applications, will often merge. In order to keep ahead of the field, Nokia is seeking differentiation strategies which build on its current strengths and include its high frequency technology expertise. Nokia’s extensive R & D investment has been channelled into a number of key areas where it knows it can create a competitive edge over its rivals. Staff training and development is targeted at these areas known as core competencies.
By focusing on consumer requirements, Nokia has become a symbol of user-friendliness, simplicity and style, combined with high technology and broad choice of features. The emphasis placed on meeting consumer requirements is likely to maintain Nokia’s competitive edge in the future.
Nokia’s ability to keep ahead of the competition is illustrated by one of its most recent state-of-the-art products, the Nokia 9000 Communicator, launched in 1996. It is a GSM phone with fax, e-mail, short message service, address-book, calendar and Internet connections and created an entirely new category of digital all-in-one communications device. The Nokia 9000i Communicator was introduced in 1997 with enhanced software features.

MOTOROLA

In the industry environment, Worldwide Interoperability for Microwave
Access (WiMax) is very important to Motorola. WiMax is an Institute of
Electrical and Electronics Engineers (IEEE) standard designated
802.16e-2005 (mobile wire-less). With WiMax cell phones will no longer be tied to cellular networks.

WiMax has the potential to replace a number of existing telecommunications infrastructures (WiMax, 2007). WiMax has the potential of replacing cellular networks, copper wire networks used by telephone companies, and the coaxial cable infrastructure use by cable
TV while offering Internet Service Provider (ISP) services.
Motorola to be aware of what their competitors are doing. This trend is also relevant to Motorola because WiMax will reduce the need for wireline equipment, especially in homes. Wireline equipment is primarily used for Internet access and e-mail.

SONY ERICSSON

Its major advantage is the technology it uses and the design of the phone. The designs have kept it apart from its competitors and has helped Sony to attain a huge market share . The technological innovations also brings the company as the global leader in mobile communication technology. Partnerships and sponsorships also allow company to attract users of their product.

SUGGESTIONS FOR MARKETING STRATEGIES

PRODUCT: The design should be more attractive, sleek and “youthful” so as to catch the attention of the youth who are so frequent in changing mobile phones.

PRICE: The price of the walkam phone should be placed around 10,000 to 20,000 to compete with other high end phones.

PROMOTIONS: Strategies to promote the phone should be deeply looked into as advertisements and promotions are the only way to catch the attention of the target audience.

PLACE: More wide availability of the phones will make it reachable to a larger audience rather than placing it through Sony outlets it should place it through other leading stores and outlets.

SOURCES:

1. www.google.com
2. Wikipedia
3. Sony.net
4. Ivythesis.typepad.com
5. Gsmarena.com