Executive Summary

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Marketing

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Feb 20, 2024

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Executive Summary This report for ACME summarizes important trends and developments in the smart television purchasing market. It will help determine where they should enter the market in the United States, the United Kingdom, and Germany. The report will give insight into consumer benefits, market demographics, and distribution channels in the three markets. It is crucial to understand each region's consumer buying behavior, needs and wants, and the reason they make the purchase. The big takeaway from the study of the future of the smart television market is to understand what the customers are looking for. Technology changes according to consumer habits. New Technology has empowered customers by giving them unlimited access to new information. There is an opportunity for technological convergence - collaborating unrelated technologies. There is also an opportunity for cross-selling - selling additional products and services to an existing customer. The difficulty to understand the market is increasing. This is due to the consumer's specific individual tastes and preferences as well as buying influences. When understanding the market, Kevin Lane Keller and Philip Kotler categorized buying behavior into “7 O’s,” (Kotler, Keller). The 7 O’s include: Occupants - who contributes; Objects - what consumers purchase; Occasions - when they make purchases; Organization - who participates in the purchase; Objectives - why they make purchases; Operations - how they purchase; and Outlets - where they purchase, (Keller and Kotler). Smart Television Market Global Market Matthew Wilson suggests that televisions in general have been around since the 1920s, (Wilson, 2020). Throughout the decades, televisions have evolved from being heavily built to smaller, simpler, and lighter, (Wilson, 2020). Additionally, televisions have gone from only three

channels with Low Definition images to multitudes of content for customers to stream in High Definition with clearer images, (Wilson, 2020). Smart televisions give consumers numerous capabilities, features, and content that the traditional ones, (PCMag). They eliminate the need for an additional setup box, (PCMag). Consumers could use their smart televisions to stream many streaming platforms such as Youtube, Netflix, Amazon Prime, and Hulu, (PCMag). Globe NewsWire projects the smart television Market across the world will reach $300 Billion by 2027 with a Compound Annual Growth Rate of 8%, (Globe NewsWire, 2020). In the middle of the COVID-19 Pandemic, the market worldwide for smart televisions reached a projected $17.2 Billion in 2020, (Globe NewsWire, 2020). They project Full High Definition Televisions to reach $112.4 Billion with a Compound Annual Growth Rate by that time, (Globe NewsWire, 2020). According to Grand Grand View Research, the demand for smart televisions stood at 268.9 million units in 2020, ( Grand Grand View Research). Between 2021 and 2028, they forecast the Compound Annual Growth Rate to be 20.8, (Grand View Research). The COVID-19 Pandemic, which forced consumers into quarantine and isolation in their homes, has increased the use of streaming services for entertainment, ( Grand Grand View Research). Customer Benefits Smart televisions bring many benefits to consumers depending on their tastes, preferences, and needs, According to Benmin Smith, one of the benefits of a smart television is that it gives access to any form of media through Internet connectivity. Consumers would not need to purchase additional hardware, nor purchase additional channels, (Smith, 2020). For the most part, consumers would not need to pay for a television subscription, (Smith, 2020). Smart televisions only have one remote that most people would understand and do not require many

cables, (Smith, 2020). They have a home screen that would allow the consumer to navigate through applications and their content, (Smith, 2020). There is an application store that would allow users to purchase additional applications, (Smith, 2020). Traditional Televisions require multiple remotes to switch between hardware and require many cables, (Smith, 2020). Additionally, they require the purchase of a cable subscription, (Smith, 2020). Another feature of smart televisions is the ability to access social media platforms such as Facebook, Instagram, and Twitter, (Smith, 2022). The three competitors: Samsung For the 16th straight year in 2021, Samsung was the market leader in all three regional markets, (Tarr, 2022). Their global market share stands at 29.5% while their unit share stands at 19.8%, (Tarr, 2022). Important developments recently shared were that in addition to the inclusion of free content being provided and hardware upgrades, their MICRO LED displays will provide customization features that include: Art mode to turn any room into a gallery, Multi-View to allow viewing from four sources, and Dolby Atmos with top, side, and bottom channel speakers to deliver an “immersive audio experience,” (Samsung, 2022). LG Statista in 2021 reported that the LG global market share was around 18.9%, (Yoon, 2022). With the new LG televisions, consumers could watch up to three live programs simultaneously and enjoy improved sound quality, (LGNewsroom, 2022). They could also broadcast media via an application or set-top box, (LGNewsroom, 2022). Vizio

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In the third quarter of 2021, Sony overtook VIZIO in smart television Sales in the United States, (Larsen, 2022). Analysts associate this gain with the result of a partnership with a streaming platform, Google, television, (Larsen, 2022). The United States Smart Television Market Keith Nissen of Standard & Poor Global reports there have not been significant changes in viewing behavior in the United States television market, despite the presence of three-quarters of United States households having at least one smart television, (Nissen, 2022). In 67% of these homes, individuals own one or more streaming devices, (Nissen, 2022). Individual consumers spend about 4 hours a day on home entertainment, especially ‘live’ sports (Nissen, 2022). Mordor Intelligence also confirms that conventional television is still the “flagship” home entertainment system in homes across the United States, (Mordor Intelligence). The continued advances in the picture and sound quality by these manufacturers are still being welcomed by consumers in the United States. Samsung remains the most popular brand surveyed for the S&P Report, (Mordor Intelligence). Mordor Intelligence estimates a Compound Annual Growth Rate of 10.5% for the United States market for the forecast period 2021 – 2026, (Mordor Intelligence). A key driver is a preference for Over-the-Top services bypassing expensive cable network services. (As a side note, the same report also mentions that the continued trade war with China will probably provide more opportunities for other manufacturers.) ACME products produced in the United States will also be free from threats of tariffs and taxes. Currently, both Samsung and LG produce their units in Mexico, (Mordor Intelligence). The United Kingdom Smart Television Market

High internet penetration has resulted in the United Kingdom being considered among the most technologically advanced nations in the world, (Statista, 2022). On average it is thought that the average citizen spends 4 to 6 hours a day on internet-based services, (Statista, 2022). In their review of changing UK attitudes to smart home products, Growth from Knowledge notes that smart entertainment devices continued to see significant growth in contrast to other ‘smart devices,’ (Growth from Knowledge, 2021). In fact, it is their view that confidence in these items will finally restore confidence in related industries, (Growth from Knowledge, 2021). Approximately 58% of households in 2021 indicated they have at least one smart television in their household – up from 49% the year before, (Growth from Knowledge, 2021). Goldstein Market intelligence forecasts the United Kingdom smart television market is growing at a Compound Annual Growth Rate of 4.53% for the forecast period of (2017-2030), (Goldstein Market Intelligence, 2020). The same report notes though that pricing of products, the impact of the pandemic, as well as increasing cost of living are factors to take into consideration in estimating future sales, (Goldstein Market Intelligence, 2020). On the whole, analysts believe there is still a demand for all new televisions – smart and traditional, (Goldstein Market Intelligence, 2022). Consumers are thought to continue with the trend of consuming entertainment at home, (Goldstein Market Intelligence, 2020). The Smart Television Market in Germany According to Evgenia Koptyug, a survey to understand the increasing popularity of smart televisions indicated that 42% of subjects answered that they consumed television shows and films via on-demand platforms rather than conventional networks, (Koptyug, 2021). Customers can watch their content repeatedly and on their own time, (Koptyug, 2021). She notes that in 2014 smart television ownership was at 11 percent of households, (Koptyug, 2021). By 2019, 56

percent of homeowners owned one or more of these devices, (Koptyug, 2021). She adds, “The main reasons for purchasing a smart television were due to image quality, screen size, and value for money,” (Koptyug, 2021). According to Jörn Krieger, consumers in Germany purchased 7.4 million television sets in 2020, (Krieger, 2021). The smart television share was 89%, (Krieger, 2021). Smart television penetration was 47 Million (Krieger, 2021). Smart Television Marketing In earlier years, we would start by dividing a consumer base into three groups: individuals, organizations, and industries, (Geoffrey Lancaster, 17). For the smart TV market, most of our purchases will be made by individuals. To a lesser extent, organizations. Eric Rudoph of Go-To-Markets at Brightcove remains optimistic that Corporate television can transform the internal and external communications of large and small organizations, (Rudoph). Rudoph also notes “To put it more simply, Corporate TV gives enterprises the opportunity to deliver video content to stakeholders in the same manner professional media organizations deliver it to their customers ... at a fraction of the cost, and without requiring an IT team to manage it all,” (Rudoph). Smart television in the organizational setting could offer opportunities for on-demand and live events, (Rudoph). Rudoph considers this market as developing with endless possibilities for manufacturers of smart televisions, (Rudoph). This is important for ACME to listen to the advice of Lancaster and ensure the needs of people including Information gatherers or product researchers; Influencers for each industry; Decision Makers; Purchasers using different channels, including e-commerce; and Consumers or end-users and their needs and wants.

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