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Walkman by Sony Ericsson - a new strategy and launching a promo campaign
On the 12 of August the sales of Sony Ericsson W800, the first company phone under the Walkman trademark, started. The product is very significant for the manufacturer, and special effort is put on its promotion. The intrigue is Sony Ericsson W800 is almost a complete copy of Sony Ericsson K750 already being sold, there are few differences (design, delivery kit and a bit changed software). You can read a review describing the differences between the models in details, and here we speak about the company's strategy in promotion of the new products.
In fact, the Walkman trademark appeared accidentally in the product line, it was unplanned. The company intended to release a musical phone, and it got concerned with the Walkman trademark not at once. The reason is the motherly company of Sony headed for the Walkman brand revival. In the course of the last several years this trademark suffered great pressure from the Apple iPod's side, and per se lost the battle in Europe and the USA. The sales rates are the maximal for Apple's digital players, and the mark is a market leader. Sony didn't want to adapt MP3 format rapidly growing popular, and that was the reason. And the company of Sony Music was against, since mp3 spread (which is an unprotected format unlike the ATRAC) was blowing up its business. That all negatively influenced the brand's position, now Walkman is known but the popularity is in the past, it's like nostalgia. The situation was unacceptable for Sony, and starting with this summer its new players can play mp3 music. The company created its model line to compete with the Apple products and considers the market leader its main rival. Now it's quite unclear how helpful will be change of the product line, most probably, it'll increase its market share but not considerably. The moment was lost, and to repair an omission they'll have to apply nonstandard solutions. To realize this real gap between iPOD and Walkman just visit a usual European book store. You'll be surprised to discover special sections with books about iPOD and none devoted to Walkman. And the same situation is taking place on the network - there are thousands of sites about iPOD, and I failed finding Walkman fan clubs, they are either absent or unnoticeable (really, I spent n hour looking for anything alike, but found nothing).
The Walkman revival requires using all the opportunities, even of the company of Sony Ericsson. However, a strategic solution to promote the mark was approved not inside Sony Ericsson; it can be considered like dictated by Sony. By the way, Sony Ericsson will find a plenty of advantages of using this trademark, so we can't consider the appearance of Walkman-phones wrong.
Also the fact all the solutions concerning Walkman are taken in the last moment counts in favour of this opinion. They look chaotic and even damage the company image. Just remember Sony Ericsson K750 and W800 were announced in one day, and the shipments were dispersed for three months, which was done in order to nothing could threaten the shipments of the line leader Sony Ericsson K750. By the announcement moment even a blister (trade wrapping) has not been ready, and its final appearance was formed only some time later. Then the W600 for the USA market was announced and the S600 with different characteristics in Europe (less memory - 64 MB against 256 MB). In a month, the S600 disappears from the company site; all the notes about it are erased without any fanfares. Now the W550 being a copy of the W600 and a copy of the S60 with more memory is released for Europe. Surely, the delivery kit is different; it includes earphones with a standard connector, software for copying music to the phone (everything coincides with the W800). But generally, this is the same device turned into the Walkman brand, an orange panel (and an extra one in a calmer colour), a note Walkman under the screen. This rush in canceling the previous product really amazes and shows the manufacturer needs to put the main emphasis on the promotion of Walkman products. Then how could we explain the company stopped following own classification and created two indexes for the same device - the W550 and W600? Usually the letter index after the number indicates the market relation, but not the number itself. For instance, Sony Ericsson Z500 had two indexes - "a" for the American market and "i" for all other markets. By the way, the Z500 was also cancelled for the European market without a fuse, but the reasons were quite different (the launch delay, the lack of EDGE chipsets).
Later we can only expect a forced transfer of the planned S-series products to the W-class. Inside the company of Sony Ericsson, there is a notion the orange colour is not good for the majority of users, thus operator versions in other colour solutions are offered, interchangeable panels in calmer colours are present (like in the W550), an attempt to make the Walkman brand less striking, but still present on the body, undertaken. The company strategy slaves the new tasks that Sony sets. In fact, this is not bad, especially when the events follow a planned scenario but not slave uprising needs, like now. Potentially, using Walkman trademark means direct collaboration with Sony Music and relative freedom in using all musical services. That will endow Sony Ericsson with freedom and its products with extra flexibility (a curious thing is SE products look more interesting than similar Sony's players in some aspects). With the appearance of hard drive phones the next year the competition with similar mp3 players will get even more evident, and then Sony Ericsson's products will become a trump card in a Sony's sleeve.
For now, the company of Apple couldn't come to agreement to release a fully-functional phone with iTunes service and a hard drive. They considered this product a threat to own prosperity and stopped at an intermediate version, and namely a turned Motorola E398. The new model is equipped with an extra player button and a capability to download compositions from a corresponding service. Memory card supports no hot change, and the max capacity is now 512 MB. Though 256 MB cards are widely spread. In general the product is quite assortment and intended for a small audience. In addition, operators are unwilling to offer their subscribers iTunes-phones, since their targeting at certain service influences own similar projects negatively.
An interesting parallel with Walkman raises. The products get less and less competitive due to fears of Sony Music's management. And the problems began on the top of popularity when it seemed nothing threatened the company position. And the same now is happening to Apple - the next development ring of MP3 players leads us to hybrid devices, and mobile phones are prior here, which force out usual digital players in the mid segment. In low and high-end segments players will be demanded for long. These tendencies are noticeable even now, and new products that will be possible to call sign are to appear in 2006. Here Sony Ericsson has all the chances, especially considering few musical phones, and iPod's example shows only several products of this kind can live. Other phone manufacturers still have no musical services supported and famous brands from this field, which puts them into a losing place. They become the makers of plain musical phones.
Now let us return to Sony Ericsson W800 and its promotion. Sony Music recommended Sony Ericsson to select one of the music bands for this device. And a well known in Europe especially in Great Britain band Jamiroquai was chosen. The band will start a tour with its new album Dynamite in autumn and Sony Ericsson and the W800 will be mentioned everywhere. The band soloist Jay Kay answered several questions to the press about the W800 and comfort of using it. The answers were fair, and they meant the device is close to the ideal musical phone. Considering the absence of similar phones on the market now, we can't argue with the Jay Kay's conclusions.
So, Jamiroquai is used for the promotion, but it has no that global influence necessary to the phone sales, it's only a fashion measure. Special stands designed for the model will advertise in sales points. Such equipment made a good showing at the Sony Ericsson T610's promotion, which will positively influence the sales of the current device.
A special site was created to promote Sony Ericsson W800, there on www.walkmanphones100.com any visitor can leave a message about three his/her favourite songs. All the songs will participate in the parade, and 100 most popular will be available to Sony Ericsson W800's users. And by the way, all the participating users can win first Walkman-phones.
The main question concerning Sony Ericsson W800 is not "will the model be popular?" but "how popular will it become as compared with Ericsson K750?". These two devices are too similar for a user noticed differences. Then the company will have to sacrifice the sales of the K750 to the W800, but the first model is the leader, so, it's impossible. I think the sales will distribute as 75 to 25, which is not bad considering great popularity of the K750. We visited London shops and had a talk with shop assistants in the first day of the sales. I'd note phones are sold exclusively with subscription for the first two weeks, they are hard to find SIM-free (the income for the shop is higher with a subscription). The assistants were glad to share the information about the device, called it the best version of the К750, but failed to explain the differences clearly. By 2 p.m. we have returned to the same points and saw that few phones were really sold, and the sales are typical for a new device, no stock-jobbing, like in the K750's case.
According to one shop assistant on the Oxford Street, "everything is predictable, preliminary orders on the W800 were placed, and even then it was clear they were more moderate than for the K750. The model is interesting, but its launch moment is not right for every customer, I think in September the market for the model will be livelier". Russian distributors showed even more skepticism. The number of orders for Sony Ericsson W800 by all the company partners are minimal, the only exception is Telephone.ru (all others order hundreds and this one thousands of the terminals). The company thinks the target groups of the device and the telephone.ru brand coincide, which will allow realizing such amounts of Sony Ericsson W800.
We think the sales of Sony Ericsson W800 on the Russian market will first be minimal, which is caused by little shipment. The first parties will be launched in the end of August. At the same time, the deficiency of the K750 will make this model interesting as a replacement, which will increase sales as well. For the Russian market a possible ratio looks like 80 to 20.
Sony Ericsson W800 will be quite popular, and at the same time it's just a test of strength, the first device of the new series. In 2006 we'll see 3 or 5 models in the new segment. Considering the musical phone theme will be very interesting the next year, the company has all the chances to raise the Walkman trademark's popularity for the motherly company of Sony.
Published - 15 August 2005
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