Zenith: Marketing Research for High Definition Television (HDTV)

By: Group 3
Bhavik Nasit 11
Deep Patel 13
Dhaval Balar 14
Keyur Patel 25
Vrushank Chauhan 39
 About Company

 Zenith Manufactured consumer electronic products, color picture tubes, color computer
monitors, cable products, and high-tech electronic components
 Headquarter: Glenview, Illinois
 Employees: 32,000 worldwide
 Strength: Brand and Distributions
 In 1989, Despite sales volume increases, Zenith saw net loss of $17 million compared to
net loss of $11 million in 1988
 Consumer Electronics: Tough because of competition from Far East Manufacturers only
sales of console TV (on the floor, larger TV) showing some positive results.
 The TV Industry

 From 1971 to 1989, the TV industry has grown considerably

 Industry was seeing record sales volumes
 Low margins made business very uncertain
 Key Competitors for Zenith: Thomson, North American Philips, Sony

Company Name Market Share (%)

Thomson 22
Zenith 12
North American Phillips 11
Sony 6
 Price, Promotion, Place and Product Analysis

 Price: Consumers have a fixed budget which was not extremely low as it signified a cheap
product. The objective was to get the best TV within the budgeted amount.
 Product: Picture quality was one of the main concerns of the consumers. They also
concentrated on other additional features such as a remote control and stereo system.
 Place: Consumers would generally tend to buy the products from the retail outlets . The
consumers used to get more information about a product at the retail outlets rather than
getting through advertisements .
 Promotion: The Informative advertising generally went unnoticed , Customers were more
interested in sale offers.
 Problems faced by Company

 The Prospected HDTV demand from the year 1992 to the year 2000 under a pessimistic
most likely and optimistic scenario
 The main factors that are to be taken into consideration in order to analyze market
research strategies
 Additional marketing research, if any, should we do now in order to access the situation
related to HDTV introduction
 Objective of Study

 The Aspect Ratio Analysis:

 Primary Objective:
• To measure consumer preference for TV aspect ration (16:9 or 4:3) with equal height
and/or equal diagonal displays using Conjoint Analysis
 Secondary Objectives:
• To determine changes in consumer preferences at various price differentials
• To determine changes in consumer preferences with different program content
• To determine changes in consumer preference with different diagonal sizes
Q1: How much existing information on TV
Buyers can be used to access HDTV market
 Growth of TV and related innovations in US market (Exhibit 2)
• It shows the growth of various innovations from the time of introduction into the market
till present
 Total Annual Sales of TVs in US from 1971 to 1989 (Exhibit 3)
• It shows the growth pattern and price of TV sets.
 Color TV tracking, Incidence and Image Awareness surveys (Exhibit 5 through 8)
• It shows the shift of consumers from one brand to another and consumer satisfaction
with brand and their perception towards it.
 Color TV Segmentation Study (Exhibit 9)
• It shows the market shares of the customer segments- performance, experience, price
and also shows the brand share under each customer segment.
Q1: How much existing information on TV
Buyers can be used to access HDTV market
 Forecast data for demand of color TV and HDTV for next 5 years by Zenith (Exhibit 11 to 15)
• It shows data related to sales forecast color TVs under various heads like first purchase,
replacement and additional.
• It divides sales data with respect to size of the TV set.
• We can use this data to estimate the demand of HDTV for the first buyers and replacement
buyers of color TV which could be targeted for HDTV.
 Qualitative study by America’s research group as commissioned by Zenith
• It shows how people perceive Zenith as a brand and relate its qualities by TV sets owned by
their parents and also impact of ads and presence on shop floors.
Q2: What are the Forecasts of HDTV demand from
1900-2000?

 Most Likely Scenario:

 HDTV would follow the adoption trend of color TV and would penetrate 7 -
10% of US Households from 1992 to 2000
 • lack of content in compatible format initially
 • adoption time required for studios and production houses to produce content
in 16:9
 • high manufacturing cost increases retail cost - for example, it costs 5300 more
to produce a 27"set for same height with 16:9 resolution
Q2: What are the Forecasts of HDTV demand from
1900-2000?

 Optimistic Scenario:
 HDTV would follow the adoption trend of VCR and would penetrate 70-80 %
of US Households by 2000
 • FCC passes HDTV standard by 1992
 • consumers accept the product because of image quality and are willing to pay
extra for the same
 • studios and production houses readily upgrade their technology to suit the
HDTV format
Q2: What are the Forecasts of HDTV demand from
1900-2000?

 Pessimistic Scenario:
 HDTV would follow the adoption trend of projection TV set and penetration
will be below 7 % of US Households from 1992 to 2000
 • FCC delays HDTV standard
 • studios and production houses take time in upgrading to HDTV format
 • high cost
Q3: What additional market research should be
done to assess market potential/consumer
preference for HDTV?
 From the previous researches and market surveys, it has been found that the following
aspects or attributes affect the market potential / consumer preference:
 • Availability of formatted content for a particular TV set (as in case of Color TV)
 • Price of TV sets
 • Image Quality
 • Manufacturing defects
 • Brand Consciousness
 • Advertisement and sales promotion
Q3: What additional market research should be
done to assess market potential/consumer
preference for HDTV?
 On the basis of the aforementioned historic data , Zenith should go for HDTV Innovators
and qualitative research on early adoption.
 From this study, zenith will benefit from getting insight on the various factors affecting
the early adoption consumer. They can use this data to market HDTV for the early
adopters when initially launching it.