JAPAN/RUSSIA: Sony targets the new affluent and seasonal demand to open up Russian market

One of the recovery strategies outlined for Sony is a focus on markets beyond the traditional domestic, European and North American territories. And in an interview with Japan's Nikkei business daily, it's been outlining how it's tackling the huge population of Russia and the former Soviet countries.

Kenichiro Hibi, who heads up local division ZAO Sony Electronics, explained that it's no longer simply concentrating on the obvious major markets such as Moscow and St Petersburg. Instead it's moving its focus out into smaller provincial cities and targeting specific local needs with products such as computer speakers with built-in FM tuners, allowing users to listen while they surf.

And it's noticed that there are very distinct seasonal variations in sales, brought about by the Russian climate. TVs and home entertainment equipment sell strongly in the long Russian winter, while the Spring sees strong performance in the likes of camcorders and Walkman players, as the people take the first opportunity to get out and about in the warmer days.

Sony benefits from strong brand recognition in Russia, Hibi says, not least because the company was a major force in broadcast equipment there in the Soviet times. He also notes that 'Demand for high-end products is also strong among wealthy people who have benefited from higher prices of natural resources.'

It seems the oil and gas billionaires, for all their fortunes may have been impacted of late, are still big Sony fans.

And while the market is dominated by a handful of big discount operators, ZAO Sony is not only building up its Sony Shop and Sony Centre presence in the Russian market, but also sending its staff out to 20-30 provincial cities to run 'X-Day' promotions.

They work alongside shop staff to improve sales techniques and offer promotions on products, and Hibi says these campaigns increase sales by 30-50%.

So why is Hibi so confident of the wisdom of investing heavily in the Russian market in these uncertain times? Simple, he says: "When the Russian market grows, it does so explosively."

Andrew has written about audio and video products for the past 20+ years, and been a consumer journalist for more than 30 years, starting his career on camera magazines. Andrew has contributed to titles including What Hi-Fi?, GramophoneJazzwise and Hi-Fi CriticHi-Fi News & Record Review and Hi-Fi Choice. I’ve also written for a number of non-specialist and overseas magazines.