Strategic brand management decision: the case of Sony Ericsson Walkman

Abstract

Sony Ericsson backgroundSony Ericsson was established as a 50/50 joint venture in 2001 by Sony (a consumer electronics corporation based in Japan) and Ericsson (a mobile communications infrastructure and systems business based in Sweden). Sony Ericsson functions as a separate business entity -designing, producing and marketing cellular phones and accessories. It had revenues of e13 billion in 2007, from the sale of 100 million units, which is a global market share of 9 percent. Sony Walkman historyWalkman is a trademark of Sony Corporation, used originally to market its range of portable audio players. The Walkman brand now extends to portable digital media players and cell phones. In July 1979, against a backdrop of skepticism within Sony and sizeable doubt among market watchers, the original Sony Walkman portable music player, the TPS-L2, was introduced. After only two months, the product had ''hit'' potential as sales soared. Sony promoted the concept of ''enjoying music anywhere, anytime'', using industry advertisements featuring celebrities with the product (a form of product placement). The first Walkman was marketed under the Walkman brand in Japan, but in other markets it was originally sold under various names, including ''Soundabout'' (USA), ''Stowaway'' (UK) and ''Freestyle'' (Australia). Walkman players became very popular in Japan and foreign tourists visiting Japan bought them as souvenirs, triggering Sony to standardize the name to ''Walkman'' worldwide. Brand extensions and digitalizationThe first Compact Disc Walkman player, the Discman, was introduced in 1984. The Discman was eventually dropped in favor of marketing all Sony portable media devices under the Walkman brand name, including the MiniDisc, launched in 1992. The MiniDisc was optimized for files encoded with ATRAC compression (a proprietary format developed by Sony). In the late 1990s, MP3 gained popularity as an open format, establishing the benchmark for digital music. Sony was reluctant to support the MP3 format in its digital Walkman devices and soon banned the term MP3 from all marketing material insisting, instead, on pushing ATRAC. MP3 finally joined the Sony vernacular in 2005 when it was apparent that the term would become colloquial for ''digital music''. It has been suggested that the company's reluctance to embrace an open source format (MP3) led to Sony losing its lead in the portable music branch, a move that allowed Apple to take leadership, receptive to the market for ''ripping'' existing CDs (to MP3).