Executive Summary In any industry always encounter many problems such as low bargaining power of suppliers, the threat of new entrants, threats of substitute products, competitive rivalry and bargaining power of customers. Therefore, a business wants to succeed in the market is very difficult. It requires that business to set up a comprehensive marketing plan and increases its strengths while decreases its weaknesses. In fact, in its financial statements, HP has earned high profits in recent years. This is due to the reaction and appropriate in the company marketing plans. Moving forward, HP will adopt aggressive marketing strategies will be analyzed in the following posts to maintain and grow its profits.
Transcript
Executive Summary
In any industry always encounter many problems such as low bargaining power of suppliers, the
threat of new entrants, threats of substitute products, competitive rivalry and bargaining power of
customers. Therefore, a business wants to succeed in the market is very difficult. It requires that
business to set up a comprehensive marketing plan and increases its strengths while decreases its
weaknesses.
In fact, in its financial statements, HP has earned high profits in recent years. This is due to the
reaction and appropriate in the company marketing plans. Moving forward, HP will adopt
aggressive marketing strategies will be analyzed in the following posts to maintain and grow its
profits.
Table of Contents
List of Figures........................................................................................................................................ 3
List of Tables.......................................................................................................................................... 3
1. Company’s History and Background of the Plan................................................................1
2. Brief information about the product/brand of the plan.................................................1
Table 7. Focused features of Product................................................................................................................9
Table 8. Focused features of Price...................................................................................................................10
Table 9. Focused features of Place.................................................................................................................. 11
Table 10. Focused features of Promotion....................................................................................................11
Table 11. Action Plan throughout the year of 2014.................................................................................13
Table 13. Income statement for project........................................................................................................15
1. Company’s History and Background of the Plan
Hewlett-Packard Company was established in 1939 by David Packard and William R. Hewlett in
the US. It provides a wide range of products and services to individual customers, from small
and medium-sized to large organizations in many areas such as governments, education and
financial institutions worldwide. The main products of HP comprise of personal computing,
services, software, information and technology infrastructure, with the total revenues of more
than 100 billion US dollars (HP.com, 2013).
The main objective of this paper is to create an annual marketing plan for HP company’s laptop
products to Singapore’s markets, and the plan will be prepared for the fiscal year of 2014. The
main targeted customers of HP in 2014 are people with high and medium income. Thus , the
marketing strategy would be set up for the introduction of a high quality product line. Singapore
is a developed country with a strong purchasing power for high-tech products, therefore an
efficient marketing plan is essential for HP to increase sales and reserve its customers from
strong competitions of other firms.
2. Brief information about the product/brand of the plan
A laptop is a personal portable computer, which integrates most features of a desktop computer
such as a keyboard, a screen or a pointing device. A laptop is powered by an AC adapter and can
be used without an outlet using the battery. Normally, a battery can provide energy for the laptop
for 3 to 5 hours, depending on different situations.
The HP company produces various types of laptops, notebooks and tablet PCs for many
purposes. They range from high performance types for watching movies and playing music
purposes to powerful notebooks for playing games. The company also offers some product lines
for business office needs such as ultra-portable laptops and netbooks. For each type of lifestyle,
the company offers its customers an appropriate choice of laptops.
3. Situation Analysis
In order to succeed in any industry, a company needs to understand the environment it is
conducting business in. An effective marketing plan can only be made when the firm knows
where its power is lying in a business situation. This paper will analyze the company’s situation
using SWOT analysis to see what the company is facing with and how to bring its strengths into
play.
To succeed in any industry, a company needs to understand the environment it is conducting
business in. An effective marketing plan can only be made when the firm knows where its power
is lying in a business situation. This paper will analyze the company’s situation using Porter’s
five forces model and a SWOT analysis:
Table 1. Porter five forces
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Table 1 shows high competitive forces in the technology industry, which can result in lower
profitability for the company. It is important to conduct a SWOT analysis as shown in table 2 to
improve HPs marketing strategies.
Table 2. SWOT analysis
4. Marketing audit
Based on the HP’s marketing plan, marketing audit is analyzed in the table below:
Table 3. Marketing audit for HP in Singapore market
Components Audit Score Comments
Competitive environment 7 The technology industry is highly competitive.
Market trend 8The market shares of HP in current are 7.2%
(Eric and Jim, 2009).
Clear marketing plan 5 HP has always set out the particular marketing
plan to achieve the goal of revenue growth.
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However, for the Singapore market, HP needs
to have a more clearly marketing plan of this
market.
Target markets 8The target market characteristics of HP are well
defined.
Market focus 7HP is targeting multiple and diversification
segments.
Product positioning 6 HP has a well position in Singapore market.
Products 8
HP has a huge range of existing laptop products
and new products that could lead to internal
competition (HP, 2013).
Price 7HP offers its products at flexible and reasonable
prices.
Distribution 6HP has significant growth in retail outlets in
Singapore.
Promotion 6HP always has the promotional marketing plan
for the purpose of attracting more customers.
5. Marketing objectives
Along with HP's efforts in 2013, this report will briefly set up HP’s goals and objectives in 2014:
Ultimate goals: to increase and even increase double the market shares in the computer
wholesale market from its current 7.2% (Eric and Jim, 2009).
Product objective: HP is looking for the target market for the professional business people as
well as large companies. HP realized that nowadays people are trying to balance their busy lives
between work and everyday life. People want their computers to transfer software more easily.
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Therefore, capturing the customer's desires, HP has been developing his computer software
combined with utility customers. With its product lines, customers buy HP computers do not
need to buy the software separately (Emilio, Nicole, and Corey, 2012). This is one of the
important objectives of HP products that are trying to develop in current and future.
Customer Objective: to improve awareness of large companies so they know that investment in
HP is the most efficient.
Collaborator Objective: to set an agreeable price so that both collaborators and the company
(HP) can benefit from their sales.
Competitive Objective: to create barriers for competitors by ensuring the safety of their
inventions through patents and non-disclosure agreements.
6. Marketing strategy
6.1. Segmenting
There are many types of variable on which the company can use in segmentation:
Table 4. Major Segmentation Variables for Consumer Markets
Source: (Kotler & Armstrong, 2012)
Strategic marketing for HP's laptop line will start in 2014 with continued successful
development of the previous year (Hewlett-Packard, 2013) (Hewlett-Packard, 2012). More
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specifically, in segmentation, the following variables will be used for segmenting consumer
market:
Table 5. Segmentation for HP’s lap top consumer market
Variables Classification
Income
Low (S$499 – S$799)
Medium (above S$799 – S$1,499)
High (above S$1,499)
Lifestyle
Ultraportable
High Performance
Everyday Computing
GenerationTouchSmart
Non-TouchSmart
Globalization and the development of social awareness in the laptop market is step by step
erasing the difference in terms of a number of variables such as age, gender, geographic
location, etc. The variables selected for the segmentation selected through market research
as well as feedbacks from customers who have previously used HP laptop. In particular, for
the Singapore market where consumers have high educational level and social life, the
development of market segments as mentioned above is appropriate.
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6.2. Targeting
With its position as one of the leading manufacturers in the industry and laptop personal
computers combined with available resources. HP has many strengths to focus on all the
segments have been identified. However, for the Singapore market, we need to have a more
strategic focus for the specific characteristics of this market. It means that we must target
some market niches.
Table 6. Targeted market niche
Variables Targeted market niche
Income Medium and High
Lifestyle Ultraportable and High Performance
Generation Both TouchSmart and Non-TouchSmart
Income Because Singapore has a developed market economy, social and Singapore living
standard is on the top of the world (Rediff, 2012), focusing on that cheap segment
especially electronic and technology goods is not a good choice.
Lifestyle HP products are usually divided into three of its laptop line based on the lifestyle
of customers in the market. This is a reasonable strategy and should be promoted because
in modern society, there are many specialized needs of different consumers (Goode, 2011).
Therefore, with the ability of the technology as well as existing reputation, HP can develop
all products in the product line laptop.
Generation: Forming the product line TouchSmart HP is the tools to meet the needs of the
younger generation when technology products are inclined tend to touch. However, this
trend was not really clear on personal computers and laptop, therefore HP should
developing both two product line in order to reduce market risks.
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6.3. Positioning
To locate the HP product in the market, one must first mention the competitor's current
HP. Because Singapore is a country with a developed economy, all famous manufacturers in
the field of laptops are available in the market (Apple, Dell, Asus, Acer, Vaio). With quality
and reputation of HP products, we will temporarily have a positioning map as follows.
Figure 1. Positioning map: Laptop market in Singapore
The plan set out in 2014 is to move HP brand on positioning map to fit the missions and
visions that HP was proposed. The world economy is recovering rapidly after a series of
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Previous year
Plan for 2014
crises happening and premium segment is a logical step. There will be high probability that
HP brand can not shift its position immediately in 2014 but it is time that we start.
7. Marketing Mix
7.1. Product
Based on the current analysis, Hewlett-Packard (HP)’s product line of personal computer (PC) is
considered in a threatened by product replacement such as tablets as replacement. In order to get
a better position as planned, HP should vary their product that provides more features such as
notebook with last longer battery life. In addition, the suggestion plan that should be taken ahead
is to create personal computer product that can be used as hybrid of tablet that can be brought out
from home and notebook with keyboard when user is using at home.
The main purpose of the plan is to satisfy the demands from customer that requires more
convenient technology. Hence, HP should also create feature such as ultrathin hybrid notebook
with similar weight compared to the current tablet product. HP is currently spending in
significant way in their research and development concerning their new component and products
features. We believed that this marketing plan would not create any barrier for HP to outperform
its competitor like Dell and Toshiba. Besides that, HP will also be significant competitive
because of its acquisition of other organizations that give them advantage of pursuing new
technology and knowledge. (Spanbauer, 2012)
Table 7. Focused features of Product
Focus on product features Suggested Plan
Performance quality of the Notebook - Provide last longer battery life
Customer Demand on product convenient - Create hybrid notebook with the
features of tablet and personal notebook
with keyboard at the same time
- Create notebook product with light
weight
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7.2. Price
Customer Perceptions of Value
HP will be setting its pricing marketing mix for the products in the future based on the
significant R&D towards consumer perceptions which had beenconducted from different market.
The purpose is to understand the pricing key of the buyers’ perception to create further target in
goods value pricing which targets at fair price with certain combination of quality and services.
In order to deliver the customer value, HP should not worry about its pricing target compared
with Toshiba and Asus. Plan suggestion of HP pricing marketing mix should be set higher
compared to mentioned competitor as the features provided to customer deliver higher value.
Thus, HP pricing for its product should be focused on medium classification range at (S$799-
S$1,499) instead of low classification of S$499 – S$799) (Hewlett-Packard, 2012)
Cost-Plus, Internal and External consideration
Pricing of PC product in the industry is at very intense condition, thus consideration on cost
willbefully analyzed by HP because the price setting should be minimized in the market. To take
the internal and external consideration, the pricing will be set to its lowest in the future to the
consideration of massive R&D cost to compete with existing competitors and preventing new
entrants as the internal and external consideration. (Hewlett-Packard, 2012)
Table 8. Focused features of Price
Pricing Focus Suggested Plan
Medium Classification - Product pricing range place at S$799-S$1,499
Cost Consideration - Research and Development cost is closely analyzed and considered into pricing of products
- Create certain margin to give some opportunity to create promotional feature to attract customer
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7.3. Place
HP’s marketing mix in place will be managed and organized based on consumer and group of
customers based on different business segment. For plan suggestion, HP should be setting its
channel coverage for sales and distribution at more convenient place.For example in Singapore,
HP should have its own retailer shop in the well-known shopping mall around Singapore (like
Vivo city and Ion Orchard).(Blauvelt, Ciasullo & Hawkins, 2012) The purpose is to have direct
selling of its product with delivering certain significant information and knowledge about the
products to customer as well. Besides that, HP can also use this opportunity to generate constant
feedback and respond about visiting customer at the store regarding their old product in order to
improve their products. (Hewlett-Packard, 2012)
Table 9. Focused features of Place
Marketing Place Suggested Place
Customer coverage - Have its own retailing shop at shopping
area around Singapore for closer
relationship with customer
7.4. Promotion
Based on HP’s effectiveness and efficiency in tracking their cost, HP are able to estimate their
future revenue deduction to certain. In the future, HP should have the promotional marketing
plan for the purpose of attracting more customers. One of the most significant promotional that
HP should be offering is by using discount method to attract customer in the first place. After
that, further promotional strategy can be used to convince customers to purchase their notebook.
For example, for each purchasing of notebook customer tends to gain advantage of life warranty
promotional method to make the higher price paid worth more. (Blauvelt, Ciasullo & Hawkins,
2012)
The main focus of the promotion strategy can be used to generate more sales for the organization
and also to build customer relationship and deliver customer value to the existing and new users
in the future. Besides that, the customer service branches discussed earlier can also be included
as one of the promotion mix tools which considered as the direct marketing tool. Branches
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placed at the entire regions will make HP easier to obtain responses from individual customer
like feedbacks, consulting, and complains counter. In addition, HP should be using the personal
selling online platform like what has been created by Dell selling system. This can help HP to
save their distribution cost and help their productivity in the market(Tandon, Chakraborty,
Srinivasan, Shroff, Abdullah, Shamasundar, Sinha, Subramanian, Hill & Dhore, 2013)
Table 10. Focused features of Promotion
Promotional Features Suggested PlanDiscount and service method - Firstly, using discount method to attract
the number of visitors at the retailers then use service promotional method that will be provided to customer to convinced the buying of the product
Direct Selling method - Using its own staff to convinced customer will be more reliable of with the help of promotion rather than using other distribution channel like general personal computer store
8. Tactics and action plan
8.2. Tactics
When new product is up in the market, then HP can use the massive marketing tool like social
media to advertise the new product and deliver its important information. Based on pricing
tactics, HP should set up its profit margin to the extent of 30% from the cost. The tactics is to
create massive market share of attraction from customers. The purpose of 30% profit margin set
to the new product is to leave some space to the promotional tactics where maybe it can be
reduced up to maximum 15% of profit margin with the deduction are taken as discounted price to
customers. For example, price of notebook of S$800 will be accounted to 15% of profit while the
other 15% is actually discounted to customer as promotion. The promotional strategy should be
applied for the first two months once the products have been introduced to the market and can re-
apply it once it has reach peak season like middle of the year and end of the year. Besides that,
marketing mix tactics of place should be rented at the place of shopping where most of the
technology stores are placed. For example, normally stores like apple, Samsung and Nokia will
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be placed closely to each other, thus what HP can do is to occupied place nearby these
environment.
8.3. Action plan
The action plan of the marketing strategy and marketing mix will be shown at the timeline below
where it concerns about time required to apply the certain strategies accordingly.
Table 11. Action Plan throughout the year of 2014
No. Action Plan 1 2 3 4 5 6 7 8 9 10 11 12
1 Setup on marketing Objectives
2 Situational analysis of the industry
3 Research and development for new product
4 Creating and designing new products
5 Set up of strategies in the marketing mix
6 Apply marketing strategy plan of segmenting and targeting
7 Set up action on the tactical plan for product pricing and promotion
8 Set up action on the tactical plan for renting a place at the shopping mall
9 Introduction event at several countries
10 Observation of business activities in the market
Kotler, P. & Armstrong, G., 2012. Principles of Marketing. 13th ed. New Jersey: Pearson.
MBA Skool.com, 2013. MBA Skool.com. [Online] Available at: http://www.mbaskool.com/brandguide/it-technology/4350-hp-hewlett-packard.html[Accessed 3 1 2014].
