CASE ANALYSIS – ZENITH: Marketing Research for High Definition Television (HDTV)
Under the Guidance of Dr. Abdul Waheed
Rohith Desikan(95) Salil Srivastava(99) Nikunj Shah(105)
Siddhant Kejriwal(109) Swati Hasija(116) Vishal Godara(127)
Zenith Electronics Corporation is an American based manufacturer of color televisions, color picture tubes, color computer monitors, cable products and hi-tech electronic components such as monochrome displays, power supplies and automotive electronics. Zenith was exploring the possibility of entering into new frontiers with High Definition television (HDTV) technology. The benefits of making this switch from their traditional stronghold of CRT technology to HDTV meant that they can provide a higher resolution experience with superior digital stereo sound to their customers. 20 companies manufactured color televisions by 1987 in 35 US cities, out of which two were US based and by 1990 Zenith was the only US based TV manufacturing company. The company saw record sales but low margins made the company executives to find ways of marketing the new color HDTVs. Electronic Industries Association (EIA) defined High Definition as picture resolution or the number of horizontal or vertical lines scanned on television and HDTV had twice the number of lines as given by the NTSC standard, providing sharper images. Japanese and European Governments and Industries were launching projects to develop HDTV systems. Zenith was researching on advanced picture tube technologies and HDTV broadcast systems. It developed flat faced CRTs which had higher resolution than curved screens. Zenith made a tenfold increase in investment in HDS research from $1 million to $10 million and estimated that overall it would be investing $50 million in R&D on HDTV displays. The vice president of marketing at Zenith, Bruce Huber, was considering conducting appropriate market research to understand current consumer preferences before launching the HDTV technology. Traditionally Zenith launched new products on intuition, on the belief that the new product, on introduction, will speak for itself. Zenith did not place much belief on the role of marketing research. Huber is currently in dilemma to choose the appropriate research strategy to consider for the launch of HDTV technology.
We have considered SWOT analysis and the 5 C model for analyzing the current situation of the company Zenith Electronics.
Strengths: 1. Good market share 2. Record Market Share 3. Popular Brand image
Weakness: 1. Increase in the net loss as compared to the previous year, in spite the increase in sales 2. Lack of awareness in the younger generation, due to the perceived “Old Image” of the brand. 3. No compatible marketing strategy
Opportunities: 1. HDTV: the supposedly new market sensation 2. New design, for either the HDTV or the CRT (aspect ratio 16:9) can revolutionize the whole TV viewing experience: thus leading to high demands in the near future.
Threats: 1. The broadcast will continue to be in the earlier format, thus reducing the picture area, causing curtains, or size reduction.
5 C's Model:
Customer: Brand image of Zenith, which is that of an “Old Brand”, which is out of fashion now. They trust the quality of Zenith, but the technology is something that they need to work upon.
Competition Competition from different Japanese manufacturers, who have already gained some ground on the whole HDTV technology. Climate The penetration is 90% in TV industry, and although Zenith is having increasing sales, but still the revenues are decreasing. Although the HDTV concept has made some waves, there is still some apprehension on the part of the manufacturers and the consumers about the long term application of the new concept.
Company Zenith, a US based company, Zenith was a player in the non console projection TV business...
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