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    Marketing ProjectDSLR Camera Brands in India

    Contents Pg.

    1. Terms Of Reference 12. Executive Summary 23. Canon India 34. Nikon India 85. Sony India 126.

    Comparative Analysis 18

    1. Terms of Reference

    For the preparation of a DSLR Camera Brands Assessment Report

    for activities associated within India.

    Date: July 2012

    Prepared for: Somaiya Institute of Management Studies & ResearchPrepared by: Ankit Mehta

    Background and Objective

    There is no doubt that Canon and Nikon are the two most famous

    camera brands in India. These brands are famous for their Digital Single Lens Reflex

    (SLR) cameras because they were the first ones to make the switch from film to

    digital. They constantly battle against each other for the title of the best SLR

    manufacturer in the world. This report tries to

    1.To document the significant areas within which the companies activity occur,including specific values that may be affected.

    2.To identify the potential effects (both favorable and adverse) on the values andfactors of the proposed activities.

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    2. Executive Summary

    Canon and Nikon constantly produce new cameras and it is difficult to tell

    which one is better. All DSLRs may look alike at first glance, but each carries its own

    advantages and disadvantages. Consumers DSLRs can be categorized into three

    types- Entry Level, Intermediate and Prosumer. Canon and Nikon have the highest

    market share, with Sony and Fujifilm still trying to penetrate the minds of the

    consumers mind. Sony certainly has the technology to be a player in the DSLR

    marketplace. And they have a natural migration path from non-DSLR consumer

    cameras they currently sell. And they sell a lot of them.

    I doubt they'll be a serious player in the Prosumer or professional

    marketplace because, despite the Sony/Konica/Minolta optical marriage, the big

    players will continue to be Canon and Nikon who not only have the optics; they also

    have outstanding digital technology.

    But Sony should play a major role at the DSLR entry level. They have

    economies-of-scale that should allow them to put a pretty competent product in themarketplace at a very competitive price.

    At the moment, I don't see any one company that can compete with

    Canon/Nikon at the top of the professional DSLR heap. As long as they continue to

    lead the market in technology and continue to refine their lenses to keep up with the

    resolution advances in chips and processors.

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    3. Journey of Canon

    3.1 Company Profile:

    Canon Inc. (NYSE: CAJ), headquartered in Tokyo, Japan, is a leader in the

    fields of professional and consumer imaging equipment and information systems.

    Canons extensive range of products includes copying machines, inkjet and laserprinters, cameras, video equipment, medical equipment and semiconductor-

    manufacturing equipment. Originally established in 1937 as Precision Optical

    Industry, Co., Ltd., a camera manufacturer, Canon has successfully diversified and

    globalized to become a worldwide industry leader in professional and consumer

    imaging systems and solutions.

    With over 195,000 employees worldwide, Canon has manufacturing and

    marketing subsidiaries in Japan, the Americas, Europe, Asia and Oceania; and a

    global R&D network with companies based in the United States, Europe, Asia and

    Australia. Canons consolidated net sales for fiscal 2011 (ended December 31, 2011)

    totaled $46 billion.

    3.2 Canon in India

    Canon India closed the year of 2011 with revenues of Rs.1525 cr and is

    targeting Rs. 2100 cr in 2012 which is 40% growth over 2011. Canon focuses on

    multiple market segments of consumer, B2B, Government & Commercial. Canons

    product portfolio extends over a vast variety of copier MFDs, fax-machines, printers,

    scanners, All-in-ones, digital cameras, camcorders and multimedia projectors, cable

    ID printers, semiconductors and card printers.

    Canon India Pvt. Ltd. is a 100% subsidiary of Canon Singapore Pvt. Ltd., aworld leader in imaging technologies. Set up in 1997, Canon India markets over 140

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    comprehensive range of sophisticated contemporary digital imaging. Today, CanonIndia is certified for ISO 9001, ISO 14001 and OHSAS 18001. The company today

    has offices in 7 cities, warehouses in 13 cities across India and employs over 930

    people. Canon has approximately 380 primary channel partners 13 National Retail

    Chain partners, and over 4000 secondary retail points. Oc distributors in India will

    now be a part of Canon partner network. Canons service reach extends to over 200

    towns with over 200 service Engineers, 4 Master service centers and 34 Canon Care

    Centers. Canon and Oc products are available with complete service support

    network.

    1. Products and Services:2. DSLRs (EF lenses, EOF cameras)3. Professional camcorders4. Compact cameras (ixus, Power Shot)5. Compact photo printers (SELPHY)6. Personal camcorders (LEGRIA)7. Fax machines (Inkjet, Laser)8. Single function printers (inkjet-pixma, laser-laser shoot)

    9.

    Multifunction printers (inkjet-pixma, laser-image CLASS)10. Scanners (document, flatbed, flatbed with film)11. Consumables (ink, paper & media)12. Projectors

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    3.3 Recent Marketing Strategies

    o Canon enters cinematography imaging domain in Indiain July 2012. Targets Bollywood and broadcast applications with new

    cinema EOS product line.

    o Announces 3 models as a part of new range ofadvanced professional cameras and 11 new lenses for cinema

    photography image capturing

    o Launches Canon Professional Services ( CPS ) forpress and media photographers in the country. The service will

    provide membership for selected media houses (company

    membership) targeting the regions of Mumbai, Delhi. CPS concept

    has been established in worldwide Canon group and herein starts

    with Indian market. This CPS concept starts with selected Press

    Media and will expand to professional photographers and

    Professional camcorder user including Cinema EOS System.

    o Canon plans to inaugurate 95 retail stores in 2011,100 in the year 2012 and another 100 stores in 2013 taking the count

    to 300 stores in the next 3 years. Canons unique initiative to tap B, Cand D-class cities of the country, Image Express, reached 38 cities in

    Tier II and Tier III towns.

    o Canon India forayed into retail space with the launchof its exclusive brand retail store called "Canon Image Square".

    o Canon launched Canon Image Express, a mobilecampaign touching 32 cities in 224 days

    o Canon launched a television commercial called MyIXUS, My Style in two languages, English and Malayalam.

    o Canons Original InkCenters touched 1000 outletsacross 176 cities in India.

    o Pioneer of 100% cash back offer on laserprinters under CLAP, Canon Loyalty Achievement Program.

    Canon India closed

    revenues at Rs. 1257 crrevenues in 2010, with 50

    per cent growth over

    2009.

    Canon organized over 75

    photography workshops

    across India.

    Announces the launch of

    Canon image RUNNER

    ADVANCE, the next-

    generation print

    architecture platform that

    will revolutionize the

    printing industry. Canon

    also announces their

    alliance with the leading

    software solutions

    provider, Microsoft India

    to create the ultimate

    document management

    office.

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    3.4 Awards

    Strong commitment to excel" at the CII-EXIM Business ExcellenceAward

    Canon was ranked amongst top 10 employers in India in the BusinessToday Best Companies to Work for in India in 2009.

    Manufacturer of the Year-Smart Photography 2010 Best Camera Company of the Year-Smart Photography 2010 Best Printer Company of the Year: Inkjet-Smart Photography 2010 Best Professional Printer of the Year-Asian Photography 2010

    3.5 Vision

    Simple advanced solutions freeing people to live their dreams and lead

    enriched lives at home and at work.

    3.6 Mission

    Canon Australia and New Zealand are market leading suppliers of consumer

    and business imaging solutions. We are a Canon Oceanic a team committed to

    our customers ongoing satisfaction through the empowerment and development

    of our staff. To be the preferred supplier we will be easy to deal with and provide

    quality, value for money products and services. To ensure success for all stake

    holders we will deliver profitability, growth, job fulfillment and have a positive

    impact on the community.

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    The president and CEO of Canons South East Asia regional headquarter

    Singapore, Fukui Eiji, is confident that India is going to be an important market

    for Canon. With the upcoming launch of products, its distribution strategy in

    place, cross-selling opportunities in digital cameras, and competitive pricing,

    Canon Indias spirits are buoyant. Going forward, two product categories digi-

    cams and projectorswill be the prime focus areas for Canons consumer

    strategy. These product categories are vital for it to scale its operations from

    business communications or automation to IT peripherals to consumer products.

    Its a big change for Canon, says Alok Bharadwaj, Director and GM,

    Consumer Imaging & Information Division.

    3.7 Summary

    Canon continues to remain motivated and responsive in their pursuit of growth.

    Canon sees India as a critical market for its overall growth and is focused on

    deepening their relationship while staying committed to realizing the untapped

    potential in the market. With Canon camera business growing at a fast pace of

    60% in India in 2012, Canon is looking forward to transform the industry withtheir new products. In accordance with this growth strategy , cinematography is a

    new domain that Canon will focus on , to consolidate its leadership in the Indian

    camera market and expects it to contribute 5% towards its top line in 2013. Next

    time you go to watch a Bollywood movie and get impressed with a scene, just

    think of Canon." Dr. Alok Bharadwaj, Senior Vice President, Canon India

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    4. NIKON

    4.1 Overview

    By capitalizing on the younger generations technological knowledge and

    creative potential, Nikon hopes to increase its market share in the DSLR

    photography sector in India. The DSLR market is known to attract a slightly more

    matured and affluent crowd and the camera are usually perceived as complicated

    and difficult to use. To engage the younger audience and debunk the

    misconceptions, Nikon has produced a guide menu to teach consumers to take

    great pictures quickly. The advantages marketing the DSLR photography interest

    to the youth in India:

    o Debunk the misconception of DLSR photography is only for the oldergeneration.

    o Increase market share in the DSLR photography sector.o Promote creative photography among students.

    4.2 Business Mission

    Become a recognized branding for DSLR photography among the youth by

    promoting affordable, user friendly and creative DSLR photography.

    4.3 Achievements

    Nikon has led in technical innovations for more than 85 years, and the

    performance delivered by Nikon products has earned the company and its

    customers prestige and recognition in a variety of fields. The majority of recent

    Pulitzer Prizewinning photographers used Nikon equipment to capture the

    winning image. Nikon Coolpix cameras have received more awards and top

    rankings than any other consumer digital camera line. Plus, Nikon SLR cameras

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    have been on every manned space flight since the Apollo 15 mission in 1971. As

    The Eyes of Science, Nikon microscopes enable researchers to make critical

    breakthroughs, and Nikon instruments have been at the forefront of discoveries in

    such areas as AIDS, Alzheimers, cancer, in-vitro fertilization, and genetic

    research. The Nikon Diaphot microscope was used for the countrys first in-vitro

    birth, and is still the predominant microscope for assisted reproduction.

    Additionally, a Nikon microscope was used in the cloning process for Dolly the

    Sheep, the first successful fully grown mammal clone. The tradition of Nikon

    quality pervades the company, extending beyond the excellence of its products.

    For the third consecutive year, Nikon has earned the distinct honor of receiving

    the National Association of Photo Equipment Technicians Manufacturer Service

    Support Awardthe highest honor for consistent quality service within the

    industry.

    4.4 Promotion

    Pictures are an integral part of our lives, and Nikon has always known that

    ultimately it is the photograph that matters most. Perhaps the picture matters forcreative expression and personal fulfillment. Perhaps it matters for income

    derived from images, or simply for pleasure and shared memories. The

    unsurpassed quality and reliability that result from Nikons dedication to

    excellence assure that Nikon equipment is exactly what you need when the

    picture matters, which is always. For this reason, the company has adopted the

    platform Ifthe Picture Matters the Camera Matters. This philosophy, or

    key selling idea, has been crafted to addressNikons various photographic target

    markets, and used for all branding and promotional pieces. Similarly, Nikons

    industrial, bioscience, and other products employ direct benefit messages to their

    target audiences in their promotions. For instance, Nikon Microscopes

    positioning as the Eyes of Sciencehighlights Nikons dedication to providing

    the scientific community with the technology that enables vision and discovery.

    Based on a longstanding philosophy that education is as much a part of the Nikon

    tradition as the development and quality of products, Nikon has developed a

    comprehensive program of educational tools and online programs that extend the

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    Nikon brand and broaden the companys reach in the marketplace.Nikons Web

    sites, publications, videos, Nikon School classes, and the Nikon Spirit Initiative

    are all dedicated to providing information, inspiration, and support.Nikons

    educational programs and development initiatives help differentiate Nikon from

    its competitors and underscore the companys commitment to quality.

    4.5 BRAND VALUES

    The Nikon name is equated with extraordinary performance, innovation,

    precision, and optical quality. The Nikon brand is a well-earned, valued asset

    an asset that Nikon will continue to invest in by pursuing continual innovation inall business activities, from product planning, design, and development to

    production, marketing, customer support, and services. The unique strength of

    the Nikon brand comes from the determination to deliver quality that customers

    can trust. Nikon is always at theHeart of the Image.

    4.6 Strategic objectives

    o Since, Japan and China contribute 10 per cent each to Nikons revenues,we are targeting 5 per cent revenues from India in the next 3 years as it has

    a lot of potential given its size and current growth, Nikon India managing

    director Hiroshi Takashina told Business Standard.

    o Mr. Tanaka (ex MD) said Nikon would soon launch an aggressivecampaign to capture the fast-growing camera market in India. Nikon was

    aiming a 45 per cent market share in the SLR market, which stands at

    around 17,000 units a year. Today we have only 10 Nikon Touch Zones

    in four metros, which would be increased to 40 by the end of this year. We

    also hope to maintain a growth rate of 35 per cent, he added.

    o Besides, the company is aiming to increase its dealer network to 1,800from 1,250 at present. We are now focusing on tier II and III cities for

    growth as the in smaller centers is more than metros and bigger cities,

    although the numbers are still small, Nikon GM (sales and marketing)Sajjan Kumar.

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    o Nikon is aiming to increase its market share inIndia to 15 per cent this fiscal.

    4.7 Mission

    Performance levels to be achieved on priority issues, such as cost

    reduction Measures of success in fulfilling critical mission statement

    elements, such as "delivering superior customer service "Expected

    performance in key result areas (those additional areas in which you

    must get measurable results if you are to succeed), including:

    Expected financial performance standards such as profitability, sales

    revenue, growth, and cost/expense levels Targets for performance on

    strategic measures that drive future financial performance, such as

    market share, customer-perceived quality and service, employee

    satisfaction, organization skills and succession, and innovation

    FourNikon products receive

    the "red dot award: product

    design 2012"

    Nikon has set up more than

    40 D-SLR and COOLPIX

    zone in India in cities like

    Mumbai, Delhi, Bangalore,

    Pune, Hyderabad, Kolkata,

    Coimbatore, Ahmedabad,

    Roorkee, Agra, Dehra Dun

    and Bhubaneswar.

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    5. SONY

    5.1 Overview

    Mr. Kenichiro Hibi appointed as Managing Director, Sony India with effect from

    July 1, 2012. Sony India achieved sales of Rs. 6,313 crore in FY11 and aims 30%

    growth in sales in FY12. India to be 5th Largest Contributor to global sales by

    FY12.

    5.2 Category Performance

    BRAVIA is No.1 in Flat Panel Market with 18.8% share (In Qty.) in CY11(Asper Display Search)

    Cyber-shot is No.1 in Compact Digital Camera market with 34% share inFY11 (As per Import Data)

    VAIO for the first time hit No.1 share of 20% in Q4, 2011 (As per IDCReport)

    5.3 Plan in India

    Enhance existing distribution network from 10,400 in FY11 to 12,200 in FY12 Boost after-sales service with 285 service touch points across India in FY12 Allocate marketing budget of Rs. 450 crore in FY12 Plan headcount increase by 500, to take the total no. to 3,800 in FY12

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    BRAVIA, VAIO and Digital Imaging (Cyber-shot, Handy-cam, Alpha & Photo

    Frame) have been the growth drivers of the business in India, contributing 35%,

    20% and 15%, respectively to the total sales in FY11.

    Cyber-shot

    With Cyber-shot, Sony retains its No.1 position in Compact Digital Camera

    market with an unbeatable market share of 34% (In Qty.) in FY11 (As per Import

    Data), which is much ahead of the nearest competitor.

    In FY11, Sony sold 11 lakh Cyber-shot cameras, which is expected to go up to 14

    lakh units by end of FY12.

    Not only this, Handy-cam has approximately 90% share of the camcorder market,

    and Sony is the only player to drive this market in India.

    5.4 Brand Equity

    As per Customer Equity Tracking Study done by Nielsen in March 2012, Sony

    hasbeen ranked as the No. 1 brand that comes to consumers mind, when

    prompted with the word General Electronics.

    Not only this, Sony obtained highest satisfaction scores with the biggest gap

    noted for Retail Price Stability, from the competition. This is a result of our Dealer

    Satisfaction Study done by Nielsen, where selected dealers were asked to give an

    overall satisfaction rating from a scale of 1 to 10 for each company.

    Time period FY10 FY11FY12

    (Est.)

    India Global sales ranking (As

    Single Country)8 6 5

    http://www.sony.co.in/productcategory/cybershot-digital-camerahttp://www.sony.co.in/productcategory/cybershot-digital-camerahttp://www.sony.co.in/productcategory/cybershot-digital-camerahttp://www.sony.co.in/productcategory/cybershot-digital-camera
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    5.5 Business Strategy

    To strengthen its business operation, Sony India follows its core business

    strategy, comprising of the following strong pillars:

    5.5.1 Sales Channel Expansion:Sony has its footprint across all major towns and cities in the India through

    a very wide distribution network. Currently Sony has 10,400 sales channels

    including brand shops, national chain stores and distributors. Sony plans to

    aggressively increase the network to 12,200 channels by FY12.

    5.5.2 Service Operation Enhancement:Customer Centricity is part of Sonys DNA. Over the years, customer

    service has evolved from just repairs to providing fast, flexible, affordable and

    comprehensive solutions to customers. Sony currently has 255 conveniently

    located service touch-points, which it plans to step-up to 285 by FY12

    As per a survey done by Nielsen on Dealer Satisfaction, Sony has gained

    No. 1 position for after sales support, which is a reflection of Sonys excellent

    service quality provided to its customer.

    Time period FY09 FY10 FY11 FY12 (Est.)

    Service

    Network4,400 6,300 10,400 12,200

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    5.5.3 Aggressive Brand PromotionSony followed a strong brand promotion strategy and invested Rs. 360

    crore in FY11. All the brand campaigns were supported with extensive Above-

    the-line and Below-the-line activities, including print and television

    commercial, Web, PR, cinema and shop-front. In FY12, Sony plans to pump

    up an investment of Rs. 450 crore, which will be in sync with the business

    growth.

    5.5.4 Local Talent DevelopmentDeveloping local Indian talent is a very crucial element of Sonys

    growth story in India. Sony plans to increase its manpower by 500employees in FY12, to match the growing business requirement.

    As per a survey conducted by Tower Watson across Sony Group

    companies, when compared to other high technology companies in

    India, Sony India has the highest score based on parameters such as

    Talent Management, Innovation, Collaboration, Empowerment,

    Leadership, Values & Objectives etc.

    Sony India also has a very low attrition rate, which is again a

    testimony to the fact that employees are comfortable with the work

    environment. While vacancies are quickly replenished with fresh

    talent, Sony India works towards creating a strong career

    development programme for existing employees which helps limit

    the attrition. This includes various Sony University programmes

    that staffs have the opportunity to participate in.

    Time period FY09 FY10 FY11 FY12

    Investment Amt Rs. 250 crore Rs. 350 crore Rs. 360 crore

    Rs. 450

    crore

    Sony India has a very

    favorable presence over the

    digital domain as well and

    the website

    (www.sony.co.in) is a ready

    reckoner for product

    information, retail outlets

    and help guide and tutorials

    for product usage. It receives

    very heavy traffic

    throughout the year, with

    about 3 crore visit in FY11

    alone. Sonys Facebook

    page has more than 6.5 lakh

    fans and over 5 lakh channel

    views on YouTube.

    http://www.sony.co.in/http://www.sony.co.in/http://www.sony.co.in/http://www.sony.co.in/
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    5.6 Outlook for FY12

    Sony plans to increase its sales turnover by 30% in FY12

    5.6.1 Cybershot

    Sony Cyber-shot grew 45% (Qty.) in FY11, higher than the digital still cameraindustry growth rate of 40% (Qty.)

    Plans to sell 14 lakh (Qty.) units in FY12 as compared to 11 lakh (Qty.) unitsin FY11

    Introduces 34 new Cyber-shot models with at least 16 models with High Zoomfeature.

    Allocates Rs.50 crore to promote incredible zoom. incredibledetails campaign with Brand Ambassador, Ms. Deepika Padukone.

    Expands channel network to 3,000 in FY12, up from 2,500 outlets in FY11.5.7 Distribution

    Sony believes a robust distribution network is essential to the growth and sales

    of Cyber-shot cameras and hence plans to strengthen its current channel base to

    3,000 counters in FY12, up from 2,500 counters in FY11. The current 2,500

    outlets are distributed amongst 300 Brand Shops, 1,200 Photo stores and 1,000

    consumer electronic stores including National Retailers. Distribution Sony being

    the company which positions itself as a seller of durable and high-end products, it

    is practicing selective distribution of its products from these elective dealers i.e.

    SONY-World. Apart from this there are grey-markets in India and other countries

    where a practice of intensive market coverage is practiced, and the products in

    these kind of markets normally do not possess all the features and benefits which

    Sony offers e.g. warranty and guarantee. Sony distributes its products in various

    channels. It uses Zero-level channel, one level channel and two-level channel. In

    India, Sony has used the method of one-level distribution channel. This means

    that, customer buys their Sony product from the retailers recognized by Sony, and

    these retailers buy the products directly from the company itself.

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    5.8 Advertising

    Sony incorporates co-operative advertising in its advertising process. Sony

    Corporation provides the dealers (e.g. Sony World) with the materials and

    guidelines to develop ads for print, television or radio commercials. This ensuresthat message is in line with, what the manufacture wants to communicate. The

    company and the dealers usually share the media costs and hence, the name co-

    operative advertising.

    5.9 Awards

    No. 1 Ranking Camera for 2010 by Cnet Asia's Top 10 Cameras of 2010

    Best Imaging Innovation: Sony SLT, Translucent Mirror Technology The 50 Best Inventions of the Year Award DPREVIEW Gold Award 2010 Camera of the Year

    5.10 Summary

    There isnt a wide range of products available under Alpha series, but what

    makes photography fun and stylish for the youngsters is the ease of software and

    auto settings. The new Cyber-shot range will be available from Rs. 5,490 to

    Rs.27,990 at Sony Center, photo channel outlets, consumer electronic stores and

    leading national retailers across the country.

    Sony is also set to launch its multi-media brand campaign across India,

    touching upon various media vehicles such as Television and Print commercial,

    shop-front, PR and web activities. Featuring Brand Ambassador Ms. Deepika

    Padukone, the incredible zoom. incredible detailscommercial oozes a carnival

    feel.

    http://www.sony.co.in/productcategory/dslr-camera#cnethttp://www.sony.co.in/productcategory/dslr-camera#cnethttp://www.sony.co.in/productcategory/dslr-camera#tipahttp://www.sony.co.in/productcategory/dslr-camera#tipahttp://www.sony.co.in/productcategory/dslr-camera#timehttp://www.sony.co.in/productcategory/dslr-camera#dpreviewhttp://www.sony.co.in/productcategory/dslr-camera#popphotohttp://www.sony.co.in/productcategory/dslr-camera#popphotohttp://www.sony.co.in/productcategory/dslr-camera#popphotohttp://www.sony.co.in/productcategory/dslr-camera#popphotohttp://www.sony.co.in/productcategory/dslr-camera#dpreviewhttp://www.sony.co.in/productcategory/dslr-camera#dpreviewhttp://www.sony.co.in/productcategory/dslr-camera#timehttp://www.sony.co.in/productcategory/dslr-camera#tipahttp://www.sony.co.in/productcategory/dslr-camera#cnet
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    6. Comparative Analysis

    6.1 Pros and Cons

    One Big difference between the companies is the lenses. Nikon is notcompletely backward compatible with the previous Nikon lenses whereas the

    Canon cameras are and they are even compatible with third party lenses. Sony

    on the other hand has limited backward compatibility issues because its fairly

    new in the market and almost all the lenses are not manufactured by it,

    because they have partnership with Carl Zeiss.

    So how does the difference impact consumers and brand? If in the future onewants to buy a specialty lens, he only has limited options with Nikon, with

    comparatively higher prices. On the other hand, with the Canon one can get

    any Canon lenses or buy third party ones which are usually less expensive.

    Prosumers is short for ProfessionalConsumers and they are intended foradvanced amateurs. One thing that distinguishes this camera from the other is

    their speed. Most SLRs are able to capture 3 consecutive photos per second,

    but Prosumers can take up to 21 photos per second. Here Nikon beats the race

    with 21fps camera.

    6.2 External Marketing Audit

    6.2.1 Macro environment

    In this section we shall analyse the macro environment of India in order for

    Nikon to penetrate the DSLR market. Wilson, A (2002) has suggested that

    what is frequently lacking is an understanding of what might be termed the

    outer environment, where four majorforces of change are at work. These

    are namely the political/government activities, economic change, sociological

    change and technological change. The acronym PEST is fondly used to

    describe these factors. Figure 1: The PEST DiagramAdapted from The

    Marketing Audit Wilson 2002.

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    PEST Analysis

    COMPANIES POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL

    Canon No govt.

    grant

    Trading agreements to

    ease shipment costand taxes on importingDSLR cameras willreduce cost forconsumers.

    Comparatively higherand steady growthrate.

    High consumerconfidence.

    Competitive cost,comparative to Nikonbut on higher side.

    Most favored brand

    and 2nd highestbrand equity afterSony.

    Preferred by mostnew ageprofessionals.

    Has changedaccording to lifestylechanges.

    Highly aggressivepolicy.

    High R&D from

    parent company.

    Focus onmarketing bymaking qualityproduct.

    Product lifecycles same asNikon.

    Rate oftechnologytransfer from Int.market is instant.

    User friendly,helps beatComplicated

    device

    Nikon NikonSchool

    Trading agreements toease shipment cost

    and taxes on importingDSLR cameras willreduce cost forconsumers.

    Increasing growth rate

    High consumerconfidence.

    Competitive cost,comparative to Canonbut lower.

    Second mostfavored brand in SLRand over all theloyalty is high.

    Preferred byprofessionals withnon DSLRbackground.

    Has changedaccording to lifestylechanges.

    High R&D fromparent company.

    Focus on sellingwhat theymanufacture.

    Product lifecycles same asCanon.

    Rate oftechnologytransfer from Int.market is instant.

    Meant forprofessionals,less user friendly,less outreach togeneral

    population.

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    Sony No govt.grant

    Trading agreements toease shipment cost

    and taxes on importingDSLR cameras willreduce cost for

    consumers

    Competitive cost.

    Economic growth ratesatisfactory.

    Very low attrition rate

    Consumer confidencenot that high.

    Has started to

    capture Youth, withthe highest brandequity in consumermarket.

    Preferred byamateurs.

    Has started with thecurrent lifestyle.

    High R&D fromparent company.

    Focus on sellingwhat they

    manufacture.

    Product lifecycles not thesame as Industrystandard.

    Rate oftechnologytransfer from Int.market is

    satisfactory.

    User friendly,generalpopulationapproving it, butnot at all by theprofessionals.

    Figure 1

    6.2.2 Market analysis

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    Sony: All is going according to plan; sales will grow slowly but steadily as the

    product is progressively introduced to the market.

    Nikon: Profits which Nikon makes are non-existent at this stage because of the

    costs of introducing the product; promotional costs are high in proportion to sales,

    and costs per unit of output are high because of low volume, but also have adding

    new functions, creating new market segments, therefore between stage1 and 2.

    Canon: The expansion of the market attracts new competitors who have various

    market-penetration strategies such as adding new functions, creating new market

    segments, and capitalizing on distribution channels, the price down, and so on,thus Profits may increase in this stage in accordance with the expansion of sales

    volume.

    6.2.3 Competition

    Porter's (1985) Five Forces' model has been most widely used in the strategic

    analysis of competition. We shall use this model for Canons competitive analysis

    relating to the five different forces (see figure 2)

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    1. New entrants: threat of entry from other organizations. (Example: Samsung and

    Sony entering the DSLR market. They currently have a share in the compact

    digital camera markets only.)

    2. Substitutes: availability and competition from substitute products. (Example:

    Mobile phones and video cameras which can match the DSLR technology in

    photography.)

    3. Buyers: bargaining power of buyers. (Example: Distributors are able

    to increase sales by providing convenient and reliable services, built on Canons

    Image Square.)

    4. Suppliers: bargaining power of suppliers. (Example: Trained specialist andadvance equipment required by Canon India to meet increasing demands.)

    5. Existing competitors: rivalry among existing competitors. (Example: Nikon and

    Olympus jockeying for position in the youth DSLR market.)

    6.3 Strategic Issues Analysis

    Despite there being no anticipation of any significant decline in consumption

    in the digital camera market, we expect consumer behavior and exchange rates will

    remain unclear in future and that intensification of competition with competitors

    and downward product price trend will continue. The Nikon Group is committed to

    strengthening its manufacturing competitiveness constantly to meet the

    expectations of its customers. The entire industry is thus striving to improve

    competitiveness in terms of speed and cost as well as quality. In digital SLR

    cameras and interchangeable lenses, sales were down due to deterioration

    of product prices brought about by the effects of a strong yen and changes to the

    sales composition ratio by price range. The Company was, however, able to

    increase its sales volume at the same level, led by sales of their new models.

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    6.4 SWOT Analysis

    Strengths

    Increasing profits Nikon's camera business seems to have racked up an

    operating profit of about 23.5 billion yen in the half, compared with a 1.9 billion

    loss in the year-ago period. Sales of digital SLR cameras rose more than 10% to

    break above 1.9million units thanks to the popularity of the entry-level D3100

    and D5000.

    Nikon has continued to improve its corporate makeup, with a balanced

    increase to high dimensions for all corporate functions, including marketing,

    development and design, production, and sales. They currently employ astructure that allows them to modify production on a weekly basis to reflect the

    latest market data. When market conditions began to deteriorate in the fall of

    2008, they decided quickly to adjust production at the end of 2008-making them

    the first in the industry to do so-and were one of the first to complete those

    adjustments. All of Nikons corporate functions operating simultaneously at

    high levels provide a true collective strength that can be leveraged in a short

    period of time.

    Common to all:

    Able to provide good customer service and support due to local service center.

    World known and recognized brand for photography equipment.

    Weaknesses

    Nikons marketing campaigns focuses on compact digital cameras rather than

    DSLR

    Opportunity

    Current economic upswing would encourage consumers to spend more on

    lifestyle luxury products such as DSLR cameras.

    Selling existing products to existing markets/ segments (market penetration).

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    Extending existing products to new markets/ segments (market extension).

    Room for market growth as the untapped source of potential youth market with

    the development of media communications studies available

    Threats

    Entry of new market players in the DSLR market such as, Sony and Panasonic.

    Canon realizing the potential of the youth market and introduces new models

    with user-friendly technology for newcomers to DSLR photography.

    Product / Placement

    The consumer grade segment of the market is most vital to both companies

    because they account for a bulk of their revenue and thus is their bread and

    butter. One way to gauge the competition is to go to a store. I go to Croma

    frequently and chuckle whenever I see both Canon and Nikon DSLR boxes side

    by side. As of late 2011, the two consumer grade cameras that Croma sells are

    the Canon 600D and Nikon D3100. While both try to compete for similar price

    range, looking at the boxes, one may feel that they're actually aiming for

    different types of consumers!

    .

    Look at the fancy jargons like "Optical Image Stabilizer Double Zoom Lens Kit", and below,

    a bunch of fancy stuff like "12.2 MEGAPIXELS", "Digic III", "3 inch LCD", "3.5 Frames

    per second", "EOS", "Picture Style". Wow! If I were a guy who loves to look at

    specifications all day, I'd get a Canon Rebel because it's obviously better on a spec-by-spec

    comparison.

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    Let's now look at the Nikon D60. Theres no sport. There's no emphasis on frozen action.

    There are no fancy jargons to woe you. There IS however lots of emphasis on people...

    portraits... softness... prettiness... connection to people. Nikon's strategy is about connecting

    to professionals in the simplest possible way.

    Canon's strategy is to use what they're traditionally good at: sports and specs. Canon loves to

    show pictures of sports, frozen in time. In addition, Canon uses higher specifications (higher

    megapixel, more frames per second, higher processor name, etc.) to lure certain types of

    buyers-- the Specification Peepers.

    What does that leave Nikon with? Nikon's strategy isn't to use specification to sell. Nikon

    doesn't need to compete on specs, because not all specs are relevant to the discerned buyer.

    For example, a higher megapixel doesnt mean better image quality (in fact, more megapixels

    means more noise at night). There are other things to consider, like contrast and color

    rendition that Nikon excels at.

    References:

    www.dpreview.com

    www.letsgodigital.org

    www.andhranews.net

    www.businesswireindia.com

    www.itnews4you.com

    articles.economictimes.indiatimes.com

    www.newsduniyaonline.com

    www.cipa.jp

    blog.kamerakevin.com

    www.oppapers.com

    www.canon.co.in

    www.nikon.co.uk

    www.johnnosta.com

    en.wikipedia.org

    www.sony.co.in

    Images and Data search: www.google.co.in

    http://www.dpreview.com/http://www.dpreview.com/http://www.letsgodigital.org/http://www.letsgodigital.org/http://www.andhranews.net/http://www.andhranews.net/http://www.businesswireindia.com/http://www.businesswireindia.com/http://www.itnews4you.com/http://www.itnews4you.com/http://www.cipa.jp/http://www.cipa.jp/http://www.oppapers.com/http://www.oppapers.com/http://www.canon.co.in/http://www.canon.co.in/http://www.nikon.co.uk/http://www.nikon.co.uk/http://www.nikon.co.uk/http://www.nikon.co.uk/http://www.johnnosta.com/http://www.johnnosta.com/http://www.johnnosta.com/http://www.nikon.co.uk/http://www.canon.co.in/http://www.oppapers.com/http://www.cipa.jp/http://www.itnews4you.com/http://www.businesswireindia.com/http://www.andhranews.net/http://www.letsgodigital.org/http://www.dpreview.com/