Sony’s ‘Aspirational’ Pricing Program

Sony (NYSE:SNE) says its unilateral pricing program (UPP) for electronics sold in the U.S. will focus attention on the company’s top products and help restore Sony’s reputation as a premium brand.

While Sony offers thousands of products, the initiative will move 140 product lines into UPP, which means each device will have a minimum price that retailers, including big-box and Sony stores, must charge customers. The new pricing model will apply to big-box retailers as well as Sony’s stores and will begin on April 1.

Sony also plans to trim its product line, with HDTVs dropping from about 40 models to 22. Headphone offerings also will be scaled back.

Sony’s focus on price and product quality, company president and CEO Phil Molyneux said, is intended as a remedy to past practices that focused far too much on sales volume. “There is a push to promote products not necessarily for the value of the product, or the service, or the content, but more on a ‘here’s a special offer this week, how about this Mr. or Mrs. Consumer?’, and I think we all got caught up in that a bit,” he said.

Without question, many brands have become casualties of price wars — usually because of oversupply. Sony, however, has been a victim of its own lack of innovation. The PlayStation 3 set-top video console and new PlayStation Vita handheld gaming device are among the few standout products that Sony currently offers, and neither is the best-selling gaming platform in its category. The PlayStation Vita debuted in U.S. stores on Feb. 22, almost a year after Nintendo’s (PINK:NTDOY) 3DS. The device has received positive reviews. The PlayStation 3, though, has never bested the annual sales of Microsoft’s (NASDAQ:MSFT) Xbox 360 – in part because the PS3 is more expensive.

At this year’s International Consumer Electronics Show in Las Vegas, Consumer Reports noted, Sony offered mostly product upgrades, including three additions to its Bravia TV line: the BX, an entry-level set; the EX; and the HX, a high-end TV that will be included in the UPP. Some higher-end TV models will feature break-resistant Corning Gorilla Glass and Sony’s new OptiContrast panel, which is designed to improve image quality in well-lit rooms.

Sony says it will reduce most product lines, including its HDTV offerings, which will shrink to 22 models from 40.

Molyneux added that playing to the brand’s higher-end products will involve a significant amount of social media marketing. And it will be a challenge to pull of the transformation, particularly with powerful and nimble competitors like Samsung (PINK:SSNLF), LG (PINK:LGEAF), and Vizio watching every move.

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