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Zenith – Marketing Research for HDTV Case Analysis

By- Group 5 (Dhiraj Agarwal, Akshay Sharma, Harish Vijayan, Soumitra Dubey, Kapil Katthar, Shreyas Gupta, Thotakura)

Submitted ToDr. K. Abdul Waheed

Problem Definition: The study is about the dilemma faced by Bruce Huber, VP of marketing at Zenith Electronics Corporation. He is scheduled to meet Jerry Pearlman, CEO of Zenith to discuss their probable alternatives regarding high definition television (HDTV), a new technology that produced sharper pictures and superior digital stereo sound. It could also permit larger screen sizes and wider screen pictures. The company had to decide how to forecast demand for HDTV and whether to conduct a study to assess consumer preferences for the new wider screen format implied by HDTV. Another aspect the decision makers at Zenith had to keep in mind was the preference of consumers in of aspect ratio. They have had traditional 4:3 TV sets till now, the HDTV now proposed is a 16:9 aspect ratio television.

Formulation of alternatives:  Dealer Research The dealers play an important role in helping the customer in deciding the television set. Zenith hasn’t accessed any syndicated dealer data, they have only asked the dealers about market preferences.

 Secondary Source Research The research is based on data from research firms in consumer marketing. The marketing department should examine all existing data on recent consumer electronics goods being embraced by customers. Estimating the size and growth rate of the HDTV market in various scenarios will be at the core of the report.

 HDTV innovators and qualitative research on early adoption The study at its foundation will concentrate on FGDs and IDIs with consumer electronic devices innovators and early adopters. Zenith can demographically and psychographically classify these customers. The data from this study could be used as a basis for future quantitative research when first deg marketing-mix strategies. The estimated costs of the study is about $50,000-$70,000.

 HDTV/NTSC-TV preference test This research reflects a collaborative survey of 1,000 respondents who viewed HDTV's actual working prototypes (when ready) and NTSC-TV monitors with equivalent screen sizes, aspect ratios, and viewing materials under different price scenarios. Only when HDTV models were prepared, which would be the earliest around 1992, could this study be completed.

 HDTV consumer awareness/”halo effect” survey After the launch, a quantitative survey could investigate the state of consumer awareness of HDTV. This research would also analyze the effect of HDTV on overall brand identity, brand awareness, and buy non-HDTV product consideration levels between different demographic and psychographic market segments.

Analyzing alternatives:  Dealer Research Advantages 1. Buyers are often assisted by the on-store sales person, whenever they make their respective buying decisions. Apart from this, even retailers were in constant touch with their end consumers. In all this Zenith benefits by having a first-hand consumer information from retailers. Zenith in short has to put in very minimal effort to know what the buying pattern of the consumers are. 2. This alternative also seems to be a good option because of the fact that the retailers were the best person to if at all Zenith wanted to have an insight as to what price for their product would be considered as the right product-price combination by the consumers, what quality and size of the screens will be accepted by the consumers. 3. Now Zenith’s well-established and widely spread distribution chain gave them an edge above its competitors. It provides them with an access to a wide variety of retailers across different regions. Thus, it would be simpler for Zenith to get information from them and that too at no additional cost. 4. This widely spread distributors strength could also be used by Zenith to have direct interaction with consumers in retail shops.

Disadvantages 1. It might so happen, that a few dealers don’t cooperate with zenith or they may be unwilling to ask their customers to answer a few research questions, because it was an additional effort for both, the costumers and the retailers themselves. 2. A major cause for the reluctance from the dealers’ end could be the lack of compensation for their additional effort. 3. Moreover, dealers may require a sample or a prototype to give a rational insight.

 Secondary Source Research Advantages 1. A secondary source research would be the simplest source of learning about consumer trends towards the adoption of recent technologies. 2. It would have also helped Zenith in getting a better understanding of the quality of the product that would have been accepted and its distribution strategy for properly penetrating the market. 3. If Zenith is able to choose an appropriate study to base their research, they will have more chances of being detailed and accurate with their forecasts.

Disadvantages 1. Generally, all the secondary sources are focused on new technologies and thus finding data to help the company which is replacing its technology with an updated version would be a little challenging and also there are high chances of variation in predicted trends. 2. The predicted costs of a secondary research was about $100,000.

 HDTV innovators and qualitative research on early adoption Advantages 1. This research would have been a good way to know into what the consumer expects from Zenith’s newly upgraded product, and what their take might be towards the new technology. 2. This research will benefit consumers as well because it would enable them to get an actual feel of the product, and analyze how is it different from the existing products in the market. This will allow Zenith to strategize accordingly.

Disadvantages 1. Since this is a focus group discussions, it might so happen that participants get influenced by the choices of other participants and s.

2. Early adopters are often technology enthusiasts, and hence their approval or disapproval of the product may not truly represent the target mass.

 HDTV/NTSC-TV preference test research Advantages 1. This research is in line with the above-mentioned alternative wherein the customers get to witness the product tangibly. The added benefit here is their ability to compare the two in of size, screen, picture and sound quality. 2. This research will help the company to market itself in of an affirmative word of mouth to potential consumers from the ones that gain a positive experience from this type of research. 3. This might also portray an image of the company that they are not fooling their customers by promising more, they are validating their words.

Disadvantages 1. One of the many issues that Zenith might face with producing a HDTV is that it requires a huge investment, to even create samples/prototypes they would have to invest heavily in R&D, technology and appropriate machinery. 2. Further, to enhance the perspective of the customers, Zenith will have to make the channels produce programs compatible with HDTV, which being an emerging technology, might be costlier. 3. This research was possible only after the HDTV has been produced and this would lead to delaying of the production.

 HDTV consumer awareness/ halo effect survey Advantages 1. Zenith can not only learn about the consumer’s perception for the brand but also the consumer’s perception of them as a brand.

Disadvantages 1. The predicted cost involved in these kinds of research is $100,000. 2. Such survey requires the respondents to spend a lot of time in filling up the responses. And then analyzing these responses would have required Zenith to spend equal amount of time, which is of essence for Zenith and would not have been possible from their end.

3. Halo survey, much alike the preference test, was possible only once the product has been launched, which would also result in a delay.

Recommendations: Being hopeful and making little strides with time is the key while working up to advancements. The best procedure, for this situation, is use HDTV trailblazers and subjective research on how the item will be embraced. As this would be an exploratory research, the organization can without much of a stretch present factors or situations, it accepts, it needs to examine its HDTV innovation. This will enable the organization to see the client responses straightforwardly which would enable them to receive the correct methodology when presenting the item. In the event that a large portion of the center gatherings feel that this will supplant or rethink the shading TV, at that point the organization can make techniques as needs be. Through this, the organization will likewise have the option to recognize buyer conduct with respect to the item, similar to their eagerness to pay, their requirement for data, where will they purchase from, and other related elements. As the organization is straightforwardly managing its clients and on the off chance that they give a positive reaction, this will assist the organization with generating positive informal exposure for its up and coming item. This can enable the organization to make a buzz in the market and make its item profoundly envisioned. This investigation won't expend time as it tends to be led at the most punctual and the expense of directing it isn't extremely high. Above all, the organization is making misfortunes and tremendous interest in research may not appear the best of thoughts starting at now.

Plan of Action: To lead exploratory subjective research on the early selection of HDTV, the initial step Zenith should take, is to structure the examination venture with anticipated needy and autonomous factors. At that point, they would need to figure a rundown of inquiries that will coordinate the focused group discussions and in-depth interviews. The objective populace will be individuals between the ages of Twenty-Five and Forty-Four who possess a TV or are intending to purchase a TV. Individuals who are eager to partake in the exploration procedure should be recognized using judgmental sampling. The focused group discussions and in-depth interviews will decide a rundown of components that will decide the evaluating inclinations, anticipated advantages, data gathered about the item, and the kind of outlets for purchasing HDTV. These elements will be gathered into buckets which will eventually shape the relevant factors for the examination. Thus, these factors will be centered around to define future

advertising systems and interactions with the clients. These factors will likewise shape further research to predict the growth of HDTV in the US marketplace.

Contingency Plan: In a situation where the above research theory can't be completed as a result of some clarification or the association contributes money for this assessment, the second-best research procedure is to test the tendency among HDTV and NTSC TV. It would give an unrivalled connection of every individual components like screen sizes, point extents at different assessing circumstances, and progressively dependable data can be procured. All the previous focal points will, in likewise manner, be procured anyway at a more prominent cost for congruity. The deferral caused due to the creation may go about as both positive and negative components. The association may focus on other advantage making plans for 2 to 3 years which may moreover give an all the more clear image of the market example of that time.