ZENITH HDTV CASE

Marketing Strategy and Organization

Group 8 Section B
Subhrojeet Mukherjee
Lalit Sharma
Arpit Kanodia
Aditya Asopa
Zenith Electronics LLC was founded in 1918 in Chicago Illinois by Ralph Matthews and Karl
Hassel. Their moto was “The quality goes in before the name goes on.” Zenith was the inventor
of subscription television and the modern remote control, and the first to develop High-definition
television (HDTV) in North America. It was later on acquired by LG Electronics in 1995.

Founded in: 1918

Issues

 No information on consumer`s preference for 16:9 aspect ratio over 4:3.

 Scarcity of HDTV programs to propel HDTV market.
 Incurred losses despite increase in sales.

Questions

Q1. How much existing information on TV buyers can be used to assess the HDTV
market?
35% of the Zenith TV buyers look for performance/features in the TV while 50% of the buyers
buy Zenith TV for enriching experience. This gives the idea that HDTV has great scope that
Zenith can easily tap in. Moreover the retention of the customers by Zenith is 30.8% that is
because Zenith has created value in the minds of the customers.

Q2. What are the forecasts of HDTV demand from 1992-2000?

There are certain perspectives to the forecast that could be analsyzed form the data that is given.
Under optimistic approach there seems to be increase in the number of sales of HDTV. It means
if Broadcasts are readily available and HDTV sets are readily available more and more
customers will be enticed to buy the zenith TV. Consumers also think that superior sound quality
and price are worth so they will not mind shedding extra for better quality. There seems to be a
staggering growth in sales under this approach. After 1997 the market share of HDTV is
expected to be exactly 100% which typically means that the near future calls for upgraded
technology.
Consumers think big screen size and higher aspect ratio will give a better status in the society.
Q3. Should Zenith do the Aspect Ratio Study?

Aspect ratio is not a singular entity, rather it encapsulates different facets critical to the HDTV
market. Hence, it`s crucial for them to conduct the study. By conducting this study Zenith can
find following information:
 Consumer`s preference between 16:9 and 4:3.
 Effect of aspect ratio on different contents (Movie, News and Sports).
 Price impact with respect to different diagonal size.
 If they needed to set up a new plant to picture tubes larger than 28’’ in diagonal.

Based on all these answers they can plan their approach for HDTV.

Q4. What additional market research should be done to assess market potential / consumer
preference for HDTV?

In addition to the analogical approach of assessing market potential using old researches and
purchased IMR consumer surveys, Zenith can do following research to gauge HDTV`s potential:
 Dealer research: As we gather from Non Zenith TV buyer survey, customers do not
recall seeing Zenith TV on sales floor. Zenith needs to work with its dealers to ensure
their product`s visibility.
 Early adopters research: Zenith can conduct a research with a group of people who
are early to adopt any technological changes. There has to be multiple groups based
on the demography and interests. Zenith can utilize their expectations in terms of
product, pricing, promotion and placement.
 HDTV/NTSC-TV preference test: Compare HDTV to NTSC TV of same
configuration under different prices. This will help to identify preference for HDTV
among prospective buyers.