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4Ps B&M: Has there been any impact of the slowdown on your business?
MT: Not really. Under good economic environment every brand can enjoy growth; however under difficult situations only a company which has strong brand, products and operation can keep their growth. Thus we believe that if you provide high quality products, which meet the consumers’ needs and demand through strong sales channel network, you can maintain growth momentum and we believe that Sony has the advantage of all these factors. In that sense it is a good opportunity for Sony to widen the gap from competitors with the advantage of capability and quality.
4Ps B&M: With the slowdown creeping in, are you making any changes in your marketing strategies for this summer as compared to last year?
MT: Sony’s strategy in India has not changed from previous plan. We are focusing on three pillars of marketing strategy, which are focusing on key strategic growth categories like LCD, DSC, VAIO, MP3WM, PS et al, further enhancement of sales channel network and local staff development.
4Ps B&M: Retail stores are an important platform for sales of consumer durables. So, what plans have you drawn in this regard?
MT: As a part of enhancing the quality of our stores, we have taken a number of steps, which include a change in the branding of our exclusive retail store - Sony World to Sony Centre in order to brush-up our brand-shops. Then secondly, we have also upgraded our display, way of demonstration and quality of floor salesmen to match global standards. This is done with a view to provide new shopping experience to the consumers.
4Ps B&M: What are the product categories on which you are betting high?
MT: Those categories, which are strategic growth categories for Sony like LCDs, Laptops, Digital Still Cameras, Home theatres, MP3 Walkman and PlayStation. These will be the growth categories for the industry as well.
4Ps B&M: A lot of consumer durable companies are making a shift form urban to rural areas. So are you planning anything on the similar lines?
MT: Our target customers are those households, which have an annual income of Rs.5 lakh and above. The rich who have the money are also included in this. Talking about the recession, we think the segment whose household income is less than Rs.5 lakh will be the most affected one. And this is also the segment which uses consumer finance as a means to buy their requisite consumer durables. Going by facts, nearly 30-40% of the total electronics sales are based on such finance schemes. But for Sony, it is less than 5%. This clearly indicates that Sony’s customers have a high income level and most of them buy products with cash. Thus we do not have such plans as of now.
4Ps B&M: What are the challenges you foresee for Sony this season?
MT: Exchange rate impact is currently being absorbed by Sony India, and this is possible due to the profit that we had earned in the first half of FY’08. But if current exchange rate continues or further declines in FY’09, we may not be able to avoid a price increase. Furthermore, the duty structure of India is still very high as compared to other countries, and the consumer is the one who pays this high taxes. Thus, the government should consider a reduction in the duty structure as a means to stimulate consumer demand.
4Ps B&M: What are your plans for the future?
MT: We do not see a pessimistic business environment for this year. Market growth, which has been around 10% for the past few years might slow-down forcing us to look carefully at the category wise trend rather than the total CAV market. But, it will help us to identify which categories will grow and which will shrink. We will drive the growth categories with attractive products and effective marketing communication.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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