[Abstract]
Flat screen TV market began its growth with the introduction of projection TV¡¯s in the year 2000. By 2004, the PDP TV market began taking off while the sales of LCD TV¡¯s began to pick up only by 2006 due to its higher price.
With a nickname of the ¡®Time Machine TV¡¯, the first flat screen TV¡¯s with the HDR(Hard Disk Recorder) function was first introduced by LG Electronics in 2005. By the first quarter of 2006, 56% of all large screen(over 40¡±) Xcanvas br TV¡¯s sold were Time Machine TV¡¯s. With such results, Time Machine TV line was quickly becoming the core product line of LG Electronics¡¯ TV division.
In order to allocate their marketing expenditures more effectively, the Marketing Team identified 5 customer segments out of which they decided to target the ¡°entertainment function seeker¡± segment as their primary target the ¡°aesthetics seeker¡± segment as their secondary target. Based on this targeting strategy, LG then designed an appropriate positioning strategy consisting of pricing distribution strategies that were consistent with the Time Machine concept.
While the Time Machine TV was the flagship model supporting the Xcanvas br name, LG was still experiencing low br awareness. Samsung had adopted the ¡°PAVV¡± br name when they were introducing the 42-inch projection TV in 1998. On the other h, LG¡¯s Xcanvas br name was introduced 1.8 years later. With such a time lag compared to PAVV, LG decided to compensate the low awareness by utilizing the 2006 World Cup in Germany. They invested heavily on advertising with the message that consumers needed Xcanvas to really enjoy the World Cup games in high definition clarity. In the process they created the new word, ¡°Xcanvas-hada¡± that successfully caught the attention of the market. By the end of 2006, amidst the fierce competition with Samsung¡¯s PAVV, the relative market share had narrowed to 51£º49 for PDP TV¡¯s 49£º51 for LCD TV¡¯s.
Compared to PAVV, the Xcanvas br currently emphasizes performance/function more than design. Furthermore, while PAVV portrays a traditional luxury image, Xcanvas is more young modern. It is priced above PAVV picture quality is evaluated by the market as being similar. Under these circumstances, the managers of Xcanvas are contemplating on how the positioning concept must evolve in the future, what should be their competitive advantage, how the competition can be kept at bay.