Professional Documents
Culture Documents
Zenith MR for
HDTV
Industry Analysis
Mature and highly competitive
Key Players: Thomson (22%), Zenith (12%), Philips
(11%), Sony (6%)
New products see high initial adoption then gradually
slows down as it matures (exhibit 2 analogy with
Color TV, VCR & Cable)
High Volume & Low Margin Sales ($)
9000000
8000000
7000000
6000000
5000000
Sales ($)
4000000
3000000
2000000
1000000
0
19701972197419761978198019821984198619881990
Rank 1
Zeniths Rank
Repurchased
RCA
Reputation
Zenith
Latest Features
Sony
Familiarity
Zenith
Less Expensive
Zenith
Recognition
Zenith
Overall Brand
Rating
Zenith
Market Potential by 20 th
Century for HDTV
No of
Households
Total TV Industry
HDTV Industry
Penetration
No of Households No of Households
(1999)
(2000)
Price
101 mn
10.12 mn
25 mn
$1108
$ 1.02 bn
$ 27.7 bn
Calculations
Households
with TV
1992
1993
1994
1995
Color TV
Cable
1997
1998
Forecast %
TV
Households
1996
1999
2000
1011562510245000
0
0
10
21.4
32.8
44.2
55.6
67
72.4
77.8
13.8
20.6
27.4
34.2
41
47.6
10
11
12
13.6
Household
Forecast
TV
Households
3223500
Color TV
1842000
1893750
4734375
8511037. 11527612
2280131225964887
1548022518672750
5
.5
.5
.5
Cable
1842000
1893750
4734375
Scenarios defined
Pessimistic Scenario
HDTV broadcast issues are resolved
HDTV sets are readily available
Quality HDTV programming is not available
Consumers do not see the benefit in paying higher price
Sales will suffer and HDTV would only be able to penetrate 3-4
% of US households. It would be a mix of the early penetration
pattern of colour TVs and projection TV.
Most likely Scenario
Sales are slow initially
Sales pick-up after as good HDTV quality programmers are
available
Consumers slowly become willing to invest in a HDTV
Sales would follow the pattern of the colour TV with slow initial
Scenarios continued
Optimistic Scenario
Broadcast Standards are readily adopted.
TV stations invest in new equipment and HDTV
shows are available.
HDTV sets are readily available.
Consumers think the superior sound and picture
quality is worth the higher price.
Estimated Research
Cost
Launch Time
Focus Group
$30,000
Few Months
HDTV Consumer
Research (WP7)
$10,00,000
Few Months
(subject to
availability of
funds)
$125,000
Few Months
Dealer Research
$70,000
Immediately
Secondary Research
$100,000
Immediately
$50,000-$70000
HDTV/NTSC TV
Preference Test
$75,000
Around 1992
Consumer
Awareness (Halo
Effect) Survey
$100,000
1994/95
% of total budget
Amount
(Total = $500,000)
Syndicated Data
32
$160,000
Color TV Research
18
$90,000
25
$125,000
VCR Research
$40,000
Advertising Research
$35,000
Miscellaneous
10
$50,000
Research
Head
Tentative
Launch time
Aspect Ratio
Study
1990
$125,000
As per
marketing
budget of 1990
Secondary
Research
1990
$100,000
As per
marketing
budget
allocated to
Syndicated Data
in 1990
Focus Group
1990
$30,000
Misc. Budget
1990 ($50,000)
% of total budget
Amount
(Total = $500,000)
WP7
Research( Instead of
Syndicated
Research)
40
$200,000
Innovators &
Qualitative Research
12
$60,000
Color TV Research
18
$90,000
VCR Research
$40,000
Advertising Research
$40,000
Dealer Research
14
$70,000
Other Initiatives
Preference test can be conducted in 1992 @ 15% of the total marketing
budget allocated last year
Consumer Awareness survey can be launched in 1994 @ 20% of the total
marketing budget (reference: 1991/92 budget)
Internet flourishing in US by 1990 s and usage of internet to
create HDTV awareness could give Zenith the first mover
advantage in internet marketing
Launch a pilot project and develop HDTV prototypes to learn
consumer responses through actual trial before launching actual
model
Collaborate with the Japanese to develop the HDTV prototypes
and working models
saving R&D Cost estimated around $50 million with $ 10
million already invested in 1991
Savings spent on improving marketing expenditure and even
helping the WP7 implement HDTV testing standard with sole
sponsorship
Cons:
Customers wont have the experience of HDTV resolution
which might undermine the product benefit
Large screen color TVs are already proliferating HDTV as
wider TV only might be seen as a variant of the same and
not new innovation
Alternative Research
Design
Develop a pilot project and manufacture HDTV
prototypes to test customer preferences
Collaboration with the Japanese can speed up
the process and lower R&D costs
Customers can get real feel of the HDTV which
would help in its rapid adoption
To be adopted by end of 1991
saving R&D Cost estimated around $50 million
with $ 10 million already invested in 1991
Savings spent on improving marketing
expenditure and even helping the WP7 implement
HDTV testing standard with sole sponsorship
CAGR
Penetration
Growth Period
Color TV
11%
74%
10 years
VCR
36%
66%
5 Years
Dealer Research
Usefulness
Clarifies mis-c0nceptions on HDTV
acceptance
Determine Consumer Aspect Ratio
preferences & corresponding changes
with price, program & diagonal sizes to
design the product accordingly
Determine the extend to which a dealer
can influence buyer behavior and push
the product
Secondary Research
Qualitative Research
Preference test