Stephanie Johnston
Marketing 320
March 7, 2012
Barco Projection Systems
In response to Sony’s introduction of the 1270 “superdata” projector, Barco Production
Systems should stop current production of their BD700 projector. Instead, Barco should focus
their attention on production of an improved BG800 projector that will compete with Sony’s new
model. To do this, they need to invest in the 8” tube, as well as find a compatible lens supplier.
Barco strives to be within the top three producers of quality projectors for industrial applications.
Barco’s vision is highlighted by president and CEO, Hugo Vandamme. “Our strategy is to focus
on top-of-the-line products in niche markets.” Our Principals of Marketing book states that
Barco is, “committed to becoming a leader in a variety of distinct, but complementary niche
markets”, has “a strong commitment to research and development”, and seeks “to expand its
international presence in sales, product development and production.” Developing a projector
that will surpass Sony’s 1270 projector will uphold Barco’s vision of producing superior
products, remaining a leader in the market for scan rates, and maintaining a commitment to
research and development.
Our Principals of Marketing book shows evidence of Barco’s customers’ desire for superior
quality as well. “With an eye to ever-increasing computer scan rates, customers tended to
purchase more performance in a projector than they needed.” This highlights the customers’
desire for the fastest scan rates; therefore, it is important that Barco maintain their high quality
image by competing with Sony’s new 1270 model.
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Information taken from Pearson Custom Business Resources, Principles of Marketing
Mission/Vision
As stated earlier, Barco’s vision is to “focus on top-of-the-line products in niche markets”.
They strive to continually provide the “best possible image”, as well as remain “flexible toward
inputs”. Barco’s niche market is high scan rates. Barco’s contemplation of continuing production
of their current projector, the BD700, would not uphold their vision. Sony’s 1270 projector
incorporates a new 8” tube that provides superior brightness, image quality, and resolution. The
model also has a high scan rate of 75 kHz and is priced low. As seen here, Sony’s new projector
has surpassed Barco’s ability to provide a product of highest quality; therefore, Barco should
develop a projector that will compete with the 1270.
SWOT Analysis
 Develop improved BG800 projector to compete with Sony’s 1270
Barco is known for their high quality projectors for industrial applications. Their strength as a
high quality producer is important to their customers and dealers. As our Principals of Marketing
book states, “Barco projectors had a dealer reputation for the highest quality final image and
excellent reliability once fully installed.” Also, Barco is the top producer for graphics projectors,
holding 55% of the market. Creating a competitive projector will help Barco to maintain their
high brand equity.
The opportunity to invest in an 8” tube from Sony was bypassed by Barco and results in a
weakness. Incorporating the 8” tube would require a different lens than Barco currently uses.
They would also have to redesign the projector’s chasis. Barco’s current lens supplier is not
capable of producing the lens required for the 8” tube, and there is uncertainty of whether Sony’s
lens supplier, Fujinon, will also supply Barco. Barco’s weakness lies in the fact that they did not
sufficiently research the availability of a lens supplier before declining the offer from Sony. This
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Information taken from Pearson Custom Business Resources, Principles of Marketing
declining of the 8” lens offer was a mistake in the “idea screening” stage of the new-product
development process.
Barco still has the opportunity to invest in the 8” tube. Sony has offered the tube in the past
and they know the 8” lens can be made, as it has already been done by Fujinon. Therefore, Barco
should not focus on worrying about whether they will find a compatible lens, but rather how they
will obtain the lens. With research, determination, and negotiation Barco will be able to source a
lens to work with the 8” tube. This will then allow them to create a competitive projector. In
addition, creating a competitive projector will satisfy their customers’ desire for a high quality
projector, as well as uphold brand equity.
Sony’s introduction of their 1270 “superdata” projector is a threat to Barco. Barco strives to
be in the top three producers of projectors, as well as maintain superior brand equity. Currently,
Barco is sutstaining these goals; however, may easily lose their position in the market if they do
not react to Sony’s new product. Our Principals of Marketing book states, “BPS stood to lose as
much as 75% of its forecasted 1990 profits”.
Internal
External
Strengths
 High quality/ Brand Equity
 55% graphics market
Weaknesses
 Declining offer for 8” tube
 Idea Screening stage
mistake
Opportunities
 Can still invest in 8” tube
 Ability to research a
compatible lens
 High quality projector will
satisfy customer needs
Threats
 1270 “superdata projector
 Could lose market position
and profits if do not
develop new projector
Positive
3
Negative
Information taken from Pearson Custom Business Resources, Principles of Marketing
Three Levels of Product
 Customer Needs/Wants or Core Customer Value
As technology advances, Barco’s projector quality needs to continue to advance as well.
Customers continually buy the projector with the highest scan rates and quality image. Similarly,
customers want a product that is low-priced, as well as easy to install in their facility. Also,
Barco has a reputation with their dealers for the reliability and quality of their projectors. Using
the 8” tube and lens will allow Barco to maintain their reputation as a high quality producer.
Barco needs to develop a competitive BG800 model to achieve the highest quality at a low price,
which will fulfill their customer needs and wants.
Actual Product
Barco’s customers value the actual product most.
 Quality Level
Barco is aware of their customers’ desire for high quality projectors. In response to this
demand, they have established a reputation as a company that produces superior projectors. To
do this, Barco has differentiated their products by continually updating and offering higher scan
rates. Scan rates as defined by our Principals of Marketing book are: “The measure of speed at
which a projector can read and process incoming electronic signals”. The book also states,
“Barco competed successfully by carving out a market on the basis of its research and
development and product quality.” This shows their high quality products are valued by
customers.
 Brand Name
Barco’s recognition for highest quality image, excellent reliability, and high scan rates have
helped them establish brand equity. They have achieved this brand equity by providing the
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Information taken from Pearson Custom Business Resources, Principles of Marketing
features customers and dealers desire. By developing a product to compete with Sony’s 1270
projector, Barco can then maintain this brand equity.
 Features
Customers value the features that comprise projectors, as the features establish product
quality and brand equity in this market. Features that establish quality are as follows: brightness,
image quality, scan rates, and resolution. These are achieved through use of tubes, lenses, and
electronics. As highlighted earlier, our book states, “With an eye to ever-increasing computer
scan rates, customers tended to purchase more performance in a projector than they needed.”
Barco’s customers are buying their projectors based on high scan rates. This shows features are
important to customers; therefore, Barco should invest in the 8” tube and create a competitive
projector to that of Sony’s 1270.
 Design
The design of Barco’s projectors is critical to its performance as a company. With continual
advancement of technology, the projector design needs to continually advance as well. This is
due to the fact that customers desire the latest technology and designs. The 8” tube and new lens
are the latest technology and require a newly designed chasis. The effort required to design a
new chasis is valued, as customers desire the new design and technology.
 Packaging
Packaging requires that a product be wrapped in material that will allow for safe and easy
transportation to customers. The package may also include an appealing look to the customer.
Although packaging is essential to ensure Barco’s projectors are delivered to their customers
safely, it is not a significant need or want for Barco’s customers.
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Information taken from Pearson Custom Business Resources, Principles of Marketing
Augmented Product
 Delivery and Credit
Delivery and credit refers to how customers pay for products and want them transported. In
addition to their dealer reputation for high quality and reliability, Barco also has an advantage
with their dealers regarding price. Dealers like to sell Barco products, as they receive a higher
percentage of the price than they do from other companies. However, Sony’s new 1270 model is
priced significantly low for the quality provided, which may influence dealers to begin selling
Sony’s projector. This can be prevented if Barco promotes a competitive product. Delivery is not
a significant need or want for Barco’s customers.
 Product Support
Product support is a service available to customers that helps work through any problems or
questions they may have about their product. Knowing they have a support system to rely on
creates a sense of security for customers when buying a product. Although relevant, product
support is not a significant need or want for Barco’s customers.
 Warranty
A warranty is a statement of guarantee that a product will work in the way a company intends
and promotes. Although warranty may be important to customers at some level, it is not a
significant need or want.
 After-Sale Service
After-sale service refers to required maintenance of the product or equipment during the
warranty period. It may also include installation of the projectors. Box dealers do not offer any
after-sale service and comprise 20% of Barco’s dealers. On the other hand, systems dealers
install the projectors based on the individual customer needs. They comprise 80% of Barco’s
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Information taken from Pearson Custom Business Resources, Principles of Marketing
dealers, and reference to the fact that Barco’s projectors are complex and hard to install;
however, are very reliable once installed.
Augmented Product
Actual Product
Delivery
and
Credit
Product
Support
Brand
Name
Core
Customer
Value
Quality
Level
Features
AfterSale
Service
* The most
valued
characteristics
are highlighted
in yellow.
Design
Packaging
Warranty
Product-Service Continuum
Barco is a combination of a product and service company. However, they are more focused
on the actual product, rather than service. Their projectors may be thought of as shopping goods,
as most customers buy a new projector about every five years. Customers also make brand
comparisons based on price and quality. This is why it is essential for Barco to develop a
competitive projector in response to Sony’s new 1270 projector. Barco’s projectors may also be
thought of as specialty products, as they have established strong brand equity.
New-Product Development Process
 Idea Generation
Barco’s fault in the development process was first evident in the idea generation stage.
Typically, companies exhaust their internal and external resources while brainstorming for new
product ideas. It seems as if Barco did not exhaust their resources, especially that of their
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Information taken from Pearson Custom Business Resources, Principles of Marketing
competitors. Our Principals of Marketing book states “In one instance…Sony introduced a video
projector with a tube that Barco had not seen”. Barco seems to underestimate Sony’s capabilities,
as well as trusts them to be open with their decisions. This is risky, especially since they source
their tubes from Sony. Since Sony caught Barco off-guard once, they should have anticipated the
possibility of it happening again. They should have generated more ideas as a way to prepare
against this.
 Idea Screening
This stage is used to reduce the number of ideas generated by a company. Barco chose to
eliminate the idea of using an 8” tube. This was a mistake. Since Barco’s vision and goals are
centered upon high quality products, it is interesting that they did not invest in the 8” tube
initially. Their customers also value quality, as well as product features and design; therefore,
Barco should have grasped the opportunity to improve their projectors. This in turn would
uphold their superior brand equity.
 Concept-Development and Testing
This stage comprises of product ideas, product concepts, and product images. Here, a product
is introduced to a group of target consumers to test their reactions. This helps them decide if the
product is worthwhile to develop further. Barco did not even reach this stage with the 8” tube, as
they discarded the idea in the idea screening stage.
 Marketing Strategy Development
This stage can be best defined as a marketing strategy statement. Our Principals of Marketing
book states that the statement “describes the target market; the planned value proposition; and
the sales, market share, and profit goals for the first few years.” Again, Barco did not reach this
8
Information taken from Pearson Custom Business Resources, Principles of Marketing
stage in the development process with the 8” tube. Instead, they chose to continue using their 7”
tube in developing their BD700.
 Business Analysis
According to our Principals of Marketing text, business analysis “involves a review of the
sales, costs, and profit projections for a new product to find out whether they satisfy the
company’s objectives”. During this stage of development, Barco considered Sony’s discounted
15% of final sale for projectors, as well as their own 10%. Although dealers prefer to sell Barco
products, due to a higher percentage return, they sell a higher volume of Sony. Barco should
have visited the possibility that Sony may develop a projector that is significantly lower in price.
 Product Development
Here, the product idea is generated into a physical product. Barco had already surpassed this
stage by the time they learned of Sony’s new 1270 model. They must have found their product to
be superior in order to surpass this stage. This was a mistake, as they already had knowledge of
the existence of the 8” tube and did not use this to create the best projector possible.
 Test Marketing
This stage consists of introducing new products in standard, controlled, and simulated test
markets. Although Barco is in the process of still developing their BD700, they also have already
sold some projectors to customers. This alludes to the fact that they surpassed this stage and have
worked their way into the commercialization stage of development.
 Commercialization
Here, a company has decided to introduce a product to the public with confidence that the
product will be a success. Barco either did not have all the information needed to make a proper
decision about commercialization, or ignored the information. They have already sold some
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Information taken from Pearson Custom Business Resources, Principles of Marketing
BD700 projectors to customers while still in the process of developing them. They should have
not ignored Sony’s willingness to offer the 8” tube.
Product Life Cycle
Currently, Barco is farther ahead in the product life cycle than Sony. Barco is still developing
their product, but are on the brink of introducing their BD700 projector. Sony is still in the early
stages of product development. However, if Barco were to develop a BG800 projector to
compete with Sony’s 1270, Barco would be behind Sony in the product development stage. This
may be an advantage, as Barco could then use Sony as a resource for what works best in this
stage. Ultimately, their end goal would be the same, to appear at Infocomm with a competitive
product; therefore, Barco would only be behind Sony for a short time. The product development
stage is described above in the “new-product development process”. The introduction stage is
characterized by low sales and profits, but a high cost per customer. Also, a basic product is
often introduced to create product awareness and trial.
Sales/Profits
*Barco
location with
BG800
*Sony location
with 1270
Losses/Investments
10
Product
Development
Introduction
Growth
Maturity
Decline
Time
*Barco
location with
BD700
Information taken from Pearson Custom Business Resources, Principles of Marketing
 Fashion
The projector models that are in the development process at Barco and Sony are a fashion.
This is due to the fact that technology advances so quickly. What is high quality and of highest
technology now, most likely will not be the highest quality and technology a year from now.
Research and development causes this to occur; therefore, the companies’ current projectors are
a fashion.
Fashion
Sales
Time
Value Proposition
As stated by our Principals of Marketing book, a value proposition is “the full mix of benefits
upon which the brand is differentiated and positioned”. In the past, Barco has maintained a
proposition that is “more for more”. They have offered more features and service for more
money. In contrast, Sony has offered less quality or benefits at a lower price. However, if Barco
allows Sony to introduce their 1270 projector without competing with an improved model, Barco
will be “less for more”. Sony would then be “more for less”. From Barco’s perspective, this is
very undesirable. To counter this, Barco needs to introduce the BG800 that will compete with
Sony’s 1270. Barco will then maintain their “more for more” proposition.
Price
*Barco
in past
More
Benefits
The
Same
Less
11
More
for
More
More
for the
Same
More
for Less
*Sony
after
1270
The
Same
for Less
*Barco
after
1270
Less for
*Sony in
much
past
Less
Information taken from Pearson Custom Business Resources, Principles of Marketing
Product Line and Stretch
As our Principals of Marketing book states, “Typically, Sony projectors were positioned
below Barco’s in terms of performance (scan rate, image quality, and resolution), and were, on
average, 15% lower in price”. On the other hand, Barco usually offers higher quality at a higher
price. However, Barco is now settling to provide less quality than is available in the market.
They are offering less quality at a higher price when compared to Sony. This quality is based on
projector features that define performance. Customers are especially interested in buying
projectors with high scan rates; therefore, Barco should invest in the 8”tube and create a
projector that is higher quality at competitive price.
Price
Barco in
past
Barco if
don’t make
BG800
Sony
after
1270
Sony in
past
Barco if
make
BG800
Quality
Customer Loyalty Matrix
Barco has maintained their brand equity by providing quality products defined by top-notch
features. This brand equity and quality, as well as features have caused Barco’s customers to
remain true friends. Our Principals of Marketing book states, “The typical end user purchased a
new projector every five years”. This shows their customers as remaining profitable and loyal
consumers. Since this customer loyalty is based upon quality and features, it is essential that
Barco upholds these characteristics valued by their customers. If Barco were not to incorporate
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Information taken from Pearson Custom Business Resources, Principles of Marketing
the 8” tube to create a competitive projector in the market with Sony, their customers may
become butterflies. Barco needs to prevent this from happening by developing a competitive
projector.
True Friends
Butterflies
 Barco in the past
 Where Barco should keep
their customers
 What Barco ‘s customers
may become if Barco does
not produce a competitive
projector
Barnacles
Strangers
Profitability
Loyalty
Customer-Driven Marketing Strategy: Create Value for Target Customers
 Segmentation
Segmentation is dividing a market into distinct groups to fulfill their wants and needs. Barco
segmented their market by product, as well as geographic. In the product segment, the segment
market sales of projectors are: video (63%), data (33%), and graphics (4%). Barco is the top
producer in the graphics segment. The geographic segment market sales are as follows: United
States (50%), Western Europe (36%), and Asia (12%). I presume they chose these three
geographic locations, as they are large players in the world market.
 Targeting
According to our Principals of Marketing book, a target market is a “set of buyers who share
common needs or characteristics that the company decides to serve”. Sony, Electrohome, and
NEC compete with Barco in the data and graphics market. In addition, firms such as: Panasonic,
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Information taken from Pearson Custom Business Resources, Principles of Marketing
Mitsubishi, and General Electric compete with Barco in the video market. All of their segments
are predicted to grow in the future. As stated above, Barco is number one in the graphics
segment. However, their Sony competitor is the top producer of data projectors. The fact that
Sony is Barco’s supplier for tubes is a major issue that needs to be considered when analyzing
their target markets and segments, as Sony has substantial leverage they could potentially use
against Barco in the future. Although Barco competes in all the segments described above, they
are concentrated in the graphics segment, as they have a large share of this segment.
 Differentiation
Barco has differentiated it’s projectors through product differentiation. More specifically,
they focus on the product feature of high scan rates. They continually update their scan rates to
provide for superior image quality and performance.
 Positioning
Barco’s customers see their products as having higher quality than Sony; however, they also
pay more for Barco’s products than Sony’s. Customers continually buy the projector with the
highest scan rates and quality image. As stated previously, Barco has a reputation with their
dealers for the reliability and quality of their projectors as well. The market position of high
quality acquired by Barco is a valuable characteristic to their customers. Since this is highly
valued by their customers, Barco should maintain this brand equity by producing a competitive
BG800 model.
Positioning Map
Current General Projector market
share for Barco and Sony
Price
Barco
Sony
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Information taken from Pearson Custom Business Resources, Principles of Marketing
High Performance
Low Performance
Orientation
Select Customers to Serve
Decide on Value Proposition
Segmentation
Targeting
Create Value for
Target Customers
Differentiation
Positioning
Risks associated with Developing improved BG800 projector to compete with Sony’s 1270
Barco is unsure when Sony’s 1270 will hit the marketplace, how it will be priced, or how
customers will respond to the new projector. Even though there are uncertainties about Sony’s
new product, Barco is certain there is potential for a better projector than what they are currently
offering. This alone is a substantial reason to introduce the BG800 when considering their
company vision, as well as the customer value they serve. Barco has the ability to control when
“their better product” will enter the market and its price, as well as shape how customers
respond.
Switching production to a competitive BG800 projector model that incorporates the 8” tube,
poses a significant time constraint on Barco. Their employees are already working overtime on
their current model, the BD700. To make an appearance at the Infocomm trade show in January
1990, Barco will have to employ their workers very heavily. This may harm worker morale. In
addition, our book states “Claerbout gave the BG800 only a 40% chance of making the
Infocomm deadline”. However, he also stated, “We have the capability to produce a great
machine, one that is superior to the 1270.” This evidence shows Barco has the ability to display a
competitive product at Infocomm. In addition, incentives can be given to employees to offset the
potential for decreased employee morale.
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Information taken from Pearson Custom Business Resources, Principles of Marketing
Conclusion
It is evident Barco needs to halt current production of their BD700 projector, and instead
begin developing a BG800 projector to compete with Sony’s 1270 “superdata” projector. Barco
as a company, as well as their customers highly value superior quality based on features. To
maintain this superior quality, Barco should invest in the 8” tube provided by Sony. They also
should locate a lens supplier that has the capabilities of providing a lens compatible with the new
tube. In doing this, Barco will uphold their vision to increase scan rates and engage in continued
research and development.
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Information taken from Pearson Custom Business Resources, Principles of Marketing