Abstract
In the last few years, the restructuring of Sony's electronics division and the repositioning of the company's TV business has enabled it to regain its status as a leading player in the global TV market. By emphasizing the superiority of Sony TVs' screen resolution and color display in its advertising, Sony has succeeded in grabbing the number two spot in the US TV sales rankings; the emphasis on color has helped to differentiate Sony TVs from rival brands such as Philips, Samsung and Sharp. Sony's distribution strategy is another important factor behind the brand's success in the US market. Sony has made effective use of a variety of different distribution channels, setting different goals for each channel; this multi-pronged strategy has enabled Sony to grow its TV sales in the US while at the same time strengthening its brand image.
Sony's distribution strategy shows that the company has a good understanding of the characteristics held by different distribution channels in the US market. It is thus important for LCD TV vendors to acquire an in-depth understanding of each distribution channel and of the types of consumers that each channel has to deal with when planning their own distribution strategy. They can then implement appropriate channel positioning and decide how comprehensive a range of models should be supplied to each channel.
3C Chains -the Most Important Channel for Sony LCD TVs
The chief characteristics of 3C retail chains are the superior repair service that they provide, their low prices, and the tech-savvy consumers that shop there. Nearly half of US consumers say that they would prefer to purchase an LCD TV from a 3C store rather than from another type of retailer. Recognizing the importance of this channel, Sony has chosen to supply a wide range of LCD TV models to its 3C distribution partners. The repair service that 3C chains provide helps vendors improve their brand image, which in turn strengthening the relationship between the 3C chain and its TV suppliers.
Mass Merchandisers -Used to Achieve the Maximum Sales Volume
Mass merchandisers' customers are mostly highly price-sensitive; marketing for this channel has to emphasize price above everything else, hence Sony's decision to supply only mid-range and value-line models to this channel. For Sony, the mass merchandisers represent a platform for growing sales volume in the US market. By supplying LCD TVs with unique model numbers to Costco and agreeing to supply custom-made LCD TVs for Wal-Mart and Target, Sony is strengthening its relationship with the mass merchandisers, which will help to ensure high sales volume.
Department Stores -Used to Boost Brand Image
Department stores' customers are extremely diverse, but are generally less price-sensitive than the consumers who purchase home appliances from 3C chains or mass merchandisers. The percentage of consumers buying an LCD TV from a department store is relatively low, so LCD TVs supplied by Sony to department stores are less comprehensive, and there have been few special promotions in this channel. The department store serves as a display platform, helping to strengthen Sony's image as a high-quality brand.
Appendix
List of Companies
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ActiveShopper |
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Amazon.com |
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Beach Camera |
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Best Buy |
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Circuit City |
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CompUSA |
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Conn's |
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Costo |
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Famas |
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Fry's |
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Harvey |
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Kmart |
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Magnolia |
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Micro Center |
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PCMall |
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RadioShack |
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Saga |
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Sears |
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Sears Holding |
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Sony Style |
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Target |
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Tweeter |
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Video Only |
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Wal-Mart |
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