CANON CASE STUDY

Caceres | Pajarillo | Magan | Maca-alin | Regalado

1. The program described above was launched in Hong Kong five years ago. In your
opinion, can the said program be applied to the Philippine market in today’s environment? What
changes will you recommend to make it relevant to the said market? Consider segmentation
and targeting variables in your analysis.

Answer:

The main reason for canon to target kids is to explore new markets. Canon had been exploring
possible markets by targeting unusual segments, like females. This may seem to be an
unconventional target due to the perception that photography is men’s activity. But with this
strategy, canon is being exposed to a variety of people, which eventually widens their range of
consumers. And now, Canon is creating a new market segment - the kids.

We believe that this new model will be very beneficial to Filipino parents. We have observed that
a lot of Filipino parents want to expose their kids to a variety of activities (e.g. singing, actin,
dancing, painting, etc) not only for the purpose of fun and entertainment. It is actually an
experimentation process where parents can observe their kids and determine their passions
and interests. In addition, it is important for Filipino parents, especially for the mothers to know
the possible interests of their children so they can be put to training as early as possible.

Indeed, with this new canon model IXUS, parents will have the opportunity to introduce another
kind of fun and entertainment to their kids. We believe that a lot of parents are more than willing
to buy their kids with digital cameras for photography function alone. Smartphones can be
dangerous to children especially internet is mainly used; and as we all know, internet is not as
friendly as before.

However, there are several critical factors that need to be considered in targeting market
segments: (www.netmba.com)
● Size of the segment (number of customers/ and number of units)
● Growth rate of the segment
● Competition in the segment
● Brand loyalty of existing customers in the segment
● Attainable market share given promotional budget and competitor’s expenditures
● Required market share to break even
● Sales potential for the firm in the segment
● Expected profit margins in the segment

To obtain all these information, the impact of both the micro-environmental and macro-
environmental variables should be considered.
We took both into consideration using the PESTEL method.

Political: In the Philippines, the tax policy is reformed wherein consumption taxes are increased
wherein it can greatly affect the attitude of consumers in purchasing goods, particularly
cameras.

Economic: Last 2018, the Philippines’ inflation rate rocketed up to 6.4%. However, the
Philippines' inflation crisis showed signs of easing, as the rate slowed down to 5.1%. With this,
the government expects inflation to further slow down.

Social: Inspired by its 20-year success in the country, Canon Marketing Philippines, Inc. (CMPI)
sets sights on a new chapter of delighting Filipinos to further strengthen its business in the
Philippines. As recorded in 2018, it ranks among the Top 500 of the Philippines’ Top
Corporations, and continues to be a strong and trusted brand for imaging and printing solutions
in the country. More so, Philippines is considered as the most optimistic consumer market in
Asia, according to findings from the Mastercard Index of Consumer Confidence. The Mastercard
Index of Consumer Confidence and its accompanying reports should not be interpreted as
indicators of Mastercard’s financial performance.

Technological: Consumer electronics in the Philippines recorded strong volume and current
value growth in 2018, although the latter was slightly slower than that of the previous year. The
best performing categories were wearable electronics, particularly smart wearables, and
laptops, while smartphones, which has been growing strongly in recent years, witnessed a
further slowdown.

Environmental: In practicing sustainability measures, Canon is implementing a multifaceted

environmental strategy using a consistent PDCA cycle-based approach. As a global corporation
working in harmony with the environment, Canon will continue to deepen its connection to the
earth based on the principle of kyosei.

Legal: Even though Canon Inc. has established its brand in the country for already 20 years, it
still has to check and ensure that their practices are legal. In the legal environment, Canon Inc.
should consider the following: Antitrust law in Business Equipment industry and overall in the
country., Discrimination law, Copyright, patents / Intellectual property law, Consumer protection
and e-commerce, Employment law, Health and safety law, and Data Protection.

Since the main goal of this program, and of all business, is profit; we have to consider economic
circumstances of kids and of parents as the biggest factor. As mentioned in the case, Canon
aims to gather attention from the middle class. It is better to know the number of the middle
class living in the Philippines, unfortunately, the team couldn’t find any available
records.However, according to Rappler, The Philippines' growing middle class is on track to
outspend Italy’s by 2030. The report was based on the growing number of internet users in the
Philippines. According to the article, Filipino internet users had reached 67M, 63.39% of the
105.7M total population as of 2018. This indicates that many are capable to buy, hence a large
chance for a high demand.

Nonetheless, it couldn’t be argued that kids in the Philippines has no discretion on what to buy.
From clothes, food, to toys; Filipino parents are usually the one to decide. How much more on a
Php 15,000 worth of equipment. Our point is, targeting kids would not be effective here on the
Philippines. Instead, we suggest Canon to target vloggers.

There had been a surprisingly large increase in the number of vloggers in the Philippines for
these past few years. The potential of this increasing population in the Philippines is a huge
opportunity for CANON to consider.

2. With digital cameras, film cameras, and smartphones as your products, create a
possible perceptual product positioning map before the program and after the program (parents
28-35 years old with small children as target market). What do you think are the factors which
will cause a shift in their positioning?
They raised awareness through promoting their new product of a new line of child-friendly digital
cameras. Thus, further promoting through a TV program campaign or social media platforms
such as Facebook, Twitter, YouTube, and Instagram can boost the marketability of digital
camera.

3. What new market segment in the Philippines can Canon target? With your selected
target market, design a creative campaign strategy to entice them to buy the product.

Humans are visual creatures and videos give us a special connection to what and who
we are watching. With the advancement of technology, taking videos becomes easier. More so,
vlogging has become a prominnent hobby. It’s engaging and exciting. Taking videos make
everything seem more memorable.

Canon can target the vloggers market segment in the country. The campaign strategy to
entice them to buy the new products would be online advertisements as to inform them of the
new product that would make it more convenient and efficient for them to make their vlogs.

A lot of people nowadays are earning on youtube and a lot of social media sites where
they get to expose their artistry in video editing and entertainment. With this, a lot people involve
themselves in the vogging industry. Another advantage in taking part in this new career is that
people get to earn in a new form of art they are passionate in. As a result, they also become
famous.
 An example of a topic people use for their vlogs is make-up. In the Philippines, your
make-up is just as important with the way you dress. In addition, cosmetics are varied in
accordance to skin type and tone. Filipinas have darker skin compared to those in the western
countries so it is important to search for a make-up tutorial that will compliment your skin type
and color. Those vloggers who are using their knowledge, skills, and talents with their viewers
are very beneficial to those who wanna look fresh for school, or for those who wanna go to
parties. Indeed, in vlogging as a “career”, people will also need a digital camera that is easy and
convenient to use both inside and outside of their homes. Furthermore, Canon can create
partnership with these vloggers to be product ambassadors or ambassadresses which can
influence their viewers in amdiring and buying Canon digital cameras.