Electronic Living @ Home
Consumer Electronics Ownership and its Role in the Connected Home

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The number of both data- or PC-centric network nodes and the number of networked entertainment nodes are set to explode in the next few years, but without a fundamental understanding of the consumer, the risk of failure is amplified as companies try to capitalize on this emerging market in this unforgiving economic environment.

Parks Associates' new multiclient proposal Electronic Living @ Home will provide the insight into purchase behavior and electronics ownership for both Internet and non-Internet households and set the foundation for solid business models and intelligent market decisions for entering and succeeding in this high-tech arena.

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Consumer Electronics and Home Networking: A Perfect Match

As consumers embrace home networking technology, electronics manufacturers and retailers seek to identify which devices will most likely be connected to the home local-area network (or LAN). According to Parks Associates’ latest research, while PCs and peripherals will remain the most common devices found on home networks, networked digital entertainment devices will drive the next generation of consumer electronics.

Parks Associates anticipates that, as PCs evolve to become entertainment centers and as “thick-client” media servers find their way into consumers’ homes, digital televisions, MP3 players, CD players, and audio receivers will soon compete with PCs and printers for a dominant presence in the home network. These consumer electronics enjoy both mass appeal and enhanced functionality when joined with a home network (see Figure 1).

Figure 1

Leveraging Market Momentum to Optimize Product Planning

Both the number of data- or PC-centric network nodes and the number of networked entertainments nodes are set to explode in the next few years. More than 55 million PC nodes and 120 million network-capable entertainment nodes will find their way into U.S. homes by 2006. (See Figures 2 and 3)

Figure 2

Figure 3

The momentum has been identified. The question is whether or not your company can leverage this momentum to generate new revenues.

It is common knowledge among those who have endured the technology and telecom downturn that surviving in this environment requires understanding both the scope and timing of emerging opportunities. The road is littered with the corpses of start-ups and well-intentioned blue-chip companies whose lofty enthusiasms were years ahead of the market. In other words – great ideas, poor timing.

Their mistake? They failed to ground their marketing and product development strategies in sound, realistic primary consumer research. Without a fundamental understanding of the consumer, their risk of failure was amplified – especially in this unforgiving economic environment.

Those companies that survived are well aware that even in the toughest of times the value of consumer research is without question. It is for these survivors that Parks Associates offers our latest national consumer study: Electronic Living @ Home.

The Benefits of Electronic Living @ Home

• Provides An In-Depth Understanding of CE Purchasing Behavior

Electronic Living @ Home will provide timely, first-hand consumer research on both who the home electronics consumer is (i.e., demographically, sociographically, psychographically), as well as specific insights into consumer purchase decisions (e.g., which products and services they will pay for, how much they will pay, and why they may select one product or service over another).

• Furnishes Insight Into Both Internet and Non-Internet Households

Electronic Living @ Home not only explores residential Internet subscribers, but will examine households that do not currently subscribe to Internet service. While online surveys can tell a great deal about Internet consumers, telephony-based surveys are required to complete the picture by bringing non-Internet households into the mix. This unique multi-mode strategy serves to differentiate this project from others that depend exclusively on either online- or telephony-based surveys.

• Provides Customized Research without the Price!

Custom research can be very expensive – in fact, to take a multi-mode research project to field would cost your organization in excess of $50,000. But by partnering in our multiclient research projects, each client gets the chance to customize the survey instrument without having to bear the exorbitant costs often associated with such customization.

• Getting Onboard Now Maximizes Costs Savings and Insures Custom Input

Partners who join Electronic Living @ Home receive a significant cost savings while maximizing the deliverables: clients are assured a primary role in the development of survey instrument and receive the raw data in SPSS format, the banner tabs, and the final report as they are generated. Purchasing the final report after the project has gone to field is significantly more expensive and limits the receivables to just the report: no raw data or banner tabs and no custom input.

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Electronic Living @ Home will utilize a mixed-mode research strategy:

• First, Parks will draw a random sample of 1.000 U.S. households using telephone-based interviews.

• Second, Parks will conduct extensive online interviews of 1,000 Internet households (500 narrowband and 500 broadband) to provide an over-sample against which to test the findings of the telephony survey.

Phase I: National Telephone Scan of 1,000 U.S. Households

Phase I of Electronic Living @ Home will be telephone-based and will comprise a survey of 1,000 U.S. households reflective of the latest U.S. census statistics. We will attempt to retain the key questions used in previous consumer surveys so as to provide trending data, with new questions added to reflect recent market developments.

Sampling

The survey will be comprised of a representative sample of 1,000 U.S. households. The survey methodology will consist of (1) matching the sample to the 2000 U.S. census, and (2) the use of random digit dialing.

Major Topics of the Survey

The major topics of the telephony survey will include:

• Consumer electronics ownership and intentions to purchase other CE devices in the next 12 months

• PC ownership and proclivity to purchase a home PC

• Features of current PCs and peripherals

• Awareness of and receptivity to high-speed Internet services

• Penetration of home networks and likelihood of non-networked homes to purchase a network in the next 12 months

• Awareness of and attitudes toward different types of Internet-enabled devices

• Types of electronics connected to home networks

• Likelihood of upgrading to high-speed Internet services

• Most appealing applications of high-speed Internet and price points for specific networked services in the home

• Marketing avenues/approaches that appeal to online users

• Demographic, psychographic, and sociographic information

Phase II: Survey of Internet Users

Phase II of Electronic Living @ Home will survey 1,000 U.S. Internet households — 500 narrowband and 500 broadband.

Sampling

The survey will be delivered to participants using a well-known Internet research house that has an extensive database of Internet consumers and has to date partnered with Parks Associates on numerous large-scale research projects. One thousand Internet households will be randomly selected from a pool of more than 32,000 online consumers.

Major Topics of Survey

The online survey design will be virtually identical to the telephony-based survey, with the exception of Internet-adoption queries. Of course, as with all of our multiclient studies, we will go to great lengths to incorporate the questions that our clients request.

Value of a Multi-Mode Research Strategy

While online and telephony-based research often produce similar results, following a multi-mode strategy helps balance the benefits and disadvantages of both approaches to provide a more consistent and reliable output. It is an excellent strategy to reduce coverage error (i.e., when individuals invited to participate in a survey are not representative of the target population) and non-response error (i.e., when individuals respond to a survey invitation different from the entirety of those sampled). While multi-mode strategies usually entail more administrative and interpretive work, they do tend to produce more reliable results.

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