zenith: marketing research for hdtv GROUP-4

Amrit Raj PathakApoorva KhandelwalDeepak SalviMonica KapoorVinay Kumar

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1Zenith Electronics CorporationConsumer electronics (mainly color TV sets), color picture tubes, color monitors, high-tech displays.Headquarters: Illinois; 32,000 employees worldwide.Net sales(1989): $1.549b; up by 10.56%, CE sales by 9% last yearNet Loss increase by 54.54% in last year due to competition from Far East.Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.2The TV IndustryTotal Sales(1989) in U.S.: 24.66M units.By 1976, 35% of total color TVs were imported.Sales of large screen TV increased : 2.28M(1975) to 9.73M(1988)Projection TV sales decreased: 0.26 M(1985) to 0.30M(1989)Color TV : Slow early adoptionVCR : Rapid adoption due to price decline and software availability.

Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.3 Industry CompetitorsMatured market: 98% households own a color TV.

Market Shares in U.S. Color TV industryGive a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.4High Definition TelevisionKey Developments: FCC issued tentative HDTV transmission standards.Manufacturers free to build various standards displays; but type of image broadcast gets affected by transmission standards. Zeniths HD Systems14 FTM high resolution color displays.Spectrum Compatible HDTV transmission system for HD broadcasting.HDS Research Investment: $10M; 10x increase.Overall planned investment(excl. marketing): $50M

Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.5Marketing at ZenithTraditionally pull comm. strategy.Top name for quality image and retail drawing power; strong in above 55 age grp.Growth of high-volume, margin oriented retailers forcing for push strategy.Adv. Budget: 1% of sales; concentration strategy; focused on consumers aged 25-49

Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.6Marketing Research at ZenithBudget(1990): $0.50MCEO Pearlmans view: Market research has a role in product positioning and comm. , not in determining new products features and attributes.Quantitative market research: Conjoint analysis employed in large-screen TV preference study.Involved rating of the relative importance of screen size, price and picture quality.

Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.7Color TV Market Research1989 CTI survey: 25% of U.S. households own a Zenith color TV.IMR survey: 18.95% of U.S. households purchased a color TV in 1989.Most Imp. Outlet: TV& Appliances Stores>50% of buyers in income range $30K-$50K.Majority of buyers(53.9%) in age group 25-44

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.8Customer Segments Market ShareGive a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.9Consumer Behavior FindingsConsumers look for value for their money and stayed within the budget.Product: Picture Quality most imp criteria.Price: Stayed close to ballpark budgetDistribution: Retail Outlet stores most imp. for getting info, not advertising.Promotion: Information, product oriented Adv. go unnoticed; Store special and sales ads noticed by consumers.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.10Non-Zenith BuyersThought that Zenith hasnt changed with times.Associated Zeniths image with old malfunctioning products.Questioned todays quality of Zenith TV.Didnt recall Zenith Adv.Didnt recall Zenith on Sales floor.Quality, main determinant of brand choice.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.11Forecasting HDTV demandEIA: 25% penetration in U.S. by the end of 20th CenturyCEO Pearlman: At best 10% penetration in total TV industry by 1999.Most studies: HDTV penetration will be slower, like that of Color TV.Traditionally, 11% of 25 and larger sets selling for over $1,000.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.12Possible ScenariosPessimist: Quality HDTV programming not available; HDTV sets are readily available.Consumers dont see the benefit to buy HDTV sets.HDTV transmission standard issues not resolved

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.13Possible ScenariosOptimistic: HDTV Broadcast standards are readily available.Producers and TV stations produce HDTV programs.Consumers think that the superior picture and sound quality is worth of premium pricing.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.14Possible ScenariosMost Likely: Slow early adoption.In next 3-5 years, HDTV programming starts boosting up.Consumers slowly become willing to spend on higher priced HDTV for better picture quality.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.15Aspect Ratio Study; Yes Or No?Acceptance of 16:9 aspect ratio: Visibly differentiable: Good for marketing30% wider screen is lot more expensive.Fixed investments and production costs increase significantly .

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.16Aspect Ratio Study; Yes Or No?Rejection of 16:9 aspect ratio: Change in fixed investments and production costs not substantial.Broadcasters would continue to broadcast in 4:3 ratio.We suggest the aspect ratio study to be done:Will determine the 16:9 aspect ratios acceptance; Will help in planning the future investment and production strategy of Zeniths TV division.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.17 Alternate Marketing Research Proposals Dealer ResearchSecondary source researchHDTV, innovators and qualitative research on early adoptionHDTV.NTSC-TV preference testHDTV consumer awareness/halo effect survey

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.18Recommended Alternate Marketing ResearchHDTV, innovators and qualitative research on early adoption: Exploratory research with innovators and early adopters of new technology.Exploration of expected benefits, willingness to pay, info channels and buying centers.Investigate marketing mix for HDTV sets from specific expectations.Est. cost: $50K-$70K; could be done next year.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.19Recommended Alternate Marketing ResearchHDTV consumer awareness/halo effect survey: Investigate consumer awareness of HDTV after introduction among demographic and psychographic consumer segments.Assessment of its impact on brand image, brand awareness, and purchase rates of non-HDTV products .Est. cost: $100,000; perhaps in 1994 or 1995.

) aged Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important.Introduce each of the major topics.To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.20Questions?

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