Hot on the heels of the DVD revolution, the high-end digital TVs that make that format look so great are strutting into thousands of Canadian homes like models down a runway. Now a variety of well-known marketers, from Samsung to LG, are gearing up to take advantage of the fact consumers are ready to shell out big bucks for the big-screen experience.

According to data provided by Consumer Electronics Marketers of Canada (CEMC), projection TVs and flat-panel TVs (which include LCD and plasma screens) are seeing huge year-over-year gains, although the aggregate numbers are still small. Flat-panel unit sales, for example, are up 170% in 2003 over 2002. Projection TV sales are up 9% for the same period. This compares with traditional colour TVs, which are down 1.4% and have fallen for the first time since 1997.

The future looks bright, too. According to the CEMC, sales of projection TVs and flat panels are expected to grow 3% and 100% respectively in 2004.

Furthermore, according to an April 2003 Ipsos-Reid survey done for Samsung, 39% of Canadians cite image quality as the most important factor they consider when purchasing a TV, well ahead of price (21%) and brand name (11%). And 72% of Canadians say they would buy an HDTV over a standard television.

According to marketers, the arrival of digital content in the form of DVDs and digital (HD) TV has been of incalculable value in driving sales of TVs. After all, what good are movie-quality visuals and sound if you haven’t got the equipment to show it off?

Toronto-based Samsung is trying to capitalize on this trend. Pat Button, VP sales and marketing, says the electronics giant is shifting its resources away from traditional analogue CRT TVs to focus on digital models. For its new line of DLP rear-projection TVs, the company is pursuing a strategy of educating the consumer. There are two marketing elements to this. One is that each DLP TV is being sold bundled with a high definition (HD) DVD player that transmits digitally to the TV. This is designed to produce better image quality than with standard DVD players.

‘Our positioning is that we have the best picture quality hands down. In Canada part of our challenge at retail is that if [the TV] is not marketed with something that provides this picture quality, you aren’t going to be able to do a proper comparison [between brands],’ explains Button. ‘So our strategy to compete against Sony or Panasonic is to make sure that it’s bundled 100% [with the DVD player] and not leave it at the retailer’s discretion.’

The second element, also a retail effort, is directed at educating the consumer. ‘You message at the floor much differently,’ says Button, referring to P-O-S material affixed to the sides of each TV that provides information about picture quality improvements, the upgraded connectors at the back of the set, as well as information about the DVD player promotion.

To back this up, Samsung is currently running an outdoor and print campaign by in-house agency Cheil Communications with ads in such publications as Maclean’s. One of the ads shows a man holding up the DVD player at a closed-down drive-in to illustrate the technology conversion that’s taking place in the market. The tagline reads: ‘You converted to high definition. It’s about time your DVD player did the same.’

So far this strategy is working for Samsung. Button says unit sales on its DLP TV achieved 140% of expectations for 2003 and is outselling its competitors, despite being $500 more expensive. He expects 200% sales growth in 2004.

Competitor Sony, based in Toronto, agrees that the arrival of DVDs is helping to propel sales of high-end TVs. According to Toshiro Matsuo, GM consumer display products for Sony, as of September 2003, only 15% of Canadian households owned TVs capable of displaying high-definition content. Additionally, DVDs can play at a 16:9 aspect ratio (for that movie-house letterbox look) and look best on the large-screen TVs. ‘So with those conditions, we think people are looking for the high-definition-ready type of product,’ he says.

Sony is pushing its line of WEGA (pronounced ‘Vega’) TVs that come in plasma, LCD and rear-projection flavours. Within these three categories there are six different types of TVs. Matsuo says the company, which has seen about 10% annual growth in TV sales over the last five years, is marketing so many models because each TV has its own distinct target.

One strategy includes a play to consumers’ appetite for style. The plasma WEGA, for example, is pricey but extremely stylish and consumers increasingly want that, says Matsuo. The TV is aimed at ‘people who are more conscious about their living or dining rooms and how they want them laid out.’

Sony’s marketing campaign focuses on promotions with select marketers (in the recent past these have included Kraft and Pepsi) and major incentive programs with dealers, along with some print advertising.

But while Sony mainly relies on its partners to communicate its messages, Toronto-based LG Electronics has had perhaps the most visible mass effort with its long-running ‘Life’s good’ campaign, which also touts other technologies.

A TV-and-print campaign for its line of plasma TVs ended in September. (TV creative is from Europe but the print portion is by Oakville, Ont.-based 3H Communications.) According to Steve Preiner, corporate marketing manager, the campaign aimed to take advantage of what the company sees as a convergence between the falling price of plasma, the desire for increased picture clarity and the product’s aesthetic value (you can hang it on the wall).

Preiner adds that there was a specific message the advertising was trying to convey, part of which has to do with overcoming existing perceptions of what LG is. ‘One goal was to announce that LG is a manufacturer of plasma technology, which is part of our overall positioning as an R&D company, and not just a company that has expertise purely on the manufacturing side.

‘And the second part was in terms of our brand positioning. The creative featured kids and the appeal was to families. We were trying to warm it up and not present it as cold, hard technological facts…. It’s a much more human approach. It’s why we switched our tagline/slogan from ‘Digitally yours’ to ‘Life’s good.”

Philips returns to consumer sales

Markham, Ont.-based Philips finds itself in a slightly different position compared to other marketers: for the last five years it was out of the Canadian consumer electronics market entirely.

Only this year has the company decided to re-enter that market, adding a consumer aspect to what has previously been a focus on institutional sales (where, according to industry sources, it has 50% of the market for high-end TVs in hotels, for example). However, Iain Burns, CEO, says Philips recognizes the growth potential in HDTV flat displays and is redirecting its R&D resources there.

Burns says that except for some one-on-one deals for flyers and endcaps, Philips currently does no mass marketing but has signed up partners Wal-Mart, Sam’s Club, Best Buy, RadioShack and Costco through which it will sell its TVs.

‘Rather than going the route of mass advertising, we’re doing it on a niche customer basis with each of the majors. Right now we’re working on most of the big guys,’ says Burns.

Next year the CINEOS line of slim, HD projection TVs will make its debut for Philips and target a niche buyer. ‘It’s probably that 25-to-40 middle-income guy who’s looking for that high-quality TV and home-theatre system and looking at capabilities down the road for HDTV. So it’s not for the masses,’ says Burns.

In fact, Burns doesn’t see mass advertising in the cards for Philips for some time.

‘The reason for that is simple – we’re just getting into it. Once we start building a base and trying to get the brand awareness, we’ll look at cross-Canada advertising. But certainly for 2004 it’s going to be on a partner-by-partner basis.’