Table of Contents
Contents
Page
Report
Executive Summary
Plasma TV – History
Plasma TV - Industry Background
Advantages/Disadvantages of Buying a Plasma Television
Competitive Analysis
How The Marketing Mix Applies to Plasma Televisions
Marketing Mix Analyzed
Consumer Analysis
What’s New for Plasma TV’s?
Market Analysis
Conclusions, Recommendations, & Long-Term Strategy
1
1
2
2
4
6
9
11
11
15
16
18
Appendices
Appendix A – SWOT Analysis
Appendices B – Network Model
Appendix C – Value Creation
Appendix D – History of the Television
21
21
22
23
24
Works Cited
25
Executive Summary
The progression of the television over time has helped changed the way human
being communicate information. The invention of the television in itself, like the
automobile, at first was too expensive. However, innovation of processes like mass
production and the assempbly line allowed its existence within the average household.
Recently, a new type of television has been created, this television no longer uses
Cathode Ray Tubes (CRT) or even LCD (Liquid Crystal Display) Technology. This
technology is cutting edge and has allowed for slique looking flat screen televisions that
can be bigger and have clearer and better images.
The main competitor of the Plasma Television is the LCD Television. Both of
these products are similar in nature, however, the LCD TV has been segmented more
towards smaller size screen purchasers as well as computer monitors. The LCD TV is
also very well known to have a longer lifespan than that of a Plasma Television.
Plasma television producers can use this knowledge of the strengths of the LCD
Television to its advantage and hopefully to take over majority sales within the television
market. Plasma televisions have a more slique design and have better and clearer images
for media that is constantly changing (in motion). Thus if Plasma TV Producers can
position their technology effectively within the television market, they can make there
stake on a large amount of sales.
Plasma television producers can take a stake within the market by managing user
perceptions. Plasma television producers should definitely make consumers aware of the
facts, both advantages and disadvantages of each TV technology as well as focusing on
the design aspects of their models. Consumers would love to have a television that is
amongst the decor of their home, both the rich and the poor. Thus Plasma televisions,
like the tape over the A-track, have an option to make there claim in the market given
effective marketing strategies.
-1-
Plasma TV - History
The first ac plasma display panel was built in July 1964 by the University of
Illinois. These first displays were created in laboratory experiments in the university and
at the time, were nothing more than points of light. Through technology development
and improvement, the plasma display had become advanced enough which allowed
scientists to construct geometric shapes by the late 1960’s1. Nevertheless, scientists were
restricted from further developing the plasma displays since the materials were simply
not available.
Thus, image quality was low and screens were relatively small.
Throughout the past 30 years, advancements in manufacturing technology have resulted
in significant progression in materials available and in high speed digital processing. As
a result, the technology is now available in a variety of ways, which has made full color,
bigger screens, and bright plasma display sets possible.
Plasma TV - Industry Background
In the late 1990’s, HDTV technology hit the mass market. With the increase in
demand for HDTV, unknown brand names have entered the market which were
traditionally dominated by Sony Corp. and Sharp Electronics Corp.
Today, with
increased production, new brands and deep discounts, prices of high-definition television
sets are even lower this year than last year2. Samsung’s 42-inch plasma is now selling for
$2,700 at Circuit City, a reduction of $800, and newcomer Maxent’s 42-inch HD plasma
is selling for $1,800 at Best Buy. For each purchase of a high-end plasma model, Fujitsu
of America offers rebates of $500 or $1,000 on each purchase. “There’s more players in
the market, there’s more display technologies, and if you look at most of the
1
2
http://www.plasmatvscience.org/plasmatv-history4.html
http://www.boston.com/business/personaltech/articles/2005/11/20/is_it_time_to_buy_that_50_inch_plasma_TV
-2-
manufacturers’ lines, we’re seeing less standard definition and a lot more high definition
being produced”3. For a 42-inch screen, plasma TV’s start at a price around $4,000 and
go as high as $21,000 for a 61-inch screen.
Although these displays are relatively
expensive, their excellent brilliance, placement flexibility and stunning colors are quickly
raising popularity amongst North American consumers. According to the Consumer
Electronics Association, the average sale price of HDTV sets fell by $1,416.90 in 2004,
which is 11% less than the previous year4. With the falling prices, it is projected that one
quarter of North American households will have at least one high-definition television.
So is it valuable to the consumer to purchase the HDTV? First it is essential to explain
that “high definition” refers to a television set that uses any four of the different display
technologies; plasma, liquid crystal display, projection and direct-view cathode ray tube
(CRT). Essentially, this high-definition technology has the potential to revolutionize TV
viewing by delivering a digital picture that is much sharper than standard definition
televisions. Plasma televisions are mostly HDTV’s and generally range from 40-60
inches. These large screens create a movie theater experience at the comfort of your own
home. As a result, they are also the most expensive of all HDTV’s, with attracting
features of being lightweight and thin so they have the advantage of being mounted on
the wall. For a more stylish device, plasma televisions require consumers to pay a
premium for the sets. Since May 2005, Panasonic has reemerged as the leader in Plasma
TV Product Placements, dominating 22.7% of shelf share, while Samsung is in second
place with 17.6% and Sony has fallen third with 15.7% of the North American shelf
share5.
3
http://www.boston.com/business/personaltech/articles/2005/11/20/is_it_time_to_buy_that_50_inch_plasma_TV
http://www.boston.com/business/personaltech/articles/2005/11/20/is_it_time_to_buy_that_50_inch_plasma_TV
5
http://www.boston.com/business/personaltech/articles/2005/11/20/is_it_time_to_buy_that_50_inch_plasma_TV
4
-3-
Advantages/Disadvantages of Buying a Plasma Television
ADVANTAGES OF BUYING A PLASMA
So why go plasma in the first place? Most importantly, because it offers the
newest technology and the transition from analog TV to digital is inevitable in the very
near future. There are a wide selection of plasma features available, including a choice
between HD (high definition) and ED (enhanced definition). Furthermore, within the HD
category there are three TV set types; HD-ready sets, Integrated HDTV sets, and Digital
–Cable – Ready (DCR) sets. There is also a great variety of brands to chose from in the
plasma TV category including Hitachi, Panasonic, Philips, Pioneer, Samsung, Sharp,
Sony, and Toshiba, and prices have dropped sharply for plasma sets over the past year.
The goal of this ultimate HD set is to provide the consumer with a home theater
experience. One of the main benefits of the plasma set is that it is easier to watch.
Specifically, this means that a plasma TV will perform exceedingly well under most
ambient light conditions6. In addition, the flat screens have a 160° viewing angle which
allows you to watch the set from almost anywhere in the room. Plasma technology offers
consumers several options for how their physical set is placed. For example, on a flat
wall mount, tilt wall mount, table stand, ceiling mount, etcetera. Thus, the thin creation
of the plasma offers the consumer a space saving design since they can place the
television almost anywhere in the room they please. The plasma offers a wide, colorful
and smooth picture with evenly lit images. The red, green and blue elements contained in
each pixel in a plasma display, work in conjunction to create 16.77 million colors7, which
is the most accurate color formation produced than it is with any other television
technology. The plasma display technology uses extremely thin materials that produce a
wide screen with high image quality, and are also not affected by magnetic fields. The
6
7
http://www.plasmatvbuyingguide.com/plasmatvreviews/whyplasmatv.html
http://www.plasmatvbuyingguide.com/plasmatvreviews/whyplasmatv.html
-4-
display of the set is also multi-functional. It is a television monitor that is capable of
displaying both regular and HDTV, home video and it is also a computer monitor. Many
consumers who want their television display to act as both a television and a computer
monitor are willing to pay a premium for higher resolution simply because it has a better
display of XGA signals from their computer. As a result, plasma TV’s can be used for
many capacities and currently, manufacturers display that plasma sets will last for 60,000
hours of use before a model will lose half of its brightness. Plasma TV’s are the best in
the market for their excellent performance with overall brightness, color saturation, fastmoving images, and high contrast levels. Please refer to Appendix C for additinoal
information on value creation for producers and users.
DISADVANTAGES OF BUYING A PLASMA TV
Plasma televisions generally run hotter, are vulnerable to screen ‘burn-in’ or
‘ghosting’ and consume more power or electricity than any other type of television. The
“burn-in” effect is when static images remain fixed on the screen since they have
permanently discolored the pixels displaying it, and this can even happen for a short
period of time, such as 30 minutes. In order to reduce the burn-in, it is necessary to
‘wash it out’ and doing so will only reduce the display units overall lifespan.
Furthermore, the long-term reliability and longevity of the plasma sets still remain an
open question since the technology is relatively new. A major drawback of the plasma is
that it requires more power to operate than any other television set. Plasmas are ‘powerhungry devices’ that use a substantial amount of electricity lighting. On a further note,
these devices are the most expensive. Although plasma prices have fallen, they are still
the most expensive TV set on the market, and there is still the uncertainty of their future
in the television production industry. LCD TV’s offer most of the new technology that
plasma sets offer yet they are cheaper and more popular in the Canadian market.
-5-
Average plasma set sales in Canada range between $2,000 and can go as high as $20,000.
Plasma sets do not handle static images very well since “burn-in” effects are still a major
issue with these monitors, as is distortion resulting from lower-resolution panels
displaying static images at expanded sizes8. There may also be some flicker on the
monitors for video images, which greatly depend on the resolution and on the quality of
the unit.
The longevity of plasma displays are still unknown and since slight electric
currents work to stimulate a combination of noble gases, these phosphoric elements fade
over time and these gases can not be replaced. In addition, these gases have a half-life of
25,000 to 30,000 hours, and then these phosphors will glow half as brightly as they use to
until the display keeps growing dimmer with use9.
Competitive Analysis
COMPETITORS- LCD TELEVISIONS
Advantages of LCD TV’s:
Plasma TV’s are the most expensive of HDTV’s, with an average cost greater
than $2,000 per model. LCD televisions are the major competitors of plasma televisions,
which are also light and thin, have competing technologies which offer similar things,
such as crystal-clear, color-filled pictures. LCD TV’s do come with wide screens as large
as 50 inches. They are also only a few inches thick and have the lightweight feature
similar to plasma sets. As a result, these sets can also be wall mounted. In addition, they
are also available in HD, ED and standard-definition (analog) models, and the smallest
models have a price less than $1,000. LCD TV manufacturers claim that these displays
last longer than plasma sets, ranging between 50,000 – 75,000 hours. In effect, there is
8
9
http://www.plasmatvbuyingguide.com/plasmatv/plasmatv-lifespan.html
http://www.plasmatvbuyingguide.com/plasmatv/plasmatv-lifespan.html
-6-
actually nothing to wear out in an LCD monitor as there is on a plasma monitor, since
LCD TV’s will last until their black light does and these bulbs can be replaced. Plasma
displays are the best in the market for moving images, but LCD technology is better at
displaying static images with particular crispness and even coloration10. Moreover, there
are no flicker or screen burn-in effects on LCD monitors. LCD TV’s also require
substantially less power to operate than plasmas do since they use florescent backlighting
to produce images.
Disadvantages of LCD TV’s:
LCD TV’s generally come in smaller screen sizes (20-32 inches) and the larger
sized LCD TV’s are slightly more expensive than comparably sized plasma sets. Picture
quality and viewing angles still have room for improvement for fast motion and deep
black level displays. With the entry of Dell and Gateway in the LCD TV market, this has
caused the price competition to accelerate. Only the best LCD displays have between
130-140 ° viewing angles, which is still less than that offered on plasma units11.
COMPETITORS – PICTURE-TUBE TV’S
Advantages:
These conventional televisions have proven reliability with outstanding
performance, and are still low in price. These tube TV’s do have analog and HD models
and still offer the best picture quality and are the second least-expensive option for
purchasing a TV.
Disadvantages:
10
11
http://www.plasmatvbuyingguide.com/plasmatvreviews/plasma-vs-lcd.html_
http://www.consumerreports.org/cro/electronics-computers/tvs/lcd-tvs/
-7-
The screens are not as wide as plasma sets and range between 13-36 inches12.
One of the major downsides to purchasing a picture tube set is that these televisions are
relatively bulky and heavy.
COMPETITORS – REAR-PROJECTION TELEVISIONS AND CRT(CATHODERAY PICTURE TUBES)
TECHNOLOGY
Advantages:
These sets are the least expensive televisions offered in the market. They also
have the biggest screens with 42-inch for the small sets and 70-plus-inch screens for the
larger sets. CRT technology has been used in rear-projection TV’s for years and has been
quite reliable13. Most rear-projection TV’s are now digital (HD-capable) sets, which can
display superior images. CRT sets have screens of about 13-36 inches and are generally
the cheapest selling televisions for a price under $1,000 and Projection sets do have
screens of 42 inches and greater, but these sets begin at a price of $1,000. On a further
note, since rear-projection sets are floor-standing units, they have an advantage for easier
installation as opposed to wall-mounted plasma sets.
Disadvantages:
These sets are a jumbo type of TV in appearance, and are heavy while taking up a
large amount of spaces. Any pattern left on CRT screen for long periods (such as video
games) can create a burn-in by producing a permanent ghosted image on the screen. Top
picture quality is not available as with plasma TV’s. Projection and CRT television sets
are more bulky in appearance and take up a larger amount of space.
12
13
http://www.consumerreports.org/cro/electronics-computers/tvs/conventional-tube-tvs/
http://www.consumerreports.org/cro/electronics-computers/tvs/projection-tvs/
-8-
How The Marketing Mix Applies to Plasma Televisions
PRODUCT (BRAND STRATEGY)
Plasma Televisions are definitely on the cutting edge of technology, however,
most of their appeal lies mostly in its style rather than its substance. Known as a “thin
TV that can hang on a wall,”14 plasma televisions have become increasingly popular
because of their size and appearance. A plasma television has a half-life of about 30,000
hours. This means that it will lose approximately 50% of its brightness during that time.
Basically, if your Plasma television is on for 8 hours a day, its half-life would be about 9
years - or, if on 4 hours a day, the half-life would be about 18 years. Keep in mind that a
standard television loses about 30% of its brightness after about 20,000 hours.15 Since
this process is very gradual, the consumer isn't aware of this effect, except for the need to
periodically adjust the brightness and contrast controls to compensate. Although the
performance of individual Plasma televisions can vary, overall, as a product class, a
Plasma television can deliver many years of acceptable viewing.
PRICE
A plasma television can either be an Enhanced Definition Television (EDTV) or
an HDTV-ready unit. Currently, most Plasma Televisions priced below $4,00016 are of
the EDTV variety, but there may be exceptions. Of course, this will change as prices
come down for Plasma televisions in the coming year(s). Today a plasma television sells
for an amount within the range of $2,000 - $20,000. A 42’ Panasonic plasma currently
sells from $1,899 - $3,00017, while a 50’ Pioneer plasma currently sells from $4,000 -
14
http://jscms.jrn.columbia.edu/cns/2005-05-03/alderman-plasma
http://hometheater.about.com/cs/television/f/aaplasmafaq2.htm
16
http://hometheater.about.com/cs/television/f/aaplasmafaq5.htm
17
http://about.pricegrabber.com/search_techspecs_full.php/masterid=4177574
15
-9-
$6,00018. The differences in price are associated with the plasma’s size, contrast ratios,
resolutions and whether or not it contains built-in HDTV tuners, compatibles.
PLACE
Plasma televisions are sold in almost every consumer electronics retail store (e.g.
Future Shop, Best Buy) and online – with over 37 websites to choose from (e.g. E-tailer
sites, such as Best Buy and Plasma Depot, to various manufacturer sites, like Sony
Electronics or RCA).
PROMOTION
Mail-in rebates – This type of promotion is very popular in selling plasma televisions.
For example, Pioneer offers a $500 Mail-in Rebate on the purchase of an eligible Pioneer
or Pioneer Elite PureVision Plasma Television.19
Special offers/incentives – Some retailers offer free gifts, (e.g. a wall mount) with the
purchase of a new plasma television. Hitachi offers a FREE Official NFL Jacket with the
logo of your choice by mail with the purchase of any Hitachi Projection TV, Plasma TV,
LCD Home Theatre Projectors or Plasma Displays.20
As well, almost all retailers offer free shipping with the purchase of any plasma
television.
18
http://about.pricegrabber.com/search_getprod.php?masterid=11677784&search=Pioneer+PDP-5060HD
http://www.pioneerelectronics.com/pna/promotion/detail/0,,2076_3147_268359494,00.html
20
http://www.hitachi.ca/Apps/hitachicanada/content.jsp?page=about/promotions/index.html&path=jsp/hcl/hcl/en/
19
- 10 -
Marketing Mix Analyzed
The current marketing frame work of the Plasma television places it in a premium
class of televisions. Compared to all the other technologies of Televisions available in
the market, the Plasma television is the most expensive. Given these characteristics, it
can be said that users will have to associate a greater value for a Plasma TV as they will
be likely to pay a premium for it. Thus the Plasma TV has been segmented into the
premium market. This all fits and this is one of the reasons that the Plasma TV is
currently very respected within the market. Though it has a short lifespan, and though it
is expensive, people continue to buy it and become excited when they walk into a friends
house who has a Plasma. Thus the price premium that is currently charged for Plasma
televisions is definitely a great marketing tactic, as users within the television market
have associated a higher quality perceived with the additional costs.
Consumer Analysis
CUSTOMER SEGMENTATION
Plasma Televisions offer the "hang-on-the-wall" desirability consumers have been
promised since the invention of the television. Plasma television technology also
contributes to its light weight, extremely wide viewing angle, and its ability to provide a
consistently focused, color accurate, and properly proportioned image no matter where on
the screen you are looking. These factors make Plasmas very practical for both home and
commercial use. Therefore the segments identified for plasma televisions are individuals
– those who would purchase a plasma television for their homes (e.g. home theatre) or
their cars and businesses – restaurants, schools, airports, malls, stores, automobile
companies, etc. Another segment might be “videophiles”- Those with an avid interest in
- 11 -
watching television or videos or in making video recordings. This segment would
certainly value a high-quality image.
CUSTOMER ACQUISITION & RETENTION STRATEGY
Generally, plasma televisions are attractive to customers because of their size and
convenience. Traditionally, televisions have operated using cathode ray tubes (CRT) –
producing crisp, vibrant images, but they have a serious drawback: They are bulky. In
order to increase the screen width in a CRT set, you also have to increase the length of
the tube (to give the scanning electron gun room to reach all parts of the screen). This
means that any big-screen CRT television is going to weigh a ton and take up a sizable
chunk of a room. Plasma televisions are a new alternative, offering wide screens,
comparable to the largest CRT sets, but they are only about 6 inches (15 cm) thick21. No
longer does one need to make room for a (traditional boxed shaped) TV, as a plasma
television can be placed conveniently on the wall. In addition, because each pixel is lit
individually, the image is very bright and looks good from almost any angle.
Maxent, a leading provider of value-priced flat-panel display solutions for
consumers, is successfully driving the mainstream adoption of flat panel televisions by
the consumer market through its popular line of affordable high-quality, value-packed,
high performance LCD and plasma televisions. Brian Ballard, VP of Maxent USA says,
“To drive sales and ensure success in this highly-competitive sector, a manufacturer
needs to deliver more than just low price. In addition to strong distribution channels,
we’re seeing a growing amount of our sales being driven by word-of-mouth – by
consumers who are purchasing Maxent products based increasingly upon its reputation
for value, performance and reliability.”22
21
22
http://www.plasmatvbuyingguide.com/plasmatv/plasmatv-edtv.html
http://www.maxentusa.com/_coreModules/content/contentDisplay.aspx?contentID=11
- 12 -
CUSTOMER CO-PRODUCTION
In terms of co-production, in order to use a plasma television to its full potential
one must find a place to hang it or provide a stand where it can be placed. One also
needs input sources, such as DVD, VCR, video game console, antenna, satellite or a
cable box and a service provider. Although some plasmas have an internal sound system,
one might consider investing in an additional sound system (connecting the plasma to a
home theatre receiver) for optimum home theatre enjoyment. As well, customers would
need connection cable to connect the plasma television with the other components.
Another main reaosn for customer co-production would be the idea that the customer, in
order to fully enjoy the Plasma TV, will be required to invest in appropriate technological
compliments, such as the proper wires that allow for high definition plasma television, as
well as an HDTV box to get clearer cable broadcasting.
CUSTOMIZATION
The arrival of the plasma television into the high-tech market has allowed for
greater customization of households everywhere. Along with selecting the best size and
speaker system to go with your plasma, some companies offer to optimize your plasma
display for the specific room it’s in, “To further customize your viewing experience, the
Elite-exclusive ISF C3 feature allows your plasma display to be optimized for the
specific rooms it's in. As an optional service available through your Elite dealer, an ISF
professional can calibrate your Elite display using ISF's exclusive C3 adjustment
procedure for optimum viewing in all kinds of viewing situations. Once these calibrations
are made, ISF becomes a selectable AV mode.”23 Another way to customize your plasma
is through selecting the frame that will envelop the plasma television. Panasonic will
begin offering eight different styles of frames (available in gold, black, pewter,
23
http://www.pioneerelectronics.com/pna/article/0,,2076_4121_183756070,00.html
- 13 -
mahogany, walnut, and antique white finishes) for select 42-inch and 50-inch plasma
TVs.24
CUSTOMER SEGMENTATION
Plasma Televisions offer the "hang-on-the-wall" desirability consumers have been
promised since the invention of the television.
Plasma television technology also
contributes to its light weight, extremely wide viewing angle, and its ability to provide a
consistently focused, color accurate, and properly proportioned image no matter where on
the screen you are looking. These factors make Plasmas very practical for both home and
commercial use.
Currently the predominant market segment for plasma televisions is the individual
consumer mass market segment. This segment consists of those who would purchase a
plasma television for their homes (e.g. to build a home theatre). This segment would
value the lightweight feature of a plasma, as well as the fact that it can be mounted on a
wall (saving space). The plasma, however, is still fairly expensive and not typically
affordable for the greater mass market. Another segment for the plasma television is
businesses. Businesses have both the money and need for such a device. Since the
plasma can be connected to one’s computer, there is great potential for the plasma
television in the business world. Businesses would surely benefit from the added features
and flexibility plasma has to offer. From its attractive (on wall) display to its touch
screen functions, plasmas would affect the way presentations are done and the way in
which meetings are conducted. The Sports & Entertainment Industry is another potential
market segment that would value greatly from the plasma television. Since one of the
greatest strengths of plasma is its ability to display fast moving images accurately and of
premium quality, plasma televisions could be used at all sporting events and concert
venues. Taking the place of jumbo screens, plasmas would offer the best quality image,
which would be viewable from any seat in the stadium/concert venue. Plasma would be
affordable to both (businesses and the sports & entertainment industry) segments and
would allow them to provide the best image quality in technology. The travel industry –
24
http://www.hometheatermag.com/news/100705panasonic/
- 14 -
airplanes and automobile companies, is another potential market segment for plasma.
Plasma’s light-weight and size is an attractive feature to these potential markets,
however, it’s lack of operational capability at high altitudes make this market not so
attractive. At altitudes of 6,500 degrees plasma’s dependence on gases and its reaction to
motion cause the technology to make buzzing noises. This is an area that plasma
televisions will have to work on improving before such market segments can be targeted.
What’s New for Plasma TV’s?
Panasonic’s 65-inchVIERA TH-65PV500 plasma HDTV now accepts SC cards
for recording video in MPEG4 format. Panasonic’s strategy of continuous innovation on
the VIERA line through its touch-screen frame to SD cards, now offers consumers an
unusual feature which is the ability to record TV directly to SC cards. This allows
consumers the opportunity to playback recordings on the TV or on portable video players
which support this format. This product is currently only available in the European
market and sells for around €10,000 EUR.
By using technology originally created for medical, industrial, and military
applications, Belkin has launched a powerful new cable that has a chip built into its
structure that significantly enhances the image being pumped to a Plasma TV*. This new
RazorVision cable has video enhancement to upgrade the picture quality for your digital
television according to your viewing preference. This new feature currently is selling for
$499.00.
In the future of televisions and Plasma Televisions, there are already major
developments being seen. Plasma television producers are currently testing the user of a
Diamond that will help project the colours for the display. Diamonds are able to project a
large variety of colours and are still in the test phase, it has been said that this type of
Plasma television could be in production by 2009 or 2010. Further, Panasonic is
currently developing a TV that allows individuals who are viewing the TV from three
- 15 -
different angles, to see three different images on the TV. This kind of technology would
allow different users to enjoy different programs and shows at the same time. This would
be a marketers heaven, being both amazing and create problems.
Market Analysis
THE USER IS KEY
The user is often the most important person that any marketer is concerned with.
Within the high-tech marketing environment, the user becomes more important, because
as technology changes day by day, marketers rely on the users to remain loyal and
continue to make purchases. A perfect example would be the iPod, users who already
have the Mini, how could iPod convince these users to invest in a Nano, the idea is
simple for iPod, their design differentiates them and creates a unique desire amongst
consumers. Given this information, it could be possible for Plasma Television producers
to take a similar route, and this route would include have a design that is like no other.
That being, non of the competiting technologies could live up to the design of the Plasma
Television. It could be said that the Plasma TV only has the LCD TV to worry about
with regards to design as it is the only other television that is flat screen and can be
mounted on a wall. Now, Plasma would like to differentiate itself form the LCD TV, and
like iPod, all that it needs to do, if this were to be its strategy, would be to design its
television so that the design itself becomes a unique value for the consumer.
As a result, the consumer is key and responding to consumer needs is very much
so necessary. Plasma television could re-frame the design of their product by enhancing
the quality of the casing of the product. Thus, though it would become a little more
expensive to purchase a Plasma, most users who have the money to purchase a television
- 16 -
of this calibre, would pay the little extra money for the slique casing and design so that it
would compliment the decor of their homes.
Another thing that Plasma producers could do would be to either start or create a
contract with an external producer to help further customize the product for the users.
This would again be a similar strategy to that of the iPod, where iPod uses
GriffinTechnology and Belkin to produce attachments for their products, Plasma
television producers could have a company that allow for casing and design
enhancements that allow users to choose the box or casing of their product. This could
potentially even start a trend, just like a person goes and shops for a sofa, people could go
and shop for casing for their new plasma televisions. Thus this customization would
become a design bonus and would help increase the value that consumer would perceive
when deciding to invest in a television.
PROBLEMS FACED
One of the main problems that Plasma televisions faced in the early going with
regards to sales was the life of their product. Unfortunately, consumers are more aware
of the idea that Plasma televisions have a limited life, than any of the other television
technology. This may be because Plasma televisions have, arguably the shortest lifespan
between it and all its competitors; but this issue needs to be resolved. This issue can be
resolved by educating the consumer, and educating the user of the major benefits of a
plasma telesion as well as the idea that all televisions have a limited lifespan (which is
true). Further, Plasma televisions could potentially even revoluntionalize the television
market by changing consumer perceptions. Currently, most television purchasers buy
televisions for a long-term and invest in one TV that will last them a long time. If Plasma
TV producers can manager consumer perceptions, they could potentially change
consumer trends into purchasing a TV every few years (one to three years). This change
- 17 -
in consumer perception and buying trends would increase the amount of televisions that
would be sold. Further it would rule out any problem when selling plasma televisions
that their lifespan was too short.
Plasma Television producers could go about changing the product life cycle of
televisions by decreasing prices (which is already happening) so that users did not feel
that every purchase was a serious investment. Futher, Plasma Television producers could
promote the idea of impulse buying by creating new sales agreements between users and
producers. These new sales agreements could include leasing or financing televisions so
that users who could not afford to pay a lump sum on a television would be able to pay
for a television over a few years.
Conclusions, Recommendations, & Long-Term Strategy
The Plasma television has entered the market of televisions, given its slique and
innovative design, and it definitely commands viewers attentions. However, though it
may have many benefits, in the early going it was known that Plasma televisions have a
limited lifespan and this turned off many users. Given high prices that started ta well
over the competing technology, sometimes twice the price (in the early going), users did
not understand why they would invest in such a television when it was destined to have a
short lifespan. Given this information and knowledge of this power, it is the job of the
Plasma television producers to manage the competitive environments perceptions. It is
already known amongst the public that Plasma televisions are a premium television
technology that is currently the cream of the crop. However, the problem was recently
that only the big spenders and upper-class could afford plasma televisions as the lowerto-mid class was not willing to invest in a product with a limited lifespan. Thus it would
become important to manage user perceptions by providing them with information, and
enlightening them with knowledge that all televisions have a limited life span and all
- 18 -
television technologies loose quality and brightness over there lifespan. Thus it would be
important to educate the users of this information and thus manage perceptions so that
Plasma televisions could make a stake within the television market. Please refer to
Appendix A for a SWOT analysis indicating some of the key strengths and weaknesses
that the Plasma currently faces.
The Plasma TV is no longer in the beginning stage of its product life cycle.
Research has indicated that product costs are beginning to fall significant, falling a little
over $1000 in 2004 (on average). Further, viewing the competitive environment, it can
be seen that there are a lot of players, and not just the few big players that have always
dominated television sales, but a lot of smaller players as well. Smaller players have
been given the opportunity to enter this market because of the increasing competition and
the high prices that big players once charged (Big players include Sony and Samsung).
Given this competitive environment of a lot of producers and decreasing prices, it would
be safe to assume that Plasma Televisions are currently within there maturity stage. This
information could be used effectively to arrive a recommendation that would suggest that
each producer is now looking to differentiate itself. As stated before, the iPod design
methodology of marketing should be followed, so a producer that wishes to take over the
market would be advised to design the Plasma television in a unique and innovative
manner. The reason for this is because a Plasma TV is no longer simply a
communication device or a entertainment system, but is now also part of the decor of a
room.
The reason for this new angle on marketing the Plasma is that, the Plasma is
currently known as the cream of the crop, but at the same time users do not exactly
understand what they are paying more money for. They do not really understand where
the additional value is coming from. Thus again, by taking a new approach on innovative
designs, the users would see a definite benefit or increase in value. This would move the
- 19 -
Plasma away from its current marketing strategy, that being that it is simply marketed
like any other television technology that current exists.
Maxtent, a new producer of Plasma TVs, focuses on low prices and having the
most amount of distribution channels as possible. Thus there strategy, as it can be seen,
is like any other television technology. Unfortunately, for Plasma’s to take a large stake
within it’s competitive environment, a producer will have to increase the value for the
consumers. Word-of-mouth and regular sales tactics may work, but as a marketer, it
would be important to differentiate your product.
Panasonic, a plasma TV producer, has already begun differentiating its product
design. Panasonic has allowed for many different styles on its casing, one model
allowing for 8 unique styles including a variety of colours.
It would be advised that the long-term strategy of televisions would be that they
reduce the product life cycle of the television, increasing the amount of purchases that are
made. This would be in congruence with the decreasing prices within the industry as
well as the increased competition. Finally, this would be wise given that television
technology is continually becoming both enhanced and innovative. Further, people
would be happy with making purchases based on design, rather than the technology, thus
increasing sales even though the technology is constantly changing.
Thus it would be recommended that as the television has become apart of a
home’s decor, that the design be focused on. This model, being so popular and effective,
with the iPod, along with falling Plasma prices could help Plasma sales explode.
- 20 -
Appendices
APPENDIX A – SWOT ANALYSIS
Internal Analysis



Strengths
Very slique design
Very innovative technology
Currently known within the market as
being the best


Weaknesses
When compared to LCD screens, users
get confused on the main benefits of
plasma’s
Has a limited life and cannot be fixed
(unlike it’s main substitute LCD)
External Analysis

Opportunities
To become a leader in sales within the
TV market (beating LCD and CRT
sales)

- 21 -
Threats
Marketing of product features (such as
length of life – 30,000 hours) must be
managed in order to better shape
consumer perceptions
APPENDICES B – NETWORK MODEL
User Network
- consumers who watch TV or
use their plasma monitor for
computer usage
- these consumers enjoy a
digital television experience
with state-of-the-art
technology
Plasma
Television
Compliment
Network
Producer
Network
TV Tuner, cable, broadcasting
networks, computers, SD card
producers, fluorescent light
and electrical companies
Companies in television
production and manufacturing
industry; Panasonic, Sony,
Samsung etc. whom produce
both plasma and LCD TV’s.
All three networks add value to the focal product since they all essentially depend on
each other. The value created by the networks of these products help to increase
profitability, increase market share, increase life cycle time, and enhance customer
relationships.
- 22 -
APPENDIX C – VALUE CREATION
Value to Consumers
 small size (thin) and can be placed on a wall
 higher quality images (high definition, advanced video processing – superior
picture quality)
 light weight, extremely wide viewing angle, and its ability to provide a
consistently focused, color accurate, and properly proportioned image no matter
where on the screen you are looking
 enhanced entertainment experience in the comfort of home
Value to Producers
 save on storage space
 tested quality performance and durability – less returns, warranty costs
 more opportunities for customization, additional revenue streams
 partnerships with service providers for maximum service and profits
 operators and programmers build consumer loyalty by providing the best product
available
- 23 -
APPENDIX D – HISTORY OF THE TELEVISION
Brief Historical Timeline of Television and its Complements
1873
Scientist, James Clerk Maxwell, predicted the creation of a unit that would allow electromagnetic
waves to be transmitted.
1900-1910 The idea of transmitting pictures was developed and understood.
1927
Philo T. Farnsworth and Vladimir K. Zworykin experimented with creating a television and
commenced the progression of the first Television.
1932
RCA transmitted 120-line pictures.
1935
RCA transmitted 343-line image.
1935
Television began to be broadcasted.
1936
First television sets were offered for sale in the England.
1938
First television sets were offered for sale in the U.S.
1939
First known television broacasting standards set in U.S. (by FCC)
1941
First regularly scheduled television program started by RCA.
1960s
Introduction of the colour television.
The progression of television technology has been complemented by better sound technology, better
broadcasting signals, bigger televisions, and clearer screens.
25
25
Marc, David. “Broadcasting, Radio and Television.” Microsoft Encarta Online Encyclopedia 2005.
<http://encarta.msn.com> Microsoft Corporation (6 November 2005).
- 24 -
Works Cited
Alderman, Jess. “Is that blood in my plasma TV?” Columbia News Service.
<http://jscms.jrn.columbia.edu/cns/2005-05-03/alderman-plasma>
Bloomberg .“Matsushita 2nd Quarter Profit Gains on Plasma TV”. October 28th, 2005.
<http://www.bloomberg.com/apps/news?pid=10000087&sid=aRpw9kBfcbXI&re
fer=top>
Burden, Jack. “What is EDTV Resolution?” December 7, 2004.
<http://www.plasmatvbuyingguide.com/plasmatv/plasmatv-edtv.html>
Buying Advice: LCD TV’s. Copyright 2005 Consumers Union of U.S. Inc.
<http://www.consumerreports.org/cro/electronics-computers/tvs/lcd-tvs/>
Buying Advice: Picture-tube TVs. Copyright 2005 Consumers Union of U.S. Inc.
<http://www.consumerreports.org/cro/electronics-computers/tvs/conventionaltube-tvs/>
Buying Advice: Plasma TV’s. Copyright 2005 Consumers Union of U.S.Inc.
<http://www.consumerreports.org/cro/electronics-computers/tvs/plasma-tvs/>
Buying Advice: Rear-Projection TVs. Copyright 2005 Consumers Union of U.S. Inc.
<http://www.consumerreports.org/cro/electronics-computers/tvs/projection-tvs/>
Conner, Phil. “Plasma vs. LCD TV”. March 6th, 2004. Copyright 2004
PlasmaTVBuyingGuide.com.
<http://www.plasmatvbuyingguide.com/plasmatvreviews/plasma-vs-lcd.html>
Conner, Phil. “Why Plasma is Better”. November 10th, 2001. Copyright 2001
PlasmaTVBuyingGuide.com.
<http://www.plasmatvbuyingguide.com/plasmatvreviews/whyplasmatv.html>
Hutchinson, Jamie. “The History of Plasma Displays”. Copyright 2005 Plasma TV
Science. <http://www.plasmatvscience.org/plasmatv-history4.html>
Mak, Susan. “Maxtent 26-inch LCD Television Ranked Among Industry’s Top Five Best
Sellers.” June 6, 2005.
<http://www.maxentusa.com/_coreModules/content/contentDisplay.aspx?contentI
D=11>
Marc, David. “Broadcasting, Radio and Television.” Microsoft Encarta Online
Encyclopedia 2005. <http://encarta.msn.com> Microsoft Corporation (6
November 2005).
- 25 -
Parks Associates. “Digital Home Entertainment Ecosystems.” 2005.
<http://www.dslforum.org/latestnews/DigitalHomeEntertainmentEcosystems.pdf
>
Part One: “Why go plasma?” Plasma TV Science
<http://www.plasmatvscience.org/buyersguide.html>
Philips. “LCD vs. Plasma TVs.” September 3, 2004.
<http://forum.ecoustics.com/bbs/messages/34579/94117.html>
Reed, Keith & Staff, Gold. “Is it time to buy that 50-inch plasma TV?” November 20th,
2005. Copyright 2005 The New York Times Company.
<http://www.boston.com/business/personaltech/articles/2005/11/20/is_it_time_to
_buy_that_50_inch_plasma_TV>
Richards, David. “Dramatically Improve your LCD or Plasma TV Image”. November 9,
2005. <http://www.smarthouse.com.au.Entertainment?>
Wiley, Robert. “How Long Do Plasma TVs Last?”. October 6th, 2005. Copyright 2002
PlasmaTVBuyingGuide.com.
<http://www.plasmatvbuyingguide.com/plasmatv/plasmatv-lifespan.html>
- 26 -