Sony AIBO: A Marketing Dilemma

Background Information

• World’s first entertainment robot (1999)

• Japan sold the AIBO at great pace

• Constant questioning of purpose of existence

• First Generation AIBO

• Second Generation AIBO

Discussion

• Problem Recognition

• Situational Analysis

• Evaluative Criteria

• Alternatives and Recommendations

• Consumer Profile

• Distribution Channels

• Pricing Strategies

• Promotional Strategies

Problem Recognition

• Sony AIBO’s possible expansion into the U.S.

• Promotional mix

• Companion or Productivity Tool?

• Ability to sell to mainstream market

• Premium Pricing

Situational Analysis

Strengths

Weaknesses •Price•High Cost of R&D

•Innovation Leader•Superior Technology•Software Adaptability•Sony´s Specialized Department

Situational Analysis

Opportunities

Threats•Perception of robots in U.S.•Aging American Market•Aversity to Technology•3 Possible markets are saturated

•American robotic market in infancy•Growth of American toy market

Evaluative Criteria

• Ability to Maintain Competitive Advantage

• Risk Minimization

• Long Term Profit Potential

• Short Term Profit Potential

• Ease of Implementation

Alternatives and Recommendation

Expand to U.S

Productivity Tool

Companion

EducationalToy

Positioning Promotional Target

Niche

Mass Marketing

Pricing Distribution

PremiumPricing

Captive Pricing

25-40 AffluentParents

Typical ToyConsumer

Superstore

Niche Store

Long Term Strategy

Short Term Strategy

Consumer Profile

• 25-40 year old mom

• Affluent Consumer

• Seeking educational product benefit

• Early Adopters

Distribution Channels

• High End Stores – Neiman Marcus, Sachs Fifth Avenue

• Online Retail

• Mass Retail Distribution (Long term)

Pricing Strategies

• Early Adopters – Premium Pricing

Strategy

• Price - $1500

• Early Majority – Captive Pricing Strategy, after next generation release

• Price - $300

Promotional Strategies

• Viral Marketing: Word of mouth, social networking

• In-store display

• Parenting and related magazines

• Crossing the chasm: cartoon, books, software, etc.