Barco Projection Systems (a): Worldwide Niche Marketing

1727 words 7 pages
Q1. What are the key differences between Sony's and Bacro's strategies as far as their product roll out is concerned prior to Aug 1989 in the projector market (that is, you need to compare and contrast the chronological order and the scan rate/prices/other features of the models that both players introduced in the market prior to Aug 1989)? Why is it that both players were playing such different strategies prior to Aug 1989?

Barco launched its first projector BV1 (scan rate of 16 kHz & priced at $11,250) in video segment in 1982. But soon Barco decided to enter the computer applications market and by the end of 1983 launched BD1 (scan rate of 16 to 18 kHz & priced at $13,500) in data segment. In 1984 Barco introduced two more projectors
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Sony's existing model in the video segment was priced at $7438 (15 % of price of BV600 i.e. $ 8,750). In the data segment, Sony's market share was 49% followed by 23% BPS and 11% EH. Sony's existing model was priced at $10,200 (15 % of price of BD600 i.e. $12,000).

Consumers in video segment do not value additional scan rate as much and hence they might not pay the extra 9000 – 7438 = $1562. They might continue purchasing the 16 kHz (at $7438) projector to suite their optimum video requirements and not trade up for 1270 (75 kHz projector priced at $9000).

Consumers in data segment tended to purchase more performance in a projector than they needed. They might value a higher scan rate of 75 kHz compared to existing ones in Sony's VPH1031 (scan rate of 16 to 35 kHz & priced at $10,500) and Barco's BD600 (scan rate of 16 to 45 kHz & priced at $12,000). It might seem obvious that customers would buy a cheaper projector with the higher product performance. ‘Price signaling quality' issue may not be a big concern here because Sony has a sound established reputation and brand recognition in the market. Further, Sony would be able to tackle this issue by physically demonstrating the performance of the projector at trade show and Infocomm show. This would weaken the correlation between price and quality in the customer's mind. As the projectors are purchased for industry use the snob