By Tom Dougherty
The Television Industry: A Television Manufacturer Market Study
Much has changed in the world of TV’s. Our TV market study looks at the category and the changes that are afoot. Many of the brands from long ago are altogether gone and the ones who just recently were kings in the category have lost their luster. It is a market where so much change takes place because so little is said. With everyone fighting to claim and own similar claims Consumers have little room to choose and the industry has transitioned to chaotic.
There are several ways television manufacturers are marketing themselves to the consumers, none of which are emotionally compelling. Below are a few of these areas and why how they get it wrong.
Television Manufacturer Market Study: TV Pricing
Price is no doubt one of the largest deciding factors for many consumers and a true testament to the lack of messaging within the industry. Price is where you find an array of brands with little to no advertising. Their value proposition is simply that their picture looks good enough and their price is low enough that the customer will consider quality of picture a wash between brands and will buy on price alone. This is the category one finds manufacturers such as Sylvania, Viore, Westinghouse Digital, RCA, Polaroid, Coby or Element. Regardless of which of these happen to be on the shelf, the specs and the designs remain about the same. The downside to a low-cost strategy is not that consumers don’t value the low-cost provider and remaining a low-cost provider is an ongoing battle. (Wal-Mart, for example, offered a $98 HDTV over the 2013 holidays.) When paired against a more meaningful brand value, the lowest cost option will lose out to reasonably priced brands with meaning.
Pricing can be an effective area to compete but there must be value beyond simply price to prompt preference. A good example of this is VIZIO. Take a look at the VIZIO ad below. In it, it refers to its price, but it also talks a lot about quality. Even though price is presented as a value, it is still positioned as a brand worth coveting – not a low-cost option a price conscious consumer has to “settle “ for.
VIZIO Ad (Old):
Now take a look at a VIZIO ad that came later.
The focus is no longer all about price. Price is only a support point to a larger idea of “fairness.” “Fairness,” in this sense, represents the ability for everyone to be able to own a VIZIO. While still a bit too internal in focus, it moved away from price at its driver, which is a good thing.
Newer still is the ad below from VIZIO.
VIZIO Ad (New):
VIZIO is selling a total brand message here, but it is still about the technology.
Size is equally as risky to claim as price. Luckily for Sharp no one has yet challenged them on the value of size. Currently if you want an easy to find television over 70 inches you will have to purchase a sharp. The size advantage offers a leg up for Sharp but they are resting on the size laurels alone, and that only buys them a bit of time. If sales for sharp begin to climb high enough, manufacturers like VIZIO, Samsung and Sony will introduce their own extremely large models.
Take a look at the Sharp ad marketing its 80-inch Aquos line.
It give consumers no reason for consumers to value Sharp beyond size of the screen, as well as making the assumption that s consumers will opt for larger picture over better picture.
This is where the repetitive nature of the industry becomes abundantly apparent. For almost about all of the manufacturers, you can find a handful that talk about nothing but deep black levels, refresh rates, the use of LED technology, thickness, etc. The list of specs is quite long and all of the big manufacturers have a model that will spec as high as the next manufacturer’s. Regardless of the sameness in terms of overall picture quality between brands, there is also a lack of intensity over this value when it comes to brick and mortar shoppers when source inputs and settings all vary from TV to TV.
The value of picture quality is only relevant when discussing the technology of the television (CRT, LCD, DLP, etc.). Overall, marketing picture quality is one of the least cost-effective strategies for manufacturers, given the effort and asset required to claim it and the low return on it.
With Wal-Mart House brands like Ilo going by the wayside, the only company utilizing a house brand in any large sense is Best Buy with its Dynex and Insignia brands. While house brands fall under much of the same caveats as brands sporting “best price,” house brands also benefit from the brand equity of the parent brand. The perception that the house brand is a good product can succeed or fail if the parent brand does not have adequate permission to brand its own television in the first place.
But when you’re, say, Best Buy, who already carries most all well-known manufacturers of televisions and devices, a house brand means you drive your own margins down, not necessarily steal business from the competition.
Update: Best Buy did not have a good holiday shopping season. It recently announced 2013 holiday sales fell .7 percent from same-store sales in the previous year. It had projected an increase.
Battle For Features
By far the most complex of the categories for one simple fact: The television manufacturing industry is one where new features happen on a regular basis. Marketing based on new features means constantly having to catch up. Messaging an idea or emotional value is always the better option because it can transition with new features, keeping messaging consistent rather than schizophrenic. Take a look at the following ads, all boasting different reasons to choose their systems.
Value is also lost when manufacturers try to create preference by marketing the same specific feature as their competitors. It essentially forces the consumer to choose based on a different value entirely because the features seen as a wash.
The battle for features is par for the course. Features don’t get you more or less market share; they just let you play the game. For example, if a consumer visits a Best Buy or an HH Gregg, they might look at contrast ratios. One might have a 10,000,000:1 and another might have a 20,000,000:1. Sure that’s a gap of 10,000,000:1 but at what point does the eye no longer tell the difference? The 10,000,000:1 still allows the consumer to say, “Look at the TV I just purchased. It has a great contrast ratios.”
And therein lies the point that the manufacturers are missing. The selection of a product is made emotionally. Things like contrast ratios are only important because they provide the consumer rational reasons to explain how their emotional decision was made. Features essentially give the customer permission to make an extravagant purchase and mask it as being wise. The more compelling the brand, the more the customer is willing to link the rational to wise.
Television Manufacturer Market Study Summary
There is little else to categorize the television market beyond product attributes and price. Manufacturers have done a poor job creating a brand identity and brand messaging that frames the aforementioned descriptors in any way that make the consumer prefer a brand.
Below is a chart outlining the positions of well-known competitors in the market landscape. While some manufacturers like VIZIO tiptoe around meaning, they all remain worried about appearing too different from the rest. There is a fear of risk associated with branching too far out, even though branching out is how you get the sun.
It is truly telling of the state of the industry that the most exciting TV is the one that is not out yet; Apple’s rumored TV. Product specs and pricing drive scattered purchasing in the short term, but brand provides preference for the long term. Until manufacturers realize this, the industry will continue on a volatile path. If that is the case, do not expect the industry leaders to remain the same. It will constantly switch back and forth, without a single brand holding a leadership position.