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Seeking Profit

TV manufacturers rethink business models, dealer relations.

July 19, 2012 By Nancy Klosek

Something had to be done to revive a broken business model. That’s the consensus among a group of key television suppliers, some who recently revamped pricing policies and third-party marketplace rules to try to increase margins on their higher-end models.

On top of those inbred problems, there are other outside factors that continue to hurt the TV market as it moves into the second half of the year: the unsteady European economy, the lousy job and housing markets, the financial markets’ volatility, the elections, and the possible tax changes that could occur in 2013. And, of course, there’s the possibility of an Apple TV.

Suppliers recently told Dealerscope about how they are re-strategizing around all these land mines to help dealers capture higher-ticket sales and better margins through the rest of the year. Here’s what they had to say.

Dealerscope: If you have instituted UPPs (unilateral pricing policies) or third-party Internet marketplace sales policies, what results are you seeing from your actions? And if you have not, what are you doing to help improve dealer profitability?

Dave Das, Vice President, TV Marketing, Samsung: Samsung instituted new policy changes in order to ensure the long-term viability of our channel partners, and to permit Samsung to continue to invest significantly in R&D to deliver cutting-edge technology and industry-leading designs.

The majority of our partners have told us that they are more profitable on Samsung year-over-year. Samsung has also gained TV market share on a revenue basis year-to-date, according to NPD. Customers continue to vote with their wallets for Samsung, and our partners are more profitable, so we are extremely pleased with the progress thus far.

Michael Fasulo, Executive Vice President, Sales Operations, Sony: Our dealers are very supportive of the policy and programs we’ve deployed this year as they see a road to profit on Sony products. The introduction of our Strategic Investment Program (SIP) and SURE program will insure the very best customer experience as they are pay-for-performance models. Those dealers that invest in providing a great consumer experience when shopping for Sony will be rewarded; those who choose not to will not.

Startup of any revolutionary activity always comes with a level of pain, but the results offset that significantly. We are already hearing of positive results from select dealers we have spoken with. The real results will occur as the program ramps up in the coming weeks.

 

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