Toshibas Marketing Strategy For 3d Televisions

Published Date: 02 Nov 2017

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Toshiba's Marketing Strategy for 3D Televisions

Executive Summary

The report focuses on the Marketing strategy for 3D Televisions made by Toshiba especially as an instrument of future success of the 3D television. The paper is divided into two parts in order to analyze the current state of affairs in Toshiba and compare it with the desired future of 3D television marketing according to the recommendations favored by this paper (Albarran, 2012). The first aspect of the paper focuses on the current marketing strategy for 3D television based on the opportunity for future establishment of the product in various market segments. In this section therefore, specific focus is placed on Toshiba as a company in its mission philosophy of leading innovation, core competencies and strengths and weaknesses. Particularly, it focuses on the journey of Toshiba in its cutting edge marketing since its products became global house hold names and how the 3D television has transformed television viewing as well as the value of television experience (Bowonder & Miyake, 2004). The situational analysis of 3D televisions from the period of launch when the market had just received the HDTV to the period when global consumption of 3D had hit its all-time high of 4 percent. In a sense, the marketing challenges including economic, sociological and technological challenges have defined the marketing environment which has influenced in turn the marketing strategy for 3D televisions by Toshiba, as this paper shall seek to demonstrate. The perceptions drawn from the first part of the current situation informs the paper’s recommendations which tough on the desired marketing strategies for 3D televisions and the marketing environment that is envisioned with the new marketing strategy (Child, 2011).

Toshiba is one of the world’s strong companies in electronic business and has had a long journey in ensuring its philosophy of leading innovation. This philosophy is brought to bear in the marketing strategy of Toshiba’s 3D televisions (Howard , 2012 ). The paper focuses on the specific product from its untimely launch to the challenges it has experienced since then. The various aspects of its existence is defined by the knowledge management that characterize the marketing strategy. In this regard therefore, the marketing strategy has been designed to focus on the market experience and the significance of marketing in the electronic business.

Company Overview and Project Focus

Toshiba Corporation, a multinational electronics and engineering conglomerate corporation, was established in 1939. Toshiba has grown through its acquisition of numerous corporates during its history from the Semp in 1977, Westinghouse Electric Company in 2006, Landis+Gyr in 2011, and IBM’s point of sale in 2012. In addition to its acquisition, the Toshiba Corporation has experienced tremendous growth that has seen it compete with other world class companies. For instance, it has emerged as the fifth largest personal computer ventures after Hewlett-Packard, Acer, Dell, and Lenovo in 2010. In the same year, the corporation was the fourth largest manufacturer of semi-conductors as determined by its revenue status (Lazer, Murata, & Kosaka, 1985). The Corporation also focuses on its most diverse market share as part of its strength in the Osaka securities exchange, the Nagoya stock exchange, the London stock exchange, and the Tokyo stock exchange. In these stock exchanges, Toshiba is listed as a constituent of the Nikkei 225 and TOPIX indices (Johnson, 2009).

The significant factor that makes Toshiba a leading company relates to its core competencies and its main business grouping areas. Its core competencies include electronic materials and components, power systems, industrial and social infrastructure systems, medical equipment, office equipment, communication systems and equipment, and information technology (Dovleac & Balasescu, 2012). Particularly, the corporation is organized into four main business groupings that determine its focus areas. These include the electronics devices group, the Home appliances group, digital products group, and the social infrastructure group. In these groups and divisions, Toshiba offers high quality products to its clientele including air conditioners, consumer electronics, railway systems, and electronic point of sale equipment among others (Jacobson, 2010).

The subject of this paper being the 3D television focuses on the elevation of television experience. This is because Toshiba’s philosophy of leading innovation promotes a significant level of innovative frameworks such as the kind that features on the Toshiba 3D television. The 3D product enjoys certain strengths and weaknesses that have prevailed since the launch of the product in October 2010 (Miller, 2012). The strengths include its substantial market share and the power of Japanese products in the international market. Secondly, the company has a wide range of products which have always excited its clientele over the years hence providing a ready audience for its new products. These include the 3D television as well as other electronics. Moreover, the strength of developing significant influences in the market through the Japanese brand promotes important avenues through which the company can expand its marketing of 3D television in the future (Child, 2011). Nevertheless, there are weaknesses that influence the failures that the product has faced in the market as well. To begin with, the product was launched at a time when competition had been scaled up by the introduction of the HD TV which most would be customers had bought. In a customer survey, it had been indicated that though the reception had been initially high, there was a significant number of the client base that had consumed the previous product and as a result a figure below 10% had resolved to consume the new product, but only after eleven months. Additionally, the product had serious health problems as well as psychological challenges which limited its adaptability (Viardot, 2004). For instance, a study of 400 filmgoers in California established that 3D movies limit viewers from intense emotional reactions, are less immersive, and do not offer any advantage as far as recalling a film’s details is concerned. Finally, since the consumption of the 3D after the HDTV was basically a lifestyle issue rather than a necessity, creative marketing designs needed to be launched in order to ensure more sales. Therefore an analysis of the marketing environment becomes very important (Viardot, 2004).

The Marketing Environment of Toshiba

The Marketing environment for Toshiba is as diverse and versatile as it is for any other electronics company that is focusing on different products at a time. However, when it comes to focusing on a single product like the 3D launched by Toshiba in October 2010, it is important to focus on the marketing environment at the time of the launch vis a vis the short term and the long term strategies (Theis, 2012). Therefore, in order to analyze the Toshiba marketing environment it is important that one focuses on the economic, technological and sociological challenges that the product faced. First and foremost, the economic challenges of time of launch and the cost of the V product featured prominently. The 3D product was viewed as more expensive than its HD TV counterpart hence making it less appealing for possible clients who had just bought the new HDTV product. The significant implication is that even though a good number of the clientele, 72 percent of them, the important financial factor could not be ignored leading to a minimal 4 percent having an interest in/ or promising to purchase the product in twelve months (Syrett & Devine, 2012).

The marketing environment was also influenced significantly by the technological challenges such as standardizing technology, lack of content and the 3D glasses (Howard , 2012 ). The lack of content posed the most serious challenge to the 3D products. This is particularly demonstrated by the fact that the presence of the Hardware only necessitated the production of the software that is that is the 3D movies that would be shown on these 3D televisions. This problem was experienced when the product was launched and therefore collaborative efforts were initiated with 3D production companies in order to produce the content needed for the 3D television. However, even a year later, this was still a challenge. Particularly, it has been noted by the Nielson report that even though most 3D hardware have been produced in different sizes, the content for 3D is still significantly limited to movies which are made available to customers through digital video disks. This discourages many people from the 3D television as they are limited to watching movies alone (Lazer, Murata, & Kosaka, 1985). The Nielson report further established that the perception of consumers would be changed if their top three favored contents would be included in the content. These include sports, nature/ animal shows, and action/ adventure series. Secondly, the aspect of standardization seriously limited the up-take of 3D television (Vatolin, Dmitriy ; YUVsoft, 2011). Consumers have begun developing a wait-and –see approach due to the development of many technologies in the market. This is because they are spoilt for choice from active and passive 3D TVs, auto-stereoscopic 3D TVs, and LCD and Plasma displays. Such a circumstance seriously limits the up-take of new technology. Particularly, the estimation of the time of launch for the 3D was poor as much of the content was still unavailable while the focus of the consumer had also been turned to the HDTV. Finally, certain application that came with the 3D television also limited the market reception for the 3D product (Vatolin, Dmitriy ; YUVsoft, 2011). The introduction of the 3D glasses provided a challenge for the 3D technology in different ways. Studies conducted by CTAM and the Nielsen Company cited high costs and the need to wear costly, dorky, and unsuitable glasses to enjoy television viewing. Moreover, the incompatibility of glasses and the screen also limited their use. Particularly, the use of the product is limited to the producer they are purchased from hence shutter glasses from Toshiba would not work with a 3D TV from a company like Sony for instance (Jacobson, 2010).

Finally, the sociological challenges such as the consumer’s wait-and-see approach, mistaking the 3D effect by 3D producers, and education of consumers. As stated earlier, the wait-and-see approach limits the up-take of new technology and slows the marketing strategies employed by the producing company. In the case of 3D television, the fact that the product was launched after consumers had settled into a new product limited the consumption of the 3D product from Toshiba thus leading to delayed profits (Howard , 2012 ). It is important to note that this environment was not hostile to the 3D product as such, but rather it had been overwhelmed by products that came before it and had to therefore take a backstage as the older products were being consumed and as the 3D television product was gathering content to enhance its marketing capacity. The wait and see attitude had to also be countered through extensive education of consumers on the importance of the product as well as its superiority over other products. The consumer education was particularly guided by the fact that television has transformed over the years from black-and-white tube sets to LCD high definition, Technicolor consoles and plasma televisions and the fact that the medium is still evolving. Nevertheless, after the format battles between plasma and LCD displays, Blue Ray vs HDTV, customers still tended to wait till there is one winner in the market before they adopted a new technology in the market, a factor that played well during and after the launch of the Toshiba 3D television in October 2010 (Jacobson, 2010). Moreover, the wait and see attitude was further enhanced by the announcement by Toshiba of its plans to launch a glass free 3D television in the second half of 2011. Moreover, consumers have become aware that whenever they adopt a wait and see attitude, the prices of a given technology are bound to go down hence making their acquisition more economical. In conclusion, the consumers have also developed a significant liking for the 3D effect. However, the attendance to movie theatres and social halls is never to be mesmerized by technology but rather to be entertained by the content (Albarran, 2012). This has served the Toshiba 3D television a blow as in the beginning it was assumed that any content produced in 3D would be attractive to the audience. This fact has promoted the poor reception of 3D in its formative months.

The environment of 3D launching may not have been very conducive. However, the various marketing strategy that focused on knowledge development, a key part of Japanese corporate culture, brand differentiation, as well as planned product improvement may also have played a significant role in the poor reception as the following subtopics shall demonstrate (Bowonder & Miyake, 2004).

Marketing Strategy for 3D Televisions

The marketing strategy for 3D televisions involved knowledge management, increasing consumer excitement through innovative technologies, and promising additions to the current technology that was meant to enhance communicative B2B marketing as well as other interactive procedures (Jacobson, 2010). The world economic crisis had not yet rescinded and there were still challenges in maintaining much of the innovative products in the market. However, the marketing executives at Toshiba ensured that the product remained in the market by noting the wait-and-see attitude and responding by the announcement that a glass free technology would be launched in a matter of months. This served to keep the interests of the consumers intact as the company went back to the drawing board (Vatolin, Dmitriy ; YUVsoft, 2011). Additionally, B2B marketing was enhanced as Miller Gail (2012), the marketing executive at Toshiba, sought to explain on her corporate profile blog. The B2B marketing focused on value producing lasting relationships with other corporates in order to promote a significant level of collaboration that would ensure content provision as well as the improvement on technology in order to appeal to the needs of customers. This value proposition model was made to appeal to the consumers’ sense of love for technology while promoting a significant level of understanding for its products in readiness for full consumption (Howard , 2012 ). The company preferred this mode in order to increase more awareness for the product while increasing the level of understanding among the consumers without necessarily having to focus on the events that are limiting the impact of the product in the market. The overall value proposition therefore, as indicated by the company’s moves, was connected with how well other corporates viewed the success that would arise from such collaborative efforts in order to increase production of relevant content as well as increase comfort while improving the quality of life (Syrett & Devine, 2012).

In addition to the value proposition targeting other corporates, the 3D television products was meant to target the young population in high consumption countries such as the European Union trading block and the United States of America (Syrett & Devine, 2012). This is mainly because the launches of the product in 2010 in the European continent and in the America’s attracted attention and much of the additions and changes that have been made have focused on the two regions, thus underlying their importance. The segmentation of the customers was therefore done through analysis of their economic status, their level of consumption and the rate at which they consume such products (Lazer, Murata, & Kosaka, 1985). However, in as much as the product was new in the market, the Toshiba company also sought to strengthen its appeal by increasing the size of the segments through acquisitions which indicated its desire to attract more consumers who are supported by the economies of these regions of the world considering that they are less economically sound and have significant sections of the consumer bracket struggling financially due to employment issues. The appeals included the acquisition of IBM’s point of sale business in 2012 and the Landis+Gyr in 2011 (Howard , 2012 ).

It is significant noteworthy that Toshiba’s marketing strategy had certain elements of awareness of the challenges that they faced at the market. For instance, they had a quicker response to the glasses issue, they strode to increase their flexibility and responsiveness, they placed a certain level of importance in their competitiveness, and viewed the crisis of poor launch date as an opportunity to make better sales once the market had become more receptive (Bowonder & Miyake, 2004). This marketing strategy assisted the company to market the 3D products to a large extent. However, the particular strategy failed to undertake an extensive analysis of the current market mix for the product. While no data exists as to the extent into which this was done, the sure fact is that the reception of the product and the eventual need to improvise indicated a lack of awareness of the current mix the product would face at the time of its launch (Fahey & Prusak , 1998).

Situational Analysis of 3D Televisions

The situational analysis of the product in terms of the overall brand position strategy, product related specifics such as differentiation and technology, price, promotion and advertising were aspects that made the company have a rough time in the initial periods but which have proven very critical for the product and the company in the long run (Child, 2011). To begin with, at the time of launch the product had a limiting factor which was the unpopular glasses. This instant limitation arose from the fact that the developers may have focused much on the technology and avoided the reception of the product. Secondly, the interaction of the consumer with the product was also a different part that was limited in terms of research. Particularly, there was a significant limitation in terms of the source of content which made it significantly challenging when it comes to creating a visible framework through which the continual service provision for the consumer would be assured through a permanent content provider. Moreover, the challenge of pricing as previous technologies had cheaper prices which made many people shy away from the product whose glasses cost more than $100 to begin with (Dovleac & Balasescu, 2012). However, the advertising channels, focusing on the most recent advertising channels by high profile companies and Box offices, made movie goers and fans of television to look forward to a renewed interest in 3D movies which was hitherto a dream.

In light of the challenges that the product faced one might forget to mention the great impact its formative months had in the world of digital migration as well as technological innovation a year after. Nevertheless, it is important to place a reminder that there still remained significant long term advantage that the product would have to Toshiba and its collaborative companies (Howard , 2012 ). The focus of the recommendations is to touch on these particular issues while analyzing the impact they would have on the product before another innovation threatens its supremacy in the market.

Recommendations for the Marketing Strategy

The specifics of the recommendation touch on the overall marketing strategy with regards to overall value proposition and the target consumers (Syrett & Devine, 2012). Additionally, overall brand position strategy, product related specifics, price, promotion and channels should also form a significant part of the recommendations to be implemented. To begin with, the overall value proposition strategy should be focused on increasing collaborative efforts that reduce Toshiba to a producer of the hardware. In doing so, the content providers would be encouraged to increase the content into sports, action and nature programs hence increasing the customer base. This would not only ensure constant demand by the market segments named, that is, in sports, nature, and action but also increase the level in which various players can get on board and promote their products in digital video disks. The idea with such a strategy is that it will break down from the interpretation that consumers may have of a purely Toshiba product to a move sociologically inclined change in technology which promotes an increase in consumption of the hardware while focusing on the content which matters more to the consumer (Lazer, Murata, & Kosaka, 1985). The goal of doing this is also to allow Toshiba to focus its attention towards improving the hardware. Particularly, it has to be appreciated that apart from the glasses, other complaints such as headaches and lack of enhancement in program understanding were serious drawbacks of the 3D experience. An appreciation of this by Toshiba would enable the company to focus its attention to the creation of a more stable and attractive technology that would keep people’s interest on the 3D television for a very long and prosperous period. It would also enable the company to engage in product differentiation and technological improvements. Significantly noteworthy is the price at which the technology is sold (Theis, 2012). The original 3D television had surpassed the HDTV in terms of price leading to some of the initial consumer shyness when it came to purchasing an untested technology costing that much money. The new marketing strategy allows the company not only to lower prices but to incur less in advertising, production, as well as different forms of consumer awareness since it will be engaging in B2B marketing which places the promotional wage bill on different likeminded partners. In a nutshell, this paper recommends that the Toshiba company focuses on promoting the strength and value of technology rather than engaging in extensive product marketing and value addition protocols that involve content but rather compatibility and usability (Theis, 2012).

Conclusion

In conclusion, it is important to note that the giant corporate companies always have a long term interest in development cutting edge technologies since the market target is always global and the financial implications of developing such products is equally high (Jacobson, 2010). For these two reasons alone, it is important to understand that companies such as Toshiba have long term goals that if not checked in time can lead to a series of miscalculated steps that are to the detriment of the product and the company’s stability in the international markets.