CHICAGO — If the manufacturer's digital strategy is successful, "Next year we will begin to be known as 'Your son's Zenith, not your grandfather's," said Sam Caputo, Zenith's advertising director, in echoing the message of its executive team to select retailers at its product line preview last week.
Zenith's presentation to almost 80 invited dealers was more than a preview of its heavily digital, upscale 2001 line, but rather an overhaul of the brand, which became a subsidiary of LG Electronics in 1999, after the South Korean manufacturer purchased a majority stake in 1995.
Zenith's strategy to re-establish the venerable brand in the minds of today's consumer as a high technology manufacturer goes across the board. Among the highlights are:
A digital dominated line that moves away from promotional analog merchandise. (For details, see p. 10.) Among the highlights of the 2001 line are: an HDTV product line that includes plasma, LCD direct-view and rear-projection, CRT and DLP front projection, direct-view 4:3 sets; an ATSC/DirecTV/NTSC set-top box; progressive scan, multi-disk and LCD portable DVD; audio CD recorder; and MP3 player.
A $30 million consumer advertising program, to break in July with emphasis in the fourth quarter, consisting of broadcast and cable TV, consumer print magazines and the Internet;
A select and limited distribution plan, which was announced earlier this year, to those retailers who can "sell up" on the sales floor, using Crosley Distribution Centers for two-step distribution and selling around 100 to 125 dealers direct on a regional basis.
Zenith CEO T.J. Lee and the rest of his management team walked a fine line in their remarks to dealers, acknowledging both his company's innovations over the years and its more recent hard times. "More than 80 percent of U.S. consumers know the name Zenith. Virtually no other brand in our business, except for maybe RCA or Sony, enjoys that level of consumer brand recognition."
But he noted that while the Zenith name has "lost some of its original luster in recent years … there is no question that the Zenith brand is a very valuable asset. We intend to build on that as we strive to become the digital leader."
He reminded his audience that Zenith "is the inventor of 8-VSB transmission technology," which was "reaffirmed once and for all this January by broadcasters and the FCC." He added that parent LG Electronics sees the company as a "powerful brand name" with "technology leadership of digital TV, which is at the center of the digital revolution in the largest market in the world."
One of the chief architects of Zenith's new strategy is senior VP Wayne Park. In his remarks he stressed that Zenith's "new digital direction is not a quick fix or a hasty detour for survival," which seemed to answer some industry critics who felt that LG's commitment to Zenith might be wavering. Park said he has been involved in developing the digital plan for the past three years "bringing together the core competencies that LG and Zenith have individually to create a single, powerful innovative force and a unique value in the industry."
Park noted that consumers, retailers and technology are changing. "Most importantly, Zenith is changing … thinking differently, acting differently, working differently and seeking partners like you … who will help us and who we will help."
VP sales Rick Powers defined the Zenith makeover as "Digital DNA" meaning a "Digital Network Approach," transforming the brand "back into an elite consumer brand through a tightly focused channel approach." He added that Zenith is also committed to revamping its training network, service program, customer service and "strategic and limited distribution to maximize profitability."
On that last point Lee told TWICE that Zenith is still selling members of a variety of buying groups but that the company "avoided buying group programs" because they were unprofitable for the manufacturer. Lee said Zenith is trying to attract "PARA and CEDIA-type dealers," among others.
And concerning Zenith's $30 million advertising program, Caputo introduced himself as advertising director with some self-depricating remarks. "For years [his position] seemed to be comprised of more hope than reality." Why? "The company hasn't mounted a serious national advertising program in almost two decades."
What resulted was that the Zenith brand name "still has brand recognition, but its viewed as an old brand, out of touch and behind the times … viewed primarily as an analog player driven on price." Caputo added that the campaign will target two key groups: "Mouse Potatoes" (25- to 34-years old, early new technology adopters, less family-oriented) and "Fast Forwards" (35- to 44-years old, more affluent, like new technology).