Wednesday, October 22, 2014

Positioning

Nearly every consumer electronics maker recognizes Apple Computer’s iPod as the gold standard for internet tablet devices. Apple has by far the largest market share (though they are not very strong in China) and its players are elegantly designed. The company prices competitively and yet still makes huge profits on this line of products. Sony, the consumer electronics mega-brand, considers Apple as its “opponent” in the personal music devices (MP3 player) category; Sony’s objective is to take away market share. Of the five general market-challenger attack options (frontal attack, flank attack, encirclement attack, bypass attack, or guerilla warfare), which would you recommend as the primary attack strategy and why?  Chapter 9

True story: I like stand-alone mp3 players but the market has been largely abandoned to Apple and cell phone. There is one company that makes very inexpensive and small players, but they are notoriously prone to breakage. Being like 30 bucks, you just buy a new one. I was tired of that, I did buy a Sony mp3 player a couple of years ago.  I couldn’t get it to transfer files and the customer service was horrible. I ended up returning it because they had a good product but the total package was wanting (I think in the end it was my fault. I bought a new version of the player that kep breaking and had the same transfer problem. Their CS suggested I try a new USB port. It worked. In 4 hours and at least three different reps, none of the Sony people thought of that solution -- nor did I).

I bought the Sony because of a couple of points of parity, I wanted a new player, but at the low end was the same thing I had been buying. I had spent probably a hundred dollars on replacing the cheap Sansa when I thought I could spend a hundred dollars for a name I was more comfortable with. I still think of Sony as a higher-end brand, in spite of some of the recent problems the company. The Sony was priced higher, but it had more advertised features.  The gold standard of the mp3 players were those in the Apple universe, from the Nano to the iPod to the iPhone. I stayed away from those because they were more expensive and then there is my perception of the cult of apple (grown much larger in the last decade) that I didn’t want to be a part of. Plus with apple, you have to buy the apple computer and the apple connectors and the apple chargers and the apple toilet paper or nothing works. I didn’t want to overpay to be in their walled garden.

So if you look at stand-alone devices, there is an untaped niche there, which Sony filled with its products. It has the name of Sony, and they’re solidly built, and you can be an anti-apple reactionary for whatever reason -- price, or snobbiness.  There is a market, so how do you market it?

In this example, Sony has ceded the bottom of the market.  That’s probably a good idea.  Judging on the quality of the build of those cheaper players, I am imagining the margins are quite thin there. They have a quality MP3 player at a lesser price than Apple, the biggest problem is that they’re not called Apple. They need to take market share away from Apple, and there are different approaches. The first is the frontal attack, matching Apple’s product, price, advertising, and advertising. Second is a Flanking attack, trying to fill gaps the competitor leaves. Third is an encirclement attack, trying to launch a grand attack on multiple fronts. Fourth is a bypass attack, which includes dissociation into products and territories as well as trying to shift the battleground. Finally there is a guerrilla attack, which are small and intermittent attacks in various manners.

Each possibility has its weakness. Sony is a large company, but Apple is larger, with larger margins. so neither a frontal nor a encirclement attack will work because apple has more financial firepower and we are told these attacks are for companies that are peers or stronger than the companies being targeted. The Bypass attack ignores the question at hand. We want to take Sony’s MP3 players up against the giant. The guerilla attack is too small and unsustained. It could be part of the advertising, but it’s not part of the engineering.  Ultimately, I would suggest that Sony do what it did. It created a product that fit in a gap that Apple wasn’t filling. I took its resources and aimed and hit the middle market. I would be a lot more excited about the outcome of that targeting if I walked my dog and mowed my lawn listening to a Sony MP3 player. What they did got the sale, but holistic marketing isn’t done even after the initial transaction happens. It goes on and on.