- Term Papers and Free Essays

Barco Projection Systems (A): Worldwide Niche Marketing

Essay by 24  •  December 14, 2010  •  1,695 Words (7 Pages)  •  1,303 Views

Essay Preview: Barco Projection Systems (A): Worldwide Niche Marketing

Report this essay
Page 1 of 7

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. 1020 was slower compared to Barco's video projectors available at that time but it had a sharper focus indicating a better quality tube. In 1985 Barco launched BD3 (scan rate of 16 - 32 kHz & priced at $17,000) and then in 1986, Barco introduced BDHR, its first projector in the graphics segment (scan rate of 16-45 KHz and priced at $17,375). In June 1987, Barco came up with BG400 for graphics segment (scan rate up to 72 kHz, initially priced at $25,000 and later reduced to $24,000). In the same year, 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'кtre 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 dealers had to hire a certain number of Barco-approved technicians. The idea behind this was that dealers would know more bout Barco products than competitors and thus would push Barco products. Barco kept the number of dealers to low because more dealers will mean that they will have more buyer power over distributors, and thus over Barco. The effect will move up the chain, e.g. if distributors are forced to decrease their margins this will put pressure on BPS. The distributors were specialized and had exclusive contracts with Barco.

As Sony's projectors were positioned below Barco in terms of performance (scan rate, brightness, image quality and resolution), so Sony's strategy was of price differentiation (to keep the projectors 15% lower in price on average). In video segment there was not much differentiation in the scan rate between Barco and Sony and accordingly Sony decided to capture that market. Also Barco was not interested in video segment because of 0.8% predicted annual growth (1989 - 1994) and scan rate was at threshold level. Sony's marketing strategy was to make use of its worldwide network of captive commercial video distributors which in turn worked with more than 1,500 dealers across the globe. Also Sony's strategy was to make use of brand name recognition which had a reputation of reliability and low price among dealers. Sony also took advantage of the fact that Barco was purchasing tubes from Sony Components. In some cases Sony's strategy was to be better off than Barco in terms of latest developments related to tubes with in-house supplier. Internal efficiencies were created from Sony Components - Sony projectors would know about new tubes before competitors and thus be able to design for new tubes immediately. This resulted in supply chain efficiencies of being more responsive to demand, and not carrying high inventories.

Q2. Consider a hypothetical case where Sony was to charge $9,000 for its new 1270 'super data' projector (assuming that 1270's marginal cost is much lesser than $9000). Do you think that Sony can merge the data and the video segments (in other words, it will attract a good chunk of customers, typically >30-40% of the share, in each of the two segments) if it was to charge the $9,000 price for 1270? Give reasons for your answer. Next, consider the hypothetical case where Sony was to charge $15,000 for the 1270 projector. Do you think Sony would be able to merge the data and the graphics segments if it was to charge the $15,000 price for 1270? Give reasons for your answer.

$9,000 for 1270 'super data' projector

As of 1988, the market share of Sony in video segment was 50% and BPS had a small share of 8%. Sony's existing model in the video segment was priced at $7438 (15 % of price of BV600 i.e. $ 8,750).



Download as:   txt (9.5 Kb)   pdf (118.7 Kb)   docx (11.7 Kb)  
Continue for 6 more pages »
Only available on
Citation Generator

(2010, 12). Barco Projection Systems (A): Worldwide Niche Marketing. Retrieved 12, 2010, from

"Barco Projection Systems (A): Worldwide Niche Marketing" 12 2010. 2010. 12 2010 <>.

"Barco Projection Systems (A): Worldwide Niche Marketing.", 12 2010. Web. 12 2010. <>.

"Barco Projection Systems (A): Worldwide Niche Marketing." 12, 2010. Accessed 12, 2010.