J.D. Power and Associates Reports: Despite Respective Advantages of Both Types of Technology, Retail Electronics Salespersons Recommend LCD TVs Far More Frequently than Plasma TVs

WESTLAKE VILLAGE, Calif.: 16 July 2008 — At a rate of more than 3 to 1, retail electronics salespersons are recommending liquid crystal display (LCD) flat screen TVs instead of sets using plasma technology to shoppers who are seeking to purchase big screen televisions (sets with screens measuring 40 inches or larger), according to the 2008 J.D. Power and Associates and Market Force Information Television Retail Insights ReportSM released today.

The report, produced jointly by J.D. Power and Associates and Market Force Information, compiles the findings of more than 2,000 trained mystery shoppers who shopped during the past six months. The mystery shopping research measures the product knowledge of salespersons and investigates the types of recommendations they make to customers.

“The fact that salespeople are pushing shoppers so aggressively to LCD sets is unfortunate because plasma technology does offer a number of unique advantages, not the least of which is that inch for inch, plasma sets cost less than LCD sets,” said Chris Denove, Vice President of Operational Research at J.D. Power and Associates. “In addition, compared with LCD sets, plasma TVs also display deeper blacks and show fast moving objects better than LCD TVs.”

The report finds that the high proportion of recommendations of LCD sets is primarily due to retail salespersons’ lack of knowledge regarding recent improvements in plasma technology. For example, nearly one-half (43%) of the salespersons who recommended LCD technology told their customers that LCD sets last longer, and more than one-third of these salespersons warned their customers that images may be permanently burned onto the screens of plasma TVs.

“Although burn-in was once a problem with the first plasmas to hit the market, this has not been a serious issue for several years,” said Denove. “In addition, the durability of plasma sets is now on par with that of LCD TVs, with many of today’s plasma sets rated to operate for 50,000 hours or more without failure.”

While many salespeople focused on problems that have been long resolved, most failed to tell their customers about some of the actual advantages of LCD’s – less than a fourth mentioned that LCD sets are lighter, use less energy, and produce less heat than plasma sets. One very real plasma concern that salespeople did bring up to their customers is that plasma sets have shiny glass screens that can reflect unwanted light in brightly lit rooms (mentioned by 68% of salespeople).

Although LCDs are recommended much more often, plasma manufactures may take solace in the fact that the gap is narrowing. The recommendation rate for plasma TVs increased from 17 percent in the first quarter of 2008 to 23 percent in the second quarter. In addition, among salespersons who recommend LCD over plasma technology, many are described as being less emphatic in their recommendation than they were just three months ago.

“The growing rate of plasma recommendations means that plasma TV technology is not likely to fade away anytime soon the way that HD DVD technology did recently, in favor of Blu-ray DiscTM technology,” said Denove.

The television brands that retail salespersons recommend most often for LCD sets are Samsung and Sony. During the second quarter of 2008, Samsung and Sony were recommended by salespersons 35 percent and 28 percent of the time respectively. Vizio sets were the third most recommended brand garnering approximately 7 percent all recommendations. No other LCD brand received a recommendation rate of more than two percent.

Among plasma television brands, Panasonic was recommended by salespersons 37 percent of the time, while Samsung and Pioneer were recommended 14 percent and 12 percent of the time, respectively.

“At most retail stores, large-screen television shoppers face an array of flat panel sets that all look essentially the same to the untrained eye, which is why recommendations from salespersons carry so much importance,” said Denove. “If customers have not established a clear brand preference by the time they begin to shop, they’re more likely to purchase the brand their salesperson recommends.”

The report finds that television shoppers are likely to encounter very different levels of service and expertise depending on the type of retailer: a big box electronics retailer (such as Best Buy or Circuit City); a specialty television retailer (such as Ken Cranes, MyerEmco); a mass merchant (such as Target or Wal-Mart); or a warehouse store (such as Costco or Sam’s Club). On average, specialty retailers provide more comprehensive and accurate answers to shoppers’ questions. Big box stores also perform well in providing customer service, but product knowledge tends to be less consistent among individual salespersons. Salespersons at mass merchants, however, are often unable to provide answers to basic technical questions or make definitive product recommendations.

“Television shoppers who visit mass merchants may be more concerned with obtaining a low price and may not be seeking expert advice,” said Denove. “However, television shoppers should be aware that the lower prices they find at mass merchants are primarily due to the fact that these stores tend to carry second-tier brand TVs, rather than major brands, such as Sony or Panasonic. When pricing for a specific television model is compared at each type of retailer, the prices are surprisingly similar. In addition, many specialty retailers and big box stores provide price match guarantees. Even though shoppers may perceive that TV prices tend to be higher at certain types of retailers, it is important that they consider shopping at retailers where they can obtain product information and technical support that will allow them to be comfortable with their purchase decision. High definition televisions can be complicated to set up and operate, which means that consumers should not underestimate the importance of sound advice.”

About Market Force Information

Market Force Information, Inc. is the leading global customer experience information and insights company for multi-location businesses including major retailers, restaurants, grocery and convenience stores, financial institutions, entertainment studios and consumer packaged goods companies. With over 120 years of combined industry experience, Market Force Information has pioneered the industry with a suite of customer experience information solutions – from 300,000 mystery shoppers, to real customer surveys, to expert evaluation – that provides actionable insight into the customer’s ‘moment of truth’ and gives its clients a holistic view of their customer’s in-store experience.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries.