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Managing Customer Value Barco Projection Systems (A): Worldwide Niche Marketing

1740 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 BV2 (scan rate of 16 to 18 kHz & priced at $9,875) and BD2 (scan rate of 16 to 25 kHz and priced at $14,750) in video and data segment respectively.1985 saw the entrance of Sony in the industrial projection market with its 1020 video model in comparison to Barco's launch of BD3 (scan rate of 16 - 32 kHz & priced at $17,000). Sony launched its VPH1031 (scan rate of 16 to 35 kHz & priced at $10,500).In June 1987, first graphics projector was introduced BG400 (scan rate up to 72 kHz, initially priced at $25,000 and later reduced to $24,000). In 1987 Barco also introduced BD400 (scan rate of 16 to 45 kHz & priced at $14,500) and immediately next year came out with BD600 (scan rate of 16 to 45 kHz & priced at $12,000) and BV600 (scan rate 16 kHz & priced at $8,750)Barco's main strategy was to work in niche markets and they believed that complexity of the application would work to their advantage by keeping large firms out of market. They had a traditional strength in electronics and given the same tube and lens combination, BPS could achieve better performance than its competitors. Barco continually upgraded the scan rates of its most sophisticated projector line to match advances in application. For this, company committed strongly to R&D to keep them ahead of the industry experience curve. Their strategy was to limit the scan rate for each segment such as video (up to 16 kHz), data (16 to 45 kHz) and graphics (16 to 64 kHz & above). The raison d'être behind this was that they could have made it on one machine for each segment but not sold it for the highest price (determined by the Willingness-to-Pay for the customer in each segment). Different projectors priced at different price would help them to extract the maximum consumer surplus. As part of marketing strategy, BPS captured more specialized markets such as process control and simulation thus covering the breadth of industries (rail road, military, consulting, computing, entertainment). BPS also made strong ties with customers such as IBM and EEC thus creating barriers to entry.Barco forced dealers to spend time learning about Barco products, and they had to hire a certain number of Barco-approved technicians. The...

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