Business Process Flow Template

How should BARCO respond to SONY?

Price decision on BG400 (currently $24,000): Wait to see how SONY 1270 prices. The 1270 seems likely to come in below the BG400 price, but a preemptive price cut might encourage even lower prices.

Product development decision: Only the BG800 seems likely to be able to compete with the 1270 on quality and probably not on price. Furthermore the BG800 has only an estimated 40% chance of meeting the Infocomm January deadline. Continue development of the BD700 and deliver in October. Bring out the BG700 as soon as possible after that and work toward introducing the BG800 for next year's Infocomm. SONY has won this round of high-end product development. Better not to rush something out, risking missing the deadline with a problem product. BARCO is better off trying to capture the more price-sensitive share of the high-end market in the near-term – price its new products low enough that some will choose the BARCO's lesser-performing products versus the 1270. Then go after the high-end again next year. Also, it is unclear whether SONY will have enough product available to satisfy demand. A 1270 stock-out could result in spill-over demand for BARCO's substitute products.

1. Given the definition of marketing (see Levitt and the other readings as well as lecture 1), does BARCO have a marketing problem?

Levitt: customer-oriented vs. product oriented, mistake: assume strength lies in the apparently unchallenged superiority of product, marketing focuses on the needs of the buyer by the means of product and the whole cluster of things associated with creating, delivering and finally consuming it

Drucker: Marketing is the process via which a firm creates value for its chosen customers. Value is created by meeting customer needs. Thus a firm needs to define itself not by the product it sells, but by the customer benefit provided.

BARCO was product focused. Scan rate demand was increasing to match...