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What Sony Knows (And Has Apparently Forgotten) About Driving Growth

by Doug Davidoff | Nov 28, 2005 11:35:10 AM

No focus group ever told Sony it needed to create a small rectangular piece of plastic that people could use to play cassette tapes with high fidelity sound while moving around (The Walkman). No focus group ever came to the conclusion that vinyl analog devices (albums) needed to be replaced by smaller pieces of plastic that played back digitally (The Compact Disc).

Sony developed many new consumer items that we now take for granted. The company’s track record for innovation has been impressive, starting with the transistor radio in 1955, and following over the years with products such as the Walkman, the Discman, the first mini-disc player, video cameras and gaming consoles – all at premium prices. With every breakthrough, the people at Sony seemed to know instinctively there was no future in producing products for which a market already existed. They realized that if a business waited until demand was already there, it would be starting as a commodity provider. As a commodity provider, profitability is always under siege and, as margins are compressed, there is no money left to take chances and make the mistakes that creating breakthroughs requires. Witness Sony’s more recent, and less spectacular, entries into the laptop computer and MP3 markets.

In the past, Sony understood that to drive and sustain profitable growth, they had to create demand with innovative products, not merely fulfill demand with “me-too” items at a lower price point. In today’s hyper-commoditized world, any business that wants to drive growth has to do the same. Sony, in many ways, has forgotten that and it shows on their bottom line.

Demand creation is different from demand fulfillment. It requires different strategies, different tactics and different sales and marketing processes. In my consulting work I constantly hear companies say they are trying to create demand. The problem is they use business development strategies designed for situations where demand already exists. Instead, they need to focus on unique solutions, created in response to new, previously unknown customer problems.

Let me be clear – the only way to avoid being a commodity provider is to create demand. Creating demand means making your offering unique, remarkable and divergent. However, the moment your offering becomes divergent, you introduce complexity and change. You must adopt a selling process based on recognizing the changes your solution will cause and monetizing the value of those changes.

The other challenge when you decide to be a demand creator is your ‘safety net’ goes away. You can’t rely on research or past results to make your marketing decisions. Old solutions don’t solve new problems. Of course, one of the reasons for this blog is to provide you with encouragement and support as you evolve into a demand-creation company that has mastered the art of unearthing problems customers didn’t know they had… and solving them with approaches they can’t find anywhere else.

Until next time, Doug

As I’ve mentioned I spend much of my time working with companies to introduce divergent offerings and create demand. If you are interested in learning more about I do this, I encourage you to visit my website: www.imaginellc.com.