Group 8

Sony AIBO- A Cultural and Innovation- Based Perspective

Submitted By: Pranav Santurkar( 0300/49) Rakesh Mishra (0267/49) Akshay Mahajan (0027/49) Anjanjot Singh (0045/49) Vinay Kumar ( 0392/49) 13th August, 2013

Introduction
"AIBO is not at all intended to replace live animals," said Grace Ann Arnold, spokeswoman for Sony Electronics. "It is technologically designed primarily for entertainment purposes. You can train it and teach it. It does have emotions and instincts built in. But it is not intended to replace animals." AIBO is the acronym for Artificial Intelligence robot which was one of the initial prototypes of robotic pets that Sony designed and manufactured. Sony started off with the following statement to define their value proposition: Why not create a robot that didn't do anything useful at all, a robot that was simply entertaining to people? Rather letting consumers get disappointed by an inadequate household robot, Sony positioned the product as a lovable which otherwise had no functional advantages. Although buggy and unpredictable, the doglike pet AIBO was an immediate hit. Sony sold out its limited production of 100,000 units in the first 2 years on the market. During the 5 years of product development and marketing, Sony has gathered invaluable consumer feedback to guide continued development of its robots. Toshitada Doi, the founder of AIBO, believed that consumers were searching for a product that would provide "love, healing, and relaxation." Although Sony did market AIBO product as a lovable pet, some executives felt it was a mistake not to position AIBO as an actual serious productivity tool. Their reasoning was that positioning the product as having functional benefits would make it easy to market as a mass product. However, in our view emphasizing AIBO's "lovability" factor was not a mistake. Sony was correct strategically positioning AIBO as a "companion," at least in the first generation of robots, because it was generally considered an inadequate household robot. Perhaps in the future, after so many generations of AIBO, when the actually engineering that comprise the robots is perfected, they can market AIBO as a "serious productivity tool." "Aibo" means "companion" in Japanese, and Sony apparently is not using this term frivolously. "Aibo is not a toy!" stresses the Aibo Web site (http://www.us.aibo.com). Aibo is "a true companion with real emotions and instincts. With loving attention from its master, it can even develop into a more mature and fun-loving friend as time passes," the Web site says.

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Adopt AIBO
Based on the study on Diffusion of Innovation conducted by Everett Rogers, there are five main prerequisites for successful adoption of an innovation which has been diffused. These are Compatibility- The innovation should be compatible with the consumers existing lifestyle Trialability- High risk perception in buying an unknown product is appeased if trial runs/smaller pack samples are provided before making a long term commitment. Complexity- Highly complex products have a longer time frame of adoption viz-a-viz fairly simple/easy to use products Observability- Innovations which are easily apparent are adopted faster because consumers can learn about them easily. Relative Advantage- The product must provide a relative advantage as compared to other products for it to gain any traction in terms of adoption. The AIBO as an innovation had attempted to change the dimensionality of the pets industry. There was a radical change in user compatibility in terms of adoption of pets with the advent of the AIBO. The AIBO displayed some of the traits of a pet without the hassles of feeding and cleaning up after it. It also overcame the permissive societal boundaries of pets not being allowed in certain residential spaces. This serves as an excellent basis for classifying it as a discontinuous innovation. Honda at the same time was coming up with a discontinuous innovation of its own in the house care segment by developing functional humanoid robots that could perform some basic household chores highly efficiently. This serves as an ideal ring therefore to see how these two distinct yet in many ways similar innovations face off. We have thus attempted to make a comparative study of how Sony AIBO scores on these parameters viz-a-viz the Honda ASIMO. Our study is restricted to two primary markets i.e. US and Japan and the comparison has been made solely on the basis of the aforementioned five parameters without taking into consideration the economic and cultural variances. We will explore the cultural aspect to this later on in this report.

Functional & Social Attributes of Innovation

As was dicussed in class, the process of innovation diffusion is based on five key attributes of the innovation (product/service) in question i.e relative advantage, complexity, compatibility, trialability and observability. Of these, relative advantage and complexity constitute the functional dimesion of innovation while the rest constitute the social dimension. Notwithstanding cultural differences, we believe that the key factors that impacts the diffusion of Aibo is compatibility. Being a discontinuous innovation, Aibo offers substantial product advantage over direct (lower-priced) competitors and substitutes (the major ones being pets but the utility of pets are low for the target consumers). Complexity could be another factor that might influence innovation diffusion especially in the US context. However, we assume here that the majority of the target segments of Sonys Aibo are less likely to be fazed by the complexity (the younger generation) or will adapt to the complexity given their needs for the product (the older segment). Since Aibo falls in the category of robot-pets and given the nascence of this product, observability is also low though the presence of social groups of Aibo owners might increase this over time. Finally, the high price of Aibo reduces trialibility

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though it is worth pointing out though that the presence of cheaper alternatives might actually promote trialibility of Aibo indirectly by exposing people to the idea of robot-pets. Compatibility deals with the coherence between the customers existing values, past experience and needs on one side and the product attributes on the other. In this context, we believe that cultural dimensions will play a crucial role in determining the adoption of Aibo as was observed in the case of higher adoption in Japan and lower adoption in US. We explore this motif in detail below.

Cultural Dimensions of AIBOs diffusion: Contrasting US vs Japan

As was evinced in the case, there was a noticeable difference in the adoption of Aibo in US and Japan. We apply HoffstedesFramework and the cultural brand personality dimensions of these 2 countries to explore this point. Hoffstedes analysis revealed that US ranks much higher than Japan in individualism. We believe that this feature of Japanese society is a crucial determinant of Aibos success in the country. In fact, Tolba and Mourad, do mention that the diffusion of innovation is higher in collectivist societies than in individualist ones, like the US. Interestingly, the authors also point out that innovation diffusion is higher in the societies that rank lower in Uncertainity Avoidance (i.e risk-taking societies). Yet, the diffusion of innovation is higher in Japan, one of the most uncertainty avoiding societies. Aaker et al highlighted that the primary difference between American and Japanese brand personality stems from the ruggedness dimension in the former being replaced by peacefulness in the latter. Mildness (Shy, peaceful) and Naivety (dependent, child-like) characterize peacefulness in contrast to Masculinity and Toughness in the case of Ruggedness. An analogy from the Hoffstede framework could be the Masculinity/Feminity dimension. It is likely that these differences in the brand personality dimensions underlie the difference in the adoption of Aibo in these 2 countries.

The Innovation Environment

A key determinant of the diffusion of innovation stems from the environment i.e whether the environment (marketplace) is conducive to growth of innovation or not. Tolba and Mourad cite the crucial role that Champions, Innovators and Promoters in spreading innovation. Innovators are earlyusers that are high on innovativeness and contribute to product-development. Promoters are opinion leaders that are willing to favorably recommend the innovation to other consumers. Champions on the other hand contain both innovator and opinion leader characteristics and hence are very crucial to the spread of the innovation. In the case of Aibo, initiatives such as the OPEN-R allowed early users to become innovators. Similarly, the presence of social groups of Aibo Owners provided Sony with the crucial network of champions and promoters of Aibo that would be necessary to drive the growth of the product in US. From the case, it was not entirely clear whether Sony had been able to target mainstream opinion leaders its marketing activities. But, this presented one opportunity area for Sony to capitalize on its goal to make Aibo more mainstream.

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Recommendations
We believe that in terms of selling in the US, a mass advertising strategy would not work for Sonys Aibo. The reason for this stems from the differences in the cultural aspects of Aibo. Rather, it would probably make more sense for Sony to target existing network of innovators and promoters to drive the growth of Aibo in US. On a related note, it is also important to choose an appropriate communication strategy in the marketing of Aibo in the US. One option that was suggested was to promote Aibo as a productivity-tool to increase mass appeal. However, we do not subscribe to this view since it dilutes the relevance of Aibo as an innovation that appeals to the social rather than functional dimension of the user . Rather, we would recommend that Sony focus on the niche segments that show a need for this product and rely on strong word-of-mouth to market Aibo amongst these target segments.

REFERENCES
http://faculty-gsb.stanford.edu/aaker/PDF/Consumption-Symbols-as-Carriers-of-Culture.pdf
http://www.aabri.com/manuscripts/11806.pdf

Consumer Behavior- Buying Having and Being- Michael.R.Solomon

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