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Marketers@war

Special Columns
Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
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SONY, NIKON, CANON AND FUJI
They are all Japanese ..... and they're all at War!
4PS B&M Undertakes an Incisive analysis of The Various Tactics that Sony, Nikon, Canon and Fujifilm are using to Lead in The Indian Market
Issue Date - 16/06/2011
 
So what if the famed ‘cola war’ didn’t live up to its hype this summer; it’s the camera segment which has become the battleground for the latest punch-up. The compact point-and-shoot digital camera market, which saw several pitched battles over the past year, is now gearing up for the climactical showdown. The face-off will decide who will occupy the pole position and be No.I among camera makers. Already, leading players have their game plans ready and are keenly deliberating their moves that will put them ahead of the rivals and help them garner precious market share in the rapidly growing Indian camera market.

Thanks to the rise of a young working class with high disposable income, increasing travel plans, and multiple camera ownership, India’s camera market is well poised for the next big leap ahead. Currently pegged at Rs.1,750 crore for FY10, the camera segment is growing at more than 30% annually, and is expected to reach Rs.2,500 crore by FY11.

Alok Bharadwaj, senior Vice President of Canon India, remarks: “The digital camera space has grown tremendously from its humble beginning – just one lakh unit sales in 2002 to reach 2.5 million unit sales last fiscal. I expect this number to reach three million in unit sales by the end of the current fiscal.” Experts say by 2015 camera sales will clock 10 million units.

Cameras have two segments: the high-volume point-and-shoot compacts, and the high-value digital SLR (DSLR) cameras. Industry players say the DSLR market will be worth around Rs. 1,000 crore in FY 2011, even though its unit sales will be around 2 lakh, with a healthy 55% growth rate.

Sony, thanks to its long entrenched premium position in the consumer electronics space, is riding the high tide of consumer connect, hoping to garner a handsome 35% market share and Rs.600 crore in earnings. Nikon is still a distant second with 20% market share and Rs.450 crore in sales. Canon had a 16% share and Rs.500 crore in revenue. Bringing up the rear is Fujifilm (7% market share), which finally seems to be getting its act together in the last two or three years, and has been quietly working towards getting a 12% share this fiscal.

 
A closer analysis of the 4P strategies of this fab four reveals how each of them hopes to crack the market and come up trumps.

Product: The onset of summer has seen all the four players holding multi-city events to launch their latest range of offerings, introducing well over 10 models each to cater to various segments. Products range from compacts – for the amateurs and semi-professionals – to DSLR cameras for professional photo-enthusiasts.

But to drive sales, each player has identified a ‘hero product’. So if Sony is aggressively banking on its Cyber-shot range of point-and-shoot digital compact cameras, Nikon is playing up the Coolpix range in the same segment. Canon, on its part is going all out to promote its HS (High Sensitivity)’ range of cameras that are suitable for low light photography, while Fujifilm is banking on its highest selling S-series range and the FinePix cameras.

But in the DSLR segment the fight is really between Canon and Nikon. Currently, Nikon controls roughly 55% market share, while Canon has about 45%.

Players are touting innovative technologies like HD image quality, 3D imaging and low light photography to break out of the clutter. Currently, Sony seems to be winning on innovation, but Nikon and Canon are slowly gaining ground and could make things tough for Sony.

Price: Most players understand that India is a price-sensitive market, and hence have focused on the low-end cameras so far. Not surprising that the sub-Rs.10,000 cameras contribute 75% of all camera sales in India. Industry insiders even attribute Nikon’s recent success on its price under-cutting strategy. Ironically, Nikon is also the leader in the the high-value DSLR segment. Canon has decided that it will play up its technology edge and focus on the mid- and -premium range cameras. It is focusing on its cameras in the Rs.8,000 to Rs.12,000 range, and the DSLR segment to gain value.

Sony has priced itself competitively starting from around Rs.5,000 to Rs.15,000 in the Cyber-shot range. But thanks to its immense brand connect and premium positioning it leads the mid- and -premium compact market currently. Fujifilm is targeting the low-end and semi-automatic point-and-shoot cameras.

Placement/distribution: Here, Sony has a clear advantage. Riding on its extensive electronics distribution network and the Sony World exclusive retail zones, it’s way ahead of the competition. It has the largest channel network with about 5,000 centres, which many analysts feel is the key to its leadership position in the market.

Masaru Tamagawa, Managing Director, Sony India, says: “We have a very strong sales network across India. We are further increasing our customer touch points through dealers, sub-dealers, distributors, national retail and photo channel partners.”

          
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