zenith.pptx

7/27/2019 Zenith.pptx

1/10

Demand Forecasting

1992 1993 1994 1995 1996 1997 1998 1999 2000

Industry Total (millions of units)100 102 105 107 110 113 115 118 121

25" & larger (millions of units)100 102 103 107 113 120 125 133 142

11% of 25" and larger over $1000

(thousands of units)

100 102 103 106 114 120 124 133 141

HDTV units industry forecast

('000s)

100 205 409 682 970 1197 1242 1333 1409

Zenith's forecast of industry sales

('000s)100 205 409 682 970 1364 1970 2727 3788


2/10

Zenith forecast of U.S. market

0

20

40

60

80

100

120

140

160

1992 1993 1994 1995 1996 1997 1998 1999 2000

Industry Total (million of units)

25" & larger (million of units)

11% of 25" and larger over $1000(thousands of units)

The above forecast clearly shows that the industry demand for 25 or higher

HDTV would continuously increase during the span of 1992 2000.

The increase in demand by 42% in the forecasting shows that the budget ofthe customers would also increase accordingly. This can also be seen by the

simultaneous increase in the 11% of 25" and larger over $1000 (thousands of

units) category.

This shows an increase of 41% in comparison with the base year 1992


3/10

HDTV units versus Zeniths forecast of

industry sales

0

500

1000

1500

2000

2500

3000

3500

4000

1992 1993 1994 1995 1996 1997 1998 1999 2000

HDTV units industry forecast

('000s)

Zenith's forecast of industry sales('000s)

. The forecast demand for Zenith in comparison to the industry for the same period

is showing a drastic increase in competition with the industry average.

The demand of HDTV units forecasted shows that the demand will increase 14

times in the year 2000 in comparison with that of year 1992, whereas the same for

Zenith would increase to almost 38 times.


4/10

Should Zenith conduct the aspect

ratio study? Since they are launching a new product that is visibly differentiable, it would be

useful to know the acceptance of the new aspect ratio 16:9 with equal height andor equal diagonal displays.

The aspect ratio study would help Zenith understand the preferences of theirconsumers towards the new HDTV wider screen aspect ratio or the currentstandard 4:3.

The previous research conducted by RCA on aspect ratio did not consider theresponse on customers on adverse circumstances in real world, such as that ofviewing with letter boxes and side curtains. In the proposed study, the researchteam recruited 2,250 respondents who had purchased TV in the past year from ashopping mall in a single city. The respondents would be exposed to various realworld situations, to choose their better preferred options. They were also givenoption to choose their overall preference as well.

Even though the study would cost Zenith $125,000, it is needed as they arelaunching a new technology for which they have to make huge investments onplant. Thus it is important to make sure that the customers are satisfied and wouldstill prefer the HDTV despite of various changes.

The results would be more accurate and reasonable in this study since theresearchers are working on real world scenarios. Hence, the company would beable to understand how the consumers made tradeoffs among the various

features of the HDTV that are under study.


5/10

What additional market research should be done to assess

market potential/consumer preference for HDTV?

Dealer Research

Pros Cons

Get first hand consumer

information

Get first hand consumer

preference (price, quality, size)

No additional investment

Direct interaction with the

consumer

Brand name with the dealership

Dealers interest in showcasing the

new product

Little cost involvement to

convince the dealers

Might require sample pieces for

showcasing to get better consumer

feedback


6/10

Secondary Source Research

Pros Cons

Would get consumer trend towards

recent new technologies

Can also understand the product

quality, sizing and distribution strategy

More chances of being accurate &

detailed

Not concentrating on a replacement

products but on new technologies,

hence the consumer trend might vary

While this seems like a good idea, it

might not give the consumers liking

for HDTV

High cost is involved ($100,000)


7/10

HDTV innovators and qualitative research on early

adoption

Pros Cons

Insight of what a consumer actually

excepts, whether he likes the new

product or not

Will allow the consumers to get a feel

of the product which will allow for

formulation of strategies

Members in a focus group might be

influenced by others and moderators

Information may not be considered of

value if they have predetermined result

Early adopters do not represent the

population


8/10

HDTV/NTSC-TV preference test research

Pros Cons

Consumer would be able to compare

both standards side-by-side and their

expectations of size, screen, picture

quality and pricing

The innovators could add positive

word of mouth

Production of HDTV, huge investment

Cost of study

Cost of developing programs to be

viewed

Research would be done only after the

HDTV is produced leading to delay


9/10

HDTV consumer awareness/halo effect survey

Pros Cons

By doing this survey, they would not only

find out about the HDTV market but would

also become aware ofzeniths brand image

and purchase considerations

Takes long to get survey results

Cost involvement of $100,000

Will be conducted after introduction so

there is a risk of product failing before

the research


10/10

The most ideal strategy in this case would be to use HDTV innovators & qualitative

research on how the product will be adopted. As this would be an explorativeresearch the company can easily introduce variables or scenarios it believes itneeds to study for its HDTV technology.

This will also allow the company to see the customer reactions directly & this canhelp them adopt the right strategy when introducing the product.

Through this the company will also be able to identify the consumer behavior withregard to the product like their willingness to pay, their need for information,

where will they buy from, and other related factors. This study would not consume time as it can be conducted at the earliest & the

cost of conducting it is not very high.

As of now the company is making losses & huge investment in research may notseem like the best of ideas. Keeping costs low even for the new product is crucialfor the company to succeed with the new technology.

Lastly, as the company is directly dealing with its customers & if the customers givea positive response, then this will help the company generate positive word ofmouth publicity for its upcoming product. This can help the company create a buzzin the market & make its product highly anticipated.

Ideal Strategy

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