A Solid Consumer Electronics And Information Technology Company Marketing Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.


Tatung Company is a solid consumer electronics and information technology company with the value of US$7 billions. It was established in 1918 and is headquartered in Taiwan. The main products include digital consumer products, displays, set-top boxes, audio and home appliances. It has expanded the sales, manufacturing and service facilities in 12 countries which enhances Tatung Co. to deliver products and supports efficiently to the target markets. Taiwan has advantages of LCD panel manufacture and a strong IT base which benefits the company ahead of the dynamic high demand in LCD TV market (Tatung Company, 2009).

The Republic of India is the 7th-largest country and the 2nd-most populous country with 1.2 billion people (United Nations Population Division, 2009). With an annual population growth rate of 1.65 per cent, Indian contributes the most to world population growth (United Nations Population Division, 2009). The Indian economy grew up at 7.9% in the third quarter of 2009; it may be the first country to recover from the global recession (Srivastava, 2009). The Indian Television industry is under the tremendous transformation, having a growing demand in HDTV 40% a year on average until 2012 (Tanner, 2008). Players are reconsidering the marketing strategies and trying to take the beginning victory at the early stage of television digitalization. The established Indian brand like Videocon was led the TV market for many decades, now the situation has been occupied by multinational companies such as Samsung and Sony. The rapid changes are due to the macroeconomic factors which force every company to create its competitive advantages. This could be a good opportunity for Tatung Co. to enter the Indian TV market with its competitive advantage of high technology products and supports from overseas Thailand facilities. The study intends to review various macro and micro environmental factors by mixing industry analysis PESTEL and five forces model. Using SWOT to analyse and look at Indian television marketing strategy. Finally, to provide recommendations and suggestions to Tatung Company based the above results.


High-definition television (HDTV)

High definition television (HDTV) first appeared as a series of television systems that differed from contemporary television systems in 1934, for example National Television System Committee (Carbonara, 1990). During the 1930s, high definition was used to describe several improvements in television picture quality, comparing to earlier ones which have a small number of 30 lines resolution. However, HDTV is now referred to a digital television system with up to five times resolution with better picture quality and sound than analog Standard Definition Television (SDTV) (BBC, 2009). SDTV is broadcasted by analog system which is applied on CRT technology and able to display 480 pixel lines. Each line takes 1/60 of a second to draw by means of interlaced scanning. Up to 100 inches larger displays had to reply CRT technology. Recently, it is able to apply on digital compression technology which requires less bandwidth and allows 720 pixel lines up to 1080 by means of progressive scanning. Each picture takes 1/60 of a second to move at one time (Beal, 2005). Therefore, HDTV can be digitally broadcasted without the dependence of analog systems. Flat panel display (FPD) has been vigorously developing in the past ten years. Among the intensive competition, large-size TV may become one of the most important areas in the new decade. Plasma panel display (PDP), digital light processing (DLP) and liquid crystal display (LCD) are major technologies. Advanced picture and sound quality at lower cost would dominate the huge market (Ko, 2005).

Market performance and forecast

The rapidly growth of the Asian Pacific television market is gradually positioned despite of the fluctuation of global economy. However, a slow growth would be expected when it begins to step into a matured market. According to Datamonitor (2008), total revenue of the Asian Pacific TV and video grew by 11.8% and generated US$54.1 billion in 2008. TV sector accounted for 74.6% of the overall market value. However, the market is predicted to slow down. A Compound Annual Growth Rate of 7.7% for the period 2008 to 2013 is estimated which is equivalent to the value of US$78.5 billion. (DATAMONITOR 2008,) There were about 88 million Indian homes with televisions in 2000; it now soars up to 105 millions. This figure is about the same as in the United States, however, it occupies about half of the Indian households, whereas, it is 98 percent of total households in the United States (BAJAJ, 2007). It shows the amazing number of TV owners in India. The chief executive of Tata Sky, an Indian satellite company ever said "Everything that happened in the rest of the world in 10 years, is happening here in two years".

Sales of high-end TV skyrocketed by 430% during the 2006/07 fiscal year, according to TV Veopar Journal (2007). By contrast, the colour-TV market as a whole grew by a still-impressive 14% (The Economist, 2007). It is predicted that liquid crystal display (LCD) TV shipments to India will surpass those of cathode-ray tube (CRT) TV by 2012. Indian TV market was estimated to be 13 million units in 2008. CRT TV was the best seller with 92.9%, followed by LCD TV with 6.6% and plasma display panel (PDP) TV with 0.5% (Austin, 2008). The demand for LCD TV is more than plasma TV. This is because LCD TVs are available in smaller sizes, while plasma TVs are large and costs more. More Indian households are able to afford LCD TV than plasma ones. The Indian flat panel TV (FPT) market is just at the beginning, and it is expected to have 100% growth annually in the following years. The skyrocket will be boosted by rising consumer buying power, digitalised broadcasting system and affordable flat panel TVs. 23 million Indian TV viewers will enter the LCD market in the near future. Major global brands like Samsung, LG and Sony and local brands like Videocon and Onida are strategising and prepare to occupy the LCD market.

According the Economist (2007), there are five main factors that drive the rising demand of HDTV in India. Rising disposable income of Indian consumers is the result of the boosted economy. Another factor is retailer revolution that makes Indian consumers like to stay in high street stores. It also benefits companies to market their products easier. It is able to provide all series of products in a single store and show rooms for consumers to experience live vibration of high-end audio and visual stereo systems. Undoubtedly, price is always the priority when making purchasing decision. The prices of LCD fell by more than a third during the fiscal year 2006/07. Moreover, people now have more channels to choose. The number of cable TV users is estimated about 70 millions in 2007 and cable operators are estimated about 60,000 (the Economist, 2007). Each cable operator has an informal monopoly in own neighbourhood. However, the poor quality of transmission has been complained. Meanwhile, the introduction of direct-to-home service has been recently favoured by many households due to the better quality pictures and additional interactive features, like movie on demand. Indian domestic movie industry is very prosperous. About 900 films and 100 documentaries released in India a year. Watching movie is one of the most popular leisure activities for Indians. More online DVD renting companies begins to offer service across the India, which will enhance the quality of DVD movies. This is highly possible to encourage households to upgrade their TVs. BPL, Onida and Videocon were three dominations of the Indian market for TV sets until the 1990s. However, the entry of Samsung and LG in the year of 1995 and 1997, these two South Korean companies have taken the Indian TV market. More foreign companies also came to share this big pie after Samsung and LG, including Sony (Japan), Philips (Netherlands), Panasonic (Japan), Hitachi (Japan), TCL (China), Sharp (Japan) and Sanyo (Japan) (The Economist, 2007). Samsung imported their finished products from overseas manufactures to India, when the demand of high quality TVs was low. In 2006, however, Samsung has established its factories and manufactures in Noida and Chennai, thanks to the rapid growth of Indian TV market. Their LCD TV manufacturing capacity is 200,000 units per year. Meanwhile, LG also has begun their production of LCD TVs in Ranjangaon since 2007. Its capacity is 100,000 units per year (The Economist, 2007).

Industry analysis - PESTEL


Although India is the largest democracy in the world since the independent year 1947, the long historical conflicts with its neighbour Pakistan over the disputed territory of Kashmir, has resulted in insurrection and violence in the north-west area (the BBC, 2009). To some extent, Indian political situation is stable. The federal government is dominated by the Indian National Congress and the state politics are anticipated by several national and regional parties. An unexpected election result in 2009, the government is continuously led by the Indian National Congress party. Fortunately, it did not provoke the anger from its opposite parties to cause any chaos. However, the country has a high level of corruption and lacks political determination to administrate complicated policies. They mostly focus on the issues of caste and religion instead of development (Datamonitor, 2009).


Since the economic reform in 1991, India has made consecutive progress and become one of the fastest growing economies with average growth rates of 9% during the period 2006-2009. It is now the world's twelfth largest economy at market exchange rates and the fourth largest in purchasing power (the World Bank, 2009). The broadcasting industry has been prosperous since governmental monopoly in TV industry was collapsed in 1992. The number of channels is still growing which is beneficial to TV display market (the BBC, 2009). Even under the global economic downturns, this emerging market has kept the average gross domestic product (GDP) growth rate over 6 %; it shows the strength of Indian economy. Indians' overseas workers are sending their money back to home country, which helps to cover the trade deficit According to the World Bank (2008) that India has been the top recipient of migrant remittances in several years with a $52 billion in 2008, followed by China with $49 billion and Mexico with $26 billion. Although India's trade deficit from quartet two to three of 2009 dropped to $57.31 billion due to the falling imports of 15 percent and declining exports, it is still high enough to offset most of their expanding trade deficit (Ians, 2009). India's GDP has been the fastest growth with an average of 6.6% in 2009 (Bloomberg, 2009). "Emerging markets benefited from their own economic-stimulus programmes and from policy activism in rich countries" said by the Economist (2009). Even though this one of the biggest emerging markets held national elections in 2009, and was won by the ruling party, surprisingly, this unusual political result does not affect its stead economy.

A promising outlook of India in information technology, business process outsourcing, telecommunications, and pharmaceuticals attracts numerous enterprises in various investments. However, the country's infrastructure strongly needs to be improved. Incomplete road and rail network hinders the logistic distribution and occasional power shortage has made some companies to purchase their own power suppliers. These problems have to be taken seriously and solved by the government in order to encourage and secure foreign investments. Moreover, the capacity of harbours cannot congest all the goods from other countries, resulting in a slow process of customs clearance (Datamonitor, 2009).


India is the second most populous country in the world with a population of 1.2 billion and that of aged between 15 to 64 is over 60% in 2009 (United Nations Population Division, 2009). Increasing young population consists of this large workforce, which is and will continue to be one of the competitive advantages in the next decade. However, the social development of the country is dragging. India was ranked 128 out of 177 nations in human development in 2007 (Datamonitor, 2009). This fact contradicts its rapid growth in economy. In addition, the increasing disparities between urban and rural regions in income and economic development should be paid attention to. In spite of the improvement of living standard in big cities, most of Indians still suffer form poverty, literacy and health problems. The social development moves slowly. Especially, the neglect of the north boarder regions, such as Kashmir, Jammu and Bihar, has caused the society disordered. Armed military and polices everywhere makes the innocent residents and visitors insecure.


The vigorous knowledge foundation, lower labour costs, and strong supports from the government attract many multi-national companies establish R&D centres in India. More than three million scientific and technical professionals exist in the country, including over 50,000 computer professionals and about 360,000 engineering graduates every year. Indian government is also active in supporting R&D. The number of patents approved is at the pace of multiple growths and the number of technology institutions is promisingly rising. This outstanding development has received global recognitions in information technology (IT), telecommunication, and pharmaceutical sectors. The competitive IT sector has been maintained, reaching approximately $40 billion during the period between 2006 and 07. It is also predicted to increase sustainably. However, their education system is unable to catch up with the current trend and cannot provide suitable programmes to prospects of the industry. Additional trainings are required for most graduates before beginning to work for the company (Datamonitor, 2009).


India has a broad legal structure which benefits companies in the management of business.

With the aid of taxation reform in recent years, it has enhanced foreign investments in India. The practice of the value added tax has indirectly collected tax for the government (Datamonitor, 2009).


There is a plenty of environmental issues have been regulated in India but the implementation by the Ministry of Environment and Forests is loose and lagging behind the agenda. Therefore, an environmental reform has been considered into legislation by the government. The usage of energy, especially in thermal energy will continuously increase since the rapid expansion of Indian economy, which has caused serious problems in environment. The major environmental issue of the country is air pollution. Suspended particulate mater levels of Indian major cities irregularly exceed World Health Organization safety standard. Impoverish water resource is another significant issue in the country. According to the Environmental Performance Index 2008, India was ranked 120 out of 146 countries. It shows a poor performance on environmental protection of India (Datamonitor, 2009).

Industry Analysis - Five Forces Model

Buyer power

TV is essential for a large number of households due to the lifestyle of India. Meanwhile, analog system is planning to be transmitted to digital TV for the period 2006-2010 in India (Telecom Regulatory Authority of India, 2005) This drives consumers to upgrade their TV sets or set-top boxes to be high definition ones. Larger manufacturers of TV market play important role to retailers. Since most consumers would not be willing to spend a huge amount of money on an unknown brand, retailers have to choose those brands that consumers trust and are familiar with. Some retailers are large enough to give pressures to manufacturers; this is one of methods to press down the retailer price and more margins for them to gain. AT the same time, some of retailers may be interested in unknown brands with lower prices. Large-sized manufacturers, such as Sony, tend to sell their products directly to end-users. Thus, retailers are prone to lose their buyer power and are unable to bargain (Datamonitor, 2009).

Supplier power

Main suppliers in TV display market are consumer electronics manufacturers. There are some powerful international companies such as Sony and Samsung. They invest significantly in new technology development and innovation. Their brand images and recognitions are very strong and solid in consumers' mind. Smaller manufacturers only can compete in price. Being suppliers of parts, components and manufacturing service to consumer electronics manufacturers is complicated, especially serving larger ones. These suppliers have to prove that they have stable finance and good futures, also particular skills can be united well with the company, logistic network must be vey broad and efficient, and their products or services should be surpass to other competitors. Most important is that the supplier has to fit in the corporate culture that is going to cooperate with (Datamonitor, 2009).

New Entrants

Several barriers exist when entering the market for a new brand, including the threats of established brands, facilities and technology transfer, brand recognition, switching costs, capital requirements, accessibility of distribution, learning curve advantages and government policies (Porter, 1980). The value of the TV market is still profitable and growing promisingly, even though in developed countries like Japan, where would be thought a saturated market and that the global economic recession would impact high value consumer goods. One of the factors is the replacement of analog CRT TVs with digital TV or set-top boxes. Thus, strict and harassing regulations in terms of broadcasting and TV do not happen in most countries. It encourages manufacturers and retailers to introduce new technologies and products. One discouraging factor would be the intensive price competition. If the company plans to establish its own plants in the market country, the investment of fixed costs has to be highly considered. Macroeconomic factors are also important for the company, whether the high-value product can be accepted and is affordable in the market. The TV market is occupied by strong brands; thus, consumers may be not easy to switch to a new brand. However, the digitalisation of TV system just begins; there is a promising space to grow in the Indian TV market. It may be a good timing for Tatung Co. to entry (Datamonitor, 2009).


There are several alternatives for TV, for example personal computers, audio players or video games, as leisure activities. These home entertainments could have impacts on retailers owing to lower prices.The threat of LCD TV is other types of display, including CRT TV, plasma TV, set-top boxes, internet TV and mobile TV. The most threaten one is the governing CRT TV, occupying 92% of Indian TV market in 2008. In comparison, the price of CRT TV is cheaper and set-top box is even cheaper than any options. The company has to be careful on the segment strategy, in order to gain reach the target customers (Datamonitor, 2009).


Currently, the TV leaders are mainly from Korea and Japan. The support of capital and technology from their governments allows them to become the leading players. Samsung and LG are the two leading companies in Indian television market. TVs can be purchased from many different types of distribution, such as wholesalers, retailers, online stores and hard sellers. It allows wholesalers and larger retailers to compete on prices and reinforce the rivalry of the TV market (Datamonitor, 2009).

Marketing Strategy - SWOT analysis


Strong ability of reaction

High quality control in products

Matured technology base

Thailand facilities


R&D investment is lower than major players

Low brand recognition


Growing demand

Rising Indian disposable income

Affordable prices

Digitalization of broadcasting

The fad of sport events


Major TV leading manufacturers

Potential players


Patent barriers

Less sales margin


Manufacturers of Taiwan are all aware of the limited growth of Taiwan consumers in terms of population, almost all of products are followed the needs of global consumers. Thus, the ability of reaction is high enough to face the dynamic market changes. The quality control of products and engineering employees are very positive as well as the profound and solid IT base, Tatung Co. has a strong supports from the industry. In addition, the management office and facilities in Thailand are able to provide an efficient solution and updated products to the target Indian market.


Owing to the economic downturn, many companies and investors are not willing to take a big risk on more capital investment. Moreover, the monetary supports from the Taiwan are much less than that of Japan and Korea. This is negative for the company to development innovation and new technology. Meanwhile, the global recognition of Taiwan brands is low. Although Taiwan has a high global performance in computer and electrics products, the marketing of TV products is still unable to compete with larger size companies.


"India has 230 million households and only 115 million of them have TVs-mainly CRT TVs providing significant opportunities for market expansion" (Austin, 2009). India flat panel TV market future is encouraging. It is predicted that over 30% of total Asia Pacific plat panel TV shipments will goes to India in 2013. Flat panel TV shipment growth in India has a slight decrease to 80% from 100% in the last four years. Comparing to other regions excludes China, this is still extraordinary. A growing middle and upper middle classes in India allows householders upgrade from CRT to LCD TVs and it is even predicted LCD TV will overtake CRT TV in 2012. After the economical reform in India, rising disposable income has make the flat panel TV market undoubtedly profitable. Unlike other developed saturated markets, this one of the largest populations has a strong potential to support consecutive growth in the flat panel TV. Indian government has reduced import duty by 50% to attract TV manufacture and assembly in the country. Therefore, large global OEMs are considering India as their manufacturing destinations (DisplaySearch, 2009).

One of main reasons drives the broad mass communication growth is prevailing sport passion, such as Olympics and cricket tournaments. A television display with accessible broadcasting is definitely required. Consumers now are pursuing high definition TV. These consumers are usually active in information updates. They are pioneers or the first groups to use new technology. They may prefer to choose multi brands to find out the differences and preferences. The more consumers in this segment, the more benefits can gain to plat panel TV (Gupta, 2006). India has a Free Trade Agreement with Thailand on import duty which is beneficial to Tatung Co. reduce the cost (Austin, 2009). Besides, digitalization of Indian broadcasting is another opportunity for the company to entry the market. Digital transmission has a number of advantages over analog system, including better reception quality, increased channel carrying capacity which enables to carry more TV channels, additional interactive features, such as movie on demand, radio, programme guides and subtitles.


Leading LCD TV brands in Indian market are Samsung with over 30% market share, followed by Sony with 19%, and LG with 16% in 2007. LG is the leading brand in plasma TV market, Samsung and Panasonic are behind. LG also leads the CRT TV market with over 25% market share, followed by Samsung and Videocon (Austin, 2008). All of these global brands have independent shops in India, at those stores where can provide all series of latest products and professional specialists to consumers. Patent barriers from these established manufacturers are also need to be taken into consideration. Besides, potential players from other countries, such as China are one of challenges that the company may be face. In addition, the profit margin becomes decreased owing to the competitive market, falling selling prices and high R&D costs (Gupta, 2006). The cost of buying a new digital TV set is much expensive than a simple set-top box which enable to translate the signal from digital to analog into a traditional CRT TV. Consumers may choose to buy a cheaper set-top box to transmit singnals rather than spending huge money on a new brand.


Since the brand recognition is low and as well as the size of Tatung Company is smaller than those major leaders, alliance or partnership strategy would be one of methods to compete with (Chen, 2005). "The firm that can effectively cope with environmental uncertainty and ambiguity, proactively reposition in competitive markets and minimize transaction costs through strategic alliances increases the probability of maintaining competitive advantages" (Ireland et. al. 2002, p.435). Tatung Company should cooperate with partners to develop innovations as well as gather the information or capital resources to build a larger size enterprise in order to support further branding or marketing campaigns.

The competitive advantage of Taiwan manufactures should be used wisely to support the rapid development in innovation and new technology. Taiwan's brands are not well known in the global market, it maybe due to the neglect of branding strategy. Tatung Company should invest in this sector and consider a trendy method to package the products. The analytical result showed previously all should be taken consideration for Tatung Company to plan the new Indian market, containing macroeconomic and microeconomic factors. The Indian political issues may be the serious hinder for foreign investors. The complicated TV imported duty framework and legal regulations also make it inefficient in management. Besides, the inadequate infrastructure would affect the efficiency of distribution networking. Although the Indian government is transmitting digitalised television broadcasting, the blur progress and unsound plan is still worrying. The differences between urban and rural areas of India in income and social development should be considered into the consumer buying behaviours when targeting the segmentation. Also, consumers are easy to be swayed by prices, especially for a new brand. The company has to be sensitive to the prices from rivals and adjust it to fit in the local market (Gupta, 2006). They company has to establish a broad distribution network and also maintain good relationship with suppliers, retailers, the government and customs in order to access the market smoothly.

Under these considerations, Tatung Company could organise an unexpected proposal to differentiate their LCD TV products with other brands.