CASE

STUDY 2
ZENITH: MARKETING
RESEARCH FOR HDTV
HORT ENSE G REGORJ CA RINA MA RINHO YA NNICK SIGNES
A UGUST IN MA NGIN RA PHA EL T ORT I

AGENDA

INTRODUCTION
MARKETING RESEARCH PROCESS
RESEARCH METHODS

About the company

TV Industry
HDTV
SWOT
Marketing Mix
Life Cycle Product
BCG Matrix
ANSOFF Matrix
TV Buyers
Forecast of HDTV demand
The Aspect Ratio Study
Additional Marketing Research
Recommendations

CONCLUSION

INTRODUCTION

ZENITH: MARKETING RESEARCH FOR HDTV

INTRODUCTION
"Zenith: Marketing Research for High Definition Television (HDTV)."
Harvard Business School ; Publishing (1991).
v To examine consumer preferences
in widescreen format HDTV
v To anticipate demand from HDTV 1992-2000
(pessimistic, most likely and optimistic scenarios)

How could Zenith improve their operations in order to maximize their potential to capitalize
on the emerging HDTV market while also bolstering their existing segments?

MARKETING RESEARCH PROCESS

Defining the
problem and
research
objectives

Developing the
research plan

Collect the
information

Analyze the
information

Present the
findings

RESEARCH METHODS
ESTIMATING CURRENT DEMAND

ESTIMATING FUTURE DEMAND

Total Market Potential

Survey of Buyers Intentions

Area Market Potential

Composite of Sales Force Opinion

Industry Sales

Expert Opinion

Market Share

Past Sales Analysis

Market Test Method

AGENDA
INTRODUCTION
RESEARCH METHODS
MARKETING RESEARCH PROCESS

About the company

TV I ndustry
HDTV
SWOT
Marketing Mix
Life Cycle Product
BCG Matrix
ANSOFF Matrix
TV Buyers
Forecast of HDTV demand
The Aspect Ratio Study
Additional Marketing Research
Recommendations
CONCLUSION

ABOUT THE COMPANY

Created in 1921

American manufacturer of radio and

television receivers and other consumer electronics
QUALITY
INNOVATION
LEADER IN DEVELOPING HDTV TECHNOLOGY
TODAY
LG Electronics & Zenith are focused
on the digital future

ABOUT THE COMPANY

They actually are the inventor of subscription television and the modern remote control, color computer
displays and others high tech electronics components

A Zenith Model 5-S220 "cube" radio

circa 1937.

A Zenith Space Command 600

remote control.

Former logo

TV INDUSTRY
SINCE 1920S

TV INDUSTRY

HDTV DEFINITION
HDTV is generally recognized as a digitalvideo broadcast with a minimum resolution of 1280pixels
wide and 720 pixels high, a rate of 30 or moreframes/second and usually an aspect ratio of 16:9. 4

MARKETING MIX
4Ps

-
-
-

Picture quality is the most important criteria

Large screen size
Features such as:
- remote control
- stereo sound
- warranty
- style

-
-

Ballpark Budget
Not too cheap to avoid interpretation: low price = bad
product

MARKETING MIX
4Ps
-
-

Most of people shopped in stores

People got information at retail outlets directly

-
-

Ads for special prices...

Informational and product oriented ads are not efficient

SWOT ANALYSIS
Internal Factors
Strengths
- Many information on consumer
preferences
- Research to create better displays
- Research on HDTV broadcast
systems
- High sales of TV

Weaknesses
- Not clear on the importance of
marketing research
- reduction of margins

Opportunities
- Future demand for HDTV
- Spectrum compatible with HDTV
transmission system
- Consumer-oriented market
research
- Developing HDTV Strategy

Threats
- Lower-cost producers in Japan for
example
- Retailers are margin-oriented
- High operating costs

External Factors

LIFE CYCLE
PRODUCT

HDTV MARKET

BCG Matrix
HDTV MARKET

ANSOFF Matrix

HDTV MARKET

AGENDA
INTRODUCTION
RESEARCH METHODS
MARKETING RESEARCH PROCESS
About the company
TV I ndustry
HDTV
SWOT
Marketing Mix
Life Cycle Product
BCG Matrix
ANSOFF Matrix

TV Buyers

Forecast of HDTV demand

The Aspect Ratio Study
Additional Marketing Research
Recommendations
CONCLUSION

TV BUYERS
How much existing information on TV buyers can be used to assess the HDTV market?
Past sales of large screen size colour TVs increased
1975 -> 2.28 million units

Past sales of large screen size colour TVs

1988 -> 9.73 million units

12
9,73

Million units

10
8
6
4

Past sales of large screen

size colour TVs
2,28

2
0
1975

1988
Years

TV BUYERS
Different buyers type

TV BUYERS

Existing growth rate information of colour TV and VCR segment

FORECASTS OF HDTV DEMAND

What are the forecasts of HDTV demand from 1992-2000?
METHOD USED:
CAGR provides a constant rate of return over the time period

FORECASTS OF HDTV DEMAND

v One way
Consumers attractiveness for innovative products with new features
So CAGR as colour TV and VCR => 11% per year

vSecond way
Consumers purchase occasion: replacement
So CAGR near of 6% per year

FORECASTS OF HDTV DEMAND

v Pessimistic scenario

Some barriers to the adoption of HDTV

As regulatory restrictions
In this case, HDTV sales will be more or less around
2% of the overall market

THE ASPECT RATIO STUDY

HDTV will bring automatically 16:9 aspect ratio
Wider screen
What are the issues ?
Expensive (only 3% to 4% sell above $1000);
Programs will not automatically be in 16:9 aspect ratio.
What is the aim of the study ?
Determine aspect ratio preferences (16:9 or 4:3);
See the consumers feelings about side curtains and letterboxed;
Analysis of all the conjoint data (price, screen size, program content) they will have.

THE ASPECT RATIO STUDY

Should Zenith do the Aspect Ratio Study?
They should do the Study because :
It is a useful marketing tool;
It analyses all the consumers;
It can be done quickly;
It doesnt bring on the notion of HDTV but deals with all the issues they will have to face
(pricing, size, program);
It can determine a proper pricing and give hints about the product;
It will be useful to see where the company needs to develop.

ADDITIONAL MARKETING RESEARCH

What additional market research should be done to assess market potential / consumer
preference for HDTV?

v The company can create a market test with a real situation (presence of
promotions, advertasing, distribution) and analyses the evolution of it.
v Send a prototype at the entry of a big supermarket and analyze the behavior
of the people that comes in the supermarket.
v Try to create a public meeting around an international event where you can
see the difference between the two qualities and watch the people react.

RECOMMENDATIONS
v Use existing customer behavior information for color TV
v Embrace the role of marketing research in forecasting demand
vUndertake a Two faces approach

CONCLUSION

ZENITH: MARKETING RESEARCH FOR HDTV

https://www.youtube.com/watch?v=4xQb9Kl-O3E&feature=youtu.be

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