Consumers shopping for video equipment this fall are likely to be running into a lot of new brand names.
While Dimensia, HPX, Optonica, Phillips and Prism will seem new at first, they are backed by some of the most recognized names in the industry.RCA makes Dimensia, Hitachi produces HPX, Sharp sells Optonica and Panasonic makes Prism. The European electronics giant, Phillips, which now sells the Magnovox-Sylvania brands in the United States, is introducing its own upscale line which to keep things simple it is calling Phillips.
All of this might seem like a pointless name game, but according to Video Magazine the new names represent a radical change in the way video equipment will be marketed in the future.
Caught in a bind caused by increased competition, cutthroat discounting, little or no brand awareness, and the declining value of the dollar compared with the yen, marketers of video equipment are striving to change their images.
A New York video retailer describes the problem in a nutshell: "Buyers were coming in and asking to be shown a television set, or a VCR, or a video camera. They wouldn't ask for a particular piece of equipment or even a brand name. Consumers perceived all brands as being the same and one being as good as the other. At that level, price became the only issue, and that's what led to the tight situation which the manufacturers are now trying to get themselves out of."
The new brands are the manufacturers' answer to the problem. They represent upscale equipment with spectacular performance and advanced features when compared with the lower priced products. Major marketing and advertising programs are in the works to create strong identities for the new brands.
Whole new dealer groups are being established for these new product lines. The emphasis will be on dealers with fewer brands, but who are better trained and equipped to sell the ones they do have.
In addition to restricting the number of dealers, manufacturers are using other methods to control cutthroat discounting. In one method being tried, cooperative advertising funds a retailer gets from the manufacturer to pay for newspaper ads are tied directly to that retailer's prices. If the retailer advertises a product below a certain minimum price, he doesn't get the cooperative advertising dollars and he'll also probably get an unhappy call from the factory.