The MiniDisc in 1992
Sony introduced the MiniDisc in 1992. The launch confused people because the audio press mistakenly perceived the MD as a smoke-and-mirrors replacement for the compact disc. That is, many electronic gadget writers, this one included, believed that Sony was trying to short-circuit development of a compact-disc recorder by producing one that wouldn’t sound quite as good. Make no mistake, the MiniDisc doesn’t sound as good as a compact disc, but it sounds infinitely better than an analog audiocassette.
So, if Sony had marketed the product from the start as a successor to the audiocassette, then it could have avoided most of the media criticism that MD has received. When Sony first introduced its MiniDisc player in December 1992, it anticipated a huge market for a portable machine that could play pre-recorded MiniDiscs, and for one that also could record. Sony, basking in the glow of its famed Walkman product, as well as the compact disk that it co-created with Philips Electronics N. V. , was convinced that consumers would welcome a new, easy-to-carry digital format.
However, Sony mistakenly targeted its advertising and marketing efforts at the MTV generation, which couldn’t afford MiniDisc players or recorders. And a second effort to re-launch the product in 1994 was widely regarded as unsuccessful, so much so that fewer than one million MiniDisc players/recorders have been sold in the U. S. The past few decades have witnessed monumental advances in the consumer electronics industry. One company that has lead if not directed the evolution of the consumer electronics industry is the Sony Corporation.
The question focuses on Sony’s newest portable audio product, the MiniDisc (MD). The successes of Sony’s previous products are quite clear: radios, Walkmans, and Discmans are everywhere, in the United States, Europe and Japan. Interestingly, however, MD is overwhelmingly popular in Japan but less popular in the United States and Europe. However, Sony invested four multi-million dollar marketing campaigns from the years 1992 to 1998 to increase sales of MDs. These campaigns were reflecting Sony’s philosophy; it should be very interesting to any business, considering the inconceivable success of the company.
In Digital Dreams, Paul Kunkel explains: “innovation is the first goal. The second is “to always lead and never follow. ” Sony, as part of its strategy towards innovation, has created the Sony design centre to fulfil these goals. The strategy towards the innovation: 1992, the first launch in December was a flop. Within a year, fewer than 50,000 units were sold. The first-generation MD players were priced at $549 while the first-generation MD recorders were priced at a whopping $750. Sony has done a mistake concerning its target. The teenagers were not able to pay such a price.
Moreover, it seems that they did not consider the justification. Another explanation for MD’s poor entrance in the American market deals with CD’s incredible growth in 1992. The CD was still in an amazing growth stage. People were still converting their LP collections to CD, and the MiniDisc didn’t appear to offer them anything new. Sony’s second campaign in 1994: “Media blitz”: It was just as disappointing as the first campaign. Sony launched a media blitz that included “coupons redeemable for free Sony MiniDiscs, extensive magazine advertising, and a giveaway program tied to Rolling Stone magazine.
The coupons called Sony Mini Money and worth $300 of MD music, were issued to consumers who purchased the new playback-only model. In addition, Sony gave away 1. 1 million MD samplers to subscribers of Rolling stone. Although this 1994 campaign is “widely regarded as one of the biggest music promotion giveaways ever,” sales in the following years were still low. 1996: “Where the music takes you” The third major campaign occurred in 1996, labelled “Where the Music Takes You. ” This promotion was one of the most aggressive and largest advertising and promotional campaigns that has been conducted by Sony.
The focus of the 1996 campaign was on the declining portable audio market, namely cassettes. 50 percent of their print advertising was about MiniDisc, that is a considerable amount devoted to just one product. The advertisements emphasized MD’s recording capabilities: “The horse, the automobile. The typewriter, the computer. The cassette tape, the Digital Recordable MiniDisc. ” This new approach to advertising showed that the MiniDisc is a great complement for CDs; MDs are not a replacement for CDs, but rather a replacement for cassettes. 1998: Year of the Minidisc.
Sony declared:”1998 will be the biggest campaign in audio history”. A Los Angeles Times article described this campaign, named “Make It With MD”: “the company will spend an estimated $30 million and will include extensive retail promotions, co-branding opportunities, and sponsorships. In addition to standard print and television advertising, Sony marketed MD with the NBA’s “Million Dollar Shot,” on the VH1 Fashion Awards, and in Old Navy clothing stores; the scope of Sony’s marketing campaign this time was truly unprecedented for the audio market.
In Term of pricing strategy, it seemed that Sony’s representatives finally decided to regard price as the limiting factor to sales instead of the misconception that MDs were going to replace CDs. Sony concedes that it may take another five to eight years for MD prices to become affordable to the mass public. The MD Product Life Cycle Most products follow the product life cycle graph shown in Figure 2 below. The graph shows sales of the product on the vertical axis and time on the horizontal axis. Figure 2 Product Life Cycle Graph After its introduction in 1992.
MD has gone through the introduction phase and is now in the growth stage. Sony, along with other MD producers, is still heavily promoting MD to ensure maximum market penetration is achieved. As can be seen in the above graph once the product reaches the maturity stage, sales no longer increase. Product sales then die away and the product is eventually withdrawn from the market. Sony had difficulties proving MD’s superiority because all of other formats have comparable advantages. First we will compare MD to the new audio formats, and then we will compare the minidisk of Sony to the other branded Minidiscs. MD versus DCC:
At launch in 1992, MD’s biggest threat was the Digital Compact Cassette (DCC), developed jointly by Philips and Matsushita. Philips and Matsushita also attempted to use DCC to replace the audiocassette, emphasizing DCC’s higher sound quality and durability. Philips and Matsushita bet on the fact that DCC players are “backward compatible,” that is they can also play regular analogue tapes that are everywhere. However, DCC does have its disadvantages compared to MD: DCC lacks instant track access – one has to wait while the machine rewinds or fast-forwards – and DCC has spools and tape, which can wear and break over time.
As described earlier, MDs have instant track access and are much more durable because there are no moving parts. Actually, neither format won. Their features were not compelling enough and they did not offer substantially higher sound quality over CDs. Philips and Matsushita, disappointed with sales and realizing that tapes were becoming low-tech, soon dropped DCC altogether. However, Sony continued to market MD because of its success in Japan.