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Sony To Step-Up Retail Programs, Support

Having been handed the reigns to Sony Electronics’ U.S. sales and marketing operations following the retirement of Jay Vandenbree, Mike Fasulo, executive VP and chief marketing officer, recently sat down with TWICE to review how the company now plans to take its strategies to retail.

The company recently announced an Altus line of wireless audio systems and components, which it will launch in part through a cooperative merchandising effort with Best Buy (see p. 10), and revealed plans to concentrate its advertising resources on a major “Why Buy Sony?” integrated marketing campaign starting next month and running the through the Super Bowl.

TWICE:How will Sony’s go-to-market strategy change under your leadership?

Fasulo: Jay and I worked together for some time on our retail execution strategy, which I am now taking to the next level. That involves translating the customer experience at the retail level and assisting our customers — being the retailers — by giving them the proper assets and tools and programs to do that. I think we were making some pretty good progress, but now with this new design we are going to see acceleration simply because we are all coordinated under the same objective.

In my early days as chief marketing officer, we did a great job of driving the brand, but driving it through retail was probably not one of our better jobs. Now we are addressing that.

TWICE:Some have said that Sony appears to be working more closely with certain buying groups again. Is that true?

Fasulo: I wouldn’t specify buying groups, but I would specify specialty retailers. Circuit City leaving the industry was not good for any of us. The specialty retailer is critically important. Everything we are introducing now — connected devices, IPTV — service models that require people and systems. Specialty retail is very, very near and dear to my heart. I understand that business, and I understand why certain retailers have higher SG&A [selling, general and administrative expenses] than others — it’s because they provide services. What I will do is look to put together a go-to-market strategy that will recognize those value-added services that are provided by specialty retailers and others. Just so the expectation is set, that is going to take a little more time. It is not something you do overnight. We are working on it aggressively, and you will start to see some of that come to fruition this fall.

TWICE:Having said that you recognize the importance of the specialty retailer, then why are you launching your new in-store Altus wireless systems merchandising program through Best Buy, who some of those dealers might consider the enemy?

Fasulo: I’m not sure they would say that Best Buy is their enemy. I would hope they wouldn’t. There is nothing exclusive in the Altus program. Best Buy has a tremendous opportunity to get directly from consumers their insights. Working together, we are stimulating interest in the market, not shifting share, and nobody has 100 percent share. We had this similar phenomenon when I launched Sony Style Stores, and people asked, “Why are you competing with your retailers?” We are not. We are giving the customers a demonstration that the retailers, because of the cost, can’t do. They can’t dedicate the amount of space for demonstrations that we can. The more I can educate a customer and send them out into the marketplace, the better it is for retail and the better for our industry.

It will be the same for Best Buy. You will see Best Buy integrated into our campaign, but it won’t be the only retailer integrated into our campaign. There will be a number of retailers working with us directly on the TV spots, and then from an Internet, online and in-store standpoint, it’s open to every retailer that is interested.

TWICE:What is the size of the advertising budget you are bringing to the “Why Buy Sony?” campaign this fall?

Fasulo: It will be $70 to $80 million. It starts Sept. 10 and runs through the Super Bowl. So the spending will be concentrated into the final months of the year, where last year we spent that on advertising for the whole year. We’ve been dark for a little a bit now.

But this type of campaign is what I want to do more of — I want to integrate it. The more we can integrate it, the more media we get, plus the easier we make it for the consumer to understand what it is that’s driving them to make a purchase.

TWICE:Is the cache of the Sony brand still as strong today as it was five years ago?

Fasulo: In quality we stand alone at the top. We aren’t arrogant about it. It is what it is, and that’s because our investments in R&D have not declined. All of our other investments have, but not R&D. It’s in the DNA of the company. Our innovation has been under attack and our design has been under attack, but still, in all three areas we are in the top one or two.

TWICE:Do you see an irony in the fact that several of the products in the new Altus connected audio line include iPod docks, when for so many years Sony’s Walkman line was the king of portable audio?

Fasulo: Our share of personal audio is still significant. Do we hope to get the MP3 business back — of course, but at the same time we acknowledge that the iPod is a significant mass-market product. So now we have quality audio to be compatible with those products. We may have embraced [supporting rival products] a little more recently, but in no way should it be viewed as us giving up on the portable audio business.