Market Share Analysis and Strategy Recommendations for Sony Curved TV market share analysis
Question
Task: How can Sony Curved TV market share analysis help optimize product strategy to maximize market share and profitability for its Curved TV in the Australian market?
Answer
Task One
Identify the product profile which is likely to get the highest market share. Using Multinomial Logit model (MNL), estimate how much market share these products can obtain?
Data Compilations and Conversion
To execute the market analysis for the Sony Curved TV market share analysis, data from Table 1 – Product Profiles has been combined with the average data retrieved from the consumer preference ranking from the Sony Data sheet. This has delivered the three main categories which would be used to perform the Logit Calculations on the excess sheet. The helps deliver the data in a more simplified and organised manner which has been entered in the Resolution and Screen Size columns have been converted to single digit numerals which would allow for a more organised Logit model (DeMaris 1992).
This would help simplify the information and deliver a visual depiction of the data so as to allow for better analysis and the identification of trends or features which may influence customer preference while purchasing Sony Curved TV market share analysis. This data can then be used to design and develop curved TV’s which falls under the most preferable categories thus allowing for maximum profit.
Visual Data Analytics
Once simplified, calculated and organized the data would then be converted in to a liner graph which would help identify Previous Curve TV data and Average preference ranking respondent survey data which would deliver the above liner graph (Simoff, Böhlen & Mazeika 2008). This graph clearly indicates TV customers tend to share the same interest towards both the TV Size and resolution which resulting this data not helping identify important customer influences. On calculating the Logit Model Data, it’s quite clear that there is a facts linked to the curved TV which is attracting consumer interest and preference.
The Logit Model data shows they 16 of the 27 subject data registered a rate of 0 to 3.646147723 whereas only 11 subjects data fall under the data group with below 0. To understand the influencing force the Primary data would require to be comparing with other categories to determine the influence. After analysis it was determined that the Logit Model Data was reflecting consumer interest linked to the TV refresh rate. According the visual below surveys customers preferred TVs which have a lower refresh rate as compared to TV’s with a high refresh rate (Cianci 2013). Customers show more interest towards TV’s with lower refresh rates which clearly seen on the below graph.
Based on the data analysis and statistics the Sony Curved TV market share analysis with a lower refresh rates is likely to attract 59.25% of customer interest as compared to the high refresh rate Curved T which would attract 40.75%. this makes it more logical for Sony to consider developing Low Refresh rate TV which are equally distributed with regard to resolutions (1080, 2160 & 4000)as well as based on the TV sizes (55,65 and 105) which all show the same consumer interest.
Task Two
If SONY decides to offer the top two product profiles based on the market share calculated in Task 1, how much market share can SONY get? (Use MNL)
99% of Australian households have at least one TV and 60% of the household invest on a new TV model every three years. As per ACME Australia, there are over 18 million television sets in Australian households and office today (Mattern 2003). With this statistic Sony can estimate the target market thus allowing the business determines sales and growth for the new curve TV. Important factors which shall influence this statistics have been listed below.
• Competitor brands – 5 brands
• Replacement Duration – 3 years
• % of replacements – 50%
• TV models – 5 models
• Affordability – 15%
Based on the above statistics we would be able to project that Sony would have a minimum target market of 51,000 units and maximum of 56,000 sold each year. This data and statistics can then be used to calcite Sony TV sales, profits and market expansion projection with regard to the new Sony Curve TV in Australia.
Task Three
SONY has estimated that potential size of its market in Australia next year is 50,000 consumers and each consumer buys one unit on average. SONY gets a margin of $400 from each of its product. SONY will incur an additional fixed cost of $5 Million every year if it decides to offer two products instead of one. Under this scenario, evaluate the profit potential of the two product strategies.
(Hint: Profit = Sales * Margin. If there is additional cost involved, then Profit = Sales*Margin – Additional cost).
Task Four
Present your recommendations to SONY.
Discuss which of the two strategies gives highest market share and why
The second strategy involving 2 products is likely to deliver a higher market share are it would allow Sony to offer 100,000 TV units to clients in Australia in the coming year. One could be high end while the other budget cost which would attract a wide client base which would help improves the brands market share (Helgert 2005). Consumers are greatly influenced by brands but it’s important to focus on affordability so as to tap in to a larger consumer market. Offering both top model and budget models will allow Sony to tap in to two consumer categories which will have a direct effect on the businesses market share.
Discuss which of the two strategies offers best profitability
The first strategy where Sony offers only one product delivered the higher profitability when calculated according to the number of units being sold but the second strategy offering two units is likely to deliver better long term results. This is because Sony would be able to tap in to a larger market share and bigger consumer basket which would contribute immensely towards the businesses suitability and growth over the long term perspective (Cagan 2017). The second strategy may deliver a lower profit margin per unit sold but it also means the brand in tapping in to a lager consumer market.
Discuss which product strategy would you recommend to SONY and why
The Curved TV market is still developing and curved TV is considerably expensive as compared to most other LED and smart TV’s Today. This results in making the Curved TV market very limited as consumers would rather wait a while before investing on the curved TV. It’s also a considerably new design and concept which makes it important for Sony to adopt developing a budget Sony Curved TV market share analysis first which they can introduce to the market after which they can consider developing larger and more expensive models.
Offering affordable models which fall in to the media income groups price as well as specification range with help introduce the new concept to the market (Doole & Lowe 2008). Gradually as the curved TVs are purchase customers will also develop more confidence and begin purchase top end models. Brands like Samsung and LG have already intruded the Curved TV’s to the market but they adopted the developing top model curved TVS first. His has resulted in limiting the Sales of the curved TV which has also affected consumer interest towards the product. Sony is well recognized for delivering the best quality thus even the budge model curved TV is likely to attract considerable consumer interest and boost the Sony TV securing a majority market share.
Bibliography
Cagan, M 2017, Accounting 101: From Calculating Revenues and Profits to Determining Assets and Liabilities, an Essential Guide to Accounting Basics, Simon and Schuster.
Cianci, P 2013, High Definition Television: The Creation, Development and Implementation of HDTV Technology, McFarland.
DeMaris, A 1992, Logit Modeling: Practical Applications, Volume 86; Volume 1992, SAGE, New Delhi.
Doole, I & Lowe, R 2008, International Marketing Strategy: Analysis, Development and Implementation, Cengage Learning EMEA, London.
Helgert, J 2005, Comparing and Contrasting Marketing Assumptions and Advertising Strategies in Japan and the United States: Case Studies, Edwin Mellen Press.
Mattern, J 2003, Television: Window to the World, The Rosen Publishing Group, New York.
Simoff, S, Böhlen, M & Mazeika, A 2008, Visual Data Mining: Theory, Techniques and Tools for Visual Analytics, Springer Science & Business Media.
