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					Market Analysis
Compact Digital Cameras


 SEBASTIEN BRUCKERT
 SEBASTIEN MARCQ
 KOLIA NEVEUX
 ANTONIO BRAGA NETO




                          Paris, January 30th 2009
Agenda


1 – Introduction
2 – Compact Digital Camera Market & Olympus Objective
3 – Analysis & Conclusions
Introduction
Group Introduction



 SEBASTIEN BRUCKERT
 SEBASTIEN MARCQ
 KOLIA NEVEUX
 ANTONIO BRAGA NETO
Compact Digital Camera
Market and Objective
           Compact Digital Camera Market
        Nom             Marque    Prix Zoom Pixels Qualité Couleur Sensibilité Flash Vitesse Autofocus
Optio 30              PENTAX       200   3  3340000 12.9    11.25      8       14.03  2.13       6.5
Camedia C-460         OLYMPUS      250   3  4230000 14.7    13.55      9       15.23  2.33      10.5
EasyShare CX 7430     KODAK        270   3  4230000 14.1    12.95     12        14.5  1.97      5.2
Coolpix 3200          NIKON        280   3  3340000 13.8    12.45      9        14.8  1.67        6
Optio S40             PENTAX       300   3  4230000  14      16.7     11         9.7   2.9      10.3
Cyber-shot DSC-P73    SONY         300   3  4100000 12.6     13.9     11       12.83  1.47       3.5
PowerShot A75         CANON        330   3  3000000 14.4     15.8     11        14.7   1.8        6
Photosmart 707        HP           350   3  5100000 14.9    17.45     11       14.63   1.6        6
EasyShare LS 743      KODAK        350   3  4230000 14.5    12.85     13       13.67  2.07       5.3
Mu 410 Digital        OLYMPUS      350   3  4230000 14.4    15.35      9       13.67   2.5       2.1
Cyber-shot DSC-P93    SONY         370   3  5200000 14.9    12.95     12       13.03  1.57       3.5
DMC-FX 5              PANASONIC    370   3  4230000  15     13.25     13       11.73  1.87       6.3
Exilim EX-Z40         CASIO        400   3  4230000  14       13      11        11.6   1.4       4.5
SL 300RT              CONTAX       400   3  3340000 14.6     16.8     13       12.07  2.17      14.5
Coolpix 5200          NIKON        400   3  5260000  15       16      10       13.73  1.87        6
VPC-J4                SANYO        400   3  3917056 13.6     13.4     10       11.77  1.27      11.5
Cyber-shot DSC-P100   SONY         400   3  5255000  15      12.5     12       13.97  1.73       3.5
Cyber-shot DSC-W1     SONY         430   3  5100000 15.4     15.3     12       14.83   1.4       3.5
Optio 43WR            PENTAX       450   3  3340000  13      11.2     10       12.63   1.9       9.4
Digital Ixus 500      CANON        470   3  5000000 15.9    16.4      11       14.57  1.83        6
Camedia C-60          OLYMPUS      530   3  6400000 15.7     15.1     11       15.23  2.07        9
Finepix F710          FUJI         550   4  6200000 15.2     13.5     14       15.83  1.23        6
Cyber-shot DSC-T1     SONY         550   3  5100000 14.4     16.9     10        10.3   1.3        1
Coolpix 5400          NIKON        600   4  5100000 14.4      13      11        15.6  2.13       10
Exilim Pro 600        CASIO        650   4  6370000 14.1    13.05     11       12.57  1.73       4.7
Camedia C-5060        OLYMPUS      800   4  5130000 15.3    14.05     11       14.03   1.8      3.5
  Objective


⇒The number of Compact Digital Cameras
options in the market continue to expand.

⇒This creates difficulties for customers to
select products and manufactures to evaluate
the market.

⇒The Olympus Team developed a statistical
model to understand and explain the pricing
levels based on relevant technical and quality
characteristics.
Objective

Objective: Explain different price levels of Compact Digital Cameras.

Development process:

* Explaining methods of calculations

1 – Could price be explained by just one characteristic?

2 - Could price be explained by “multiple characteristics” as
described on regular data sheets?

3 – Establishing a statistical model to estimate Compact Digital
Camera prices considering the most important characteristics.

4 – Presenting the Olympus CAMEDIA C5060 and key features.
Analysis & Conclusions
1 – Could price be explained by just one characteristic?
      * Methods of calculations
      Comparing 2 variables ( Simple Regression )




                                                     σ        Precision of the Method



                                                              Quality of the Method
                                                     R


                                                           Source: Xavier BOUTE, HEC MBA Material
Competitors argue that CAMEDIA C-5060 is expensive by
comparing price and number of pixels only!

   1 – Could price be explained by just one characteristic?



                 By looking at price only,                    Max price
                  CAMEDIA seems to be
                      overpriced!!!
         Price




                                                               Average price of
                                                              Compact Cameras




                                                              Lowest price
Competitors argue that CAMEDIA C-5060 is expensive by
comparing price and number of pixels only!

   1 – Could price be explained by just one characteristic?




                                                     A simple comparison
                                                     between Price and
                                                     Number Pixels might
                                                     create the misconception
                                                     that CAMEDIA C-5060 is
                                                     overpriced!!!
Competitors argue that CAMEDIA C-5060 is expensive by
comparing price and number of pixels only!

   1 – Could price be explained by just one characteristic?




                                                  Low Precision:
                                                  By using number of pixels only, a
                                                  price estimation would range from
                                                  -214Eur to + 214Eur !!!
2 - Could price be explained by “multiple
characteristics” as described on regular data sheets?

  * Methods of calculations
   Comparing N variables ( Multiple Regression )




                                              Source: Xavier BOUTE, HEC MBA Material


  Multiple Regression expands the previous model by
  representing all variables and their respective
  coefficient on the same equation
   σ     Precision of the Method



   SIG     Percentage of error assuming a variable is relevant
2 - Could price be explained by “multiple
characteristics” as described on regular data sheets?

   Considering all characteristics



                                                               Apparently, the
                                                            precision seems to be
                                                                 acceptable



                                                        Despite the improved
                                                        precision, the analysis show
                                                        that Pixels and Color would
                                                        not be relevant while Zoom is
                                                        showing maximum relevance.


                                                        Obviously, this is counter-
                                                        intuitive and contradicts the
                                                        previous analysis
2 - Could price be explained by “multiple
characteristics” as described on regular data sheets?

   Evaluating the effect of “Zoom” on the camera price.




                                                               “Zoom” has a direct
                                                                  effect on price.
                                                             Apparently, it seems to
                                                             be “quantitative” but in
                                                             fact, it is a “qualitative”
                                                                   characteristic




                                                          Since “Zoom” is an important
                                                          characteristic but also
                                                          disruptive to the analysis, an
                                                          alternative way of
                                                          representing the “Zoom”
                                                          influence in the model has to
                                                          be found.
2 - Could price be explained by “multiple
characteristics” as described on regular data sheets?

   Discarding “Zoom” variable since it is a qualitative variable.


                                                                    By extracting “Zoom”,
                                                                    there is a degradation
                                                                         of precision.




                                                              The conclusion is “Zoom” is
                                                              an important characteristic
                                                              but also disruptive to the
                                                              analysis if used with the
                                                              format available on the market
                                                              analysis ( x3 or x4 )
2 - Could price be explained by “multiple
characteristics” as described on regular data sheets?




Given the unique influence of “Zoom”. Considering all characteristics and
replacing “Zoom” by a new variable “Zoom4” where:

Zoom4 = 0 when ‘Zoom’ of the camera is 3x

Zoom4 = 1 when ‘Zoom’ of the camera is 4x



We now have 2 group of cameras by the introduction of this variable into the equation:
a) Group Zoom 3
b) Group Zoom 4
* Methods of calculations
Backward Method
The backward model eliminates the irrelevant variables by relying
on SIG until reaching the most accurate model (the smallest σ
value).




                                             Relevance of variable or
                                              Percentage of Error
       3 – Establishing a statistical model to estimate
       Compact Digital Camera prices considering the
       most important characteristics.



       σ     = 67, Hence the precision range is -134Eur to +134Eur

Estimated Price = -52 + 293xZoom4 + 80xQuality – 18xSensitivity - 30xFlash – 73xSpeed


Since the equation is known, an estimated price can be calculated
for a camera with “Zoom=3” or “Zoom=4”:

Estimated Price for a CAMEDIA C460 with “Zoom=3”: 370Eur (Real price 250)

Estimated Price for a CAMEDIA C5060 with “Zoom=4”: 714Eur (Real price 800)


                       An estimation was possible but could we
                                 improve accuracy?
       3 – Establishing a statistical model to estimate
       Compact Digital Camera prices considering the
       most important characteristics.
       Similar to the influence on sensibility, “Zoom” influences all variables:




The influence of “Zoom” has to be taken into consideration on all the other
characteristics by creating new ‘cross variables’ which are




     The influence of “Zoom” has to be taken into consideration on all other
     characteristics by creating “cross variables” by multiplying “Zoom4” and all
     other variables
        3 – Establishing a statistical model to estimate
        Compact Digital Camera prices considering the
        most important characteristics.



        σ      = 59, Hence the precision range is -118Eur to +118Eur

Estimated Price = -29 + 2x10E-5xPixels + 51xQuality – 21xFlash - 77xSpeed – 84xSensZ4 + 84xQ_Z4



With these additional variables, an estimated price can be
calculated for a camera with “Zoom=3” or “Zoom=4”:
Estimated Price for a CAMEDIA C460 with “Zoom=3”: 305Eur (Real price 250)

Estimated Price for a CAMEDIA C5060 with “Zoom=4”: 781Eur (Real price 800)



                        This is the most accurate method selected by
                          Olympus to evaluate price positioning of
                                      CAMEDIA C5060
3 – Establishing a statistical model to estimate
Compact Digital Camera prices considering the
most important characteristics.
     4 – Presenting the Olympus CAMEDIA C5060
     and key features.




“selling arguments” for CAMEDIA C5060                    Source: Steve’s Digicams website



The Olympus selected method shows that the following characteristics are the
most important to promote and compare CAMEDIA C5060 with competitors:

1 – Zoom
2 – Quality
3 – Sensitivity
Number of Pixels ‘might’ be considered a key characteristic on “low end”/ “near zoom”
cameras, but on “high end” cameras, the value added is on Zoom, Quality and
Sensitivity.
THANK YOU

				
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