Acer

Marketing Management 2, Group 1

Indian Laptop Industry

• In sync with global trends.• Reasons for growth:

– Lifestyle of consumers– Affordability– Better Legislation

Marketing/Situation Analysis (The 5 C’s)Notebooks Netbooks Business PCs

Consumer PCs

Server & Storage

Regular series - students, youth population,Travellers (TravelMate)Ferrari-designed laptoRetail Partnersps - high end customers like architects, designers etc.

StudentsYoung entrants in job market

Government and institutional clients

Household consumers through retailers

System integrators in the BFSI, IT, education, telecom and government segments

• Company– Currently the world’s No. 2 total PC and notebook

player– Today, Acer is a multi-brand company, having

successfully implemented a Multi-brand Strategy

• Competitors

Market Shares

• Collaborators– Acer has always been dedicated to a single,

unambiguous Channel Business Model,– Acer has tie-up with Scuderia Ferrari for niche

products like Designer Notebooks and Smart Phones

• Context– growth rate of IT product industry is considerably

high

Market Segmentation (Geographic)Acer HP Dell Lenovo

North, South, East, West (Rural, Semi-urban, and Urban)

North, South, East, West (Rural, Semi-urban, and Urban)

North, South, East, West (Rural, Semi-urban, and Urban)

North, South, East, West (Rural, Semi-urban, and Urban)

Market Segmentation (Psychographic)

Social Class Lower, Middle, Upper

Lower, Middle, Upper

Lower, Middle, Upper

Lower, Middle, Upper

Lifestyle Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Acer HP Dell Lenovo

Market Segmentation (Behavioural)

Benefits Quality, Service, Economy, Speed

Quality, Service, Economy, Speed

Quality, Service, Economy, Speed

Quality, Service, Economy, Speed

User status Non-user, Ex-user, Potential, First-time, Regular

Non-user, Ex-user, Potential, First-time, Regular

Non-user, Ex-user, Potential, First-time, Regular

Non-user, Ex-user, Potential, First-time, Regular

Usage rate Light, Medium, Heavy

Light, Medium, Heavy

Light, Medium, Heavy

Light, Medium, Heavy

Loyalty status None, Medium, Strong, Absolute

None, Medium, Strong, Absolute

None, Medium, Strong, Absolute

None, Medium, Strong, Absolute

Readiness Unaware, Aware, Desirous, Intending to buy

Unaware, Aware, Desirous, Intending to buy

Unaware, Aware, Desirous, Intending to buy

Unaware, Aware, Desirous, Intending to buy

Acer HP Dell Lenovo

Market Segmentation (Demographic)

Age Kids,Youth, Middle, Old

Kids,Youth, Middle, Old

Kids,Youth, Middle, Old

Kids,Youth, Middle, Old

Gender Male, Female Male, Female Male, Female Male, Female

Income NoIncome, Low, Medium, High

No Income, Low, Medium, High

No Income, Low, Medium, High

No Income, Low, Medium, High

Occupation Home, Home Office, Small Business, Medium Business, Large Business, Public Sector, Education, Healthcare, etc.

Home, Home Office, Small Business, Medium Business, Large Business, Public Sector, Education, Healthcare, etc.

Home, Home Office, Small Business, Medium Business, Large Business, Public Sector, Education, Healthcare, etc.

Home, Home Office, Small Business, Medium Business, Large Business, Public Sector, Education, Healthcare, etc.

Acer HP Dell Lenovo

Targeting

Acer HP Dell Lenovo

Geographic Pan India Pan India

Pan India

Pan India

Targeting (Demographic)

Age All All All All

Gender Both Both Both Both

Income Low, Medium Low, Medium, High

Low, Medium, High

Low, Medium

Occupation Home, Home Office, Small Business, Medium Business, Large Business

Home, Home Office, Small Business, Medium Business, Large Business, Public Sector, Education, Healthcare, etc.

Home, Home Office, Small Business, Medium Business, Large Business, Public Sector

Home, Small Business, Medium Business

Acer HP Dell Lenovo

Targeting (psychographic)

Work and Entertainment (Sports/Music) Oriented

Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Work-oriented, Sports/Games Oriented, Music/Media Oriented, Style/Looks-Oriented

Work and Entertainment (Sports/Music) Oriented

Acer HP Dell Lenovo

Targeting (Behavioral)

Quality, Economy, Speed

Quality, Service, Economy, Speed

Quality, Service, Economy, Speed

Quality, Economy, Speed

Acer HP Dell Lenovo

Positioning

POD Price, Performance

Design, Quality, Features, Performance

Design, Quality, Performance, Delivery

Price, Performance, Quality

POP Quality, Performance, Price

Quality, Performance, Price

Quality, Performance, Price

Quality, Performance, Price

Tag Line “Empowering People”

“Let’s do amazing”

“The power to do more”

“The power of Ideas”

Acer HP Dell Lenovo

MAJOR PLAYERS AND STRATEGYPart 4

Hewlett PackardStrength

• Leadership Position.• Consumer Centric Brand. • Strong after sales service.• Design Strategy: looks.• Cost Strategy.

Weakness• Low Flexibility: Unlike Dell, HP

does not have high customization available.

• Decline in digital entertainment market.

• Software Service.

Opportunity• PC business.• Service Industry: Bought

World’s no.2 service provider, EDS.

Threat• Pricing pressure.• Component pricing.• Slow revenue growth.

HP : Market Strategy• Maintain Status Quo as market leader, and continually innovate to strengthen

position.• Products: Notebooks, Tablet PCs, Desktops, Gaming Systems, Printers, Toner,

Paper, Scanners, Monitors, Servers, Software, Networking, Accessories.• Pricing: Oracle's Siebel technology reducing marketing spends by 15%. Cut

notebook prices by 15 to 20% creating a volatile price war.• Promotion: Innovative word of mouth marketing called the 31 days of dragon.

Associates with various Hollywood themes to target movie going audience.• Place: Uses online method for booking. Has outlets in major cities. • Product Development: HP has launched aggressively into the Indian market. Ease

of availability. • Diversification: M&A: In August 2001 HP and Compaq came together to merge by

a 25 billion $ stock deal.

DellStrength

• Inventory turnover rate is 6 days.• Revenue Growth at 100%.• Cost efficiency.• Direct to customer business model:

minimum credit risk.• Latest technology Customization.• Internet sales leadership: $5M

everyday, worldwide.

Weakness• No proprietary technology.• High dependency on component

suppliers.• Lack of Software Support for

customers.

Opportunity• Network service in B2B. • Strong potential in China and India.• Low costs and advanced

technology.• Growth in business, education and

government markets.

Threat• Dell’s market share very less.• Price range considered premium.• Currency fluctuation.• Political instability. • Tariff trade barriers.

Dell : Market Strategy• Products: PC, laptops, customer service, storage, workstations, and auxiliary

services.• Pricing: Direct Model approach, pricing below competitors.• Promotion: On-line model, direct mail order, catalogues, Premier Pages, special

training and certifications, editorials, reviews, sales reps, and awards.• Place: Direct from Dell: On-line, telephone, mail-order. • Market Penetration: Continue to do more of the same. • Product Development: Pursue Mid-Range Server Growth. By 2001, Dell was the

market leader in entry level servers, but had no presence in the mid-range server market.

• Increase product line: New products like a PDA. • New International Market Development: Enter new markets with existing

products. • Merger and Acquisitions: By 2000, the external storage market was growing at

23% per year. By acquiring an innovative leading company like the EMC Corporation, Dell can effectively enter the external storage and software market

LenovoStrength

• National Image (China)• Knowledge about local market:

Lenovo excels in its strategy for the Chinese market.

• Strong R&D: Taken over from IBM.

• Mass manufacturing capability. • Quick Responsiveness.

Weakness• Poor global brand perception.• No pure electronic sales• Low inventory turnover: About 40

days.• Poor After sales service.• Limited knowledge of global

market.

Opportunity• Import barrier.• Increasing global demand.• Internet boom. • Growing wireless pc market.• Government’s association.

Threat• Heavy competition.• Industry reaching maturity.• Software piracy and clone market.• Little firms’ growth.

UNFULFILLED NEEDPart 5

Up gradation of Laptop

• We are expecting that the up gradation of laptops will be one of the most important requirements of the people owning laptops. If the laptops are made compatible enough to integrate these up gradations and also done at a reasonable price, it will attract more customers to the product.

Secondary (Second Hand) Market

• People buy second hand, because it is very easy to change the parts of a PC. It is expected that given the chance of buying the laptop second-hand with proper provisions of warranty and reasonable price exchange people will buy it.

Survey & Analysis• Main areas and features a company should concentrate on should be, strive to provide the best possible customer

experience. • Demography: The age group was primarily 18 to 35 years. A majority number of respondents were from the Indian

subcontinent. Around 15 percent of the respondents were from USA. • The respondents were majorly students and professional. Almost all had used a laptop or possessed a laptop. An

interesting result was that most of the people who used the laptops gave ratings as “good” and “very good” to the performance of the products they had used. The respondents wanted an Apple laptop when given a choice for the “dream laptop”. Dell was the first runner up followed closely by HP.

• The hardware specifications are the first choice for the users when choosing a laptop. The second choice is the brand name followed closely by price. Warranty & Services, Mobility, Design and Bundled Software follow suit. This is an interesting insight to the user preference and can prove handy to laptop manufacturers when constructing a laptop for the target audience.

• pricing: Respondents were ready to pay a high price for quality and sturdiness. • Need: upgrade the laptop. About one – third of the respondents do not want an upgrade of their laptop. • An open ended question on the features required on the laptop gave an amazing insight into the needs.

Unfulfilled needs – • Battery management• Heat Control in the laptops • TV tuner card• Light weightiness• Keyboard Lighting

Meeting Unfulfilled Need• 4 P’s to be catered:

• Product: The new product launched will have a better Battery management and heat controlled Laptops. The Laptop will have an inbuilt TV tuner card and also will have a light weight. Additional feature provided will be keyboard lighting. Full customization will be provided for customers.

• Price: The survey results indicate that the price of the laptops preferred by respondents is ranging from 30,000 to 50,000 Rs. A low pricing strategy can also be used by selling laptops lesser than competitors Laptops.

• Promotion:• Television and Radio advertisements can be used to introduce the product in the market. Primetime

advertisements with taglines such as “you need it, you have it” can be used as this new product is introduced catering the unfulfilled needs of the product. Also advertisements should be shown on news channels and sports channels as the target market is students and professionals.

• Online, Newspapers and magazines can be used to support the initial promotion. As we are targeting professional and students these mediums should be effectively used as this is the easiest way to reach our target audience.

• Place: Very effective distribution techniques should be used. As we have identified the unfulfilled need of up gradation, then the process of up gradation should also be very easy and less time consuming. In metros free home delivery of the parts can be done and engineers can go house to house to upgrade the Laptop. In small towns all the laptop sellers can have a separate department for up gradation and all the up gradation related queries and installations can be handled there separately.

CONCLUSIONPart 6

ROAD AHEAD• notebook industry is the future of personal client PC market. Based on predictions,

the mobile computing notebook devices market are subdivided as ultra mobile sub notebook PCs and notebook PCs.

• Innovative educational laptops like, $100 laptops are also looked at as the products which rule the future of Indian notebook market.

• Laptops with extensive multimedia features continue aiming to gain more personal, home notebook users, whereas notebooks with longer battery life and higher performance will continue to cater the needs of business professionals.

• Gaming industry being itself in very nascent stages. There are several series in Dell and HP which cater to this group already. High speed connectivity and low weight notebooks generally are most demanded ones today.

• HP being top performer in multimedia and personal computer section should try to concentrate more towards capturing large organizations, and dell the vice versa.

• Though notebooks are seen as the replacement of desktops most of the times, it is still a long way before notebooks sales overtakes that of desktops in number of units sold.

REFERENCES

• www.mait.com [manufacturers association of information technology] for Market Segmentation graphs

• policies.gov.in for government policies• india.gov.in/govt/policies.php for government policies• http://www.intelliquest.com/resources/technical/

MarketSegmentationOverview_MBIQ_June24.pdf for Market Segmentation

• http://www.utdallas.edu/~tskim/Lecture%20Note%206.pdf for Market Segmentation

Thank You.

Questions.