Sony’s Branding Problem
Today’s New York Times has a fascinating article about the decline of Sony. It really is shocking how far the company has fallen. Sony hasn’t made a profit since 2008. According to the article, the company is now worth one ninth of Samsung and one thirtieth of Apple. You can read the article here:
The article highlights a number of problems at Sony including a lack of innovation and a dysfunctional corporate culture.
I think the article didn’t spend enough time on one of the most critical issues: Sony’s brand. There is a simple branding problem at Sony; the brand lacks meaning.
What precisely is Sony? I suspect most people would say it is a quality Japanese electronics company. But this isn’t differentiating in a world full of quality electronics companies.
Sony is an example of what happens when a company falls blindly in love with its brand. Sony uses its brand on all sorts of products: televisions, cameras, computers, music players, digital book readers and toys. In a remarkable move, several years back Sony decided to use the brand on a movie studio and on a music label. Sony’s high-end products carry the Sony brand. The low-end products carry the Sony brand, too.
After all this, the brand gets watered down; it loses meaning, becoming a fine but not distinctive player in the electronics world. This is a problem.
One of the few successes at Sony has been PlayStation, a business that built a distinct brand. PlayStation is a unique and special brand. Sony isn’t.
As the executives at Sony work on the latest turn-around plan, a top priority should be rebuilding the Sony brand, doing so in a way that makes it unique and special. The “all things electronic to all people” clearly hasn’t worked out too well.
Sony gave us the Walkman, Discman, Playstation Digital camera with Carl Zeiss… they’re predicts were synonymous with quality and innovation. Then came along Howard Stringer who completely Sony. He tried to apply an American management approach to a Japanese company and it failed miserably. He significantly cut funding in research and development and caused the company to slide in the innovation department. Only with his departure is the company starting to turn itself around.
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I don’t think it’s that much of a branding issue. Sony just doesn’t have great products. It fell behind on the flat-panels, insisting on charging high prices for mediocre products and let manufacturers from other countries (Korea, Singapore) lead the way. It had a failed and cumbersome partnership on the smartphone front with Ericsson. Walkmans went away and the iPod stole the show. Sony tried to win with hardware but the game had shifted, Apple won on software (user interface/click-wheel). Even with the e-readers, it was blindsided by Amazon, who had (at first) it’s own $9.99 kindle e-books which could not be read on Sony’s e-readers.
On top of all that, Sony is a very bureaucratic institution which fails to innovate the way newer companies do. And, since 2008, the Yen’s strength has crushed Sony’s pricing power globally.
Sony needs to stop making several of its products, including the e-reader, and focus on high-end products, because it’s difficult to compete on the low-end and win given Sony’s legacy cost-infrastructure (can’t easily layoff workers in Japan, aging pop, etc.)
High-end Vaio laptop/desktop/tablets (maybe just 6 products), cutting-edge flat-panels (4 total products?), one or two cutting-edge phones (ala Apple), one or two audio players, and possibly even spin-off the rest of the businesses (camera, home/car audio, playstation).
Unless a brand can become a fashion statement, it has to have an incredible product behind it in order to be successful. Otherwise, sooner or later, the brand loyalty will wear off as people flock to better products, as they already have for Sony.
Well said. I agree Sony has a brand problem and a product problem. Narrowing the focus might help on both fronts. It would have a big financial impact in the short run, but the financial situation isn’t good in any event.
[…] of what happens when a company falls blindly in love with its brand,” writes Tim Calkins, at Building Strong Brands. Calkins is a marketing professor at Northwestern University’s Kellogg School of […]
[…] “Sony is an example of what happens when a company falls blindly in love with its brand,” writes Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, at Building Strong Brands. […]
[…] “Sony is an example of what happens when a company falls blindly in love with its brand,” writes Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, at Building Strong Brands. […]
[…] “Sony is an example of what happens when a company falls blindly in love with its brand,” writes Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Manag…. […]