Originally Posted by heatwave3
Pioneer's branding isn't the issue. I think most folks would agree, even with basic consumers, its brand is well regarded.
I would agree that branding isn't their biggest problem, but it could easily be part of the solution for them.
I don't think most 'basic consumers' are all that aware of the Pioneer brand in TVs, and if they are, they don't hold it in anywhere near the regard that we videophiles do. Those two things, lower awareness and insufficient regard, cause most average buyers to be unwilling to pay the the significant premium that Pioneer TVs go for.
Pio can be a "tough sell", as someone on the store floor would say.
Improved branding, while not the core of the problem, could definitely be part of the solution for Pioneer. Look at Apple, for example- ppl are willing to pay significant premiums for Apple computers, and have been for many years. Without this, Apple would not have survived their rough years in the mid/late '90s, and would've been acquired by someone else, a very similar situation to what Pio is going through now.
Apple is a case of successful branding. Pio needs to improve in this regard, and become more of a 'status' brand than they currently are.
Unfortunately it has still overpriced its products or not communicated the value of its 5 plasma models well enough to make a profit. In fact, their plasma business is an abject failure from a business perspective after 5 consecutive years of net losses.
The only way better marketing and branding would help is to position their products with an even higher price than they already have to avoid a loss on every single unit they sell. We can all guess how well that would work in this economy.
I wouldn't be so quick to write off branding as part of the cure. The high-end of any market, while not immune to the state of the economy, is at least somewhat sheltered from it. The rich tend to stay rich, after all.
While I think Pio's long-term survival is indeed incumbent upon attracting more 'upper midrange' customers instead of being more or less exclusively high-end, there's no doubt that better branding (of the RIGHT kind) would be helpful. I would agree that its not the whole solution, their cost structure is out of whack.
However, they are taking steps to address that. Look at their recent deal with Panasonic.
Think of Pio's future, involving branding, not so much as using branding to justify EVEN HIGHER prices, as you said, but more a one-two punch of somewhat lower prices (again, due to their Panny deal and restructuring) PLUS better branding/the right branding message.
As in, "Hey, there's this incredibly awesome luxurious TV that only the smart/rich/in-the-know ppl use", BUT, it's actually almost affordable. *YOU* could actually own one."
Before you say that such status/exclusivity is impossible without greatly higher prices as opposed to somewhat-lower, but-still-high prices, again, look at Apple. That's pretty much what they do.
The other alternative is to change their business model to a much more volume based business approach that would allow them to capitalize their fixed costs across many more units sold. This approach would mean far lower prices, elimination of their dealer network and elevate their mass media volume targets. This is a possibility however it would certainly diminish their brand image and possibly have an impact on their other product lines. I'm also sure their exclusive dealer network would have a serious problem with this approach.
That is indeed the tightrope they walk. If they go too far towards the mass market, then yes, they face brand diminishment and dealer rebellion. But there is some sort of happy medium where they increase sales volume without being 'just another brand'. That, combined with their Panasonic deal and recent restructuring plans, could drive down their costs significantly enough to be very useful.
Lastly is to sell off the Plasma business and focus on their profitable and larger car audio business. A possibility.
Or merge the entire business with a stronger better capitalized company. Since Sharp is a 15% equity holder of Pioneer, they are certainly a candidate to take them over. I could see Sharp buying Pioneer and selling off the Plasma business to Panasonic to fund the acquisition. Sharp would dump the money-losing Plasma business given Sharp's lack of Plasma business knowledge and Panny's focus in that area.
That's a very interesting and possible scenario. I think if Pioneer's TV assets get acquired by anyone, most of us here would prefer it be Panasonic in the end, for obvious reasons.
All just speculation but my suspicion is that decisions are in the works and will be executed sooner rather than later given the world economic decline. History says Pioneer can't make money on their Plasma business in a good economy therefore they will only lose dramatically more in a cratered economy.
+1000. I think you hit the nail right on the head, barring some dramatic changes.
Pio's making some good moves now, but if I had to bet, I'd say that they'll likely be acquired. But the problem of making the Pioneer brand and TV assets work will remain, even if they become part of another entity. No one is likely to simply just dump the Pioneer brand over the side, it's part of the value of acquiring those assets..