Just being in the same league as the big brands would be enough for most young companies, but VIZIO is a legitimate big brand killer: In the second and third quarters of 2007, VIZIO beat out its better-known rivals and took first place in market share, according to researcher iSuppli Corp. VIZIO did fall to third place in Q4 2007 and Q1 2008, but that seemed to be largely because Samsung and Sony used deep discounts and aggressive promotions to compete with VIZIO. Less than one percentage point separates the three vendors in sales, according to iSuppli.
Nevertheless, VIZIO is now a brand—maybe the brand—to be reckoned with in LCD TVs. According to CNBC’s Silicon Valley Bureau Chief, Jim Goldman, Vizio came out of nowhere. In 2002, William Wang tried to sell Gateway on the idea of moving from computers to flat panel TVs. Gateway never successfully made the switch—so Wang went off on his own and launched VIZIO. “This is one of the most extraordinary stories I’ve seen in some time,” says Goldman.
VIZIO’s numbers have been anything but flat: According to Jim Goldman, VIZIO had sales of US$ 700 million in 2006 and was expecting triple that in 2007. And, says Goldman, all of this revenue is coming from the United States. The company has only recently started to sell its televisions internationally, so the potential for future growth is unlimited.
How did a new brand with no defined reputation rise so high so quickly? The company’s slogan embodies the answer: “Where Vision Meets Value.” Very simply, VIZIO came to the market with a quality product at a price that was not just low—it positioned the brand as the low price leader. And in a market where products are typically priced in the thousands of dollars, that is a powerful advantage.
VIZIO is based in California and has a small staff in the US, but it manufactures its products in Asia and Mexico. Low overhead means VIZIO can make televisions for a fraction of the price of its larger competitors. In fact, in 2003, a VIZIO 46-inch TV was first introduced into the market at a retail price of US$ 2,799—around half the price of competitors’ similar models.
VIZIO has maintained its strategy to be recognized as the lowest-priced brand. For example, the 42-inch screen Vizio “Gallevia” can currently be purchased for as low as US$ 1,199. It was the least expensive LCD TV reviewed by PCWorld (September 12, 2007), yet it earned the best image-quality score of any LCD TV. At the time, comparable sets were selling for anywhere from $200 to as much as $600 more than the Gallevia.
VIZIO’s exceptional awareness is also fueled by the brand’s distribution strategy. VIZIO brand televisions are sold exclusively in such giant discount retailers as Costco Wholesale, Sam’s Club, and Wal-Mart, where the bigger brands’ prices can be undercut. Wal-Mart alone gives the VIZIO brand exposure to a huge consumer audience of value-based buyers.
It also doesn’t hurt that VIZIO is something of a media darling. In October 2007, TIME magazine called the 42-inch Gallevia one of the “best inventions of the year.” VIZIO has been featured on NBC’s Today Show and ABC’s Good Morning America. Its products have won numerous awards, including Good Housekeeping’s Best Big-Screens, CNET’s Top 10 Holiday Gifts, PCWorld’s Best Buy, Sound & Vision’s Editors Choice, Home Theater Magazine’s Rave Award, and PC Magazine’s Editors Choice.
Exceptionally low prices and excellent media coverage have carried VIZIO through its early years, but now it wants to build critical mass. That is a formidable challenge against competitors with very deep pockets, so VIZIO has taken a big step by investing millions of dollars in marketing.
In July 2007, VIZIO signed an endorsement deal with 2006 NFL MVP LaDainian Tomlinson, who appeared in a VIZIO television ad late last year. Tomlinson also makes personal appearances on behalf of the brand. In early 2008, VIZIO created the “VIZIO Top Value Performer Award,” presenting the first one to David Garrard, quarterback of the NFL team, Jacksonville Jaguars. VIZIO says the award is intended “to salute the athlete whose performance on the field outpaced his salary by the widest margin.” That’s a novel way to tie the award directly to VIZIO’s unique selling proposition.
Linking a brand with sports is a proven marketing strategy. For VIZIO, it makes perfect sense: Sports television programming is a hot commodity, so the marriage with VIZIO’s product line is a natural. If VIZIO can keep pounding competitors with its compelling message of outstanding product value, then the brand could be positioned to score a knockout punch in the market for flat-screen TVs.