When a company introduces a new product, there is never a guarantee that it will be a hit with the public. Some variables such as determining the proper target market, packaging, advertising, and product quality all affect the eventual outcome of how successful a new product will be. According to Robert McMath of the Failed Products Museum, only about five percent of new products actually end up on store shelves (Jerome, 2000). Some additional factors that can be attributed to a new products failure are: it offered no advantage over the existing brands currently on the market, little or no interest from retailers to carry the product, lack of brand identity in an image driven category, ignorance of buyer behaviors, and misleading positioning of the products goal (Gruca, 2003). This paper will look at Sony Betamax, the evolution of the product, the demise of the product and what Sony could have done differently to make it a success.
Sony introduced the first Betamax combination TV and Betamax system in 1975 and the first stand-alone video cassette recorder (VCR) in 1976 as the model SL-7200 (CED, 2006). The stand-alone unit initially sold successfully in the U.S. for $1,295.00. An optional external clock to set recording times came at the request of Sony's then CEO, Akio Morita (CED, 2006). Previous models included an internal clock, but Morita believed that by having an external clock, should it malfunction, repairs could be made without having to bring the whole VCR to the repair shop. The external clock was mistake number one of many made by Sony; VHS (Video Home System) VCR's made by JVC hit the market in 1977 and offered an internal clock and much cleaner look, giving VHS a much needed marketing advantage. The interest in th...
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...was needed. With pre-recorded movies and blank recording tapes extremely hard to find, consumers naturally chose to use the products that were more easily accessible. By reducing costs, Sony could have made up what they would have lost in decreased prices with an increased volume of sales.
The result of all this is that Sony had a significant advantage over their competition, but let it slip away by not recognizing consumer needs and striving to meet them. Competing products that are not compatible with each other must accurately determine the most important element of success, which is having the majority of the market share and being the product of choice since they can not co-exist; in this case it was the stand-alone VCR unit. Sony failed to recognize that, and as VHS systems became the unit of choice, taking the full market share and consumers away from Betamax.
Product life cycle is an important marketing concept which divides the sales history of a product into distinctive stages (Vashisht, 2005). These different stages would present their own opportunities and opportunities and thus call for different strategies for marketing practitioners. Generally, a product would goes through four stages including introduction, growth, maturity and decline. Home theatre products seem to head towards its declining stage with its sales dropped by about 10% in 2012 in Australia (Euromonitor International, 2013). Its profit is also dropping with more generous pricing competition in this market. However, there is a new trend emerging that could transform the competition landsc...
...ons as to why the studio system collapsed and how Hollywood tried to prevent this from happening. The Hollywood we see today is a reformed version of the old studio system, yet is still seen as the most dominant film industry in the world, despite its earlier collapse.
As a new product, it also had some factors that make its adoption difficult. the most serious factor was the discrepancy between the information that customers received though various medias and the entirely designed functions that Tivo had. As mentioned by the company, neither TV ads nor printed ads c...
The market penetration of TiVo has been very poor. Fourteen months after its introduction only 0.04% penetration has been achieved out of the total of 102million TV watching population. This is also reflected in the poor revenue position of the company. Exhibit 3 shows that the company recorded a loss every quarter since the introduction of the product in September 1999 and has been getting worse.
With a near total saturation of the consumer electronics market, companies need to look beyond their boundaries and add value to their offerings, and sometimes it means total reinvention of the company.
A major threat to TiVo's market share is the low barriers of entry into the DVR market.
Among the film companies Kodak had the highest market share with 70%, far beyond companies like Fuji (11 %) and Polaroid (4 %) as well as private label (10 %) and other (5 %). (Exhibit "Market Share") However, Fuji´s global sales of $10 billion made it half Kodak´s size. Even though Kodak was the dominating brand, it faced the problem of a 6% decline in market share within the last five years and a 3% drop in sales in the last year. At the same time, Fuji´s and Polaroid´s sales grew more than 15% in the past year. This is closely linked to the four price tiers in the film market, namely, Superpremium brands, Premium brands, Economy brands and price brands. With prices ranging from $4,27 to $4.69 Fuji and Kodak are positioning themselves in the high price segment through their superpremi...
Since 1999 the growth of spending on DVD purchases and rentals has been incredible. According to Alexander & Associates, “Rapidly growing consumer activity and spending has built this industry into a major market phenomenon. The DVD format for enjoying pre-recorded entertainment at home is extraordinarily popular and consumers are changing their behavior to accommodate it.”
TiVo has had competitors for the first year that it was conceived which has made it difficult to thrive when fighting for market share. The two major competitors were DVR, and ReplayTV. All made their debut in 1999 and the Consumer Electronics Show in Las Vegas. Replay won the Best of Show award. (Pearce & Robinson, 2013) However years later no one remembers ReplayTV. Whereas TiVo and DVR has gone on to become household names in the market place. However in the early years of this technology TiVo thrive. Using clever marketing slogans such as, “It’s not TiVo unless it’s a TiVo”, “Simple enough you mother could do it, or “Hey if you like us, TiVo us.” Additionally, TiVo engaged in employing celebrities to endorse the TiVo brand. These are all time tested marketing strategies that work to help corporations dominate a market share and drive them to financial success. So why has TiVo dominated the market early but never turned a profit.
The Z3 case provides a stimulating overview of how creative ideas can influence a new product launch. It illustrates the role of cross-promotions and movie product placements within the marketing mix, as well as their role in developing a new brand and a brand’s ‘personality’. It also shows how communications strategy and tactics have evolved beyond traditional TV advertising.
When creating a marketing mix for a product, the company needs to look at the 4Ps: product, place, price and promotion (Eugene McCarthy, 1960). “When considering the 4 P’s of the GoPro, it is clear that the company’s success has been due in large to such great marketing.” (Suki Chan, 2013)[1].
[3] Gandel, Stephen. "How Blockbuster Failed at Failing." TIME.com. N.p., 17 Oct. 2010. Web. 10 Dec. 2013.
Although Hastings vowed to be divergent from other video retailers, his goal was to use an identical pricing strategy; however, one that would “appeal to customers [. . .] who used online shopping as an alternative to traveling to retail outlets” due to ease of access and more preferences (Shih, Kaufman, & Spinola, 2009, p. 3). Furthermore, Netflix launched its business at a time DVDs had barely hit the marketplace as the firm anticipated the new technology to be a promising venture. Nonetheless, within a year DVD players became so vast...
Sony is in a different industry than Kodak. Sony belongs to the Audio/Video Equipment Industry where Eastman Kodak is in the Photography Industry. Sony, however does manufacture photographical tools. Based on the two companies’ history, Kodak will likely continue to have a larger selection of electronic photography products, but Sony will continue to develop similar products, often “improved” versions of Kodak’s original products.
Sony Music should have been better engaged to allow this division’s management to properly voice their concerns over the piracy of their content. If there had been a taskforce, as mentioned above, developers for the two music devices could have worked with Sony Music to adjust their products to meet the piracy concerns. Maybe then either team could have produced a product that not only did not have sizeable technical drawbacks, but was innovative enough to capture the attention of the marketplace.