BETA LOSE TO VHS
Why did Beta lose to VHS?
Yes Beta does lose to VHS. It's just because JVC did a better job of marketing VHS than Sony did of marketing Beta.
During the 1970s, Sony developed a machine designed to deliver home video-taping equipment. The machine used Betamax technology, and hit the stores in 1975. In its first year, 30,000 Betamax video recorders (or VCRs) were sold in the United States alone. But after one year Sony's rival JVC came out with the VHS-short for ‘video home system'-format VCR. By January 1977, there were four more Japanese electronics companies manufacturing and marketing VHS-based machines. Whereas Sony had either been unwilling or unable to license Betamax technology. JVC had been more than happy sharing their VHS format. Slowly and steadily, the competitors were catching up Sony's advancement and market share. Since the two formats are incompatible, users had to choose either of the products. Pretty soon Sony was feeling under pressure as its competitors started to drop prices to as much as US $300 below Sony's machines and the market share of Betamax VCRs came down to 25%. Although Sony claimed that Betamax was technically superior, it lost ground on the fact that while VHS machines could record for a considerable length of time, Betamax machines could only record for one hour. In other words, VHS delivered value on a dimension that mattered to customers. Beta delivered excellent value on dimensions that did not. In 1987, VHS captured 95% of market share. On 10 January 1988 Sony finally swallowed its prides and announced plans for a VHS line of video recorders. Overseas production of Betamax hobbled on until 1988, and in Sony's home territory, Japan, machines were still being made until 2002, although not in huge numbers. On 22 August 2002, Sony finally announced it would be discontinuing Betamax products.
Factors which leads to Beta Failure
1) Going first into the market, though often a huge marketing advantage probably did not worked in this case because while it readied consumers for a shift in the paradigm, it attracted the unwanted legal attention of Hollywood and actually gave the JVC/VHS competition a leg up by presenting a more accepting market when that competitive technology became ready to sell, thus making it easy to quickly lower VHS prices.
2) The Sony kept its Beta technology mostly to itself, whereas the JVC (the Japanese inventor of VHS), shared its secret with a raft of other firms. And as we know, for regular buyers, the variety is a strong point when purchasing a product, and seeing a system with wider support (in terms of brands) attracts buyers, even before they see the image quality any system could offer. So, just by not realizing the rights of duplicating its products contributed a major reason to the failure of Sony's Betamax technology.
3) Sony misunderstood the technological attributes most important to VCR customers (length of record time versus tape cassette size), the most fatal kind of mistake of all. Sony did not take into account was what the customers wanted. Sony believed that having better quality recordings was the key to success, whereas it soon became clear that consumer desire was focused more intently on recording time and compatibility for easy transfer of information.
4) According to Richard Rosenbloom of Harvard Business School, “ Sony did ‘lack the manufacturing capacity' and furthermore refused to become an ‘OEM supplier', hence it sought only those partners able and willing to take over manufacturing responsibility”. In other words, in a very rapidly developing market “a large part of the VHS advantage came from the sheer ability to deliver more VHS machines than Beta producers could make early on in the competition.”
Marketing Theories Can Be Approved
Marketing theories can be approved. Ries and Trout present the ninth “law” of marketing as the Law of Opposite, or “If you're shooting for second place, your strategy is determined by the leader (Ries & Trout, 1994).” In strength there is weakness. Wherever the leader is strong, there is an opportunity for a would -be No. 2 to turn the tables. You must discover the essence of the leader and then present the prospect with the opposite. (In other words, don't try to be better, try to be different). This is the main strategy which was adopted by the JVC against the leader Sony, whose focus just remained on try to be better ignoring what the customer actually wants. So the strategy adopted by the Sony i.e. try to be better rather than different leads to the failure of Beta over VHS.
Being better in its quality is not sufficient for the product to survive for a long-run in the market. Besides, being better there are also several attributes of the product which should be taken care off before offering it to the customers. With the above discussed case we can clearly say that, inappropriate marketing strategies adopted by the company may often lead to the loss of market share with compared to its competitor.
Ries, A., & Trout, J. (1994). The 22 Immutable Laws of Marketing. New York City: Harperbusiness.