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4Ps
Meet the Sonus!
Neha Saraiya analyses in this delightful report on how Sony India reached a fantastical 25% growth... and on what ‘Sonus’ means!
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 If proof of the pudding is in the eating, then Tamagawa is putting his words into action. Walk into a Sony shop and you’ll realise that for one, the company has changed the branding of their exclusive retail stores – Sony World – to Sony Centre, brushed up their brand shops and upgraded their displays, ways of demonstration and even the quality of floor salesmen to world standard level. Tamagawa claims that these moves would provide new shopping experiences to the consumers that cannot be availed of in any other consumer shop in India.
Strangely, despite the recent excise duty cut, Tamagawa says Sony just might increase its product prices, “If the current exchange rate continues or further declines in FY09, we may not be able to avoid a price increase. Furthermore, the duty structure of India is still very high compared to other countries, and the consumer is the one who pays this high tax. The government should consider a reduction in the duty structure as a means to stimulate consumer demand.”
Namita Chhetri, CEO, ICMR, Planman Consulting, disagrees, “The real killer of all these glorious attempts of Sony is not the duty structure but Sony’s refusal to understand that providing consumer finance drives consumer sales in the Indian electronics industry!” There seems some sense in the logic as, while the industry average for financing products is at 40%, Sony India finances only a measly 5% of its total product sales.
At the end of the day, the fact is that Sony was the first foreign company to be allowed into India with 100% FDI. And it’s certainly not going to be the last. Unless Sony fortifies its consumer loyalty levels, rising competitive pressures and reducing duty structures might see a day when Sony ends up getting the shorter end of the market stick, both in differentiation and in price.
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 So what do you say Mr...
Takakiyo Fujita,
GM-Marketing, Sony India
4Ps B&M: How has been the last year in terms of financials?
TF: Sony India during FY’08 for first three quarters (April- December 08) has realised actual sales of around Rs.28.3 bn which is a 25% growth from corresponding period in the previous period. However though Q4 (January–March’09) growth is expected to indicate a minor slowdown, we estimate that we can continue to maintain over 20% growth for the total FY’08 compared to last year.
4Ps B&M: How much is the size of CAV market in India and how do you plan to increase your share of the matket?
TF: Consumer Audio Visual (CAV) market in India is around Rs. 125 bn of which Sony has a market share of 18%. And overall trend in the industry has indicated a 10% growth till FY‘08 so we are quite optimistic about the same this year too.
4Ps B&M: Sony has been in India for a long period of time. But you didn’t have a brand ambassador for your products. Are there any plans in this regard?
TF: Globally we have a brand ambassador. But in India we think that we don’t need a brand ambassador for our products. Moreover, this is our strategy to differentiate from others.
4Ps B&M: What is the potential that you see in India in terms of growth?
TF: Indian economy is domestic demand driven economy. Thus saving ratio is higher than other countries. Moreover, the dependency on installment (consumer finance schemes) is also lower than other countries. Thus we see a great potential in terms of growth in future.
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Neha Saraiya
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