The case study focuses on the expansion of the Sony VAIO premium laptop brand into China and the challenges that the product manager Richard Lopez had with selecting which segments were most relevant for the market. VAIO laptops were created by Sony as another major successful line of consumer products to add to its existing industry leaders such as the Walkman and the Handyman. VAIO laptops were premium and ahead of the industry in design, characteristics (hardware), and software, making it a high-end niche product. Sony focused strongly on the VAOI laptops and gained some advantage as portable computers began to penetrate the market typically dominated by desktops. The VAOI computer line was targeting high-end individual consumers and business professionals who wanted to generate a class or fashion statement. Lopez was presented with four consumer reports, 3 studying China and identifying potential uses and consumer groups in the country, and 1 based on Sony’s global Compass program, which presented segments based on a worldwide scale. Lopez is finding it difficult to narrow down which segments would be best applicable in China and how to utilize this targeting in the VAIO marketing plan.
The key marketing theory that is being applied in this case study is market segmentation. While it may seem that most products are appealing and available to everyone, even the most generic ones have the most effective target segments. Market segmentation inherently consists of dividing a broad consumer market into groups with common characteristics or interests in the product category, making them approachable can be used for much narrower marketing efforts. For some product categories, such as laptops, that can be highly effective since various individuals within those segment groups have different uses for the respective product. Therefore, as in the case study, just a regular home user would likely not be attracted to Sony’s VAIO brand because it is too expensive and likely has too much hardware and software that an average consumer would find no use for. Meanwhile, a high-end business or creative industry professional may find it appealing because it represents a high-end, “fashionable class,” and productive laptop.
However, as Lopez discovered, these segments can overlap, such based on the CLUES segmentation; for example, the VAIO brand may be appealing to business-focused, tech enthusiasts, and heavy users. Market segmentation consists of three steps: segmentation, targeting, and positioning. As indicated by the CLUES and Compass reports, there are different consumer segments, some of which share similarities between Chinese and global markets. For example, technosocializers can be best associated with fashion-oriented, unfussy basics with family users and performance seekers with tech enthusiasts. Some are less clear such as quality of life benefits multiple groups about the same, while performance seekers can also be found in decent percentages across business-focused and heavy users as well. These focus not only on geographical segmentation but behavioral segmentation as well, diving into the market by behaviors and decision-making patterns that drive consumption patterns, lifestyles, and usage of the products in the category.
The next step would be targeting, which involves choosing the market segment that best responds to the product offerings. Meanwhile, positioning seeks to fill the gaps in the market that the brand could fill. Therefore, with targeting, Sony could select the three segments discussed above, tech enthusiasts, business, and heavy users. Next, with positioning, they would begin developing more segment-specific marketing material. For example, tech enthusiasts are likely to be younger, more involved in technology, obsessed with the latest specs and features, having an understanding of all the technological terms. Therefore, marketing will be aimed at presenting the highly technical components of the laptop and highlighting its high-spec performance. Meanwhile, business users are likely to be older (and part of the fundamental basics segmentation), needing a VAOI laptop for productivity and demonstrating class, but they are interested in making sure the laptop fulfills its role as a business instrument. Sony would advertise the same product but in vastly different ways to these segments to ensure that the marketing is more appealing to their needs while still meeting their expectations.