Sony's Molyneux Details UPP, Dealer Program

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New York - Phil Molyneux, Sony Electronics' president/CEO, provided details on its unilateral pricing program (UPP) that covers 140 upscale products, and its strategic investment program with retailers, both of which are designed to emphasize profitability, during a media briefing at the Sony Building, here, this morning.

Molyneux said the UPP - starting April 1, the beginning of Sony's fiscal year - involves 140 products, which includes the company's Alpha, EX- and HX-Bravia lines, selected headphones, RS receivers, HX and TX projectors, 4K products, Sony tablets and "pretty much all of our premium products."

While they are premium products, the 140 SKUs under UPP are out of "tens of thousands" of Sony Electronics products available by April 1.

Penalties for those retailers that do carry these Sony products and do sell below the UPP would include Sony "not shipping products to retailers for a certain period of time." However, the program is being implemented "in collaboration with our partners," Molyneux said.

The UPP applies to all channels, online and physical stores, including Sony stores. "We play by the same rules," he said.

Sony is emphasizing those products that can generate profit, so its 2012 TV line will have 22 models, compared with the 40 in the 2011 line.

"But that does not mean that we are pulling out of TV. It is the center of the living room and of home entertainment," Molyneux said. "We have to rationalize the number of SKUs to generate profits."

As for Sony's strategic investment program with retailers, which also begins April 1, Molyneux said that since he became president on Sept. 1, 2010, he has studied the relationship it had with its dealers. He said, "We were paying for participation vs. paying for performance."

"We have developed a comprehensive criteria for retailers to work with us, collaborate with us ... to drive value of products, services," and to collaborate on a common message for Sony and its dealers "in terms of visibility, control of inventory - what is selling - to set up a better working framework," Molyneux said.

He added, the goal of UPP and the strategic investment program is "not to drive volume through price discounts, but to engage dealers [and explain to consumers] the value [and features] of our products. That should result in better margins for dealers and for Sony, so we can invest more in R&D for future products. The consumer benefits because dealers will be able to provide a better effort on explaining what the experiences" Sony products can provide.

For more on Molyneux's press conference, watch and the March 12 issue of TWICE.


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