Visio’s Unusual Yet Successful Strategy
If you don’t know Vizio yet, you will very soon. The LCD TV maker has quickly staked out a place in the flat-panel market and has elbowed aside some of the biggest names in electronics in the process. For all the clout and brand recognition that accompanies names like Sony and Samsung, it was Vizio, a virtual unknown a year ago, that topped all LCD TV makers in the second quarter of this year in televisions shipped to retailers. Vizio sold 606,402 TVs in North America in the second quarter, a 76% jump from the previous quarter. Former market leader Samsung dropped to second place. But the company that took the biggest dive was Sony.
The biggest reason for Vizio’s sudden rise is its distribution strategy. At the beginning of the second quarter, the company expanded its list of retailers to include Wal-Mart Stores, Sears, Kmart and Circuit City, providing a huge boost to its shipment total. The company started by selling TVs only through warehouse stores Costco Wholesale and Sam’s Clubs. In addition, the quality of Vizio LCDs looks very similar to the Sonys and Samsungs on the store floor–and the price is significantly lower. Much of the sales have been word-of-mouth endorsements. Vizio has done little in the way of advertising. But that’s about to change come this fall.The company is prepping for a big marketing push when the new National Football League season kicks off next month. The ad campaign attracted a big-name spokesman, too: last year’s league MVP, LaDanian Tomlinson of the San Diego Chargers. The advertising, of course, will be done in true Vizio style: the budget will be less than 1% of overall spending. Vizio’s strategy essentially revolves around trying to have the cheapest TVs in the mid- to high price range.
