SESSION

BARCO – A Pricing Case

Dr. Easwar Krishna Iyer

GREAT LAKES INSTITUTE OF MANAGEMENT
 What gets assimilated in the
BARCO PROJECTORS

BARCO vs. SONY Case

An HBR Case

Product
Fair Value Policy Price
Pricing Dynamics

Perceived Product
Value Line
Pricing Evolution

Marketing
Category Preemption
Realignment Strategy

What is the difference between

Global Competitive Niche Vs.
 CATEGORY AWARENESS Branding Full Market
Positioning
 CATEGORY ALIGNMENT &
 CATEGORY REALIGNMENT
 Give equivalent competitor scenarios to the
BARCO PROJECTORS

BARCO vis-à-vis SONY case

An HBR Case

 Jyothi Labs Vs. HUL

 TAFE Vs. Mahindra

 Nirma vs. HUL

 Give “Opposite” terms describing the differential positioning
BARCO PROJECTORS

of BARCO types Vis-à-vis SONY types

BARCO (types) SONY (types)
An HBR Case

Niche Market Player Full Market Player

Margin Driven Player Volume driven Player
Economies of Scope Economies of Scale
Customization Player Standardization Player
Cash Strapped Player Cash Rich Player

Cannot cross-subsidize Can cross–subsidize, yet do

(projectors is main product) short term survival

Product specific branding Global umbrella Branding

 What do you understand by the negative correlation
BARCO PROJECTORS

between product share & segment growth?

An HBR Case

Can you read any

BARCO vs. SONY
behavior ?

Niche players will focus on high Full-breadth players will focus on

growth, margin Products – mature, low growth, volume Products
BARCO and higher end – SONY and lower end
G
G

D D

V
V
 What is the TEXT BOOK PRICING OBJECTIVE of BARCO for
BARCO PROJECTORS

the three product segments – Video, Data and Graphics?

An HBR Case

How does this map into the PV vs. PP plot?

Survival
V
G
Maximum
D Market Share D

G Product-quality V
Leadership
 The SONY 1270 Introduction
BARCO PROJECTORS

 Why did Sony brand its advanced scan rate projector as a

An HBR Case

“Superdata” Projector?
 Why did it consciously allow price rumors to fly by not
coming up with a clear pricing at Siggraph?
 What will be the impact of
Sony 1270 launch on the
two running models:
1. BG400 [24 K]
2. BD600 [12 K]
 Product Options @ BARCO
BARCO PROJECTORS

 With the 1270 launch imminent, what would you do with

An HBR Case

the two proposed new launches:

BD700
SCRAP?
MAINTAIN?
UPGRADE?

BG800
SCRAP?
MAINTAIN?
UPGRADE?
 Pricing Options @ BARCO
BARCO PROJECTORS

For each of these 6 pricing possibilities of SONY 1270, what are the pricing
An HBR Case

options for the 4 BARCO products? Start with any combo of your choice …

15 16 17 18 19 20
Let us now move to …
 Sony 1270 Price Option 01 1270 @ 20000 BARCO starts 20000 downwards
Vs.
BARCO BG 400 Pricing
Option 02 1270 @ 18000 BARCO starts 18000 downwards

Fall in GP for this product only Option 03 1270 @ 16000 BARCO starts 16000 downwards
Fall in sales
for BG 400
Fall in sales in
percentage
 Jump, Backfill, Jump @ BARCO
BARCO PROJECTORS
An HBR Case

Jump Why did they do it?

Where did they go

Backfill
wrong?

What else could

Jump they have done?
 Extra Premium Strategy @ BARCO
BARCO PROJECTORS

Can you explain this plot?

An HBR Case

PP
Gb
Db Gs

Vb Ds
Vs PV
 MISTAKES @ BARCO
BARCO PROJECTORS

1. Inordinate Product Focus

An HBR Case

2. Jump, backfill and then jump strategy

(backfired)
3. Unnecessary premium price capture in an
uncontested market [BG400]
4. Naively sticking to a ‘vision’ when they aren't
the true product leaders
5. Naïve enough not to differentiate Sony the
supplier and Sony the competitor
 What Industry Paradigm was killed by SONY?
BARCO PROJECTORS

Price = f [Scan Rate]

An HBR Case

More such “Changing terms of engagement” cases

Industry Who Killed what Paradigm

Canon Killed the Xerox Paradigm

Copier
Price = f (copies per second)

Great Lakes Killed the B-School Pricing Paradigm

B-Schools Price = f (Duration of Course)