Student registration No.

: 70077973
·      Student Name: MAHA ISRAR
·      Course title.:    Dynamic Marketing
·      Course Code : MKT05207 
TIME: 1:00 pm- 3:30 pm
·      Teacher name.   ARSLAN ARSHAD

(SUBJECTIVE PAPER)
Q1: Describe the product line strategy of the Barco Projection Systems Division?

ANS :
 BPS had developed three lines of projectors: video, data, and graphics.
 Its projectors were consisted of three major components based on the same design
—tubes, lenses, and electronics.
 It uses its traditional strength in electronics to achieve better performance in
every main areas of evaluation.
 Only differentiated BPS’s product line was scan rate
 BPS was pursuing more specialized markets such as process control and
stimulation too.
 BPS used different scan rates to segment its markets: video projectors at 16
kilohertz, data projectors at 16 kHz to 45 kHz, and graphics projectors from
16kHz to well above 64 kHz.
 It decided developing the computer application was feasible, the complexity of
the application would keep larger firms out of the market and expand projection
markets too.
 BPS was looking toward digitally controlled projectors in 1989. Due to all
adjustments to BPS projectors setting were controlled manually, the digitally
controlled projectors would allow the projectors to be controlled by a remote.
 The strategy was to create a projector that had the best possible image, most
flexibility of inputs and most user-friendly.
 Barco Projection Systems originally started off as a consumer marketer, however,
it eventually branched out into industrial markets considering its batch
manufacturing style.
 BPS offers similar goods at relatively different price levels, This strategy allows
BPS to reach out to as many customers as possible from different segments.
 With the desire to expand the projection markets in the future,
Dejonghe,Claerbout, and Dursin mapped out 3 strategies: (1) downgrading or (2)
upgrading its projector, (3) developing a brand-new computer-compatible
projector.
  During the progress of enhancing a new computer projector, they realized that in
order to be compatible with the most upgraded technology, “scan rate” had to be
increased and projector had to be flexible with each model of computers.
 As a result, BPS decided to use scan rate as its market segmentation strategy,
which made the business stand out.

Q 2: Why did Sony decide to reject BPS’s vision of the market

in August 1989?

Ans:
Sony decided to reject BPS’s vision :

 Because Sony was no longer willing to compete with Barco and Electro home for a few
hundred projectors per year in the graphics segment.
 They were aiming to reconquer the market of data and graphics market.
 As Sony projectors were positioned below Barco’s in terms of performance, to reconquer
the market, Sony needed to change the market image.
 Although BPS was technology leader since 1985.
 This was a clear transition of BPS from being a technology leader to a follower of Sonys
technology.
 Further, there were no suppliers apart from Sony components that produced tubes with
the quality needed for high-end graphics projection.
 As a result, BPS had to heavily rely on Sony for the tube technology. Sony perhaps
believed that BPS did not introduce at a fast teeming rate to capture the growth latent in
the market. So Sony decided to hurl itself ahead of BPS in terms of the market vision.
 It was obvious that Sony was not interested in competing with Barco and Electrohome
anymore.
 Instead Sony was to conquer data and Graphics market, For this they need to break their
market image as mass production of low end products. It goes without any doubt that
Barco cannot win the price and innovation war against Sony.

Q 3: How serious a threat is the Sony 1270? What are

Sony’s objectives?

ANS:
Sony was a major threat to BPS as they were their suppliers too so BPS relies on Sony and
this itself a major threat for BPS production. Moreover the further explanation is given
below:

 It captured the first place of the highest performing projector as it surpassed BPS’s
BG400. The combination of low price and high performance threatened not only to break
its traditional market segmentation but also drop price to untenable levels. Its scan rate
had reached up to 75kHz and its featured “8” Sony tube gave it higher marks than BG400
in brightness, image quality and resolution. It would cause BPS stood up to lose 75% of
its forecast 1990 profits.
 Sony’s objective was attempting to widen the market through lower prices as it kept a
higher level of performance with a price decrease of 20%-40%. Their aim is to reconquer
BPS’s data and graphics markets.
 Sony is a threat with the introduction of Sony 1270 graphics because most of the
competitors, such as BPS, have set high prices for BG600 and BG400. Sony 1270
graphics will be priced lower in the market. The strategy is used to eliminate competitors.
What is more, the graphics will also be quality creating a higher value to the users.
 The objectives of Sony is to be a market leader in the data and graphics market. The aim
will be achieved because of its loyal and robust distribution network. The company uses
its distributors, making it cheap for them to reach out to the customers. Therefore, the
 lower pricing of the valuable Sony 1270 is justified with the successful distribution
channels.
 The huge growth potential (40%) expected in the graphics segment has perhaps prompted
Sony to drive the technology neuter in this segment and develop the 1270.
 In addition, by set it lower Sony aims at merging the data and graphics segment and
thereby achieving economy of scale.
 Sony aims to eventually require the graphics segment a goodness market rather than a
niche market.

Q4: What should Barco do now with respect to its product

development plans?

Ans:
There are mainly three different product development plans for Barco to execute.

 Barco could continue its schedule as planned, introduced the BD700 and delivered it on
time on October. BD 700, as BPS’s first digital projector, was expected to increase 25%
of its incremental sales.
 It was important to complete the production of BD700 as its engineers had already put a
lot effort in it and it would fulfill BPS’s promise to its loyal customers.
 The weakness was that it would not defeat 1270’s performance.
 It could use the progress of BD700 to produce BG700. BG700 would be able to have a
higher scanning frequency that matched 1270.
 But it would postpone the schedule until December and made the advance-order delayed.
BG700 would still be inferior to 1270 in light output, picture quality, etc.
 Another option was to develop BG800. It was the digital upgrade of BG400 and designed
to surpass 1270.
 The problem was that Barco was not sure to get the resource for the lenses. And the
preparation time would be too long for Infocomm.
 Generally, Barco had the capability of producing a projector that could surpass 1270, but
there were still a lot of uncertainties.

Precisely, The further explanation Product Development Plans is listed below ;

Option 1:
This option intends to continue with the production of BD700 and add upgrades. With a
digital projector like the BD700, it is clear that this projector is Barco’s best innovation
yet and the market is also in high demand. Like previously mentioned before, the
anticipated revenue in 1990 is $17.2million and the BD700 is also expected to make an
increase of 25% in sales over the previous BD600 which is about $4.3million. Moreover,
German distributors already had booked orders priced at $16,000. Revenue wise, the data
segment contributed to BPS more than the graphics segment hence it makes complete
sense to pursue the BD700 project. (Graphics=23%, Data:51%)
 Also, BPS is 2nd in each region in the data segment behind Sony and the data segment is
anticipated the most growth suitable for BARCO among all the other segments. While the
graphic segment has a growth rate of 40.2% and data segment has a growth rate of
12.3%, the sales made for data is significantly higher than sales made for graphic, and
hence, it makes sense to pursue the BD700 project. Lastly, Sony’s surprise announcement
about the 1270 launch did not have a specific date hence, it does not make sense to
abandon to BD700 project when 86% of the production is complete and Infocomm is
only months away.
Risks in abandoning plans to produce BD700:
 The production of BD700 not only is right for business in terms of numbers, it is crucial
for the image BPS portrays to its customers. By completing this project, BPS is showing
that they are responsible on meeting deadlines. Abandoning this project would discourage
workers and disappoint customers hugely. Additionally, suspending this project and
transferring over to produce BG700 or 800 would not meet deadlines before the
Infocomm show.

Option 2:
Option two was for BPS to transfer the skills from BD700 to complete a graphics
projecter, the BG700 in order for it to be competitive with Sony’s 1270. BPS can develop
this product within 2 months for it to be ready for Infocomm. Also, not much change
would have to be made since they can use the same physical materials for BG700 as they
planned to use for BD700. This launch would also give BPS a head start on producing
BG800 in 1990 and they can also lower price for BG700 in order to be more competitive
with 1270.
Risks with option 2:
 However, there are massive risks associated with this launch. BPS would have to solely
rely on their price than performance. Moreover, they would have to completely divert
from the BD700 project and a large chunk of the 86% of their progress would go to
waste. They also already orders worth $16,000 on the BD700 and that is another
monetary loss. To top all of this, their corporate image would face harm because they
would have “betrayed” their customers by abandoning the BD700 project.

Option 3:
 Divert all resources and make the BG800.