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Sony Ericsson earmarks media budget upwards of Rs 10 cr; eyes premium pie

Sony Ericsson earmarks media budget upwards of Rs 10 cr; eyes premium pie

Author | Preeti Hoon | Thursday, Jun 17,2010 8:29 AM

Sony Ericsson earmarks media budget upwards of Rs 10 cr; eyes premium pie

Placing itself as a niche brand, Sony Ericsson, the leader in mobile innovation, is claimed to be the second highest spending mobile brand in India, with a clear strategy of not depending on the rural segment to acquire market share.

In an exclusive conversation with exchange4media, Anurag Kontu, Head - Channel Marketing (APAC) and Head of Marketing, Sony Ericsson India, said, “We had been the No. 2 in India in terms of share of voice for the month of April, which is based on a mix of media reports and media spending.” Meanwhile, sources in Sony Ericsson said that the company had decided to have a media budget upwards of Rs 10 crore for every new campaign launched in India.

Media engagement

Explaining the need for such a media budget, Kontu emphasised on the need for constant engagement with the media. “Media spending is not just about buying slots for TVCs and outdoors, it is also about engagement. It has been a constant engagement for Sony Ericsson right from the first launch in March. I personally make it a point to meet media professionals every time I’m in India to continue the momentum in the media review and reports. It doesn’t have to be with the top line media or media that sells the most, it is just media that you engage with. At the end of the day, it is all about your PR strategy, mixed with media spending.”

So far, Sony Ericsson has stayed away from launching phones specifically for the low-end rural segment. On this, Kontu explained, “It is a conscious decision not to tap the rural segment, simply because that is not where we can make money from. India is an emerging market in the telecom sector. The figures for GSM in India for the year 2010 are 97 million GSM handsets, out of which nearly 80 per cent constitute handsets priced below Rs 3,000. This does not make much profit sense for the brand, it only affects the market share.”

When pointed out that other brands were aggressively entering the rural segment, Kontu said. “They are doing it for instant market share in a hope that people, who use their brand for the first purchase, will continue being with them as they evolve. However, India is not only an emerging market for the telecom sector, it is also a booming market for big spenders. People are finding new money and that is when they shun away from the first mobile phones they have used and they don’t want to be associated with the same set they used to, and that is where our strategy comes in, where we are placing ourselves as the ‘replacement brand’ or the ‘premium brand.”

Market share doesn’t matter

So, does that mean that market share holds no importance for Sony Ericsson? Kontu replied, “It does not matter at all. We don’t benchmark ourselves in the market share segment. We are all about value and profit. At the end of the day, we have to have enough money to make investments since we are the leaders in innovation. We brought the first music and camera phone and we want to continue with the innovation legacy. In order to do that, there has to be enough funds to support R&D, for which we have to make profits.”

Sony Ericsson’s strategy is crisp clear when it comes to market segment and they have no plans to mould it for a market like India. Kontu added, “Selling phones in the lower segment will not help achieve the innovation approach and we will end up being just another brand. Our strategy is very clear – we are not a mass brand, we are a niche brand. There are segment of people who do not want a phone that everybody has and that’s where we come in.”

Focus on customer service

Kontu also revealed plans to improve after sales customer service and the initiatives they would take to assure consumer loyalty and trust. “We are aggressively and candidly looking at improving customer service, which we have probably neglected for a long time. If we say we are a premium brand, we need to deliver premium service too. We are focused and prepared for a service campaign to address every single Sony Ericsson phone and provide free service. If they are repairable, they will be repaired, else we will give upgrade options to the consumers. From the factory level to R&D level, we are focusing on making quality of the products much better than our competitors. Being an electronic product, faults in this category are beyond human control. We will make sure that our consumers have an approachable service network in unlikely circumstances and the downtime of service will be in hours, while 1-2 days maximum in worst cases,” he added.

As a niche brand, Sony Ericsson is particular about choosing the right medium of communication. Kontu elaborated, “In India, where there is such diverse culture, all the mediums of communication are important. If you look at other markets, the medium of television has been ruled out because people there don’t watch TV, but in India, television is an equally important medium, with print and press also playing crucial roles. These days, digital is where the biggest boom has happened. We look at all these mediums, but since we are not a mass brand, we are targeting those channels that are watched by our affluent target group. Similarly, for print, the selection of media would be very entertainment focused and aligned with our corporate vision.”

Sony Ericsson has 3-4 agencies handling its branding and positioning in India, a market where there’s already an existing debate as to whether one integrated agency is more efficient than several hired ones as it reduces the painstaking task of briefing all together. On this, Kontu commented, “I think it is more of an organisation’s competency. If I can manage to communicate the same message across and have them working on the same objective, everyone understands and they take cues from each other to work on better lines.”

Meanwhile, after a soft launch at the retail stores in India, Sony Ericsson is officially launching its Xperia X10 Mini phone (priced at Rs 14,999) by the third week of June, while Xperia X10 Mini Pro will be launched in the first week of July and will be priced between Rs 15,000 and Rs 20,000. Marketing plans for both the launches are in place and will be primarily via digital media.

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