Tuesday, April 29, 2008

Introducing the washing machine of TVs

Today's Wall Street Journal quotes the vice president of brand marketing for LG Electronics as saying, "If you go to Best Buy, you can't tell the difference between any of the TVs; even to me, I cannot tell which is LG. They all look the same." (I doubt that was on the list of talking points prepared by his PR team, but I respect his candor.)

Why do the major TV set makers allow this steady commoditization of their business to continue?

Sony Electronics was a client of mine several years ago. Sony Wega TVs (pronounced, oddly enough, "vega") were the industry benchmark because they were based on an innovative and proprietary picture technology that offered customers a clear reason to pay more. (This built on a heritage of picture quality that started with the Sony Trinitron.) Sony's minimalist silver boxes also set a new design standard with a look that has now become common.

But much has changed over the years. Low price offerings from LG, Samsung and Vizio have created a war at retail. Consumers wait to buy the latest and greatest at steep discounts.

I think there are two sources these companies can turn to for inspiration to find a way out of this price-driven mess -- i.e. Apple and, ironically, LG appliances.

Apple can charge a premium for its laptops for reasons that are well known: their design stands apart from the sea of sameness and, importantly, because they work better (i.e., simpler, more intuitive).



Several years back LG challenged the commoditization of the appliance category with washers and dryers that brought curvaceous design and bold colors to a category that only knew white boxes. LG also brought forward useful new features such as steam cleaning. (As Best Buy's agency for its home appliance business, the team at BD'M has seen first hand how this approach to design has elevated these "boxes" to become true objects of desire.)

In both cases these marketers challenged and beat a commoditized market by using design as a business strategy. And both managed to charge a premium by doing so.

The average person may not pay 10% more for a 10% improvement in picture quality. But they are more likely to pay more for fresh design that showcases their discerning sense of style and brings a small bit of joy to everyday activities.

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