It is hard to find a consumer who doesn't know what a flat-panel TV is-flat-panel TVs dominate in CE stores nationwide. A walk around CES confirms that flat-panel fever will continue well into next year.   But awareness of flat-panel TVs is not the same as familiarity or comfort with the key technologies in the category. Research shows that mainstream consumers still don't know the differences between plasma TVs and LCD TVs, for example, and often remain confused even after they have made a purchase.

Now, the proliferation of "1080p" TVs bearing "Full HD" labels-on display throughout CES-threatens to exacerbate consumer confusion, experts warn. And for the market to reach a truly mass scale, much more needs to be done by both manufacturers and dealers to better educate consumers about all aspects of flat-panel TVs as well as about HD technology and content.

The key to success, according to the experts, will be more "experiential" marketing that demonstrates the benefits of each technology to consumers in a variety of settings.

For their part, manufacturers and dealers say they already have begun to step up such consumer education efforts but also concede that more remains to be done.

FLAT-PANELS DOMINATE

Today, the best-selling TVs are flat-panels, and sales are expected to skyrocket in the next couple of years as consumers buy fewer CRT and projection TVs.

According to Quixel Research, based in Portland, Ore., sales of LCD TVs in the U.S. will grow to 16.5 million units in 2007, from 10.2 million in 2006 and 4.6 million in 2005. By comparison, plasma TV sales are expected to grow to 3.8 million units this year, from 2.8 million last year and 1.7 million in 2005.

DisplaySearch, based in San Diego, Calif., predicts that LCD unit volume will exceed CRT unit volume some time in 2007. And by 2008, the market research firm says, LCD unit sales will climb to 25 million, while plasma sales will climb to 5.2 million, CRT sales will be at 4.2 million, and rear-projection sales will be at 2.3 million.

Yet, popularity aside, says Tamaryn Pratt, principal of Quixel Research, "There's absolutely confusion between the two technologies"-plasma and LCD. "People remember their screen size more than they remember their technology," she says, noting that in focus groups held by Quixel last spring, consumers raved about the top-tier brand plasma TVs they bought. The problem was, she says, the TV maker was not one that sold plasma TVs. 

Consumers have been using the term "plasma" generically to refer to any big flat-panel TV like they use the name Kleenex to refer to all facial tissues-whether it applies or not, Pratt and other experts note.

"There is no doubt that awareness of HDTV has improved among consumers," says Michael Greeson, principal analyst at The Diffusion Group in Plano, Tex. According to TDG, approximately 90 percent of consumers are aware of HDTV, but only 50 percent are familiar with the technology. Meanwhile, only 20 percent of U.S. households already own an HD-ready TV set and less than 20 percent are "ready to buy," Greeson notes. Manufacturers and dealers need to concentrate on increasing consumers' familiarity with flat-panel TVs, to inspire them to take the next step and buy one, he says.

 "What we have to do as an industry is to sell the positive attributes of each technology at each screen size," says Andy Nelkin, vice president of TVs at Panasonic Consumer Electronics Co. in Secaucus, NJ. Manufacturers and dealers that focus on the negative aspects of one technology versus another will only confuse the customer, and, "a confused customer doesn't buy anything. A confused customer wants to do more research."

EXPERIENCE IS KEY

Right now, says Greeson, the flat-panel TV market is in the "early mass market phase." Early adopters already have bought their first sets, and it is mainstream consumers who are the new target customers. To close the deal, he advises, avoid speaking in technology lingo, and even more important, talk about the benefits and demonstrate the experience of owning a flat-panel TV. "Consumers need to understand the value relative to the price," he adds. Despite falling prices, the value still is not obvious to consumers, he contends. By combining experiential marketing with lower prices, dealers clearly can show the value to their customers.

One of the best examples of experiential marketing, Greeson says, is the Magnolia Home Theater outlets inside Best Buy stores. They are outfitted with couches to resemble a home environment.

But these outlets feature only high-end TVs, Greeson says. Retailers, including Best Buy, ought to "take that experiential zone and move it out to the floor," or move some moderately priced HDTV into the zone, as well, he says.

In fact, that is exactly what Circuit City, the second-largest CE retailer in the U.S. after Best Buy, has done, notes Tom Crowell, vice president of TV merchandising at Circuit City Stores Inc., in Richmond, Va. Last October, Circuit City completed a massive re-modeling effort in 500 stores, and in half of those stores installed lifestyle-oriented "vignettes" that resemble living rooms. The vignettes feature some of the store's most advanced TVs, but not necessarily the most expensive TVs, Crowell says.

"There is confusion" about which TV to buy, but "it's not just the technology," Crowell says. "It's the content, too. Consumers are confused about high-definition content and how to get it into the TV they buy."

Retailers also should not fear talking about the death of analog television in 2009 as a way to educate consumers about flat-panel TVs today, Greeson asserts. And it should be emphasized that it would be a mistake to wait for further price reductions. There's a lot of evidence that the rate of price decline is slowing, so waiting another year will not result in significant savings, he says.

National CE dealers such as Best Buy and Circuit City sell more flat-panel TVs-as a percentage of TV sales-than regional dealers like American TV or Ultimate Electronics, according to Chris Connery, vice president of market research and consulting at DisplaySearch in Chicago. The reason: flat-panel TVs dominate the shelves that consumers see as soon as they walk in to a national dealer, Connery says. By comparison, he says, regional dealers devote more of their floor space to rear-projection TVs.

Overall, according to data from NPD Group (DisplaySearch's parent company), regional dealers account for 25 to 33 percent of all TV sales on a weekly basis, and sell more rear-projection TVs. They are successful because their salespeople take the time to talk with customers about their needs, and then stress TV size rather than technology, Connery says.

Connery also advises that dealers should "promote TVs as TVs" and "not confuse the issue by calling them multifunction devices" just because they can be used as a computer monitor, as well. Discussing this added functionality "tends to scare people," he says, adding that consumers are intimidated by anything associated with computers.

To be sure, there is one new technology that does require both explanation and demonstration, experts say: 1080p, or what some TV makers are calling "Full HD."

For both manufacturers and dealers, the predicament is this: Consumers have been told for years that HDTV is the best TV, but with the advent of 1080p they're now getting the message that they've been misled-that anything but full HD is inadequate.

The solution, Connery suggests, is to demonstrate 1080p TVs by showing both lower resolution (720p) HD video clips and 1080p clips together on the same full HD set so that consumers can see the difference for themselves.

BRICKS OR CLICKS

Of course, consumers don't just shop in bricks-and-mortar stores. They also turn to the Web for both an education about flat-panel TVs and to purchase. And manufacturers and dealers are responding, by putting more useful information about flat-panel TVs online.

The Web is "the spot for the richest, most technical dialogue about TVs," says Circuit City's Crowell. A "Click & Learn" page inside Circuit City's website walks the user through the process of choosing a TV based on placement and lifestyle considerations, screen size and resolution. This page also links to other pages that explain the technologies inside LCD, plasma and projection TVs. In addition, the site offers customer reviews of particular TVs, as well as numerical customer ratings. And the site contains special pages dedicated to particular brands, where Circuit City provides additional information with "richer content" about each TV maker's products, Crowell says.

More than half of the customers who visit a Circuit City store go to the website first to do research.

Amazon.com, a leading online-only seller of TVs and other CE products, also features customer reviews of particular TVs. Additionally, the details page for each TV uses Flash animation, so the picture of the TV can be rotated to show it from every angle-something that is impossible to do with a TV perched on a store shelf, points out Noah Herschman, director of audio and video at Amazon.com in Seattle, Wash. And the details page also shows which TVs were purchased by other customers who looked at this TV-another fact impossible to know in a bricks-and-mortar store while shopping.

Manufacturers, too, are using the Web to educate consumers about flat-panel TVs. For example, Toshiba developed a new website to promote its new line of Regza LCD TVs, which are on display at CES. The site features a personal assistant who guides the user through a series of questions aimed at discovering which type of flat panel is the best choice. However, while the aim of the site is to promote LCD TVs, if the questions lead to the conclusion that a different type of TV better suits the user, then that will be the assistant's recommendation, says Scott Ramirez, vice president of marketing at Toshiba America Consumer Products in Wayne, N.J.

The questions on Toshiba's site ask how far back from the TV the viewer will sit; what will be the viewing angle; what type of cable-TV box, satellite-TV box or antenna will be hooked up to the TV; and whether the room where the TV will be is dark or sun-drenched. A person can sit closer to a higher-resolution TV, Ramirez notes. Plasma TVs, which achieve darker "black levels," are better in dark rooms than LCD TVs. But LCD TVs, which are brighter and less reflective, are better in brightly lit rooms.

The site also has rotating photos and explanations of technologies such as connectors, chassis and panel types, in layman's terms. Additionally, the user can upload a picture of the room where his new TV will be placed, and then insert a picture of a Regza LCD TV to see how it would look in the room. 

A Sony website dedicated to explaining HDTV, and to promoting Sony's TV lines, also features some technology explanations. On the "Learn" page, users choose their level of understanding, from "basics" to "in-depth." Last September, Sony launched a campaign named HD Test Drive that places Sony evangelists in stores, to explain HD in detail to consumers. The program, which runs through February 2007, is highlighted along with a store finder on the site.

Nelkin says Panasonic has had a similar program, sending experts in to stores to talk with both salespeople and consumers during high-traffic shopping times, for more than a year. 

"In 2007, additional technologies will be introduced into the marketplace that will further complicate things," says Toshiba's Ramirez, citing technologies in all TVs to enhance picture quality, color and contrast, and technologies in LCD TVs to reduce motion blur. What's needed, he says, are more resources that mull it all down for consumers. As an industry, he says, "we don't do that now." 

"There is a lot of education that still needs to be done," Nelkin declares. "In the end, the customer who understands more will buy more." 

GLOSSARY OF FLAT PANEL TERMS

Resolution: The number of horizontal lines a TV is capable of displaying, as produced by either a progressive or an interlaced scan.

Progressive Scan: A technique for displaying lines of resolution sequentially in one sweep of the screen from top to bottom.

Interlaced Scan: A technique for displaying lines of resolution alternately and merging them imperceptibly into one visible picture, in two sweeps of the screen from top to bottom. 

1080p: An abbreviation for 1080 progressive, considered by many as the best in HDTV resolution.

HDMI: An abbreviation for high-definition multimedia interface, a technology for connecting an HDTV and high-definition audio/video peripherals by means of a special cable and type of connector built in to the devices. HDMI connectors commonly are found on the latest flat-panel TVs.

THE PLASMA DISPLAY COALITION

Plasma technology was developed to be a high-performance, large-screen home entertainment digital television. The Plasma Display Coalition promotes the growth of plasma television and encourages education of its advantages and benefits.

Founded in 2005 by Hitachi Home Electronics, LG Electronics USA, Panasonic Corp. of North America, Pioneer Electronics (USA) Inc. and Samsung Electronics USA, the coalition continues to invest billions of dollars in R&D. Education efforts focus on both retailers and consumers. The coalition's president and founder is Jim Palumbo, formerly of Sony.

Because consumers have several display technologies to choose from for their home entertainment system, the coalition focuses on highlighting the benefits and advantages of plasma. These include crisp, clear picture quality, exceptional color reproduction, consistent brightness from any viewing angle, high contrast ratio that extends the display's ability to render the range of gray steps between black and white, accurate rapid motion performance resulting in no lag or drag, wide viewing angle approaching 160 degrees and longevity (as much as 60,000 hours).

The coalition also works to dispel the myths surrounding plasma, especially the two most prevalent-image retention and energy efficiency. According to Palumbo, independent tests that the coalition commissioned show that image retention has been virtually eliminated as a result of new plasma advancements in cell structure and phosphor formulations and that nearly all current plasma TV models from coalition members are Energy Star compliant.

Palumbo says it is vital that consumers are informed about the different display technologies when they head out to make their digital television purchase. "Retailers and the media have the responsibility to understand the products they are selling and writing about and to make sure that the information they are sharing is accurate."

To help educate consumers, the Plasma Display Coalition has developed a series of promotional initiatives including a website, www.plasmadisplaycoalition.org, a public relations campaign and a comprehensive brochure.

THE FIVE PLASMA DISPLAY COALITION MEMBERS

Hitachi:

The Hitachi Director's Series(tm) 55HDX99 55-inch plasma HDTV features the most advanced plasma technologies to deliver the ultimate home theater experience. For a larger screen home theater experience, this model delivers exceptional detail and a smooth, lifelike picture.

LG Electronics:

This new 60-inch plasma HDTV from LG Electronics features "Full HD" display capabilities (1920 x 1080P) with LG's exclusive XD Engine(tm) for superior picture performance and fifth generation digital tuner for optimal reception.

Pioneer:

Pioneer's Elite PureVision PRO-FHD1 plasma is the world's first 50-inch 1080p display that doubles pixel density and resolution of previous models to deliver outstanding picture quality. With 1920 x 1080 resolution, this monitor can display the entire range of HD broadcasts including 720p, 1080i and 1080p.

Samsung:

The Samsung HPT5064 adopts Samsung SDI's new generation W2 plasma panel that provides improved 'bright room' contrast and eliminates 'false contour' issues through a unique image process algorithm. This TV is compatible with Samsung's new digital multi-media center (MMC) that makes it possible to enjoy a variety of digital content like MPEG, MP3 and JPEG.

Panasonic:

Panasonic's TH-65PX600U 65-inch plasma TV delivers crisp, powerful images. The 1080p display provides a vibrant picture with remarkable detail. Incorporating technology developed by Panasonic, it provides high-density video and sound that unleash the full potential of today's HD content, including Blu-ray Disc.V

By Robert Calem  
January/February 2007