Marketing Weblog: SONY + BLU-RAY: THE VICTORY OF MARKETING STRATEGY OVER PRODUCT QUALITY

The triumph of Sony´s Blu-Ray is a demonstration that an outstanding product is never enough. Because, as it was demonstrated with the Betamax and Blue-Ray Stories, unless you accompany it with a winner Marketing Strategy, you will not make it.

Let me make a quick summary of the Betamax and the Blu-Ray stories: In the 80s Sony came up with an outstanding format for the videorecorders called Betamax. It was an state-of-the art technology, far beyond the one they were competing with: VHS. Sony thought that the product quality in itself was enough to win the format battle, and did not put in place a Marketing Strategy to get it fully supported. The result was that the VHS format became the mainstream and the Betamax has to be abandoned.

More than 20 years later Sony was facing a similar situation: The standard for the high definition was at stake. They had their own format, the Blu-Ray, which was competing with another one developed by Toshiba called HD-DVD.

One month ago, Toshiba announced that it would abandon the production of the latter. The main reasons for this are not to be found in the product quality of Blue-Ray, but on the Marketing Strategy defined and implemented by Sony. Good for them that they have learned of their mistakes. These are some the key points that they put into place:

1. Hardware manufacturers support
2. Content support
3. Long-term strategy management of the product portfolio
4. Smart communication campaign to reinforce the new standard

The first thing to get was the hadware manufacturers support. Both Sony and Toshiba ran to get it, but Sony was smarter. In the case of Sony they made a huge lobby and ran intense negotiations to get the full support of the PC and DVD manufacturers. The result was that Dell, Hitachi, Hewlett-Packard, Panasonic, Pioneer, Philips, Samsung and other IT equipment producers, announced publicly that they were to support this format and produce based in it. The outcome has been that they have been able to put into place in the market an increasing and significant installed base of Blu-Ray performers.

The second thing was to get the Content Companies producing according to their format. One of the reasons why Sony decided to enter into the Content Market was to be able to push its own formats against competition. This was clearly shown on this scenario. Good start but not enough. It was also key to get the support of other Content Companies for, not only you need people to get your technology, but also to be able to find the movies and games they want to play exclusively in your format. Thus they managed to get Electronic Arts, Vivendi, Metro-Goldwyn-Mayer and Walt Disney on board from the beginning assuming, as it happened, that other content producers will follow little by little.

In parallel, a long-term strategic management of their product portfolio took place. The first step was taken, as explained, by getting into the Movie Business. And the second and most crucial one came with the Playstation 3. They made the decision of incorporating in the PS 3 from the beginning the Blu-Ray, to assure of massive installed base. This was heavily criticized by analysts for the production delays it generated (the PS 3 had a launch delay of approx. 8 months), but have turned out to be absolutely key. Not only for the Blu-Ray in itself, but also for the PS 3 that is now positioned as the console of the future thanks to the former.

And last but not least, they have come up with something that we tend to forget: The first to communicate is the first to launch (check this posting in the IE MK Weblog for more details). They have therefore launched an ATL campaign where they clearly state that Blu-Ray has become THE HD-DVD technology and that it is produced by Sony. Smart thing by the way: They get the message across and grant Sony´s Brand with additional premiumship.

Congrats for Sony. They have demonstrated that an outstanding technology is never enough. A holistic Marketing Approach is the only recipe for success.

Comments

Very informative post. It reminded me of the false belief that if you build the best mousetrap people will line outside of your door to get it. Unfortunately things don't work like this and marketing your product plays a crucial role in getting the sales.

Sony learned from its previous mistake and managed to run a successful campaign in front and behind the scenes that lead to the prevalence of its product.

"And last but not least, they have come up with something that we tend to forget: The first to communicate is the first to launch (check this posting in the IE MK Weblog for more details)."

where is this IE MK weblog?

can you post the link?

You can find the posting "The first to communicate is the first to launch" within International Marketing.

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