Australian Consumer Electronics Market Report

Introduction

The consumer electronics market is one of the markets with the highest prospective for growth in Australia. Even during the economic recession of 2009, this market has shown great performance indications due to the growth of the economy which was stimulated when the government of Australia extended fiscal support (Smith, 2009, P 56).

This has resulted in a sustained high consumer spending power, meaning that the consumer electronics market continued to experience growth. Most the electronic goods that are marketed in Australia are sourced from Japan. Japan sells various electronics to Australia, for example: Television sets, phones, laptops and cameras. Australia has experienced a boom in the communication sector; as a result there is an increased demand for mobile phones, laptops and broadband communication peripherals.

There is a high usage of the internet in Australia whereby 31% of all purchases are carried out online and the demand for broadband speeds is very high.

However, when compared to other developed markets, according to (Catley,1996) Australians still use the internet far less for everyday purchases and as a result, the internet still poses a high growth opportunity for the communications industry and their electronics counterpart. The paper has made use of an interview which is used to establish the role of marketing strategies in business success.

Markets

According to United States Department of State (2009), the Australian Consumer Electronics market is valued at $300 billion, but due to the increasingly blurring boundary between the telecommunications and the computer industries, the overall value runs to about $2 trillion. This failing distinction between the electronics that are categorized as of telecommunications and computers started to be witnessed during the initial stages of the digital era that began to be widely felt during the early 1990’s.

The Australian Consumer Electronics market is driven by the individual constituents markets that make up the entertainment, telecommunications and computing industries. These markets have been brought together into a common force by the extensive usage of the internet and its related technologies (Bill, 2001). Electronic devices have now become increasingly difficult to pigeonhole into a particular industry, with mobile devices being used as computers, communicating devices and entertainment devices all at once.

The Australian Consumer Electronics market is defined by the development of new products that are designed to overcome the limitations that are being faced by an increasingly mobile and internet savvy consumer (Bruce & Marty, 2000).

Customers

The average Australian consumer is usually technologically informed and would easily spend money on the latest gadget to fulfill her needs. The consumer will easily spend money on a flashy electronic gadget so as to fulfill the desire of having the latest gadgetry in their ownership.

According to Catley (1996) the international electronic brands consistently record good sales volumes pointing to a trend in the Australian Consumer Electronics market of attaching prestige to the newest offerings by multinational companies. Multinational electronic company, Sony corp. consistently records the highest volume of sales in Australia due its ongoing offering of good quality electronics like television sets and audio systems.

The Australian consumer has a high purchasing power, where, according to the United States Department of State, (2010) the per-capita GDP stands at $41, 982 when it was calculated in the year 2010. This means that the Australian consumer has one of the highest abilities to spend money as compared to consumers in other parts of the world. The Australian consumer values durable electronics, regardless of the price of the cheaper alternative.

Competition

In accordance to the United States Department of State (2009), there is a lot of competition in the Australian market. Some segments of the industry are dominated by a small number of enterprises. This is mainly because of the Australian history, distance from other parts of the world, and an expansive land with a meager population. Australia is a notable player in the world’s commercial setup, with the country being a dominant force in the region of Oceania.

Australian electronics companies have the advantage of having established their brands over a long period of time, thus they experience solid standing with the Australian Electronics Consumer and have strong relationships with the suppliers of their products. The Australian market is readily serviced by comparatively cheaper priced electronics from the Asian producers, for example Japan and Malaysia, and other producers from other parts of the world.

In order for an electronics firm to remain relevant in the Australian market, they have to offer more value than the existing competition which is mostly composed of low-cost alternatives from the neighboring Asian region.

The Australian Consumer Electronics market is dominated by several electronic firms, most of whom have their roots in the Asian region, they include:

• Sony Corporation
• Sanyo Electrical Company
• Pioneer Electrical Corporation
• NEC Corporation
• Olympus Corporation
• Sharp Corporation
• Nikon Corporation

Other Stakeholders

The market is influenced by the fiscal policies of the government and various other initiatives that cater for the interests of the retailers: Australian Retailers Association (ARA), the interests of the suppliers: Consumer Electronics Service Association (CESA).

Market Analysis

The Australian market is sophisticated and well developed, however the companies that deal with the industry of consumer electronics and are native to Australia do not have a sizeable share of the market. The Consumer Electronics Market has the latency to grow because Australia is a net importer of electronics from high quality, low-cost markets. This means that the growth of the electronics market will continue since the consumer has the purchasing power and has displayed intent to always buy new products as long as they satisfy her taste (Thomas & Hirokazu, 1999, P 78).

According to Smith (2009), the Australian electronic consumer prefers to spend her money on the latest gadgets and relies on the same to carry out most of her chores around the house. The consumer depends on the electronics to do purchases online. A reputable brand will be bought a regardless of its country of origin by the consumer (P 54).

This section will analyze the Australian Consumer Electronics Market according to the prevailing political and legal factors; economic factors; social and cultural factors; technological environment factors.

Political and Legal Factors

An enterprise that is involved in the electronics industry is required to comply with the laws of Australia that are meant to protect the rights of the consumer. The laws have also been designed to facilitate a healthy competition among the players of the industry, thus keeping the cost of their goods at reasonable levels.

The Trade Practices Act was drafted to further the cause of protecting the consumer and supporting the healthy growth of the industries. The government of Australia promotes fair trading practices among competitors in the marketplace, which enhances the interests of both the buyer and seller of a product (Catley, 1996).

When an enterprise concerned with the electronics industry conducts its marketing campaigns, it should be careful to align its practices to those recommended by the Trade Practices Act, failure to which, the enterprise will be prosecuted by the government of Australia. An enterprise found to be guilty of contravening this act is heavily fined and put through steep civil damage suits which consequently tarnish the reputation of the firm due to the negative exposure that it experiences.

The government of Australia has put in place acts and laws that govern the advertising practices of firms, which are overlooked by the Australian Competition and Consumer Commission (ACCC) and the Office of Fair Trading. This is meant to deter the industry players from engaging in deceptive promotions of their products or tarnishing the image of their competitors. The trade acts set good trading practices, including for marketing carried out over the internet.

Economic Factors

The economic factors will determine the purchase power of the consumers that are in a particular market. The amount of income of a consumer determines the frequency, quantity and quality of purchase that she will make. When the economy has stagnated or is going through a recession, the amount of income that the consumers have at their disposal is reduced and they are forced to purchase only those goods they really need, or those goods that will last them a longer time (Cooper, 1993).

The Australian government initiated reforms on the structure of the country’s economy during the 1980s. These reforms transformed Australia from a highly protected economy, to one that was open to freely explore international markets, and they in turn access the local Australian market. These reforms enable low-cost electronics from the Asian markets to be introduced into the Australian market, leading to readily available electronics of a diverse selection.

Social and Cultural Factors

In order for a marketing strategy to be successful it should take into consideration the social values of its consumers. Electronics are usually marketed as being top-of-the-range, sexy and a status symbol. However companies should be careful not to overstep the cultural values of their target market (Guntis, 2001, P 19).

Technological Environment

The electronics industry is highly fluid and depends on technological advancements to bring the next product release into the market. Enterprises that are involved with this industry should therefore be constantly monitoring changes in technology, so as to base their marketing strategy on the latest trends.

Marketing Mix Audit

Marketing mix is a term mostly used in the world of marketing. The elements in the term are the main components of a marketing plan and are the ones which form the base and the tactics strategies for the plan (Thomas & Charlotte, 1999, P 315). The method of marketing which is in use is also called the four P’s technology.

The Ps stand for price, place, product and promotion. The main concept behind the marketing mix concept is to mix the four factors in such a careful manner so as to get the best results. Some other cases have seen the concept being increased to five or seven P’s.

Price

There are various ways in which a product can be priced. It is important therefore for the people responsible for this task to be careful of the methods that they use to set the prices in order to use the policy or the strategy that is best for them at that time.

If the product or the service being offered is unique and rare, one can set high prices. In such a case, the person should be having a better competitive advantage over their peers (Charles, 2001, P 40-42). Such premium pricings can be directed to luxurious offerings like cruises.

In order to try to gain some share in a certain market, prices can be set at a certain low value in order to penetrate. When the costs of the manufacturers are kept at a minimum low in tough economic times, there can be introduced some economy pricing which is a bit low than the normal prices.

Depending on the substantiality of the competitive advantage, a company can charge high rice and due to a subsequent increase in supplies decrease the price and therefore attract an influx of customers. The question of pricing falls in accordance to the situation in the market and it is upon the people involved in that market to make sure that the strategies which are applied in the process are to the good of the organization (David, 1999, P 28).

Place

This is another critical area of the marketing mix which any industry should seek to dwell into with a lot of care. Place can also be taken to be the channel, the intermediary or the distribution. This is the method that is used to transfer the goods from the manufacturer to the consumer. There are many issues that surround the choicer of the distribution mode which include; the channels of distribution, coverage of the market, members oriented to a specific channel, centers of distribution, warehouses, transport mechanisms, and reverse logistics.

In the recent past, the internet has grown to be a channel intermediary. This is mainly due to the wide geographical coverage that the internet enjoys. Such a market has come to enjoy a very wide audience and reception by very many and diverse backgrounds of potential consumers (Jerry & Jennings, 1989).

The costs of investing in the internet marketing are very low due to a very low barrier to entry owing to the low costs of setup. The paradigm shift in today’s market which has become internet savvy is really changing the way of doing things including actions such as the proliferation of e-commerce.

Other type of members involved in the system “Retailers, wholesalers and finally distributors”. This group of people helps in the market by making the goods available to the people who are need of them or the consumers. They simplify the manufacturers’ work of getting the right customer for a certain product. They get responsible for some marketing.

Product

This is the tangible entity that a person purchases. The product is divided into some core features which define the value of the product to the user (Cooper, 1993). The main part is that place that a person cannot feel but happens to be the one that a person values in a certain product.

In a product like an electronic product, some core benefit which means the value can be the comfort, ease of operation and other peculiar things. There are other factors in the product which determines the market ability of that product like the augmented product which is the added value in that particular product. This can be the guarantees and the warranty allied to that product.

Promotion

This is a critical factor in the marketing nix concept as it determines the ability of the marketer to communicate with his or her potential clients. This method has to be efficiently mixed such the best positive value of a product is presented to the customer. It is possible to put together different promotion tactics so as to deliver an approach that is unique to the product and attractive to the customers.

In promotion, there are various elements that can be incorporated. Such are personal selling, promotional sales, public relations, mail, trade fairs, advertisements, exhibitions and sponsorships (Mark, 1997). When these elements are integrated to form a campaign that is unique and coherent form, marketing gets to a higher notch. There should be a specific process which should be followed when trying to get a certain product promoted through the campaigns.

As part of this research, there will be a simple survey of an industry poised as being one of the biggest suppliers of consumable electronics in Australia, Sony Electronics. In getting to know how they have grown to be the best retailers of consumable electronics in the country, a simple interview was conducted in one of the shops.

The interview was conducted in one of Sony’s retail outlets within the local city. The main aim was to establish the main methods and tactics that were being employed by the outlet and other Sony shops in establishing the leading role in the market. The interview is attached in the appendices.

Having done this simple research, it was evident that the company took advantage of promotional services to the best to get to the level that they boasted. Once a product came to the, market, a lot of advertising was done through the local dailies and through billboards.

Most of the clients were happy with Sony products without worrying much of the prices that were charged. This is due to a belief that Sony electronics is the best quality electronics products’ supplier. The mode of promotion focusing on quality and the guarantees that are given have been made to sink in the minds of several consumers that they find themselves buying products without even comparing them with any other companies.

In case of bulky items, the company offers home delivery services throughout the state. This has encouraged many people to invest most of their entertainment facilities in Sony (Suh-KY, 2000, P 52). The main target is particular products for entertainment and in particular to the young generation. Billboards showing a completely relaxed group of young individuals enjoying their time with Sony products like iPods’ are everywhere.

At the local markets, the retail store focuses on direct sales to the customers and improved public relations. This makes the customer enjoy shopping at the mall and also happens to refer other people to the mall. Another way in which this happens is through advertising campaigns.

On the regional and the national scenes, promotion is mainly through sponsorships, the internet and also advertising on the media. The company has involved itself in various charitable acts which have helped it to gain a positive reputation from the population. This has been a way which has increased the sales very much.

Conclusion

From the analysis of the consumables electronic markets in Australia, it is evident that the kind of reception from the customers a company receives is dependent of the marketing that is done to the products on sale. The case of Sony has indicated an excellent use of promotion by the industry to attract the customers.

The PEST factors that have been analyzed are seen to have a kind of a general impact on the whole industry and it is upon a particular company to align itself well to the needs of the consumers so as to have a better market of its products. Sony has proved to be a good example of a company which has taken advantage of strategic marketing and market analysis skills to dig roots in a wide base of customer loyalty (Laermer, & Simmons, 2007).

Recommendations

For any company to succeed in its sales and services there needs to be a better understanding of the needs and the requirements of the customer and also the current trends in the market. This will help not only in having to sell more but also in gaining customer satisfaction and therefore loyalty.

This is essential for the life of the business and in enhancing increased profitability. Businesses should focus on increased education on market analysis and skills on strategies to their employees to make them better placed in today’s competitive world. Quality performance should be focussed on choosing the best tools to tackle the objectives.

References

Bill, R. (2001). Electronics and business; An Unfinished Symphony. Electronics, 27 (10) 76-82

Bruce, F., & Marty, F. (2000). The MP3 and Internet.

Catley, B. (1996). Globalising Australian Capitalism. Melbourne: University of Cambridge publishers.

Charles, B. (2001). Try Me, Buy Me. Far Eastern Economic Review , 164 (44), 40-42.

Cooper, R. (1993). Winning at New Products: Accelerating the Process from Idea to Launch. Massachusets: Addison-Wesley.

David, D. (1999). Look Out! Here Comes the MP3 Explosion. Dealerscope Consumer Electronics Marketplace , 41 (12), 28.

Guntis, M. (2001). New Technology Takes Time. Oil & Gas Journal , 99 (39), 19.

Jerry, L., & Jennings, B. (1989). Media Use in the Information Age: Emerging Patterns of Adoption and Consumer Use. Hillsdale, New Jersey: Lawrence Erlbaum Associates Publishers.

Laermer, R. & Simmons, M. (2007). Punk Marketing, New York: Harper Collins.

Mark, T. (1997). Europe and the Japanese Challenge: The regulation of multinationals in Comparative Perspective. Oxford: Oxford University Press.

Smith, P. (2009, September 2). Australia to phase out stimulus measures. Financial Times , pp. 50-58.

Suh-KY. (2000). More Muscle for Your Money. Far Eastern Economic Review , 163 (46), 52.

Thomas, C., & Charlotte, H. (1999). The Link Between Attractiveness of ‘Extraband’ Attributes and the Adoption of Innovations. Journal of Academy of Marketing Science , 27 (3), 306-319.

Thomas, T., & Hirokazu, T. (1999). The Relationship between Mass Media Availability and the Multicountry Diffusion of Consumer Products. Journal of International Marketing , 7 (1), 77-96.

United States Department of State. (2009). Doing Business in Australia: 2009 Country Commercial Guide for U.S. Companies. Washington: United States of America Department of commerce.

United States Department of State. (2010). Doing Business in Australia: 2010 Country Commercial Guide for U.S. Companies. Washington: United States of America Department of commerce.

APPENDIX

Interview questions

1. How do you approach your customers
2. What are the main modes of promotional services that you use to attract your customers
3. How do you make new products known to the customers
4. Do you offer delivery services to your clients?
5. How do you assess the target markets to know of the varying customer needs?
6. How do you make sure that all people are satisfied?
7. Are there unique needs that can be traced to the local community?
8. If Yes, how to you align yourselves to make sure that you meet the specific requirements?
9. What is the difference in the promotion that you do and that offered at national and regional levels? How do you narrow down to the locals?
10. Having a record high of clients purchasing consumable electronics from you, what is the formula behind this? Why do you think many people like your stores?