Magazine article Marketing

Sony Breaks Record with 9m Pounds Sterling Gamble

Magazine article Marketing

Sony Breaks Record with 9m Pounds Sterling Gamble

Article excerpt

Sony breaks record with 9m pounds gamble Sony will launch the biggest advertising campaign ever seen in the consumer electronics industry next week with a 9m pounds push for the mass market. But one rival has already described the move as an "act of sheer desperation".

National TV, press and poster ads through Bartle Bogle Hegarty break this weekend and run until the end of January. The spend will be divided across the range of Sony products but with special emphasis on its televisions and camcorders.

Sony says it has changed advertising strategy and will now emphasise the more mass-market, "ease kf use" virtues of its goods. Last year's ads were slammed in the industry as too esoteric.

But Sony's decision to boost spend at a time when the sector is suffering one of its harshest recessions has raised questions about where chairman Akito Morita is taking the world's second most recognised brand.

Last week Morita rebranded new acquisition CBS Records as Sony Records in a further indication of his ambition. But it came at a time when Sony was still counting the cost of the takeover of both CBS and Columbia Pictures.

Some rivals argue that Sony is in danger of "corrupting" its hard-won brand values of quality and innovation by seeking mass volumes. They claim Sony is walking a tightrope between its reputation and its desire to compete in all sectors of the 2.8bn pounds brown goods market.

Toshiba's marketing director Mark Todd says: "We're in this business to make money. You wouldn't spend 9m pounds unless you really had too. It shows they've got problems."

Sony spokesman Paul Campbell, not surprisingly, denies that desperation is a factor. He says the company has decided that the shellshocked market, as well as the demise of own-label and Korean brands, means the time is right for a big push from a major name like Sony.

"While there's confusion, it's the best time for us to go out there and say 'We're the company you can trust'," says Campbell. He says the change in ad strategy was not prompted by negative feedback but by a desire to resurrect the appeal of the mid-80s John Cleese campaign.

But that campaign's "So simple the cat can do it" theme fits in nicely with Sony's descent into the mass market over the past three or four years. Meanwhile, rivals like Philips, Toshiba and Sanyo have moved in the opposite direction and distanced themselves from a mass-market tradition.

Dan O'Gorman, president of the Radio Electrical and Television Retailers Association, backs the players who have moved up-market. "The market is already saturated with low price product and traditional growth sectors like video recorders are reaching maturity," he says. "And the replacement market is characterised by people trading up-market, not shopping on price alone."

Retailers should be expected to applaud Sony's bold decision to boost advertising, particularly when spend in sectors like colour TVs slumped 75% in 1989. But rivals maintain that Sony's mass-market strategy has caused ruptures which even the biggest promotional push cannot smooth over.

The problem is that even when Sony fills the lower-end gaps vacated by own-label and Korean brands, its own brand strength forces the competition to reduce their prices -- which in turn eats away at the retailers' margins.

One rival reports how a leading electrical multiple was "pig sick" after Sony introduced a 12.99 pounds clock radio which immediately brought its rivals' prices down by 10%. …

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