Strategic Marketing for High Technology and Innovation

Integrated Marketing Communication : DVD

1114052 - Suresh J

Integrated Marketing Communication

Advertising Sales Promotion Public Relations & Publicity Events & Experiences Direct Marketing Interactive Marketing Word-of-Mouth Marketing Personal selling
Brand Awareness

IMC

Brand Equity

Brand Image Brand Responses Brand Relationships

Marketing Management- Philip Kotler et al, 13th Edition, Chapter 17.

DVD : The Evolution

STATEMENT

Since September 15 (1995), when a general agreement was reached on a common format for the high-density optical disc, the SD and MMCD groups have continued discussions to finalize details of the format. Today, they announced an agreement on the final details of the new format. This technical breakthrough in digital storage was reached by Toshiba, Matsushita, Sony, Philips, Time Warner, Pioneer, JVC, Hitachi and Mitsubishi Electric. DVD technology promises important benefits for consumers, the film and computer industries, and consumer electronics firms. The nine companies will now undertake discussions in an effort to develop a patent licensing program. Thomson, which has worked closely on DVD development, has expressed a desire to join the discussion. From today on, the companies supporting DVD will propose and promote a wide range of applications for the format. They will continue to develop the technology and work to position DVD optical discs as the ideal digital storage medium for the age of multimedia. Specifications have now been finalized for the DVD movie player and the ROM (Read Only Memory) for computer application. These specifications reflect the recommendations made by the Hollywood studios and the computer industry. Specifications for music applications will be finalized after hearing opinions from the music industry. The name chosen for the new format is a familiar one: DVD.

http://www.toshiba.co.jp/about/press/1995_12/pr0802.htm - Toshiba 1995 statement on DVD

DVD : The Roll Out begins

January 5, 1996 At the CES Show, Las Vegas, Sony & Toshiba unveil home entertainment systems using DVD March 14, 1996 Philips displayed its DVD_ROM at the CeBIT trade exposition in Hannover, Germany.
price of roughly $200

March 23, 1996 Toshiba leads charge into DVD market two models : the $599 SD-1006 and the $699 SD-3006 featuring video outputs for optimal quality picture and a flourescent display of key performance functions and options. DVD players to use different versions of a film edited to fit PG, PG-13, R, or NC-17 ratings. Other DVD manufacturers work on gaming, educational video, and other markets that use large amounts of digital video.
CES REPORT: DVD high-tech focus - http://news.cnet.com/2100-1001-201370.html Philips shows CD-sized DVD-ROM - http://news.cnet.com/2100-1001-207458.html&tag=mncol%3btxt Toshiba leads charge into DVD market - http://news.cnet.com/2100-1001-212880.html

DVD : The Roll Out stumbles

April 1996 Motion Picture Association of America (MPAA) and Consumer Electronics Manufacturers Association (CEMA) raise concerns about
hardware and software standards for protection of copyrights.

MPAA and CEMA would like, all DVD manufacturers would have to build their devices to support the standards. PC industry was never consulted, according to the Information Technology Industry (ITI) Council, a trade organization that represents companies such as
Apple Computer, Compaq Computer, Intel, Kodak, Motorola, and Silicon Graphics.
Dispute gives preview of DVD problems - http://news.cnet.com/2100-1023-210247.html

DVD : Another Roll Out

August 30, 1996 Matsushita announces it will sell its first DVD player in the United States and Japan on November 1. Products under the Panasonic brand name,
two models priced at approximately $735 and $900.

The players can also play standard compact discs. Up to eight languages can be dubbed on the discs and subtitles for up to 32 languages can be displayed for movie titles.

Matsushita to release DVD this fall - http://www.vxm.com/21R.66.html

DVD : Further ahead

Warner, MGM, UA and Columbia enthusiastically support DVD. Paramount, Fox & Disney stay out.
Reasons Concerns @ piracy, wait for installed base to build up.

1996 DVD in markets in Japan. 1997 DVD hits US Markets. 1998 DVD out in Europe.

Surviving a Standards War: Lessons Learned from The Life and Death of DIVXDavid Dranove and Neil Gandal - http://www.tau.ac.il/~gandal/divx.pdf

DVD : The Buzz..

Summer of 1997 Early Adopters optimistic about the new format. DVD Forums spring up on Internet. Popular DVD Chat Sites received more than 2000 posts every week. Posts predicted that the upcoming Christmas season would see the mass-market breakthrough of DVD.
Surviving a Standards War: Lessons Learned from The Life and Death of DIVXDavid Dranove and Neil Gandal - http://www.tau.ac.il/~gandal/divx.pdf

DVD : The Marketing Game

Summer of 1997 Internet Vendors offered discounted prices on DVD Hardware and Software. Best Buy (second largest electronics retailer in US) supported DVD in the following Heavy Advertising. Special In-Store Displays. Wide Selection of hardware and software at discounted prices. Best Buy was rapidly establishing an identity as the place to go for DVD

Early adopters tended to be frequent Internet users, a DVD culture developed on the Internet. Several on-line hardware and software vendors participated heavily in DVD-related sites.
Surviving a Standards War: Lessons Learned from The Life and Death of DIVXDavid Dranove and Neil Gandal - http://www.tau.ac.il/~gandal/divx.pdf

DVD thrashes DiVx

Summer of 1997 Chat groups helped consumers communicate information and coordinate actions. Since many of the early adopters were also Internet users, the large number of active DVD and DIVX web sites conveyed very useful information to potential adopters in real time. The information spread across the Internet turned out to be remarkably accurate. Internet chat sites correctly anticipated the nature of the Circuit Citys new technology, the difficulties that Circuit City would have in enlisting partners, and the dip in sales that would result from market confusion.

Surviving a Standards War: Lessons Learned from The Life and Death of DIVXDavid Dranove and Neil Gandal - http://www.tau.ac.il/~gandal/divx.pdf

DVD : Key Lessons

A standards war that was quickly resolved. Followed by the formation of the largest coalitions
With biggest names in consumer electronics (hardware, software), content/studios, and retailers. Led to early network effects which are so crucial to the success in high technology space.

Combined might of multiple companies deployed in different media. New age media like internet offers avenues for discussion by early adopters
This has its own indirect marketing potential for good products. Improves chances of rest crossing the Chasm.

Thank You