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Int. J. Management and Decision Making, Vol. 7, Nos. 2/3, 2006 143

Copyright 2006 Inderscience Enterprises Ltd.

Marketing strategy based on customer behaviourfor the LCD-TV

Yu-Jing Chiu

Department of Business Administration, Chung Yuan Christian

University, 200, Chung Pei Rd., Chung Li 32023, Taiwan

E-mail: [email protected]

Institute of Management of Technology, National Chiao Tung

University, 1001, Ta-Hsueh Rd., Hsinchu 300, Taiwan


Hsiao-Chi Chen




Gwo-Hshiung Tzeng*



Kainan University, No.1, Kainan Rd., Luchn,

Taoyuan County 338, Taiwan


*Corresponding author

Joseph Z. Shyu




Abstract: Manufacturers of LCD-TV tend to focus on technology with little

consideration for customer needs. We have researched customer behaviour inorder to learn more about customer needs in an effort to reduce the gapbetween technology and customer-needs. Customer behaviour is defined in thisstudy as buying behaviour. The traditional concept of marketing strategy is notmulti-dimensional, so we employed the Decision Making Trial and EvaluationLaboratory (DEMATEL) method. The DEMATEL method is used to detectcustomer buying-decision-factors. The relative relationship supports strategic planning in actual situations and the competitive environment. Results showthat customer buying-factors include price, quality, resolution of kinescope,low radiation, and the relationship between these factors. Quality is a powerfulfactor affecting others with advertising as a prime example. The marketingstrategy planning framework is proposed according to the relationship of


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144 Y-J. Chiu, H-C. Chen. G-H. Tzeng and J.Z. Shyu

decision factors. This study provides relationships and marketing strategy

planning for firms in the LCD-TV market to meet customer needs.

Keywords: LCD-TV; customer behaviour; market marketing strategy.

Reference to this paper should be made as follows: Chiu, Y-J., Chen, H-C.,Tzeng, G-H. and Shyu, J.Z. (2006) Marketing strategy based on customerbehaviour for the LCD-TV,Int. J. Management and Decision Making, Vol. 7,Nos. 2/3, pp.143165.

Biographical notes: Yu-Jing Chiu received her BS in Business Administrationfrom Chung Yuan Christian University, Taiwan, and her PhD Degree fromInstitute of Management of Technology, National Chiao-Tung University,Taiwan, in 2000 and 2005, respectively. She is currently an Assistant Professorin Business Administration at Chung Yuan Christian University, Taiwan.Her primary research interests include consumer behaviour, marketing, and

technology management.

Hsiao-Chi Chen received a BS in Business Administration from Chung YuanChristian University, Taiwan, in 2001. She is presently a PhD candidate at theInstitute of Management of Technology in National Chiao-Tung University,Taiwan. Her research interests include industry analysis, platform structure,and strategic management. Her major subject is Strategy Planning.

Gwo-Hshiung Tzeng received his BS Degree in Business Management fromthe Tatung University; Taipei, Taiwan, his MS Degree in Urban Planning fromChung Hsing University; Taipei, Taiwan, and his PhD Degree in ManagementScience from Osaka University, Osaka, Japan, in 1967, 1971, and 1977,respectively. He was a Visiting Professor in the Department of Engineering andEconomic System, Energy Modelling Forum at Stanford University, fromAugust 1997 to August 1998 and a Professor at Chaio Tung University from

1981 to the present. He has achieved the position of National DistinguishedChair Professor. He is a member of IEEE, IAEE, ISMCDM, and WorldTransport. His current research interests include multivariate analysis, routingand scheduling, multiple criteria decision making, and fuzzy theory.

Joseph Z. Shyu is now a Professor at the Institute of Management ofTechnology in National Chiao-Tung University, Taiwan. His professionalspecialty is Science and Technology Policy, Industry Analysis, and AnalyticalChemistry.

1 Introduction

A new application for Thin Film Transistor Liquid Crystal Display (TFT-LCD) is LCD

Television (LCD-TV). LCD-TV has become popular in consumer electronics within the

household television market, as a result of rapid technology development. Display

Search (2002) forecasts that LCD-TV demands will expand quickly at a compound

annual growth rate of 104% from 2002 to 2007. LCD-TV has huge potential for the

future. However, manufacturers of LCD-TV focus on technology with little regard for

customer needs. Therefore, we attempt to study customer behaviour in order to reduce

the gap between technology and customer-needs. Customer behaviour is defined in this

study as buying behaviour.


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Marketing strategy based on customer behaviour for the LCD-TV 145

Little attention has been given to how customers evaluate products resulting

from the convergence of television sets (Roberts et al., 2002). Hultink et al. (1995) notedthat pricing and skimming strategies are used to successfully launch high-tech products.

Previous studies show that marketing strategies of high-tech products are interesting

issues, and have been in high demand. This is particularly true when customer behaviour

and market strategy extend to the next generation product, making LCD-TV a critically

important issue for high-tech manufacturers.

Marketing strategy is critical to corporate planning and is dependent on the study of

technology, product, channel, customer behaviour and so on. When suppliers consider

increasing their investment in customer relationships, principal concerns include

potential benefits from such an investment (Anderson et al., 1991) and the likelihood of

receiving rewards from customers for collaborating in product development. This

illustrates how product and market strategies of a corporation are influenced by customer

behaviour. As this supply-side-driven trend occurs, consumer perspective becomescritical in evaluating the likely market acceptance of new product categories, giving

individual buyers a complex behavioural role. Managers should be acquainted with

customer needs in order to effectively stimulate additional market needs. Burger and

Cann (1995) found that improving customer satisfaction and adding value to customers

in high technology purchases are very important factors for technology-based

organisations. We propose customer-orientated thinking for technology-based firms and

marketing strategy planning based on research of customer behaviour.

Managers usually make strategic decisions according to a single purpose or

dimension. However, strategy is influenced by many corporate factors, especially

marketing strategy. The traditional concept of strategy lacks a multi-dimensional

emphasis. In this paper, the DEMATEL method is used to build the relative relationship

of decision factors for customer buying behaviour. The relationships support a

multi-level viewpoint for planning strategy.

This paper is organised as follows. Section 2 introduces the TFT-LCD industry

development, LCD-TV, and a brief review of customer behaviour researches. The model

construction and implementation are shown in Section 3. An empirical study of LCD-TV

in Taiwan is presented in Section 4. Finally, conclusions and recommendations are

presented in Section 5.

2 TFT-LCD industry and customer behaviour reviews

This section presents the TFT-LCD industry development, LCD-TV, and a brief review

of customer behaviour researches. The TFT-LCD industry development and LCD-TV

can assist us in understanding the big picture and environment of this industry.In addition, we discuss customer behaviour trends to describe the importance of customer

needs.

2.1 TFT-LCD industry development and LCD-TV

The Liquid Crystal Display (LCD) industry has made significant advances in technology.

Market share and applications of LCD have grown steadily since the 1970s. LCDs are

widely used in notebook PCs, mobile phones, Personal Digital Assistants (PDAs) and

soon-to-be TVs currently. However, thin film transistor (TFT) technology that allowed


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for improving colour quality and faster refresh rates was first commercialised for

large-sized displays in the early 1990s. The TFT-LCD market is segmented by panel size into small, medium and large. The large-sized segment is defined by

DisplaySearch (2000) as panels that are ten inches and above in diagonal measurement,

representing the largest part of market value. Large-sized TFT-LCD panels are primarily

used for notebook computer screens and computer monitors with a new application of

LCD-TV, designed in size, from thirteen to over forty inches in diagonal measurement.

The LCD-TV offers a different technology from the traditional Cathode Ray Tube

(CRT) with advantages of low radiation, low power consumption, slim size. A

comparison table of LCD-TV and CRTs characteristics is provided below (Table 1).

Table 1 Comparisons of TFT-LCD and CRT to TV applications

Products Characteristics Weak points

High contrast ratio

Good luminance

The quality of resolution close to CRT

Slim

Low radiation

TFT-LCD

Low power consumption

Higher cost than CRT

Good luminance Heavy

High contrast ratio and resolution power consumption

CRT

Low price Radiation problem

LCD-TV has been unable to increase its market share due to its high price.However, there is growing evidence of a trend that LCD-TV will replace CRT-TV

(DisplaySearch, 2004). Technology advance of large TFT-LCD panels and the glass

substrates broadening tendency will reduce manufacturing cost (Deutsche Bank Group,

2004). DisplaySearch (2002) proposes that the LCD-TV market will increase as

TFT-LCD producers build fifth and sixth generation factories, which can reduce

large-area display costs. ING estimates (2003) that the driving factors of LCD-TV

adoption are:

lower prices

regulations enforcing the migration of broadcast TV from analogue to digital

proliferation of personal TVs used as supplements to the household TV.

Tracey et al. (1999) studied the relationship between firms with a high level of advanced

manufacturing technology and greater customer satisfaction. Technology should be

studied while analysing high-tech products, as extensive strategy distribution depends on

technological intellectualism. Diagonal technology, size, resolution, aspect ratio, contrast

ratio, luminance, frame rate per second (fps), interface type, power consumption, and

viewing angle are critical technological issues in the LCD-TV industry. Therefore, slim

size, low radiation, and low power consumption are advantages of the LCD-TV.

Diagonal technology, resolution, aspect ratio, contrast ratio, and luminance are the result

of resolution of kinescope. Frame rate per second in kinescope is another technological


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indicator for the TV user, as well as a satisfactory size. Additionally, inner functioning,

product design, and other functions of LCD-TV are included. Resolution of kinescope,frame rate per second, size, inner functioning, product design, and added functions are

six key criteria for consumer buying behaviour applied to technical aspects of this study.

2.2 A brief review of customer behaviour researches

Market orientation has been adopted by managers, and long been defended by marketing

academics (Lear, 1963; Levitt, 1960). It first appeared in the 60s management theories,

and was promoted in firms during the 90s.

The four components of market orientation include customer orientation, competitor

orientation, inter-functional coordination, and customer focus-one of two long-term

decision-criteria l (Kohli et al., 1990; Narver et al., 1990). Market orientation has been

correlated with profitability and other measures of corporate success (Narver et al., 1990;Liu et al., 1997; Wang et al., 1993). Market orientation and customer orientation are

terms that have been used to describe the implementation of the marketing concept

(Kohli et al., 1990).

The customer-oriented marketing concept presented by Kotler (1967) is no longer a

mirage. Da Silva et al. (2002) showed that customer orientation is a central factor in

market orientation, but despite the importance of customer and market orientation, there

has been little research into how well suppliers understand their customers in a

commercial context. Additionally, Gruner et al. (2000), using empirical study, pointed

out that collaborating with financially attractive customers, or customers exhibiting

lead-user characteristics increases new product success. These literatures show that the

consumer plays a critical role in market strategy planning.

Companies therefore, need to position customer orientation accordingly and analyse

consumer buying-behaviour. Sheth (1994) has described relationship development as an

evolution from normal buying and selling to a new state where the customer is so

satisfied that he/she becomes another marketing arm for the seller. In addition,

Assael (1987) distinguished four types of consumer buying behaviour such as, complex,

dissonance-reducing, habitual, and variety-seeking, based on the degree of buyer

involvement and differences among brands. There are many variables that shape the

consumers decision-making process, including individual differences, environmental

influences, and psychological processes (Engel et al., 1995). Peter et al. (1993) studied

consumer behaviour as a means to improve marketing strategy and to assist product

promotion, pricing and channel strategy planning. This paper designed a questionnaire

based on the consumer decision process model with the idea that knowledge about

consumer buying behaviour will help firms in planning their marketing strategy. The

research shows some important factors about how customers make decisions.

3 Model construction and implementation

The concept of model and implementation are proposed in this section.

The implementation process is illustrated in Figure 1.


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Figure 1 Implementation process

The implementation process includes four steps. They are data collection, customer

preference analysis, measuring the relationships among customer decision factors, and

marketing strategy planning. The details about the four steps are as follows:

Step 1: Data collection.

The data is collected from questionnaires. The questionnaire is designed to match the

research objective. A random sampling is adopted in this study.

Step 2: Customer preference analysis.

We can know the customers preference by analysing the collected data. Data regarding

their comprehension levels of LCD-TV, willingness to buy, information source, preferred

brand, possession rate, motive, buying place, etc are collected by asking the customers,relevant questions. Through these questions, we can illustrate customer preference and

basic information.

Step 3: Measuring the relationships among customer decision factors.

The DEMATEL method is used to analyse the customers decision factors. It is a kind of

structural modelling approach. It is a comprehensive method for building and analysing a

structural model involving causal relationships between criteria. The special questions

formed are designed for DEMATEL. An example is shown in the appendix.

Step 4: Marketing strategy planning.

When we know the customers preference and relationships among customer decision

factors, we can make intelligent marketing strategy plans. We must integrate the aboveinformation to provide a synthesised marketing strategy plan.

4 An empirical study of LCD-TV market

There are five subsections of customer behaviour that provide clues to marketing strategy

in the LCD-TV market. The subsections include a questionnaire and data sampling,

customer preference analysis, measuring the relationships among customer decision

factors, and marketing strategy planning.


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4.1 Questionnaire and data sampling

The purpose of this empirical study is to understand customer behaviour with regard to

the LCD-TV through a questionnaire survey. The questionnaire includes three parts; the

first part is used to measure the relationships among decision factors; the second part

investigates the customers preference; the third part includes socio-economic data.

The population of this study is defined as persons over twenty years of age, living in

Taiwan. The sample size is at least 385 according to the two principles Mc Clave and

Dietrich (Hill et al., 1962) and Roscoes seven criteria (1975). A total of 1500

questionnaires were delivered, 779 returned, with 430 considered effective.

The Cronbach reliability coefficient of the questionnaire is 0.8320. We concluded that

the Cronbach reliability coefficients of this questionnaire are reliable. Table 2 shows

the collected sample according to gender, family life-cycle, age, income (monthly),

qualifications, and occupations.

Table 2 LCD-TV potential customers: questionnaire profile

LCD-TV questionnaire Sample Percentage

Gender

Male 320 74.4

Female 110 25.6

Family life-cycle

Singles 170 39.5

Couples 84 19.5

Younger parents 176 40.9

Age (years)

2125 35 8.1

2630 116 27.0

3135 51 11.9

3640 65 15.1

4145 66 15.3

4650 45 10.5

5155 36 8.4

5660 14 3.3

Over 60 2 0.5

Income (monthly)

Below 20,000 45 10.5

20,00140,000 67 15.6

40,00160,000 119 27.7

60,00180,000 90 20.9

80,001100,000 60 14.0

Over 100,001 49 11.4


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Table 2 LCD-TV potential customers: questionnaire profile (continued)

LCD-TV questionnaire Sample Percentage

Qualifications

Basic education 0 0

Secondary school 8 1.9

HND diploma/ certificates 48 11.2

Degree 125 29.1

Graduate institute or above 249 57.9

Occupation

Service industry 32 7.4

Student 45 10.5

Farmer 0 0

Engineer 405 24.4

Businessman 27 6.3

Public official 70 16.3

Teacher 17 4.0

SOHO or Unemployment 6 1.4

Housekeeper 0 0

Military or Police 77 17.9

Retires 1 0.2

Others 50 11.6

4.2 Customer preference analysis

We obtained basic information about the customers (Table 3) and found that 97.7% were

familiar with LCD-TV, showing that LCD-TV has become popular in Taiwan. Where do

customers obtain information about LCD-TV? Primarily from television (21.45%).

A small percentage (4.2%) owns LCD-TV, while the majority (95.8%) does not.

The preferred brand among customers is BenQ. In addition to the brand factor, the

marketing channel is also considered. 51.6% of customers prefer to buy the LCD-TV

from electric appliance retailers. Therefore, we must pay more attention to this preference

and plan appropriate channel strategies.

Furthermore, 88.6% of customers are willing to buy the LCD-TV if the price is

reasonable. The main motive for buying is the size of the LCD-TV and customers prefer

the 3040-inch size. Most manufacturers coincidentally produce LCD-TVs in3040-inches, but they must overcome some technical problems and cut to appropriate

sizes.

The most important issues are customer decision factors. These include price

(27.0%), quality (23.3%), resolution of kinescope (9.5%), and low radiation (8.7%).

Presently, each company producing LCD-TVs is making greater efforts to reduce cost to

increase their market share. But what is reasonable price? Take the 42-inch LCD-TV

for example. The accepted price is NT $50001 to NT $70000 (28.4%). From this data, we

can suggest that a reasonable price for a 42-inch LCD-TV can be between NT $50001

and NT $70000.


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Table 3 Customer preference analysis of LCD-TV


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4.3 Measuring the relationships among customer decision factors

We not only want to find the important factors but also to measure the relationships

among these factors. Why is such a relationship so important? Because understanding the

relationship among decision factors can assist managers in making marketing strategies.

A manager usually makes strategic decisions according to one purpose or dimension.

However, strategy is an interactive decision making process and is influenced by many

corporative factors, especially marketing strategy. The traditional concept of strategy

lacks multi-dimensional interaction. In this paper, the DEMATEL method is used to

build a relative relationship of decision factors for consumer buying behaviour.

The relationships support a multi-level viewpoint to plan a strategy which conforms to

actual situations and a competitive environment.

Before analysing the use of the DEMATEL method, it is important to be aware of

customer decision criteria. In previous researches, buying behaviour was studied only forthe supply side. Weber et al. (1991) reviewed 74 papers published since 1966, which

researched criteria used in selection of suppliers by all types of industrial buyers. Criteria

included price, quality and service issues. Da Silva et al. (2002) used six attributes to

assess customer orientation in buying behaviour. The criteria are cost, work quality,

delivery time in buying behaviour, responsiveness to requests, innovative ability, and

good design ideas. Kotler (1988) indicated the importance of analysing buyer behaviour

in market management. He also proposed the concept of price, product, place and

promotion for marketing strategy. Besides the literature review, at the inception of this

research, many interviews were made with customers and LCD manufacturing firms to

test and confirm which criteria appeared to be the most important in this context.

We synthesised the literature review, interviews, and the technological characteristics of

the LCD-TV to illustrate customer decision factors. The customer decision factors are

shown in Table 4.

Table 4 Dimensions and decision factors of customers

Dimensions Decision factors

Price

Quality

After-sale service

Size

Brand

Product

Function

Sales exposition

Advertising

Promotion

Channel

Good design ideaCreativity

Innovative ability

Slim

Low radiation

Low power consumption

Frame rate per second

Technical capability

Resolution of kinescope


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Details about the DEMATEL method are introduced in the Appendix where we explain

the DEMATEL method step by step.

Step 1: Notations

Notations used in this section are as follows:

fi i-th decision factor for customer

S a set of elements S= {f1,f2, ,f16}

Z initial direct-relation matrix

X normalised direct-relation matrix

T total-relation matrix

D sum of rows forTR sum of columns forT

Step 2: A customer evaluates the relationship between a pair of factors for decision

factors in the questionnaire. The initial direct-relation matrix Z is a 16 16 matrix

obtained by pair-wise comparisons in terms of influences and directions between

decision factors.

Step 3: The normalised direct-relation matrix X is obtained through equation (A2) and

equation (A3). The normalised matrix of direct relation is shown in the Appendix.

Step 4: The total-relation matrix T is calculated by using equation (A4). The matrix of

total relation is shown in the Appendix.

Step 5: Using the values ofD (sum of rows) andR (sum of columns) in the matrix of total

relations, a level of influence and a level of relation are defined. Based on Definition 5

and Definition 6, a causal diagram is created through equations (A5), (A6) and (A7).

The features of each decision factor are visualised as the oriented graphs. In this study,

we adapt the threshold value (p) as 0.39 to obtain the total relationship. 0.39 is the most

appropriate value to acquire a suitable relationship from trying above and under 0.39.

The value under 0.39 gains too many factors and complex relationships in the whole

system; the relationship is not obvious above 0.39. The key decision factors and

relationships are obtained from the total-relation matrix (Table 5) and the influence

degree of customer decision factors (Table 6). The causal diagram of total relation of

customer decision factors is shown in Figure 2.


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Table 5 The matrix of total relation


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Table 6 The influence of degree of purchasing concern factors

Symbols Di+ Ri DiRi

f1 9.868 1.124

f2 10.040 1.630

f3 10.114 1.019

f4 9.979 1.012

f5 9.898 0.902

f6 9.942 1.043

f7 9.870 1.333

f8 9.989 1.974

f9 9.847 1.069f10 9.790 0.173

f11 9.814 0.150

f12 9.702 0.165

f13 9.965 1.103

f14 9.908 0.328

f15 9.797 0.881

f16 9.819 1.294

Notation:

Symbols Contents

f1 Price

f2 Quality

f3 Brand

f4 Function

f5 After-sale service

f6 Size

f7 Sales exposition

f8 Advertising

f9 Channel

f10 Good design ideaf11 Innovative ability

f12 Slim

f13 Low radiation

f14 Low power consumption

f15 Frame rate per second

f16 Resolution of kinescope


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Figure 2 The causal diagram of total relation (p 0.39)

Results show that Quality (f2) is a powerful factor and plays a main role, because

the value of (Di +Rj) and (Di Rj) is very significant. On the contrary, Advertising (f8)

is negatively influenced by the other factors, because the value of (Di Ri) is

negative and the value is also significant. At the same time, we find the causal diagram oftotal relationship shows the same results Quality (f2) is a very powerful factor

affecting other factors and Advertising (f8) is the factor which is intensely affected

by the others.

In view of the causal diagram of total relation, there are four main factors,

Quality (f2)

Advertising (f8)

Sales exposition (f7)

Brand (f3).

Quality (f2) plays the key role in total-relation, while the other three factors are intensely

affected by other factors. Quality (f2) directly affects Brand (f3), Function (f4), Size (f6),Sales exposition (f7), Channel (f9) and Advertising (f8). Quality (f2) is the base on which

to develop Brand (f3). If the quality is good, Brand can be driven to be good;

simultaneously, it is bad. Function (f4) and Size (f6) are two parts of the whole product.

They are also developed, based upon quality. In addition, the marketing channel is

affected by quality. When there is good quality, there is a good channel. Each retailer

wants to sell good quality products. It is necessary to manufacture high quality products

to establish a good relationship with retailers. The same concept can be explained in the

relation between Sales exposition (f7) and Quality (f2).


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Furthermore, Advertising (f8) is influenced by six factors:

Price (f1)

Quality (f2)

After-sales service (f5)

Low radiation (f13)

Frame rate per second (f15)

Resolution of kinescope (f16).

As far as Price (f1) is concerned, it controls the attraction for consumers in advertising.

High or low price is dependent on product positioning in the market. Furthermore,

Quality (f2) can provide a guarantee of LCD-TV and avoid fraudulent advertising.

After-sales service (f5) is another factor affecting advertising success. Furthermore, Low

radiation (f13), Frame rate per second (f15), and Resolution of kinescope (f16) are special

characteristics of the LCD-TV. These technology factors are partially composed of

LCD-TV advertising. However, the styles, kinds, idiosyncrasies of customers and further

details of advertising are not discussed in this paper.

Moreover, Sales exposition (f7) is the second factor that is influenced by four factors:

Price (f1)

Quality (f2)

Low radiation (f13)

Resolution of kinescope (f16).

Price (f1) and Quality (f2) influence the degree of popularity degree to sell the product.

Price and quality are the most important factors for consumers. Sales can introduce

different levels of products with diverse prices and qualities to meet consumers various

needs. Sales must fully understand all kinds of price and quality levels, and knowledge of

Low radiation (f13) and Resolution of kinescope (f16) with regard to the LCD-TV is very

important for sales. Sales must have the ability to sell high-tech products. Sales with the

good exposition can catch consumers attention and help them choose suitable products.

Another influence factor is Brand (f3). It is separately affected by Quality (f2), Low

radiation (f13), and Resolution of kinescope (f16). High Quality (f2) can be a guarantee to

support brand. Low radiation (f13) and Resolution of kinescope (f16) are characteristics of

the LCD-TV. They affect the Brand image in the eyes of the consumers. In short, the

total relation is very important to help us understand the relationship of each key factor.

After understanding the complex relationship, we can then draft marketing strategy planson the basis of the causal diagram of the total relation in each section.

4.4 Mapping marketing strategy framework by decision factor relationship

A marketing strategy planning framework is illustrated, based on customer decision

factors relationship (see Figure 2) in this section. The perspective of decision factor

relationship shows the interactions among twelve decision factors. It is obvious that

Quality (f2) is a critical factor affecting the other eleven decision factors, so we put it as


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central to the marketing strategy planning framework. According to the characteristics of

factors and interactive relationships, we induced three strategic clusters based on marketposition and strategic operation concept. The three strategic clusters are product strategy,

sales strategy, and advertising strategy. Product strategy and sales strategy are named by

inducing the factors relationship. They are known as the Golden Triangle Strategies.

The marketing strategy framework is shown in Figure 3.

Figure 3 Marketing strategy planning framework

Brand (f3) plays the main role in product strategy. Other product characteristics areincluded. They are Function (f4), Size (f6), Low radiation (f13), and Resolution of

kinescope (f16). Sales exposition (f7) is a key factor successfully affecting sales strategy.

Sales exposition (f7) has an interaction relationship with Price (f1), Low radiation (f13),

and Resolution of kinescope (f16). As Channel (f9) also affects sales strategy, we put it in

this cluster. Furthermore, advertising strategy includes Price (f1), After-sale service (f5),

Low radiation (f13), Frame rate per second (f15), and Resolution of kinescope (f16). They

are the distinguishing features of LCD-TV except for Price (f1); so it is clear that

adverting strategy should focus on the LCD-TV characteristics.

The framework explains noticeable issues and interaction in marketing strategy

planning which can help marketing managers to plan suitable marketing strategies with

limited resources. Correct strategic aspect in firms is adopted to support substantial

management in the future.

4.5 Marketing strategy planning

Television is a kind of product shopping (Kotler et al., 2001). When customers are in the

process of choosing and making buying-decisions, they will carefully compare

applicability, price, quality and styles. Marketing managers do not typically distribute

their products through numerous sales channels, but provide consulting services to assist

customers making decisions. Understanding the characteristics of television can help us

to make appropriate marketing strategy plans.


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Three marketing strategies are proposed in Figure 3. First, we discussed product

marketing strategy. A products strategic decision is achieved by considering: productquality, function, size, and brand. Product quality is composed of performance quality

and conformance quality. Performance quality is the capability to implement LCD-TV

functions. Conformance quality encompasses quality control while conveying a stable

performance quality level to customers. High product quality then means high quality of

performance and conformance. Return on quality (ROQ) has been recently adopted in a

great majority of companies (Rust et al, 1995). Many decision makers regard quality as a

potential strategic weapon or a competitive requisite to create customer value and

satisfaction.

Product function is categorised as product characteristics. Each product can be given

a different level of characteristics. As the functions increase, the grade is higher.

However, the content of built-in functions is dependent on customer needs; it is also

valuable to customers and to the companys technology. According to the analysis above,the 3032-inch size TV is the most popular, with the 3540-inch being the second most

popular, showing the current preference for 3040-inch LCD-TVs. The large size

LCD-TV can be produced using high technology levels. If companies are equipped with

both technology design and mass production capability to deliver a high-resolution large

size LCD-TV, they will have a competitive advantage in the market. Size is just one

factor of product design. Good product design can attract customer attention, improve

product performance, and reduce production cost. In the future, LCD-TV manufacturers

should pay more attention to product design to increase their market share. For example,

the frame colour can be designed to match living room dcor. Individual style is

important for customers in this era, and conforming to current trends could increase

profits.

In addition to quality, brand is more important than product function and size

for product marketing strategy and branding can increase product value

(Kotler et al., 2001). In the LCD-TV market, most brands are owned by manufacturers.

In competing head-to-head with global customer electronics giants such as Sony,

Panasonic, and Samsung, brand name is no longer a panacea in the digital TV sector. But

brand is still a critical part of a product. At the same time, low radiation and high

resolution of kinescope must be considered when we make brand policy, as they are not

only the technology dimension factors but also product characteristics. With the causal

diagram of total relation, the two elements affect the brand. Brand image should be added

to the two technical elements to emphasise its importance. Customers still maintain a

high loyalty to home appliances, so it will be easier to contract with leading

manufacturers than creating a new brand. It means the well-known brand is a valuable

asset. Local manufacturers should heavily invest in brand name building and using that

brand image to gain more market shares.Second, we will illustrate the sales and marketing strategy. Quality, channel, sales

exposition, price, and technical characteristics should be considered while formulating

sales and marketing strategy. Sales exposition is the most important factor in obtaining a

successful sales and marketing strategy. Many factors contribute to building up the high

performance of sales exposition, e.g., recruiting, sales training mechanism, cordial

service attitude and professional knowledge about selling skills and LCD-TVs.

Additionally, price and technical characteristics low radiation and high resolution of

kinescope still affect sales exposition. Pricing policy can be divided into three levels:

high-price, general-level-price, and low-price. Generally speaking, lower price is more


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acceptable than higher price, so it is important in sales to be able to discriminate between

customers with different price demands. Regarding technology level, low radiation andhigh resolution of kinescope are special properties of the LCD-TV. Sales needs to

understand technical knowledge and characteristics, and should highlight the benefits of

low radiation and high resolution. Essentially, quality is a forceful guarantee to sales and

customers. Product quality, sales quality, and channel quality control the success of a

sales marketing strategy. The collection data shows that 51.6% of customers prefer to

buy the LCD-TV from electric appliances retailers; 20% of customers buy the LCD-TV

from brand channels; 14.7% of respondents from the mart. Since marketing managers

provide professional consulting services to assist customers making decisions, the

marketing channel can be an electric appliance retailer, a brand agent, or the mart in

accordance with information from customers. It is important therefore for manufacturers

to maintain a positive relationship with marketing channels.

Third, advertising marketing strategy is presented. Quality, price, after-sale service,mass media, resolution of kinescope, frame rate per second, and low radiation should be

considered in advertising marketing strategy. The first decision concerns the mass media.

Television, the internet, magazines, and newspapers are the most popular mass

media among customers. We should attract attention by using these popular mass media

avenues, especially the new medium- the internet. We must design various alternatives

according to different mass media. When we choose a medium, the message-marketing

strategy forms the basis for our decision. Advertising can transmit a companys mission,

brand image, product characteristics, and sales and marketing strategy. It is an important

medium for a company to convey particular information. Advertising is affected by

quality, price, after-sale service, resolution of kinescope, frame rate per second, and low

radiation With the exception of quality, the five elements can be separated into three

dimensions:

technology dimension (including resolution of kinescope, frame rate per second and

low radiation)

service dimension

price.

These can be regarded as advertising objectives to communicate with customers and be

classified into three kinds of advertisements. We can consider technology characteristics

as an informative advertising of a new product. High quality and after-sale service are

key elements for persuasive advertising. They tell customers that the company provides

the best quality and service. When we undertake promotion-marketing strategy, price

becomes the critical factor in marketing channels. We also can design different

advertising marketing strategies in accordance with product life cycle which canco-operate with other factors to make a good advertising marketing strategy.

The whole concept of synthetic marketing strategy is illustrated above. In this paper,

we provided a strategic framework and an aspect of marketing strategy planning for the

manager in TFT-LCD manufactures or LCD-TV firms. However, there are different

resources and competitive situations in different firms. This research only gives a clear

marketing strategy planning framework for the LCD-TV industry. Marketing managers

will need to adjust this marketing strategy framework to fit the corporation strategy

planning of different firms.


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5 Conclusions and recommendations

Customer needs should be highly regarded in new product development. In contrast to

supplier-side researches, we focus on the customer-side to explore customer preference.

According to our findings, the four most important customer decision factors are price,

quality, high resolution of kinescope, and low radiation. It is interesting that, no matter

whether customers prefer traditional TVs or LCD-TVs, they emphasise both Price and

Quality, rather than the technological aspect.

Measuring the relationships among customer decision factors can help us understand

the interactions. It not only provides critical decision factors but also illustrates

interactive relationships. Managers focus on a single critical purpose or central concept

of the corporation to make strategic decisions. But practically speaking, strategy is

influenced by many corporative internal actives and is interactive decision making.

Assisting the marketing manager in planning an overall marketing strategy is important.The DEMATEL method provides a useful way to obtain knowledge of the relationships

among customer decision factors. Then, a marketing strategy planning blueprint is

illustrated in the base of total relations among customer decision factors. We also

proposed three main strategies- product strategy, sales strategy, and advertising strategy,

which together we call the Golden Triangle Strategies. Golden Triangle Strategies are in

the basic of Quality. Then we synthesise customer preference analysis, and mark

segmentation information to design marketing strategy planning.

This study provides relationships and marketing strategy planning framework for

firms in the LCD-TV market to understand customer needs and reduce the gap between

technology and customer-needs.

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Appendix

DEMATEL method

The DEMATEL method is based on a graph theory that enables us to plan and solve

problems visually, so that we may divide multiple criteria into a cause and effect group in

order to better capture causal relationships visibly. Directed graphs are more useful than

directionless graphs, because digraphs can demonstrate the directed relationships of

sub-systems. A digraph may typically represent a communication network, or a

domination relation between individuals, etc. Suppose a system contains a set of


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elements S= {f1, f2, ,fn}, and particular pair-wise relations are determined for

modelling with respect to a mathematical relation E. Next, to portray the relation Eas adirect-relation matrix that is indexed equally on both dimensions by elements from the

set S. Then, take out the case that the number is 0 appearing in the cell (i,j), if the entry is

a positive integral that has the meaning of:

the ordered pair (fi,fj) is in the relationE

it has the kind of relation regarding that element fi causes elementfj.

The digraph portrays a contextual relation among the elements of system, in which a

numeral represents the strength of influence (Figure A1). The A, B, C, D and E represent

the factors which have relations in Figure A1. The number between factors is influence

or influenced degree. For example, an arrow from B to A represents the fact that B

influences A and its influenced degree is three. The DEMATEL method can convert the

relationship between the causes and effects of criteria into an intelligible structural modelof the system. In order to apply the DEMATEL method smoothly, we refined the version

used by Hori and Shimizu (1999) and made essential definitions as below.

Figure A1 DEMATEL digraph

Definition 1: The pair-wise comparison scale may be designated into four levels, where

the scores of 0, 1, 2, 3, and 4 represent No influence, Low influence, High influence,

and Very high influence respectively.

Definition 2: The initial direct-relation matrixZis a n n matrix obtained by pair-wise

comparisons in terms of influences and directions between criteria, in which zij is denoted

as the degree of which the criterion i affects the criterionj.

11 12 1

21 22 2

1 2

n

n

n n nn

z z z

z z z Z

z z z

=

(A1)

Definition 3: The normalised direct-relationmatrix X can be obtained through the

equations (A2) and (A3), in which all principal diagonal elements are equal to zero.

X=sZ (A2)


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11

1

( , 1,2, , )max

n

iji n

j

s i j nz

=

= =

(A3)

Definition 4: The total-relation matrix T can be acquired by using the equation (A4),

where theIis denoted as the identity matrix.

T=X+X2 + =X(IX)1 (A4)

Definition 5: The sum of rows and the sum of columns are separately denoted asD and

R within the total-relation matrix Tthrough the equations (A5), (A6), and (A7).

[ ] ( , 1,2, , )ijT t i j n= = (A5)

1

( )n

i ij

j

D D t =

= =

(A6)

1

( )n

j ij

i

R R t =

= =

(A7)

whereD vector andR vector denote the sum of rows and columns respectively.

Definition 6: SupposeDi. denotes the row sum ofi-th row of matrix T. Then,Di. shows

the sum of influence dispatching from factor i to the other factors both directly and

indirectly. Suppose R.j denotes the column sum ofj-th column of matrix T. Then, R.j

shows the sum of influence that factori is receiving from the other factors. Furthermore,

when i =j, i.e., the sum of row sum and column sum (Di.+R.j) shows the index ofrepresenting the strength of influence both dispatching and receiving, that is, (Di +R.j)

shows the degree of central role that the factor i plays in the problem. If (Di R.j) is

positive, then the factori is rather dispatching the influence to the other factors, and if

(Di R.j) is negative, then the factor i is rather receiving the influence from the other

factors (Tamura et al., 2002).

Table A1 The matrix of direct relation

Factors f1 f2 f3 f4 f5 f6 f7 f8 f9 f10 f11 f12 f13 f14 f15 f16

1 0.000 0.052 0.066 0.068 0.057 0.068 0.074 0.077 0.068 0.060 0.063 0.059 0.056 0.061 0.056 0.054

2 0.057 0.000 0.070 0.072 0.060 0.073 0.078 0.082 0.073 0.064 0.067 0.063 0.060 0.064 0.060 0.057

3 0.043 0.042 0.000 0.056 0.047 0.057 0.062 0.065 0.057 0.050 0.052 0.049 0.047 0.051 0.047 0.0454 0.044 0.042 0.056 0.000 0.046 0.056 0.060 0.063 0.056 0.049 0.051 0.048 0.046 0.049 0.046 0.044

5 0.054 0.052 0.069 0.068 0.000 0.066 0.072 0.075 0.067 0.059 0.061 0.058 0.055 0.059 0.055 0.052

6 0.044 0.043 0.056 0.055 0.045 0.000 0.060 0.063 0.055 0.049 0.051 0.048 0.045 0.049 0.045 0.043

7 0.045 0.043 0.057 0.056 0.046 0.056 0.000 0.058 0.051 0.045 0.047 0.044 0.042 0.045 0.042 0.040

8 0.042 0.040 0.053 0.052 0.042 0.052 0.051 0.000 0.049 0.043 0.045 0.042 0.040 0.043 0.040 0.038

9 0.044 0.042 0.056 0.055 0.045 0.055 0.054 0.058 0.000 0.049 0.051 0.048 0.045 0.049 0.045 0.043


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Table A1 The matrix of direct relation (continued)

Factors f1 f2 f3 f4 f5 f6 f7 f8 f9 f10 f11 f12 f13 f14 f15 f16

10 0.050 0.048 0.064 0.062 0.051 0.062 0.061 0.066 0.062 0.000 0.058 0.054 0.051 0.055 0.051 0.049

11 0.049 0.047 0.062 0.061 0.050 0.061 0.060 0.065 0.061 0.054 0.000 0.052 0.049 0.053 0.049 0.047

12 0.049 0.047 0.062 0.061 0.050 0.061 0.060 0.065 0.061 0.054 0.055 0.000 0.052 0.057 0.052 0.050

13 0.056 0.054 0.071 0.070 0.057 0.070 0.068 0.074 0.070 0.062 0.063 0.063 0.000 0.060 0.055 0.053

14 0.052 0.050 0.066 0.065 0.053 0.064 0.063 0.069 0.065 0.057 0.058 0.058 0.051 0.000 0.051 0.049

15 0.054 0.052 0.068 0.067 0.055 0.067 0.066 0.071 0.067 0.059 0.061 0.061 0.053 0.057 0.000 0.053

16 0.056 0.054 0.071 0.070 0.057 0.070 0.068 0.074 0.070 0.062 0.063 0.063 0.055 0.060 0.057 0.000

Table A2 The matrix of indirect relation

Factors f1 f2 f3 f4 F5 f6 f7 f8 f9 f10 f11 f12 f13 f14 f15 f16

1 0.255 0.242 0.320 0.316 0.259 0.316 0.321 0.343 0.314 0.277 0.286 0.274 0.255 0.276 0.257 0.246

2 0.267 0.260 0.340 0.335 0.275 0.335 0.341 0.364 0.333 0.294 0.304 0.291 0.271 0.292 0.272 0.261

3 0.209 0.201 0.268 0.262 0.215 0.262 0.266 0.284 0.260 0.229 0.237 0.227 0.211 0.228 0.213 0.204

4 0.206 0.198 0.262 0.261 0.212 0.258 0.263 0.281 0.256 0.226 0.234 0.224 0.209 0.225 0.210 0.201

5 0.247 0.238 0.314 0.310 0.257 0.310 0.316 0.337 0.308 0.272 0.282 0.270 0.251 0.271 0.252 0.241

6 0.204 0.197 0.260 0.256 0.210 0.259 0.261 0.278 0.254 0.224 0.232 0.223 0.207 0.224 0.208 0.199

7 0.196 0.188 0.249 0.246 0.202 0.246 0.254 0.268 0.244 0.216 0.223 0.214 0.199 0.215 0.200 0.191

8 0.184 0.177 0.234 0.231 0.189 0.231 0.236 0.254 0.230 0.203 0.210 0.201 0.187 0.202 0.188 0.180

9 0.202 0.194 0.256 0.253 0.207 0.253 0.258 0.275 0.254 0.221 0.229 0.220 0.204 0.221 0.205 0.197

10 0.229 0.220 0.290 0.287 0.235 0.286 0.292 0.312 0.285 0.254 0.260 0.249 0.231 0.250 0.233 0.223

11 0.222 0.213 0.282 0.278 0.228 0.278 0.284 0.303 0.276 0.243 0.255 0.242 0.225 0.243 0.226 0.216

12 0.226 0.218 0.288 0.284 0.233 0.284 0.290 0.309 0.282 0.249 0.258 0.249 0.229 0.248 0.231 0.221

13 0.254 0.244 0.322 0.318 0.261 0.318 0.324 0.346 0.316 0.278 0.289 0.276 0.260 0.278 0.259 0.247

14 0.235 0.226 0.298 0.294 0.241 0.294 0.300 0.320 0.292 0.258 0.267 0.255 0.238 0.260 0.239 0.229

15 0.245 0.235 0.311 0.307 0.252 0.307 0.313 0.334 0.305 0.269 0.279 0.266 0.248 0.268 0.252 0.239

16 0.255 0.245 0.323 0.319 0.262 0.319 0.326 0.347 0.317 0.280 0.290 0.277 0.258 0.279 0.259 0.251

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