Research and development and marketing costs, Financial Management

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a) Product orientated businesses tend to be produce products and inward looking that they hope will sell in the marketplace. For example, Sony hoped that its $101,500 audio systems and ¥380,000 digital cameras would sell. However, with huge competition in these mass consumer markets, Sony seemed to be overlook the market prices being paid by the usual consumer of such products.

b) explanation and Identification of two dmerits needed for full marks.

• Since consumer requirements are ignored, there is probably to be a high failure rate as in the case of the Sony Qualia line of products

• It is a high risk marketing strategy since Sony merely hopes that customers will purchase these very expensive gadgets

• Research & Development and Marketing costs often prove fruitless; hence this represents incompetent use of Sony's finances

• By being inward looking, Sony's rivals such as Hitachi and Samsung are likely to take away some of its market share

• The extremely high prices set by Sony do not reflect the willingness and ability of customers to pay (such prices) for these products 


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