The shift, which has begun internally, creates a new unit called the Consumer Segment Marketing Division that, along with other still-evolving aspects of the re-organization, will radically change the way Sony goes to market, according to an internal Sony memo obtained by Advertising Age.
Instead of individual products being marketed by product managers, Sony is assigning executives to champion demographic segments.
The move will affect everything from product development and design to retail merchandising, advertising and consumer loyalty programs. Media dollars will also be realigned to deploy budgets more effectively to target the new segments.
"Beginning with the new fiscal year we will also create and report a virtual [profit and loss statement] that restates our [approximately] $8 [billion] consumer business by consumer segments," the memo stated.
Sony has not finalized its marketing budget for the new fiscal year starting April 1. Sony Electronics spent $122 million in measured media in the U.S. last year, according to Taylor Nelson Sofres' CMR.
The Consumer Segment Marketing Division's mission is to "develop an intimate understanding of Sony's end consumers ... from cradle to grave," according to the memo.
Sony is dividing consumers into the following segments: Affluent; CE Alphas (early adopters); Zoomers (55+); SoHo (small office/home office); Young Professionals/D.I.N.K.s (double income no kids, 25 to 34); Families (35 to 54); and Gen Y (under 25).
A Sony spokeswoman confirmed the authenticity of the memo. "Sony's a marketing powerhouse. ... This company is always looking for how to improve and approach what we do best," she said. "The goal is to get closer to the consumer."
WPP Group's Y&R Advertising, New York, and Irvine, Calif., is Sony's ad agency. "We're excited about the shift. It evolves Sony to a consumer-centric as opposed to a product-silo model," said John Partilla, managing partner-Sony at Y&R Advertising, New York.
Sony executives, who will work closely with the heads of the company's five product divisions, were shuffled within the revamped marketing function. Vic Pacor, formerly senior VP in the now-disbanded corporate marketing organization, was named chief marketing officer of Sony Electronics, a new title. He will oversee general managers in charge of segment marketing and develop segment-marketing initiatives; he reports to Fujio Nishida, president-chief operating officer, Sony Electronics.
T. Scott Edwards, formerly senior VP-corporate marketing organization, will helm the division as consumer segment marketing officer, reporting to Mr. Nishida. Mr. Edwards will continue managing Sony Electronics' ad agency relationships.
Traditionally, Sony has marketed by product category. In the last two years, Sony has inched toward a solutions-oriented approach, promoting, for example, the way a Vaio PC, digital camera and photo printer work together rather than touting stand-alone products.
Gen Y and its various sub-segments-tweens, teens, college students-are of critical importance in the new strategy as Sony aims to engender brand loyalty early on and build off a comprehensive consumer database to initiate frequent contact through loyalty and relationship marketing.
Sony's Consumer Segments:
2) CE Alphas ("early adopters" of technology at any age)
3) Zoomers (55 +)
4) SoHo (small office/home office)
5) Families (35 to 54)
6) Young Professionals/D.I.N.K.s (double income no kids, 25 to 34);
7) Gen Y (under 25)