How would you market the new all-in-ones?

Samsung Electronics introduced its latest gadget - the Home Media Centre - at the Consumer Electronics Show (CES) in Las Vegas in January. Due to launch in the next 12 months, the device promises to make your life easier by storing and routing video, voice and Internet content throughout your home, allowing one person to watch a movie in one room while another surfs the Internet elsewhere and a third looks at e-mailed photos on a portable display. All communicate through a single computer, using new technology from Microsoft.

Samsung Electronics introduced its latest gadget – the Home Media Centre – at the Consumer Electronics Show (CES) in Las Vegas in January. Due to launch in the next 12 months, the device promises to make your life easier by storing and routing video, voice and Internet content throughout your home, allowing one person to watch a movie in one room while another surfs the Internet elsewhere and a third looks at e-mailed photos on a portable display. All communicate through a single computer, using new technology from Microsoft.

Microsoft’s two new projects, code-named Mira and Freestyle, aim to transform the PC into a tool for accessing information from any part of the home, without the need to be sitting at a keyboard.

Similarly, the Moxi Media Centre, created by the California start-up, Moxi Digital (formerly Rearden Steel) comprises a DVD drive, digital video recorder, music jukebox and computer networking hub, allowing all your home entertainment desires to be fulfilled through a single device.

Never one to lag behind, Sony is preparing to turn its PlayStation2 game console into a home entertainment gateway. An online gaming service coming into play for PS2 later this year will provide access to America Online as well as to music and video. Sony also promises an external hard drive that would plug into PS2, potentially enabling it to morph into a digital video recorder and digital music jukebox.

John Kelly, home computing manager at Mississauga-based Hewlett-Packard Canada believes that the trend towards converging consumer IT and consumer electronics products is destined to grow and grow.

‘Because of the high level of PC penetration in Canada and the high level of education and comfort with technology, people are looking at PCs and wanting to get more out of them to improve their quality of life,’ he says.

Broadband growth and Internet penetration are the key drivers in this convergence, according to Kelly, together with the fact that vendors are increasingly making technology easier to use and understand.

In terms of Hewlett-Packard’s marketing strategies for its own hi-tech devices, including its line of Pavilion home entertainment PCs, education about the technology is still the main focus, Kelly says, although the emphasis has shifted in recent months from a tech-savvy niche to the mainstream consumer, with an increased use of TV and print ads.

‘There is a big growth area among the average consumer as technology continues to become easier to use. We believe the PC will remain the hub of home entertainment,’ says Kelly.

The possibilities are endless. How can a marketer persuade an already well-equipped household to dispose of its TV sets, video, DVD player and computer, to put its trust into one compact – but undoubtedly costly – machine, which is equipped to carry out all the home-entertainment functions you could possibly desire? And who is the ideal target demographic? Strategy polled three industry pundits to find out.

Michelle Warren

IT analyst

Evans Research, Toronto

Michelle Warren proposes two distinct product lines – one lower-priced entry-level product targeted at the space-conscious consumer, and one higher-end product range for the corporate environment – each requiring a distinct marketing plan. First and foremost, she recommends educating the public.

‘There are a lot of negative connotations around these types of products. Because they are so expensive, consumers fear that if one element of the system breaks, the whole thing will be rendered worthless and that is actually not the case.

‘This fear needs to be addressed with some sort of campaign to educate the public about the benefits of this technology, probably using billboards, Web sites and TV spots. Perhaps a White Paper to highlight the benefits of this product line could be incorporated with a PR push to get product reviews in the press.

‘One selling point of these products is that they are space-savers, so they should really be pushed at consumers for whom space is an issue. The 17- to-24 age bracket is the ideal group as they are tech-savvy early adopters, who are often going off to college or university and sleeping in dorm rooms without much space, or else they are starting a first job and purchasing a first condo. Chances are they will be buying a stereo, TV and DVD player at some point, so why not target them with an all-in-one? I would suggest an ad featuring a young man or woman in a small loft apartment, perhaps in print form, around university and college campuses.

‘You could be really creative in showcasing a product like this. I would also suggest running cash incentives with distributors and retailers, to keep these products at the forefront of their minds.’

For the higher-end corporate products, Warren suggests selling via resellers, with a specific push towards professional groups such as legal, political and medical.

‘These are the groups who do a lot of video conferencing and would benefit from this sort of technology in the workplace. Targeted print ads could be used in medical and legal journals, for example. The important thing to remember is that this is a niche product so it has to be marketed towards a niche audience.’

Once price points begin to decrease and consumer awareness increases over time, Warren advises gradually moving towards a mainstream marketplace.

Max Valiquette

Youth marketing consultant

Youthography, Toronto

From the youth marketing perspective, Max Valiquette feels that the manufacturers need to focus on trial and demonstration days, and add additional features to attract young consumers. He also believes that the computer should be the central feature of the system, rather than the TV.

‘This battle will be pretty much like pushing water up a hill. I would recommend some sort of lifestyle-based advertising, together with a heavy trial and sampling program. Load up the vans and really push them on university campuses, to show young people how they work.

‘These products have the potential to make the TV the hub of the entertainment system, which doesn’t really fit well with young people today. If they miss a program on TV they are more likely to download a digital copy than worry about videoing it.

‘I also think this might be an area of exploration for computer manufacturers. All computers are coming with a great-looking small, flat screen that fits well in a student’s room, so why bother with a TV to begin with? The idea is you’re going to need a computer for your studies anyway, so my thought is that a decent computer with a flat screen fits better into a young person’s lifestyle. In many homes now the young person’s bedroom is the convergence center of technology and entertainment. They are looking for all these items to come together in a computer rather than a TV.

‘One of the problems with these devices is that a lot of them don’t do enough. Say the things retail at $800 to $900, you’ve got to be thinking, as a young person, that you could get a not-quite-so-good TV and also get a PlayStation for the same price. I worry that anything that allows them to compare this experience to another experience is going to fall somewhat flat. Why not just buy a TV that stands alone and then buy a DVD/CD player? Even mid-range computers these days have DVD systems built in, and if not it’s only an extra $100 to get it installed, and then you can watch DVDs off the computer screen.’

Marc Stoiber

VP, executive creative director

Grey Worldwide, Toronto

In Marc Stoiber’s opinion, home entertainment systems fall into the domain of ‘boy toys’ and should be marketed as such with a strong emphasis on the young male consumer, through product demonstrations and targeted advertising.

‘Boys love fiddling with gadgets and anything with flashing lights, so you really have to push features such as the power and thrill factor.

‘We have seen an evolution in other areas such as the mini-system. Home stereos used to be like home entertainment systems now, with lots of flashing lights, knobs and gadgets to appeal to men. Marketing was accented on design and simplicity, and that really worked.

‘I don’t think it will be difficult to sell these systems providing you show off the special features and power to the male demo. I would suggest advertising in men’s magazines. Men are always going to be interested in buying the latest gadget regardless of whether or not they really need it, just because it is there. Most people have had VHS players for years, but as soon as DVD players hit the shelves, everyone was out buying them and it will be the same for the new home entertainment systems.

‘I believe that the best way to sell a system like this is through live demonstrations. If I go into a Future Shop or an electronics store and see them playing a new system, it makes me want to pull my Visa card out on the spot. No amount of print or TV advertising can have that effect.’