BPS’s marketing strategy will highlight our reputation and continued commitment to quality, placing emphasis on our market leading technology. Sony is known for being a mass production company focused on the consumer market, rather than a cutting edge developer with a focus on quality. Sony’s advertisements for the 1270 will attempt to rebrand them as a pioneer of market leading technology. BPS’s emphasis will counteract these claims, highlighting our trusted reputation for a quality product. Corporations and business professionals will be our target audience. Advertisements will run on TV shows such as CNN and nightly news. Magazine and newspaper advertisements will run in professional publications such as the Wall Street Journal, the Economist and technology magazines.
We consider Sony a threat in the data segment and expect their next product to be a higher performing data projector, for release in the fall of ‘89, and also expect them to enter the graphics segment in late ‘90. This development exposes the relationship we entered into with Sony in 1985, where we subcontracted with them for our tube production, as a direct threat to our future success. This contract had helped BPS keep in lockstep with Sony’s advancements in tube technology, but it also created a dependency on Sony. We justified this relationship “on the assumption that Sony would respect our (BPS’s) vision of the marketplace”. By relying on Sony, instead of obtaining an independent supplier to produce market leading technology, BPS has provided them with a significant competitive advantage. Sony has control over timing of technology releases, the design of new tube technology, and insight into BPS’s development schedule. This was exposed when Sony introduced a superior 8” tube which had a new adaptor we had not seen before for the 1270. Sony had a head start designing their product with the new adaptor, working off of a five year product life cycle, which caught BPS and the rest of the market off guard and unprepared.
BPS owns 23% market share in data projectors, a larger segment of the total market. While loss of market share in the graphics projectors would negatively affect our forecasts, the data projector market has greater opportunity, see Figure 1. A 15% increase in data market share would increase net profits by $20M. Strategies 1 and 2 would counteract Sony’s new product but we must consider the effect of protecting 55% of a smaller market and ignoring the larger segment, data projectors. Ignoring the data segment exposes us to other competitors, including Sony, releasing a superior