Pricing and Promotional Strategies for Samsung and VIZIO

Pricing and Promotional Strategies for Samsung and VIZIO

HiDef 2 The television is a commonplace appliance in the everyday American home, as plentiful as bathroom sinks or a toilets. Everyday, Millions of people worldwide use televisions for enter- tainment, to catch up on local and global news or to listen to their favorite mixes of songs. Some televisions have built-in support for wireless networking, allowing for immediate access to streaming content like Netflix or Hulu. Still others boast magnificent screens with resolutions at the limits of what the human eye can discern, in sizes that can take up an entire wall. Until the early 20th Century, an individual would have to talk to a neighbor, pick up a newspaper or listen to rudimentary radios to catch up on the day’s news. For entertainment, one would have to visit a cinema or go to a production at the local playhouse. The idea of causally lounging in one’s living room and watching something tens, hundreds of thousands of miles away from you was preposterous. That all changed in 1927, when the first successful television test was completed (Stephens, 2000). At the time, televisions were quite different. Units were larger, bulkier and heavier. The technology used to create the images was based on cathode-ray tubes, similar to the technology used in tubed guitar amplifiers. Pictures quality was moderate, at best. As the technology advanced and manufacturing prices came down, more and more peo- ple were able to afford televisions. Eventually, televisions became a staple of the home. Today, televisions can be found in restaurants, pubs, hospitals and almost anywhere that has ample space available on a wall or a table (or even a ceiling!). Among the leading television brands are Samsung and VIZIO (Statista, 2015). Samsung is an electronics giant based in Korea, tapping into such markets and cell phones, laundry and kitchen appliances and car stereos (Samsung, 2015). Samsung has enjoyed leadership in LCD- TV (Liquid Crystal Display) market share since at least 2008, having held close to 20% of the market single-handedly (Statista, 2015). In contrast, VIZIO was a fledgling operation in 2008,
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HiDef 3 having only been formed in 2002 in California (VIZIO 2015). While Samsung touts their exper- tise and prestige in design and manufacturing, VIZIO is a disruptor in the Television market, of- fering designs at lower prices than many competitors. As such, VIZIO has quickly become a thorn in the side for Samsung and many of the other competitor firms. VIZIO’s secret weapon is that they do not assume the costs of manufacturing their television sets, having a manufacturing partner produce the units at a lower overhead cost (Suciu, 2012). This strategy is similar in na- ture to how Apple produces iDe

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