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Zenith Adds LG As `Premium’ CE Brand

Lincolnshire, Ill. – Zenith Electronics said it is preparing to again establish a premium brand for upscale consumer electronics products – this time under the LG logo of its corporate parent.

In 1996 Zenith briefly tried to build the Inteq moniker as a separate premium digital brand for televisions and CE components. The current move with LG is to establish it as a high-end name ‘to better meet the diverse needs of its retail partners and achieve significant marketing synergies with its parent company.’

Zenith said it will introduce the first LG products in the second half. These will include plasma displays, LCD TVs and digital set-top boxes.

The additions are expected to give the company ‘even more flexibility to meet the varied feature and pricing needs of our customers,’ said T.J. Lee, Zenith CEO.

Lee said he believes the LG brand will succeed where Zenith’s Inteq and Thomson’s ProScan brands failed, because the LG trademark ‘already has a huge global footprint and initial success in cellphones and digital appliances in the U.S.’

Lee added he is not concerned with any lingering associations with LG’s formerly unsuccessful and highly promotional GoldStar brand, because the company has since transformed into a digital technology leader with a strong reputation.

He pointed out 20 million Americans will be carrying high-tech LG mobile phones by the end of 2003, and ‘that’s a great base to build on.’

The company said it will continue to support the Zenith brand with ongoing marketing programs, while adding ‘strategic advertising’ initiatives to introduce the LG line.

Lee said by adding the brand, both Zenith and LG will be able to leverage the advertising brand awareness programs and global marketing campaigns of sister companies.

‘We will maximize the value of both brands,’ Lee said. LG invested heavily to acquire and rebuild the Zenith brand, which continues to achieve success in the U.S. market. ‘We plan to continue to leverage Zenith’s special pedigree in the industry as the primary developer of the HDTV broadcast standard while capitalizing on LG’s worldwide leadership position in digital displays and other digital products,’ he said.

The company said it will seek to broaden distribution of Zenith digital products while offering LG-brand products to selected retail partners.

Beginning in early April, Zenith will meet with current and prospective retail partners to determine which will carry the LG line in the fall, Lee said. He added that distributors such as Crosley, which now works with Zenith, will also be consulted at that time. However, distributors will likely continue to carry primarily mid-range products under the Zenith line, he said.

Zenith also plans to market LG-branded products to its commercial customers, such as the lodging, education, health care, industrial and custom-installation channels.

Zenith, which has been a wholly owned subsidiary of LG since 1999, has been successfully repositioned as a digital company, said Lee, who added that digital products comprise more than 90 percent of Zenith’s 2003 product line.

‘With success comes new challenges, like how to grow and bring new products to market more quickly. While most 2003 digital products will continue to be marketed under the Zenith name, the premium LG brand will help us meet these goals and address increasingly diverse customer needs. And LG is the natural choice, especially considering the marketing synergies with LG mobile phones and digital appliances.’

‘Based on our successful digital transformation, Zenith believes that this is the right time to introduce a premium brand to further enhance our role as a digital leader. At the same time, this fits perfectly with LG’s global strategy,’ said Lee, who also serves as CEO of LGE-US, LG’s North American operations.

The move comes as part of a corporate goal to become No. 1 in the world in its core, strategic business areas of digital TV, displays and mobile phones, Lee explained.

‘The U.S. represents the world’s largest market for digital products. Introducing LG-brand video products in the U.S. builds on the progress that Zenith has made with its digital strategy and allows us to capitalize on marketing synergies with other high-tech LG products,’ Lee said.