Marketing ProjectDSLR Camera Brands in India

Contents Pg.

1. Terms Of Reference 1

2. Executive Summary 2

3. Canon India 3

4. Nikon India 8

5. Sony India 12

6. Comparative Analysis 18

1. Terms of Reference

For the preparation of a DSLR Camera Brands Assessment Report for activities associated within India.

Date: July 2012Prepared for: Somaiya Institute of Management Studies & ResearchPrepared by: Ankit Mehta

Background and Objective

There is no doubt that Canon and Nikon are the two most famous

camera brands in India. These brands are famous for their Digital Single Lens Reflex

(SLR) cameras because they were the first ones to make the switch from film to

digital. They constantly battle against each other for the title of the best SLR

manufacturer in the world. This report tries to

1. To document the significant areas within which the companies’ activity occur,

including specific values that may be affected.

2. To identify the potential effects (both favorable and adverse) on the values and

factors of the proposed activities.

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2. Executive Summary

Canon and Nikon constantly produce new cameras and it is difficult to tell

which one is better. All DSLRs may look alike at first glance, but each carries its own

advantages and disadvantages. Consumers DSLRs can be categorized into three

types- Entry Level, Intermediate and Prosumer. Canon and Nikon have the highest

market share, with Sony and Fujifilm still trying to penetrate the minds of the

consumers’ mind. Sony certainly has the technology to be a player in the DSLR

marketplace. And they have a natural migration path from non-DSLR consumer

cameras they currently sell. And they sell a lot of them.

I doubt they'll be a serious player in the Prosumer or professional

marketplace because, despite the Sony/Konica/Minolta optical marriage, the big

players will continue to be Canon and Nikon who not only have the optics; they also

have outstanding digital technology.

But Sony should play a major role at the DSLR entry level. They have

economies-of-scale that should allow them to put a pretty competent product in the

marketplace at a very competitive price.

At the moment, I don't see any one company that can compete with

Canon/Nikon at the top of the professional DSLR heap. As long as they continue to

lead the market in technology and continue to refine their lenses to keep up with the

resolution advances in chips and processors.

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3. Journey of Canon

3.1 Company Profile:

Canon Inc. (NYSE: CAJ), headquartered in Tokyo, Japan, is a leader in the

fields of professional and consumer imaging equipment and information systems.

Canon’s extensive range of products includes copying machines, inkjet and laser

printers, cameras, video equipment, medical equipment and semiconductor-

manufacturing equipment. Originally established in 1937 as Precision Optical

Industry, Co., Ltd., a camera manufacturer, Canon has successfully diversified and

globalized to become a worldwide industry leader in professional and consumer

imaging systems and solutions.

With over 195,000 employees worldwide, Canon has manufacturing and

marketing subsidiaries in Japan, the Americas, Europe, Asia and Oceania; and a

global R&D network with companies based in the United States, Europe, Asia and

Australia. Canon’s consolidated net sales for fiscal 2011 (ended December 31, 2011)

totaled $46 billion.

3.2 Canon in India

Canon India closed the year of 2011 with revenues of Rs.1525 cr and is

targeting Rs. 2100 cr in 2012 which is 40% growth over 2011. Canon focuses on

multiple market segments of consumer, B2B, Government & Commercial. Canon’s

product portfolio extends over a vast variety of copier MFDs, fax-machines, printers,

scanners, All-in-ones, digital cameras, camcorders and multimedia projectors, cable

ID printers, semiconductors and card printers.

Canon India Pvt. Ltd. is a 100% subsidiary of Canon Singapore Pvt. Ltd., a

world leader in imaging technologies. Set up in 1997, Canon India markets over 140

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comprehensive range of sophisticated contemporary digital imaging. Today, Canon

India is certified for ISO 9001, ISO 14001 and OHSAS 18001. The company today

has offices in 7 cities, warehouses in 13 cities across India and employs over 930

people. Canon has approximately 380 primary channel partners 13 National Retail

Chain partners, and over 4000 secondary retail points. Océ distributors in India will

now be a part of Canon partner network. Canon’s service reach extends to over 200

towns with over 200 service Engineers, 4 Master service centers and 34 Canon Care

Centers. Canon and Océ products are available with complete service support

network.

1. Products and Services:

2. DSLRs (EF lenses, EOF cameras)

3. Professional camcorders

4. Compact cameras (ixus, Power Shot)

5. Compact photo printers (SELPHY)

6. Personal camcorders (LEGRIA)

7. Fax machines (Inkjet, Laser)

8. Single function printers (inkjet-pixma, laser-laser shoot)

9. Multifunction printers (inkjet-pixma, laser-image CLASS)

10. Scanners (document, flatbed, flatbed with film)

11. Consumables (ink, paper & media)

12. Projectors

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3.3 Recent Marketing Strategies

o Canon enters cinematography imaging

domain in India in July 2012. Targets Bollywood and

broadcast applications with new cinema EOS product

line.

o Announces 3 models as a part of new range of

advanced professional cameras and 11 new lenses

for cinema photography image capturing

o Launches Canon Professional Services ( CPS ) for

press and media photographers in the country. The

service will provide membership for selected media

houses (company membership) targeting the

regions of Mumbai, Delhi. CPS concept has been

established in worldwide Canon group and herein

starts with Indian market. This CPS concept starts

with selected Press Media and will expand to

professional photographers and Professional

camcorder user including Cinema EOS System.

o Canon plans to inaugurate 95 retail stores in 2011,

100 in the year 2012 and another 100 stores in 2013

taking the count to 300 stores in the next 3 years.

Canon’s unique initiative to tap B, C and D-class

cities of the country, Image Express, reached 38

cities in Tier II and Tier III towns. 

o Canon India forayed into retail space with the

launch of its exclusive brand retail store called

"Canon Image Square".

o Canon launched Canon Image Express, a mobile

campaign touching 32 cities in 224 days

o Canon launched a television commercial called My

IXUS, My Style in two languages, English and

Malayalam.

o Canon’s Original Ink Centers touched 1000 outlets across 176 cities in India.

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Canon India closed

revenues at Rs. 1257 cr

revenues in 2010, with 50

per cent growth over 2009.

Canon organized over 75

photography workshops

across India.

Announces the launch of

Canon image RUNNER

ADVANCE, the next-

generation print

architecture platform that

will revolutionize the

printing industry. Canon

also announces their

alliance with the leading

software solutions

provider, Microsoft India

to create the ultimate

document management

office.

o Pioneer of 100% cash back offer on laser printers under CLAP, Canon Loyalty

Achievement Program.

3.4 Awards

“Strong commitment to excel" at the CII-EXIM Business Excellence

Award

Canon was ranked amongst top 10 employers in India in the Business

Today ‘Best Companies to Work for in India’ in 2009.

Manufacturer of the Year-Smart Photography 2010

Best Camera Company of the Year-Smart Photography 2010

Best Printer Company of the Year: Inkjet-Smart Photography 2010

Best Professional Printer of the Year-Asian Photography 2010

3.5 Vision

Simple advanced solutions freeing people to live their dreams and lead

enriched lives at home and at work.

3.6 Mission

Canon Australia and New Zealand are market leading suppliers of consumer

and business imaging solutions. We are a Canon Oceanic a team committed to

our customers’ ongoing satisfaction through the empowerment and development

of our staff. To be the preferred supplier we will be easy to deal with and provide

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quality, value for money products and services. To ensure success for all stake

holders we will deliver profitability, growth, job fulfillment and have a positive

impact on the community.

The president and CEO of Canon’s South East Asia regional headquarter

Singapore, Fukui Eiji, is confident that India is going to be an important market

for Canon. With the upcoming launch of products, its distribution strategy in

place, cross-selling opportunities in digital cameras, and competitive pricing,

Canon India’s spirits are buoyant. Going forward, two product categories – digi-

cams and projectors – will be the prime focus areas for Canon’s consumer

strategy. These product categories are vital for it to scale its operations from

business communications or automation to IT peripherals to consumer products.

“It’s a big change for Canon,” says Alok Bharadwaj, Director and GM,

Consumer Imaging & Information Division.

3.7 Summary

Canon continues to remain motivated and responsive in their pursuit of growth.

Canon sees India as a critical market for its overall growth and is focused on

deepening their relationship while staying committed to realizing the untapped

potential in the market.  With Canon camera business growing at a fast pace of

60% in India in 2012, Canon is looking forward to transform the industry with

their new products. In accordance with this growth strategy , cinematography is a

new domain that Canon will focus on , to consolidate its leadership in the Indian

camera market and expects it to contribute 5% towards its top line in 2013. Next

time you go to watch a Bollywood movie and get impressed with a scene, just

think of Canon." Dr. Alok Bharadwaj, Senior Vice President, Canon India

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4. NIKON

4.1 Overview

By capitalizing on the younger generation’s technological knowledge and

creative potential, Nikon hopes to increase its market share in the DSLR

photography sector in India. The DSLR market is known to attract a slightly more

matured and affluent crowd and the camera are usually perceived as complicated

and difficult to use. To engage the younger audience and debunk the

misconceptions, Nikon has produced a guide menu to teach consumers to take

great pictures quickly. The advantages marketing the DSLR photography interest

to the youth in India:

o Debunk the misconception of DLSR photography is only for the older

generation.

o Increase market share in the DSLR photography sector.

o Promote creative photography among students.

4.2 Business Mission

Become a recognized branding for DSLR photography among the youth by

promoting affordable, user friendly and creative DSLR photography.

4.3 Achievements

Nikon has led in technical innovations for more than 85 years, and the

performance delivered by Nikon products has earned the company and its

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customer’s prestige and recognition in a variety of fields. The majority of recent

Pulitzer Prize–winning photographers used Nikon equipment to capture the

winning image. Nikon Coolpix cameras have received more awards and top

rankings than any other consumer digital camera line. Plus, Nikon SLR cameras

have been on every manned space flight since the Apollo 15 mission in 1971. As

“The Eyes of Science,” Nikon microscopes enable researchers to make critical

breakthroughs, and Nikon instruments have been at the forefront of discoveries in

such areas as AIDS, Alzheimer’s, cancer, in-vitro fertilization, and genetic

research. The Nikon Diaphot microscope was used for the country’s first in-vitro

birth, and is still the predominant microscope for assisted reproduction.

Additionally, a Nikon microscope was used in the cloning process for Dolly the

Sheep, the first successful fully grown mammal clone. The tradition of Nikon

quality pervades the company, extending beyond the excellence of its products.

For the third consecutive year, Nikon has earned the distinct honor of receiving

the National Association of Photo Equipment Technicians Manufacturer Service

Support Award — the highest honor for consistent quality service within the

industry.

4.4 Promotion

Pictures are an integral part of our lives, and Nikon has always known that

ultimately it is the photograph that matters most. Perhaps the picture matters for

creative expression and personal fulfillment. Perhaps it matters for income

derived from images, or simply for pleasure and shared memories. The

unsurpassed quality and reliability that result from Nikon’s dedication to

excellence assure that Nikon equipment is exactly what you need when the

picture matters, which is always. For this reason, the company has adopted the

platform “If the Picture Matters the Camera Matters™.” This philosophy, or

key selling idea, has been crafted to address Nikon’s various photographic target

markets, and used for all branding and promotional pieces. Similarly, Nikon’s

industrial, bioscience, and other products employ direct benefit messages to their

target audiences in their promotions. For instance, Nikon Microscopes’

positioning as the “Eyes of Science” highlights Nikon’s dedication to providing

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the scientific community with the technology that enables vision and discovery.

Based on a longstanding philosophy that education is as much a part of the Nikon

tradition as the development and quality of products, Nikon has developed a

comprehensive program of educational tools and online programs that extend the

Nikon brand and broaden the company’s reach in the marketplace. Nikon’s Web

sites, publications, videos, Nikon School classes, and the Nikon Spirit Initiative

are all dedicated to providing information, inspiration, and support. Nikon’s

educational programs and development initiatives help differentiate Nikon from

its competitors and underscore the company’s commitment to quality.

4.5 BRAND VALUES

The Nikon name is equated with extraordinary performance, innovation,

precision, and optical quality. The Nikon brand is a well-earned, valued asset —

an asset that Nikon will continue to invest in by pursuing continual innovation in

all business activities, from product planning, design, and development to

production, marketing, customer support, and services. The unique strength of

the Nikon brand comes from the determination to deliver quality that customers

can trust. Nikon is always at the Heart of the Image.

4.6 Strategic objectives

o “Since, Japan and China contribute 10 per cent each to Nikon’s revenues,

we are targeting 5 per cent revenues from India in the next 3 years as it has

a lot of potential given its size and current growth,” Nikon India managing

director Hiroshi Takashina told Business Standard.

o Mr. Tanaka (ex MD) said Nikon would soon launch an aggressive

campaign to capture the fast-growing camera market in India. Nikon was

aiming a 45 per cent market share in the SLR market, which stands at

around 17,000 units a year. “Today we have only 10 Nikon Touch Zones

in four metros, which would be increased to 40 by the end of this year. We

also hope to maintain a growth rate of 35 per cent,” he added.

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o Besides, the company is aiming to increase its dealer network to 1,800

from 1,250 at present. “We are now focusing on tier II and III cities for

growth as the in smaller centers is more than metros and bigger cities,

although the numbers are still small,” Nikon GM (sales and marketing)

Sajjan Kumar.

o Nikon is aiming to increase its market share in India to 15 per cent this

fiscal.

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4.7 Mission

Performance levels to be achieved on priority issues,

such as cost reduction Measures of success in

fulfilling critical mission statement elements, such as

"delivering superior customer service "Expected

performance in key result areas (those additional

areas in which you must get measurable results if you

are to succeed), including: Expected financial

performance standards such as profitability, sales

revenue, growth, and cost/expense levels Targets for

performance on strategic measures that drive future

financial performance, such as market share,

customer-perceived quality and service, employee

satisfaction, organization skills and succession, and

innovation

5. SONY

5.1 Overview

Mr. Kenichiro Hibi appointed as Managing Director,

Sony India with effect from July 1, 2012. Sony India

achieved sales of Rs. 6,313 crore in FY11 and aims

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 Four Nikon products receive the "red dot award: product design 2012"

Nikon has set up more than

40 D-SLR and COOLPIX

zone in India in cities like

Mumbai, Delhi, Bangalore,

Pune, Hyderabad, Kolkata,

Coimbatore, Ahmedabad,

Roorkee, Agra, Dehra Dun

and Bhubaneswar.

30% growth in sales in FY12. India to be 5th Largest Contributor to global sales

by FY12.

5.2 Category Performance

BRAVIA is No.1 in Flat Panel Market with 18.8% share (In Qty.) in CY11(As

per Display Search)

Cyber-shot is No.1 in Compact Digital Camera market with 34% share in

FY11 (As per Import Data)

VAIO for the first time hit No.1 share of 20% in Q4, 2011 (As per IDC

Report)

5.3 Plan in India

Enhance existing distribution network from 10,400 in FY11 to 12,200 in FY12

Boost after-sales service with 285 service touch points across India in FY12

Allocate marketing budget of Rs. 450 crore in FY12

Plan headcount increase by 500, to take the total no. to 3,800 in FY12

BRAVIA, VAIO and Digital Imaging (Cyber-shot, Handy-cam, Alpha & Photo

Frame) have been the growth drivers of the business in India, contributing 35%,

20% and 15%, respectively to the total sales in FY11.

Time period FY10 FY11FY12

(Est.)

India Global sales ranking (As

Single Country)8 6 5

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Cyber-shot™

With Cyber-shot, Sony retains its No.1 position in Compact Digital Camera

market with an unbeatable market share of 34% (In Qty.) in FY11 (As per Import

Data), which is much ahead of the nearest competitor.

In FY11, Sony sold 11 lakh Cyber-shot cameras, which is expected to go up to 14

lakh units by end of FY12.

Not only this, Handy-cam has approximately 90% share of the camcorder market,

and Sony is the only player to drive this market in India.

5.4 Brand Equity

As per Customer Equity Tracking Study done by Nielsen in March 2012, Sony

has been ranked as the No. 1 brand that comes to consumer’s mind, when

prompted with the word ‘General Electronics’.

Not only this, Sony obtained highest satisfaction scores with the biggest gap

noted for Retail Price Stability, from the competition. This is a result of our Dealer

Satisfaction Study done by Nielsen, where selected dealers were asked to give an

overall satisfaction rating from a scale of 1 to 10 for each company.

5.5 Business Strategy

To strengthen its business operation, Sony India follows its core business

strategy, comprising of the following strong pillars:

5.5.1 Sales Channel Expansion:

Sony has its footprint across all major towns and cities in the India through

a very wide distribution network. Currently Sony has 10,400 sales channels

including brand shops, national chain stores and distributors. Sony plans to

aggressively increase the network to 12,200 channels by FY12.

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Time period FY09 FY10 FY11 FY12 (Est.)

Service

Network4,400 6,300 10,400 12,200

5.5.2 Service Operation Enhancement: 

Customer Centricity is part of Sony’s DNA. Over the years, customer

service has evolved from just repairs to providing fast, flexible, affordable and

comprehensive solutions to customers. Sony currently has 255 conveniently

located service touch-points, which it plans to step-up to 285 by FY12

As per a survey done by Nielsen on Dealer Satisfaction, Sony has gained

No. 1 position for after sales support, which is a reflection of Sony’s excellent

service quality provided to its customer.

5.5.3 Aggressive Brand Promotion 

Sony followed a strong brand promotion strategy and invested Rs. 360

crore in FY11. All the brand campaigns were supported with extensive Above-

the-line and Below-the-line activities, including print and television

commercial, Web, PR, cinema and shop-front. In FY12, Sony plans to pump

up an investment of Rs. 450 crore, which will be in sync with the business

growth.

Time period FY09 FY10 FY11 FY12

Investment Amt Rs. 250 crore Rs. 350 crore Rs. 360 crore Rs. 450

crore

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5.5.4 Local Talent Development 

Developing local Indian talent is a very crucial element of Sony’s growth story in

India. Sony plans to increase its manpower by 500 employees in FY12, to match

the growing business requirement.

As per a survey conducted by Tower Watson across Sony Group companies, when

compared to other high technology companies in India, Sony India has the highest

score based on parameters such as Talent Management, Innovation, Collaboration,

Empowerment, Leadership, Values & Objectives etc.

Sony India also has a very low attrition rate, which is again a

testimony to the fact that employees are

comfortable with the work environment.

While vacancies are quickly replenished

with fresh talent, Sony India works

towards creating a strong career

development programme for existing

employees which helps limit the attrition.

This includes various Sony University

programmes that staffs have the

opportunity to participate in.

5.6 Outlook for FY12

Sony plans to increase its sales turnover by 30% in

FY12

5.6.1 Cybershot

Sony Cyber-shot grew 45% (Qty.) in FY11, higher

than the digital still camera industry growth rate of

40% (Qty.)

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Sony India has a very

favorable presence over the

digital domain as well and the

website (www.sony.co.in) is a

ready reckoner for product

information, retail outlets and

help guide and tutorials for

product usage. It receives

very heavy traffic throughout

the year, with about 3 crore

visit in FY11 alone. Sony’s

Facebook page has more than

6.5 lakh fans and over 5 lakh

channel views on YouTube.

Plans to sell 14 lakh (Qty.) units in FY12 as compared to 11 lakh (Qty.) units

in FY11

Introduces 34 new Cyber-shot models with at least 16 models with High Zoom

feature.

Allocates Rs.50 crore to promote ‘incredible zoom. incredible

details’ campaign with Brand Ambassador, Ms. Deepika Padukone.

Expands channel network to 3,000 in FY12, up from 2,500 outlets in FY11.

5.7 Distribution

Sony believes a robust distribution network is essential to the growth and sales

of Cyber-shot cameras and hence plans to strengthen its current channel base to

3,000 counters in FY12, up from 2,500 counters in FY11. The current 2,500

outlets are distributed amongst 300 Brand Shops, 1,200 Photo stores and 1,000

consumer electronic stores including National Retailers.  Distribution Sony being

the company which positions itself as a seller of durable and high-end products, it

is practicing selective distribution of its products from these elective dealers i.e.

SONY-World. Apart from this there are grey-markets in India and other countries

where a practice of intensive market coverage is practiced, and the products in

these kind of markets normally do not possess all the features and benefits which

Sony offers e.g. warranty and guarantee. Sony distributes its products in various

channels. It uses Zero-level channel, one level channel and two-level channel. In

India, Sony has used the method of one-level distribution channel. This means

that, customer buys their Sony product from the retailers recognized by Sony, and

these retailers buy the products directly from the company itself.

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5.8 Advertising

Sony incorporates co-operative advertising in its advertising process. Sony

Corporation provides the dealers (e.g. Sony World) with the materials and

guidelines to develop ads for print, television or radio commercials. This ensures

that message is in line with, what the manufacture wants to communicate. The

company and the dealers usually share the media costs and hence, the name ‘co-

operative advertising’. 

5.9 Awards

No. 1 Ranking Camera for 2010 by Cnet Asia's Top 10 Cameras of 2010

Best Imaging Innovation: Sony SLT, Translucent Mirror Technology

The 50 Best Inventions of the Year Award

DPREVIEW Gold Award

2010 Camera of the Year

5.10 Summary

There isn’t a wide range of products available under Alpha series, but what

makes photography fun and stylish for the youngsters is the ease of software and

auto settings. The new Cyber-shot range will be available from Rs. 5,490 to

Rs.27,990 at Sony Center, photo channel outlets, consumer electronic stores and

leading national retailers across the country.

Sony is also set to launch its multi-media brand campaign across India,

touching upon various media vehicles such as Television and Print commercial,

shop-front, PR and web activities. Featuring Brand Ambassador Ms. Deepika

Padukone, the ‘incredible zoom. incredible details’ commercial oozes a carnival

feel.

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6. Comparative Analysis

6.1 Pros and Cons

One Big difference between the companies is the lenses. Nikon is not

completely backward compatible with the previous Nikon lenses whereas the

Canon cameras are and they are even compatible with third party lenses. Sony

on the other hand has limited backward compatibility issues because it’s fairly

new in the market and almost all the lenses are not manufactured by it,

because they have partnership with Carl Zeiss.

So how does the difference impact consumers and brand? If in the future one

wants to buy a specialty lens, he only has limited options with Nikon, with

comparatively higher prices. On the other hand, with the Canon one can get

any Canon lenses or buy third party ones which are usually less expensive.

Prosumers is short for “Professional Consumers” and they are intended for

advanced amateurs. One thing that distinguishes this camera from the other is

their speed. Most SLRs are able to capture 3 consecutive photos per second,

but Prosumers can take up to 21 photos per second. Here Nikon beats the race

with 21fps camera.

6.2 External Marketing Audit

6.2.1 Macro environment

In this section we shall analyse the macro environment of India in order for

Nikon to penetrate the DSLR market. Wilson, A (2002) has suggested that

“what is frequently lacking is an understanding of what might be termed the

‘outer environment’, where four major forces of change are at work.” These

are namely the political/government activities, economic change, sociological

change and technological change. The acronym ‘PEST’ is fondly used to

describe these factors. Figure 1: The “PEST” Diagram Adapted from “The

Marketing Audit” Wilson 2002.

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PEST Analysis

COMPANIES POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL

Canon No govt. grant

Trading agreements to ease shipment cost and taxes on importing DSLR cameras will reduce cost for consumers.

Comparatively higher and steady growth rate.

High consumer confidence.

Competitive cost, comparative to Nikon but on higher side.

Most favored brand and 2nd highest brand equity after Sony.

Preferred by most new age professionals.

Has changed according to lifestyle changes.

Highly aggressive policy.

High R&D from parent company.

Focus on marketing by making quality product.

Product life cycles same as Nikon.

Rate of technology transfer from Int. market is instant.

User friendly, helps beat “Complicated device”

Nikon Nikon School

Trading agreements to ease shipment cost and taxes on importing DSLR cameras will reduce cost for consumers.

Increasing growth rate

High consumer confidence.

Competitive cost, comparative to Canon but lower.

Second most favored brand in SLR and over all the loyalty is high.

Preferred by professionals with non DSLR background.

Has changed according to lifestyle changes.

High R&D from parent company.

Focus on selling what they manufacture.

Product life cycles same as Canon.

Rate of technology transfer from Int. market is instant.

Meant for professionals, less user friendly, less

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outreach to general population.

Sony No govt. grant

Trading agreements to ease shipment cost and taxes on importing DSLR cameras will reduce cost for consumers

Competitive cost.

Economic growth rate satisfactory.

Very low attrition rate

Consumer confidence not that high.

Has started to capture Youth, with the highest brand equity in consumer market.

Preferred by amateurs.

Has started with the current lifestyle.

High R&D from parent company.

Focus on selling what they manufacture.

Product life cycles not the same as Industry standard.

Rate of technology transfer from Int. market is satisfactory.

User friendly, general population approving it, but not at all by the professionals.

Figure 1

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6.2.2 Market analysis

Sony: All is going according to plan; sales will grow slowly but steadily as the

product is progressively introduced to the market.

Nikon: Profits which Nikon makes are non-existent at this stage because of the

costs of introducing the product; promotional costs are high in proportion to sales,

and costs per unit of output are high because of low volume, but also have adding

new functions, creating new market segments, therefore between stage1 and 2.

Canon: The expansion of the market attracts new competitors who have various

market-penetration strategies such as adding new functions, creating new market

segments, and capitalizing on distribution channels, the price down, and so on,

thus Profits may increase in this stage in accordance with the expansion of sales

volume.

6.2.3 Competition

Porter's (1985) ‘Five Forces' model has been most widely used in the strategic

analysis of competition. We shall use this model for Canon’s competitive analysis

relating to the five different forces (see figure 2)

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1. New entrants: threat of entry from other organizations. (Example: Samsung and

Sony entering the DSLR market. They currently have a share in the compact

digital camera markets only.)

2. Substitutes: availability and competition from substitute products. (Example:

Mobile phones and video cameras which can match the DSLR technology in

photography.)

3. Buyers: bargaining power of buyers. (Example: Distributors are able

to increase sales by providing convenient and reliable services, built on Canon’s

Image Square.)

4. Suppliers: bargaining power of suppliers. (Example: Trained specialist and

advance equipment required by Canon India to meet increasing demands.)

5. Existing competitors: rivalry among existing competitors. (Example: Nikon and

Olympus jockeying for position in the youth DSLR market.)

6.3 Strategic Issues Analysis

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Despite there being no anticipation of any significant decline in consumption

in the digital camera market, we expect consumer behavior and exchange rates will

remain unclear in future and that intensification of competition with competitors

and downward product price trend will continue. The Nikon Group is committed to

strengthening its manufacturing competitiveness constantly to meet the

expectations of its customers. The entire industry is thus striving to improve

competitiveness in terms of speed and cost as well as quality. In digital SLR

cameras and interchangeable lenses, sales were down due to deterioration

of product prices brought about by the effects of a strong yen and changes to the

sales composition ratio by price range. The Company was, however, able to

increase its sales volume at the same level, led by sales of their new models.

6.4 SWOT Analysis

Strengths

Increasing profits Nikon's camera business seems to have racked up an

operating profit of about 23.5 billion yen in the half, compared with a 1.9 billion

loss in the year-ago period. Sales of digital SLR cameras rose more than 10% to

break above 1.9million units thanks to the popularity of the entry-level D3100

and D5000.

Nikon has continued to improve its corporate makeup, with a balanced

increase to high dimensions for all corporate functions, including marketing,

development and design, production, and sales. They currently employ a

structure that allows them to modify production on a weekly basis to reflect the

latest market data. When market conditions began to deteriorate in the fall of

2008, they decided quickly to adjust production at the end of 2008-making them

the first in the industry to do so-and were one of the first to complete those

adjustments. All of Nikon’s corporate functions operating simultaneously at

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high levels provide a true collective strength that can be leveraged in a short

period of time.

Common to all:

Able to provide good customer service and support due to local service center.

World known and recognized brand for photography equipment.

Weaknesses

Nikons marketing campaigns focuses on compact digital cameras rather than

DSLR 

Opportunity

Current economic upswing would encourage consumers to spend more on

lifestyle luxury products such as DSLR cameras.

Selling existing products to existing markets/ segments (market penetration).

Extending existing products to new markets/ segments (market extension).

Room for market growth as the untapped source of potential youth market with

the development of media communications studies available

Threats

Entry of new market players in the DSLR market such as, Sony and Panasonic.

Canon realizing the potential of the youth market and introduces new models

with user-friendly technology for newcomers to DSLR photography.

Product / Placement

The consumer grade segment of the market is most vital to both companies

because they account for a bulk of their revenue and thus is their bread and

butter. One way to gauge the competition is to go to a store. I go to Croma

frequently and chuckle whenever I see both Canon and Nikon DSLR boxes side

by side. As of late 2011, the two consumer grade cameras that Croma sells are

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the Canon 600D and Nikon D3100. While both try to compete for similar price

range, looking at the boxes, one may feel that they're actually aiming for

different types of consumers!

.

Look at the fancy jargons like "Optical Image Stabilizer Double Zoom Lens Kit", and below,

a bunch of fancy stuff like "12.2 MEGAPIXELS", "Digic III", "3 inch LCD", "3.5 Frames

per second", "EOS", "Picture Style". Wow! If I were a guy who loves to look at

specifications all day, I'd get a Canon Rebel because it's obviously better on a spec-by-spec

comparison.

Let's now look at the Nikon D60. There’s no sport. There's no emphasis on frozen action.

There are no fancy jargons to woe you. There IS however lots of emphasis on people...

portraits... softness... prettiness... connection to people. Nikon's strategy is about connecting

to professionals in the simplest possible way.

 Canon's strategy is to use what they're traditionally good at: sports and specs. Canon loves to

show pictures of sports, frozen in time. In addition, Canon uses higher specifications (higher

megapixel, more frames per second, higher processor name, etc.) to lure certain types of

buyers-- the Specification Peepers.

What does that leave Nikon with? Nikon's strategy isn't to use specification to sell. Nikon

doesn't need to compete on specs, because not all specs are relevant to the discerned buyer.

For example, a higher megapixel doesn’t mean better image quality (in fact, more megapixels

means more noise at night). There are other things to consider, like contrast and color

rendition that Nikon excels at.

References:

www.dpreview.com www.letsgodigital.org

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www.andhranews.net

www.businesswireindia.com

www.itnews4you.com

articles.economictimes.indiatimes.com

www.newsduniyaonline.com

www.cipa.jp

blog.kamerakevin.com

www.oppapers.com

www.canon.co.in

www. nikon .co.uk

www.johnnosta.com

en.wikipedia.org

www.sony.co.in

Images and Data search: www.google.co.in

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