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Zenith (HDTV)

Himanshu Arora
1301-528
Section - B
1
Introduction
• Net sales in 1989-$1.559 billion
• Products: colour Tv, video recorders, color
picture tubes, color compute...
TV INDUSTRY
• From 1971-1989 the Tv industry has grown
considerably
• Average price per unit has fallen down from
$698 to ...
Issue 1
• The prospective demand for HDTV from 1992
to 1999 under pessimistic, most likely and
optimistic approach
• The m...
Issue 2
• Aspect Ratio Analysis
• Primary Objective: to measure consumer preferences for TV
aspect ratios (4:3 and 16:9) w...
Consumer Behaviour towards Tv
• Consumers looked for value for their money
and stayed within their budget
• Picture qualit...
Competitor Analysis based on Market
Share
Sales

Zenith
RCA
Sony

Magnavox
GE

HIMANSHU ARORA 1301-528_B

7
Focus Group Analysis about Zenith
• Zenith had an old image
• Used to be a good brand
• Associated Zenith with the malfunc...
LEAD QUESTION NO. 1
• What should Bruce Huber do?
– Bruce Huber should, for the time being, concentrate on
the research fo...
LEAD QUESTION NO. 2
• Should Zenith undertake the aspect ratio study? I so,
when and what should be the research design? W...
LEAD QUESTION NO. 2
• Second, conduct a ‘HDTV preference test’. A conjoint
analysis with 1000 respondents which would incl...
LEAD QUESTION NO. 3
• How should one assess the market potential
for HDTV
– Under pessimistic, most likely and optimistic
...
LEAD QUESTION NO. 3
• Most likely:
– Sales are slow initially
– Sales will boost as soon as the HDTV programming improves
...
LEAD QUESTION NO. 4
• What is the role of MR for innovative hightech consumer durable innovations
– Marketing research for...
LEAD QUESTION NO. 4
• No trend analysis should be conducted on
acceptability of similar innovations in the past
as there i...
LEAD QUESTION NO. 5
• All findings from the MR relating to price,
product specifications, acceptance etc. will
ultimately ...
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Case: Zenith (hdtv)

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Case: Zenith (hdtv)

  1. 1. Zenith (HDTV) Himanshu Arora 1301-528 Section - B 1
  2. 2. Introduction • Net sales in 1989-$1.559 billion • Products: colour Tv, video recorders, color picture tubes, color computer monitors etc. • Headquarters- Illinois • Number of employees- 32,000 • PROBLEM- Despite increase in sales Zenith saw net losses because of competition from far east HIMANSHU ARORA 1301-528_B 2
  3. 3. TV INDUSTRY • From 1971-1989 the Tv industry has grown considerably • Average price per unit has fallen down from $698 to $280 HIMANSHU ARORA 1301-528_B 3
  4. 4. Issue 1 • The prospective demand for HDTV from 1992 to 1999 under pessimistic, most likely and optimistic approach • The main factors that need to be considered in order to analyse the market • Solutions to the factor issues HIMANSHU ARORA 1301-528_B 4
  5. 5. Issue 2 • Aspect Ratio Analysis • Primary Objective: to measure consumer preferences for TV aspect ratios (4:3 and 16:9) with equal height and and/or equal diagonal displays using conjoint analysis • Secondary Objective:  To determine changes in consumer preferences at various price differential  To determine changes in consumer preferences with different program content (sport, movies, news)  To determine changes in consumer preferences with different diagonal sizes HIMANSHU ARORA 1301-528_B 5
  6. 6. Consumer Behaviour towards Tv • Consumers looked for value for their money and stayed within their budget • Picture quality was the most important evaluative criterion • Tv’s were purchased from retail outlets • Advertising with information, product orientated focus seemed to go unnoticed • Data show that Zenith had brand loyal customers HIMANSHU ARORA 1301-528_B 6
  7. 7. Competitor Analysis based on Market Share Sales Zenith RCA Sony Magnavox GE HIMANSHU ARORA 1301-528_B 7
  8. 8. Focus Group Analysis about Zenith • Zenith had an old image • Used to be a good brand • Associated Zenith with the malfunctioning Tv their parents owned • Questioned it quality • Did not recall Zenith advertising HIMANSHU ARORA 1301-528_B 8
  9. 9. LEAD QUESTION NO. 1 • What should Bruce Huber do? – Bruce Huber should, for the time being, concentrate on the research for production of HDTV sets rather than the HD content or programs. This is so because he has scarce resources and has to prioritise. Also by creating a product like this he is going to create an opportunity for the existing content production houses to produce HD programs and Zenith will then be the sole television which could show such programs. – For example: in India, smartphones with 3G technology came much before 3G networks actually got installed. This was in anticipation that the advancement is superior and the network providers will make a move on it. HIMANSHU ARORA 1301-528_B 9
  10. 10. LEAD QUESTION NO. 2 • Should Zenith undertake the aspect ratio study? I so, when and what should be the research design? What are the pros and cons of the existing proposal? – Zenith should do the research on a different pattern which will provide it more certainty with regards to the acceptability of the product. This design is as follows • First conduct a ‘HDTV innovators and qualitative research on early adoption’. A focus group qualitative research that will tell consumers’ expectations for the product, price, placement and promotion & hence take insights on preparing the marketing strategy – Cost: $50000 - $70000 HIMANSHU ARORA 1301-528_B 10
  11. 11. LEAD QUESTION NO. 2 • Second, conduct a ‘HDTV preference test’. A conjoint analysis with 1000 respondents which would include showing them an actual working model of an HDTV. This will show – Their willingness to buy – The premium they are willing to pay – Cost: $75000 • Third, if the research has given positive results, conduct the aspect ratio study that will clearly show whether the customer wants to buy a bigger TV set or not and how much premium he will pay for the size and resolution – Useful as there are high investment costs if zenith has to produce sets of more than 28’ – Cost: $125000 HIMANSHU ARORA 1301-528_B 11
  12. 12. LEAD QUESTION NO. 3 • How should one assess the market potential for HDTV – Under pessimistic, most likely and optimistic approach • Pessimistic: – Quality HDTV programming are not available – HDTV sets are readily available – Consumer do not see the benefit of spending so much on them – HDTV issues are not resolved HIMANSHU ARORA 1301-528_B 12
  13. 13. LEAD QUESTION NO. 3 • Most likely: – Sales are slow initially – Sales will boost as soon as the HDTV programming improves – Consumers slowly become willing to spend on a HDTV • Optimistic Approach: – – – – Broadcasts standards are readily available Tv stations invest in new equipment and HD programming HDTV sets are readily available Consumers think the superior sound quality and price are worth HIMANSHU ARORA 1301-528_B 13
  14. 14. LEAD QUESTION NO. 4 • What is the role of MR for innovative hightech consumer durable innovations – Marketing research for an innovative high-tech consumer durable should be a little different for products whose features or types are already known by the consumer at large. • The research should be aimed at recognising the current underserved needs and the fallacies in the products they are using currently • To find out the premium they are willing to pay for such a new innovation in product features HIMANSHU ARORA 1301-528_B 14
  15. 15. LEAD QUESTION NO. 4 • No trend analysis should be conducted on acceptability of similar innovations in the past as there is no plausible explanation that the consumer will react the same way. This is because – The time zones may be different due to which the evolution of the consumer may get unaccounted for – Mediums of information transfer may accelerate the acceptance by customers – There may have developed an overall culture to shift to better products HIMANSHU ARORA 1301-528_B 15
  16. 16. LEAD QUESTION NO. 5 • All findings from the MR relating to price, product specifications, acceptance etc. will ultimately aid the marketer to develop a marketing plan based on information and not intuition while also saving itself huge sums on costs as it already is incurring losses and cannot afford to overspend HIMANSHU ARORA 1301-528_B 16

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