Marketing 401

Name of organization: Nikon Corporation
Product analysis and strategy
Pricing strategy
Promotion strategy
Distribution strategy

Environmental Analysis

Nikon operates in a highly competitive consumer and professional optics environment. The product range in this industry starts with consumer level digital cameras then moves through to pro-level film and digital cameras and includes sport and scientific optics such as binoculars and telescopes. There are a number of competitors all pushing for market share. Smaller competitors include Lumix, Olympus, and Leica. Larger, more dominant, competitors include Nikon, Canon, Sony and Pentax. The largest influence of this environment is the economy. Sales are typically directly inline with expendable cash flow of both businesses and consumers. Technological advancements are also a major influence. Although professional optics and cameras tend to have longer shelf lives, consumer level products are expected to advance a much quicker pace. Advancements in micro-technology assist with making consumer products smaller, faster, and more powerful as the market and consumer spending habits tend to dictate. Finally, in foreign markets such as the UK, political debates about the right to photography in public often influence which type of optics are released and how powerful those optics are. Environmental scanning would be conducted on a continuous basis across all existing products. Closely monitoring competitors advances, shifts in demographics, economic changes and shifts in consumer tastes as well. Ad Hoc scanning would also be employed when developing and implementing new products and taking the temperature of market when looking to discontinue a product or product line.

Industry Information

Nikon exists in the consumer electronics industry. Specifically, the focus is on consumer to professional-level photography equipment such as film and digital cameras, lenses, and accessories. Nikon also offers a range of sport optics such as binoculars. The industry is competitive with many of its top performers having decades in the industry and very loyal customers. The industries current leaders include Nikon, Canon, and Sony. There are a few smaller competitors such as Olympus and Pentax who have significant market share at the consumer level and late entrants such as Lumix and Leica who a steadily gaining ground. Nikon and Canon are dominant at the professional level, ultimately competing with each other. Consumer Electronics has been on a constant rise as of late. Digital photography, specifically, has seen significant thrust. The rise in the number of Internet users and the popularity of social networking has been a direct influence. This has dually increased the competitive nature of digital photography with companies avidly competing for market share. Consumers have enjoyed amazing technology at even more amazing pricing. Although consumer-level products are a hotbed, advertising is kept more-or-less tame, focusing more on gaining consumer interest and trust as opposed to taking shots at the competition. Even with sizeable gains in micro-technology bringing overall costs down, there are some barriers that exist for new entrants. While manufacturing is not a hindrance due to third-party and outsourcing, advertising is. Advertising is extremely expensive and global. The main sources to reaching existing and potential customers are print(magazine) and web. Larger companies, such as Nikon, Canon, and Kodak also delve into television advertising, making it extremely difficult for new or late entrants to gain a competitive advantage; even with less expensive and sometimes better quality products. Exit barriers are also a factor. The most prominent being continued maintenance of pro-level products. Professional camera bodies have a very long shelf life. Professionals often opt to fix a broken body rather then invest another $5000 - $8000 dollars on a replacement. This poses a real threat to discontinuing a specific product because you cannot simply leave your pros hanging without resources to maintain and service. Third party vendors are an option, however they are scarce and scattered about.

Competitor Analysis

Canon is undisputedly Nikons number one competition with both consumer level and professional level digital photography products. Widely renown as an industry “giant” Canon’s primary digital photography line is there EOS products. This is their flagship line that ranges from consumer to professional Digital DSLR cameras. Canon’s strength is primarily in it brand and consumer loyalty in that brand. The offer a wide range of high quality cameras and optics. Canons weakness may be that it is too diverse in it’s product lines. Along with photography products, Canon offers printers, scanners, faxes and other office equipment. The margins in this industry are small, and some may see printers and copiers as a fledgling area of focus – given the international focus on saving resources and going “green”. As previously stated, competition in this industry is fierce and constantly changing. As social media, mobile browsing, and even mobile devices such as smart phones and tablet computers continue to emerge, photography equipment companies are not only competing with each other, but the are also competing for the consumers “extra” dollar in the overall consumer electronics industry. Cellular phones have made significant strides in the size and picture quality their cameras can now produce, this is not s factor for professional lines, but definitely steals a dynamic range of user demographics out of consumer level products.

Corporate Mission

Nikon’s mission is simple and straightforward. It is routed in “creativity and trust” and is focused on their “Aspirations” of “”meeting needs” and “exceeding expectations.” Nikon lists their commitments as being proactive - Be broad-minded and well-informed in order to act quickly and resolutely; seek new knowledge - Pioneer new potential through self-study and insatiable curiosity; Communicate well - Harmonize diverse skills by thinking out of the box and communicating effectively with others; and display integrity - Work with diligence and sincerity as a responsible individual. This type of language is an indicator that Nikon intends to focus on it’s current user pole and develop enhancements that not only build trust and loyalty in the brand as well as bring in new consumers with an innovative and responsible approach.

Corporate Analysis and Appraisal

Conducting a corporate appraisal of Nikon Corporation would be a thorough process and repeated on a five-year basis. I would use a top-down approach in evaluating all aspects of the company’s business starting with, paying close attention to, and top management. I would evaluate any philosophies or habits of company leadership that could possibly be helping or hindering the company. Next would be corporate publics. An in-depth look into the areas of interest among these groups would be key to a meaningful evaluation of Nikon. After exploring corporate publics, I would delve into the corporate resources asking the following questions along the way: What are our resources? How are they allocated? Do we have an abundance or shortage in any one, or multiple, areas? Also within the analysis of resources, our vendors, employees, and suppliers would be evaluated for efficiency, knowledge, effectiveness and reliability. The external environment would then be considered. Are there any external factors influences or changing the direction the company is taking or needs to explore? Finally, I would take my findings and compare against past performance and adjust strategy and implement new ideas accordingly. Nikon’s strength rests solely on its consumer through professional digital photography line(cameras, lenses, and accessories). Nikon has effectively captured a large customer base and developed product lines to suit a wide area of needs while remaining affordable to those in each category. Nikon cameras work with every major computer operating system and have assisted in changing the industry standard photograph format from JPEG to Raw on the professional level. Products developed for serious amateurs – or prosumers – integrate seamlessly with professional products for those who take the leap. Knowing that one could upgrade cameras without having to replace all of their lenses offers a very enticing invitation to Nikon products. Consumer level products are also given the “industry standard” treatment amongst the bulk of the product line. A glaring weakness in Nikons strategy is the availability of professional products at the retail store level. Because of pricing, even the largest of retailers are reluctant to stock professional level products. With an average retail price of $1500.00 for pro lenses and the least expensive pro level camera selling for $2600.00 retail, the risk of stocking these items is too great and too costly. Nikon does not offer branded retail stores in any market, forcing customers to purchase online or rely on retailers to special order products. Which, to the consumer, is risky and time consuming. Another weakness is Nikon’s sport optics line. Although the products offered in this line are strong the line is lacking in diversity, which ultimately could negate Nikons overall performance in the long term. Nikon has drastically improved compared to past performance. When film was the industry standard, Nikon was not considered as major force in the industry. In fact, professionals often snubbed Nikon. Their previous strategy and model did not take the consumer in mind and pushed Nikon’s own agenda almost exclusively.

With the surge of the digital age, Nikon seized the opportunity to recreate not only its model, but it’s product line as well. They have successfully captured the majority of market share and built a trustworthy brand, which is rapidly becoming a household name.

General Marketing Strategy

Nikon’s growth strategy, which is noted in many aspects of their mission, is routed in innovation and forward thinking. They intend to grow their company and their product lines based on technological strides, strides that will dynamically advance the industry and the creativity of their users. An example of this strategy has already been implemented at the prosumer level with the addition of HD movies capability to two of their Digital SLR cameras – the D300S and D3S. It can also be found at the consumer level with the D90. This type of forward thinking – adding technology that was once reserved to fixed-focal length and point-and-shoot cameras, at this level is an indicator that Nikon is serious and committed in its belief that innovation can grow their corporation. Strategically, it would make sense for Nikon to align itself with other forward thinking technology firms and software companies such as Apple, Adobe and Google. All three “giants” offer products and services that are increasingly important to the consumer. Apple has a strong name in integration across its platform while developing innovative products for individual and business use. Their computers are widely heralded as creative tools. Adobe is arguably the industry standard in imaging. Their flagship products such as Photoshop are staples in the photographic community. Google is a leader in open-platform software development. One key area that may be of interest to Nikon is Google unmatched geographical tagging technology. This technology could help streamline and improve Nikons efforts in this area. Nikon will gain the competitive advantage by focusing efforts and allocating resources that are important to our core consumers as well as important to the industry. Developing relevant technology and implementing technology in a way that is affordable, cost effective, and that will spawn future developments and innovations is at the heart of Nikons mission today.

Marketing Research Techniques Employed

Industry trends are closely monitored. Sales trends in various markets give Nikon a clear understanding of which technologies are on the forefront and which technologies have been rendered irrelevant. Sales trends are a clear indicator of consumer needs and behaviors. Data indicates where consumers are willing to spend their dollars – whether it’s on individual products such as cameras and cell phones, for example or bundled products such as cell phones with considerably high-end cameras built in. Sales data can also provide insight to how many consumers will purchase both or neither and which markets have a tendency to “grab” the latest technology as soon as it is offered. With that data we can steer our company to placing the right products in the right markets – at precisely the right time. Along with sales data, Nikon watches the industry through blogs, conventions and, of course, the rumor mill. All three give important insight into the market respectively. Blogs allow the company to take the community “temperature” with respect to our products and those of our competitors. They can indicate which advancements users found useful or useless, where their frustrations lie and what they would like to see next. Industry conventions are important because companies show off their latest greatest ideas to the world. We can gather a sense of direction from our competition while providing a glimpse into ours. Rumors are their own entity and are often perpetuated through blogging. What they offer is another barometer of what the consumers want or do not want. They also provide feedback to what rumored technology could very well be successful.

Market Segmentation Strategy

Nikons digital photography products are segmented by type of user. There are three major classes in which the users fall – Professional, Serious Amateur or prosumer, and general or consumer level usage. Each class has specific products – cameras and lenses – that are offered to them based on their usage, spending, and knowledge of photography. For the professional, Nikon offers the D3X, D3, D3S and D700(listed from highest to lowest). These DSLR cameras offer a range of features geared specifically to professional photography such as high megapixel ratios, full-frame image sensors, and field functionality or functions available by knobs and switches on the body of the camera, so the user does not have to pause and look at a menu screen. Retail prices range from $2700.00, for the D700, up to $8000.00, for the D3X. This class also includes the ability to use all lenses available from Nikon. The “prosumer” line is equally as broad. In this class, Nikon offers the D700(technically not a pro camera, but used as a back up camera for many Nikon photographers), D300S, and D90 – listed from highest to lowest. The range of features and field functionality in this class are similar to the professional class, however there is more menu functionality and pre-programmed user modes for those who are still learning or may need a little assistance in the field. Pricing in this class starts at $900.00 for a D90 and runs up to $2700.00 for the D700. Lens compatibility is limited in this class as the D90 and the D300S do not offer full-frame image sensors. The broadest class is consumer level user. There are two DSLR cameras offered in this class – the D5000, D3000 and D40, as well as a wide array of compact digital or point-and-shoot cameras. The three DSLRs offer only the ability to change lenses above their point-and-shoot counterparts and their image quality is significantly less then the “prosumer” and professional models. Pricing in this category ranges from $630 for a D5000 to $150.00 for the least expensive digital compact.

Positioning Strategy

As demonstrated in the segmentation of Digital Photography products, Nikon positions all of its products across each product line by user and by use or application. Each product and line is specific to the skill sets of the user in each class and tailored up or down to suit the foreseeable application of each product by the user. Each product is then aligned among other products in each class based on the same strategy. In essence, each class has a range of products suitable for users at that skill level and usage. Products, such as the D700, are then re-positioned based on sales and usage data. The D700 for example is not, by Nikon standards, a professional device. However, it is positioned in a manner, which is appealing to professionals and “prosumers” alike, making it widely successful.

Promotion Strategy

Nikon’s promotion mix strategy takes full advantage of all media outlets. For print, Nikon take advantage of thousands of Photography, sport, hunting and gaming, and imaging related magazines available internationally. Nikon focuses most of its resources on Internet and print advertising, utilizing banner advertising, Google Ads(advertising based on keywords or content), and cross-promotion with retailer websites for Internet advertising. For print, Nikon take advantage of thousands of Photography, sport, hunting and gaming, and imaging related magazines available internationally. Television and radio promotion is also used during relevant programming. Advertising is directly influenced by the ways our customers and other users of our types of products use to access information. With the rise in mobile computer, print is becoming less important, while Internet and mobile device(such as iPhone applications) methods are gaining more relevance. Measuring success of advertising has become a less daunting task thanks in part to the rise in web content advertising. These services typically offer necessary insight to how the viewer reacts to the ad in real-time. The company is able to determine how many times an ad had been displayed and clicked and directly align those results to shifting sales data. It also allows for an almost immediate adjustment to unsuccessful advertising methods. With so many new ways to promote, our efforts to reach more users in more places will undoubtedly be served. Nikons branding will be available on every form of visual content available to the consumer.