Category: Laptop

Summary

The evolution of information technology is an important development in South Africa. Moreover, emphasis on globalisation has further increased demand for information technology in the country. South Africa is an emerging economy and is the most developed in the continent. The country has established markets and well-built infrastructures. In addition, South Africa is a major investment hub because of low labour cost and market accessibility. Given this scenario, it is expected for IT product manufacturers to penetrate the area.

There are several changes in the current structures that lead to the notion that selling computers will be a profitable business. Students have are exposed to the necessity of gaining information at their convenience. Professionals have recognised the need have access to current trends in markets. Executives also value the presence of computers in particular laptops. The trends suggest that the demand for laptops in South Africa will increase. Further research will prove that the South African market is opening and possible boom in the laptop industry will happen in the long run.

Selling laptops in South Africa is a huge challenge for any firm. But the rewards provided appear to compensate for the expected risks. There are some important aspects of the products that need to be highlighted. The quality of the laptops is the primary concern of the company. Moreover, the cost will be lower than products produced by established laptop makers. The laptops will also use the best parts from top notch suppliers. It is imperative for the company to ensure that the laptops will be competitive in a strong market.

Industry Assessment

Porter (1980) introduced the concept of five forces that seeks to analyse the competition in an industry. Based on the model, there are four forces that have to be assessed to determine the condition of the fifth force (McGahan, 2004). The threat of new entrants shows the openness of the market to new laptop producers. The current situation suggests that more players will come into the market. The demand for laptops in the market remains high and will entice more makers to invest.

The emergence and threat of substitutes is a major concern for industry players. Mobile phones and smart phones have controlled some segments catered by laptop manufacturers. The continuous surge of mobile phones is an obstacle that laptop makers need to hurdle. The bargaining power of the buyers determines the capacity of consumers to acquire laptops. In addition, the aspect illustrates the behaviour of customers in relation to laptops. South Africa boosts the highest income per household in Africa. In addition, the market has been receptive of products related to IT.

The bargaining power of the suppliers ensures to maintain the high quality of laptops produced by the company. The industry boosts diverse suppliers. As stated, laptops are highly dependent on the parts provided by the suppliers. In addition, the suppliers also provided enhancements in the marketability of the laptops. The descriptions rate the substitutes as the main source of competition. The increased number of players also strengthens the market. The market for laptops is regarded as one of the most competitive.

Product Description

There are three laptop components that have to be explained. These include the hardware, software, and peripherals. The hardware will be built by the company using various parts from suppliers. Laptops will be custom made and comes in different sizes. The screens can be change from 12” to 17”. The other parts are similar to most laptops sold in the market. Memory is standard 80GB and other specifications are dependent on the clients. The operating system to be used will be supplied by Microsoft.

Aside from Microsoft OS, the company will also include AV software and licensed MS Office installer. Clients can request the company to make the laptop Vista ready. The semiconductors to be used for the laptops will come from Intel. The motherboard will be built by Asus. The other parts of the laptop will be manufactured by the company. Peripherals include built-in mice and web camera. This is included to make the laptops more interactive. The laptop is also provided with a heavy duty battery. This means that the gadget can be used in prolonged hours even without electricity connection.

As for the price, the laptop will be one of the lowest priced in the market. Basic laptops start at $500. Then the price goes up as specifications are added. There are three product classifications that need to be provided. Safari GT is the basic, Safari GTX is designed for professionals, and Safari GT3000 is for company executives. Safari GT, Safari GTX, and Safari 3000 come in black and silver colours. White Safari GTX and red Safari GT3000 are limited edition models priced at higher values.

Product Quality Assurance

The manufacturing scheme of the company revolves around the concept popularised by Dell Inc. The emphasis on quality is being outlined by the method used in producing computers. For the company the procedure is simple: reduce the cost of productions, treat suppliers as partners, load the laptops with top of the line software, and ship the laptops within 5 days. The company considers the role of consumers in this process. Quality is important in building the reputation of the company as a laptop maker.

In selling the product, the company will create prototype models for display. The procedure starts with the order slip being provided to customers. With the order slip, clients are asked to give the specifications of their desired computers. After the orders are secured, the company will start assembling the laptops. In this process, the storage and handling hazards of the laptops are lessened. After quality has been checked, the finished products are delivered to the clients. The company includes the transportation cost to the laptop price to reduce the delivery hassles.

Supplier Partnership

One of the best ways to be efficient in production is to create partnerships out of firms that produce products related to computers. The company believes that suppliers provide advantages for the products. Using the parts of computers made by partner suppliers adds to the quality of the computer. Most of the suppliers included by the company are leaders of the industry. For instance, the software used is provided by Microsoft. The chips that are in the laptop came from Intel. The use of products produced by suppliers eliminates the production cost and helps on the promotion of the computer. When these suppliers are conspicuous in the laptops, clients will know that quality is assured.

The partnership with suppliers ensures that the company is accorded with ample resources. Since suppliers are committed to supply certain volume of products, shortage of parts will be prevented. Aside from the parts, suppliers often partake in the research and development of new products. This decision will reduce the company’s cost in making laptop models. The partnership also allows the company to gain access of suppliers’ technology. That knowledge will allow the company to enhance production capacity.

Customers Service

Aside from quality and low-cost laptops, the company has a consumer service networks to add convenience to customers. There are two segments that operate as consumer service provider. The first cluster involves direct customer interaction. These personnel are in-charge of handling orders. In addition, client service is provided to customers who queries on the laptops. Interaction is essential in ensuring strong relationships with customers.

The other part of the customer service network involves technical and other assistance. These personnel handle the after sales services provided by the company. Clients who have problems with their Safari GT laptops can contact technical service for questions. The network is can be accessed through phone calls. The technical service team also assists the clients in installing software and using their laptops.

Distribution Scheme

The process of product dissemination is provided in the company’s supply chain. The end goal of this strategy is to ensure that laptops are delivered to clients at fast times. Since the products are new to the market, the distribution strategy will be handled by the company. Instead of commissioning retailers, the company will establish a distribution network. There are several reasons that justify this move. The company is decided on limiting the risks of laptops being mishandled by retailers. In addition, price of laptops tend to increase as retailers put mark-ups and gains.

In maintaining the inventory, the company will use the process developed at Toyota Motors. The scheme eliminates excessive stocks of laptops. Instead, only the parts of the laptop will be stored (Juran, 1974). Once orders are secured, laptops are built and subsequently tested. In addition, the finished products are directly shipped. This lessens the distribution time and ensures fast transactions. Unlike establishing retail stores, clients tend to wait when the retailers run out of stock. Through direct communication with the company, the orders are assured and delivered within the specified date.

The company strictly follows a first-in first-out policy. Laptops assembled first will be delivered first. The shipping process involves scrutiny and meticulous handling. Company personnel are assigned in shipments to regularly check the quality. In the delivery process, secured vehicles are used. Laptops are placed in well-built package to ensure quality. When the laptops are received, company personnel will provide contact numbers for queries.

Marketing Objectives

Marketing audit is considered as a vital component of marketing processes. Brownlie (1993) stated that it is the initial stage in undertaking managerial initiatives in marketing. The focal point of the marketing audit is its design which ultimately determines the process in performing such method. Marketing audit is a systematic and comprehensive approach that evaluates the marketing initiatives of the company. This is manifested to identify possible problems in the company, personnel, and marketing activities. The information gained from this activity contributes in moulding the marketing plan.

Market targeting is an important objective that needs to be included in the process. There are three target segments that the company plans to penetrate. The students will benefit from these low-cost laptops. Professionals will also be enticed by the interactive options included in the laptops. Moreover, company executives are provided with alternatives to improve their processes. These three segments are the most important for the company. Most of the promotional and selling activities will be done using the three groups as reference.

Market positioning refers to the perceptions developed in the minds of the target market. The process entails the image creation of the brand that will banner the laptops (Trout and Rivkin, 1996). Positioning is purely procedural and relies on the completion of stages before making further improvements. The company plans to make Safari GT as the brand that provides value for money. The model will exist as a low-cost option that is boosted with quality and top notch laptop features.

Combining the different aspects associated to marketing is vital to the company. The development of marketing mix entails strategies that are design to ensure consistency in the quality of performance (Culliton, 1948). The first aspect that has to be considered is the price of the product. Despite the high quality of inputs used by the company, the prices of the laptops have to be competitive. The company has to devise better strategies to reach the lower echelon of the society. That means increase in demand and the possibility of extending the market beyond the current targets.

There are several promotional activities that have to be considered. Display centres have to portray the values and aspirations of the company. Since the name of the product is Safari, the company can design as centre built on actual Safari. This will provide a good impression to the clients. Even in Safari, the company’s laptops will be highly effective. Before the product is unveiled, the company has to conduct some road shows in schools and companies. This is vital because the company’s target segments are staying in these institutions.

The role of the marketing department is critical in this process. Their ideas are important in defining the success of the laptops. As expected, initial initiatives are subject to changes. Marketing plans have to be flexible to accommodate the uncertainties in the market. Most important, the marketing team has to constantly monitor the success of their programs. Evaluation results are crucial in making further promotions. The results of these marketing objectives will provide the saleability aspect the laptops need. Hence the marketing team has to step up and be accorded with sufficient support.

Copyright Policy

There are two important strategies that the company will use to ensure that only authentic Safari GT laptops are sold in the market. The initial process involves application of patent license from the South African government. This will prevent outsiders from copying the laptops. In addition, the company will also apply for patents in the US and Europe. This is to ensure that the uniqueness of the product is maintained solely by the company. With the ongoing piracy issues, the company is prepared with concrete protection plans.

The other strategy that the company will use was discussed in the early section. This entails direct sales and elimination of retail stores. In this manner, the company can assure the clients are authentic GT laptops are provided. The company advises interested customers to contact company hotlines for orders. In addition, the customer service network can provide guidelines as to the quality of the products. Customers are directed to report computer shops that sell Safari GT laptops without authorisation.

The Use of Media

The company recognises the power of media a vehicle in introducing the product to the public. The primary purpose of media outlets is to advertise the Safari GT laptops. Since the products are in the penetration process, massive print and broadcast reminders will be initiated. The company has provided ample funds to include Safari GT laptops in leading newspapers. In addition, the laptops will be advertised by huge television networks. The initial advertisement plans involves primetime placements and billboards.

When the products are distributed, majority of the advertising initiatives will shift to the Internet. The company maintains the need to reduce cost; hence the Internet is a possible option. Moreover, most of the segments targeted by the company have Internet access. This means that the Safari GT laptops will be exposed to intended markets. Online advertising is also cheaper than the print and television. The shift will allow the company to save and at the same time connect with targeted market segments.

Market Introduction

The process of introducing the laptops in the market of South Africa is divided in three phases. The initial part involves road shows to be conducted by the company. When the Board has decided to pursue on this expansion, the company will draft a plan for the shows. A total of 6 shows will be conducted before the next phase. These shows will be held in 3 colleges and 3 firms. The company will select 2 schools and 2 companies and Johannesburg. One firm and one university will be selected in Pretoria.

After the road shows have been completed, the company will provide showrooms in malls. The target of the company is to spread 12 showrooms in the stated cities. Company personnel will man the showrooms to provide assistance and accept advance orders. After the 200^th advance order is obtained, the company will schedule a final introduction date. The ordered laptops will be delivered and the selling will start. Showrooms will be upgraded and the customer networks will be activated. During the introduction date, at least 100 units will be available in each showroom.

Test Markets

The company uses set criteria to determine the test markets for the products. In terms of location, the company has identified market size as the primary determinant. Aside from market size, accessibility to vital government agencies is necessary. The company also considers infrastructures as aspect affecting test markets. Moreover, the company includes the presence of relevant industries as major contributor. Given all these aspects, the company has opted to start the penetration in Johannesburg and Pretoria.

The other markets were the products will be tested involves students, professionals and executives. These three groups cover the most demand for laptops in the market. Students require laptops to aid in their studies and other educational activities. Professionals consider laptops as gadgets that provide leisure and enjoyment. Executives, meanwhile use laptops to organise their meetings and store relevant files. Aside from the demand, these three groups are financially equipped to acquire laptops.

Future Expansions

As soon as success is documented, plans for expansion will roll out. The company will be deliberate when it comes to moving to other markets in South Africa. The company uses the same metrics provided in identifying the test markets. With such circumstances, the company will head to Cape Town after Johannesburg and Pretoria are served. When it comes to segments, the public sector appears to be a viable option. The company intends to participate in biddings held by government agencies that require laptops.

Budget and Sales Forecast

The budget for the investment is allocated to three major segments. These include production, sales and promotion, and research and development. The Production division is allocated with the highest portion covering at least 65% of the budget. There are departments that are part of the production division. The budget is used for the acquisition of materials and machineries. Some parts of the production budget are used for the personnel. The workforce comprise of the production team, client and technical service, and administrative.

The sales and promotion team is accorded with 25% of the total budget. But this rate will be reduced and transferred to other segments. The target of the company is to limit promotion expense to 10%. The budget for this division is used in making the product known. The budget for research and development starts at 10%. But this will go up as excess funds for advertising are channelled to R&D. After the promotional activities are completed, the budget for R&D will increase to 20%. In addition, the budget provided for the production segment will also go up to 70%.

Sales figures are hard to predict. The company intends to break even after 2 years of selling the laptops in the South African market. In the early months, the company targets to sell at least 5 units per location in a day. In the two locations, the company will target 18,000 to 20,000 units in one year. The figures will increase as targets are met. The company plans to realise a 15% gains on investment by the 5^th year of market existence. When these goals are met, the expansion will continue to other locations near South Africa.

References

Brownlie, D., (1993), Marketing Intelligence and Planning, “The marketing audit: A methodology and explanation,”.

Culliton, J., (1948), The Management of Marketing Cost, Boston: Harvard University – Graduate School of Business Administration.

Juran, J., (1974), The Quality Control Handbook 3^rd Edition, New York: McGraw Hill.

McGahan, A., (2004), How Industries Evolve – Principles of Achieving and Sustaining Superior Performance, Boston: Harvard Business School Press.

Porter, M., (1980), Competitive Advantage: Techniques for Analyzing Industries and Competitors, New York: Free Press.

Trout, J. and Rivkin, S., (1996), The New Positioning: The Latest on the World’s Number 1 Business Strategy, New York: McGraw Hill.

Executive Summary

There has been a significant increase in the demand for notebooks in the Indian market during the past year and we want to get a bigger chunk of the market. To do this, we are launching the Acer Extensa model. We are confident we can compete with the other leaders in the industry because our product combines competitive features with affordable prices. We are targeting specific segments of the market, and taking advantage of the opportunities brought about by the demand for affordable quality notebooks.

The primary marketing objective of this plan is for Extensa to be the highest-selling notebook of its class in the Indian market, thus duplicating its success in the US market during the first year of its release. The primary financial objectives are first-year sales of $66.5 million or ten percent (121,000 units) of total market share with first-year losses at not more than half, and break-even in the second year. The ultimate objective is to capture Hewlett-Packard’s 37 percent market share or an annual average sale of more or less half a million units.

Table 1: India PC Shipments (million units)ю

Situation Analysis

Taiwan’s Acer, Inc., one of the top three computer vendors in the world next to Hewlett-Packard and Dell (Acer, 2007; IT Voir, 2008), is planning to sell affordable notebooks in India following a strong reception for notebooks in the market.

India is among the top three evolving economies in the world that have been predicted to be most buoyant in 2008. In 2007, total notebook sales in this market increased to 59 percent; whereas, just four years ago, notebooks accounted for less than 3 percent of the PC market. (IT Voir Network, 2008). It is projected that the demand for notebooks will continue for years (Josie, 2006).

Like China, India has the largest population in the world and can be explored for its market potential for notebooks.

To gain a bigger market share in India, Acer must focus on targeting carefully chosen specific market segments, including small to medium businesses. A study by the New York-based Access Markets International (AMI) Partners, small businesses in India invested $4 Billion in a notebook in 2007 (AMI Partners, 2007).

Market Summary

The Acer market consists of busy consumers who need to work, communicate and exchange information on the go, and corporations who want to help their middle-level executives to be able to work, communicate, and have access to vital information while being mobile. Segments to be targeted include professionals, students, corporations, and entrepreneurs.

Exhibit 1. Needs and corresponding features/benefits.

Strength, Weaknesses, Opportunities, and Threats (SWOT) Analysis

Acer has several strengths on which to build, such as a trusted brand name and affordable price, but its main weaknesses include having the least features among the notebooks of its class.

Strengths

• Good features. Acer Extensa boasts of features that are comparable with its competitors.
• Trusted brand. Acer is among the top developers and vendors of computers and notebooks in the world. The brand is the greatest strength of the product.
• Pricing. Value for money is another selling point of Extensa. Consumers are becoming more and more demanding of quality products, but remain unwilling to shell out extra cash, and Indians are generally regarded as cost-sensitive.

Weaknesses

• Least memory. Although Acer Extensa has an unquestionably high RAM for multi-tasking, it has the least RAM among its competitors, (2 GB) compared with Dell’s 2 GB expandable to 4 GB, and Toshiba’s and Packard-Hewett’s 3 GB expandable to 4 GB.
• Lower capacity hard drive. Acer Extensa has a very powerful hard drive (160 GB, 5400 rounds per minute or rpm), but it is less powerful when compared with its competitors, each of which features a hard drive of 250 GB, 5400 rpm.
• Heavier weight and bigger size. At 6.4 lbs., 1.7”, Acer Extensa is slightly heavier and bigger than its competitors. Hewlett-Packard Pavillion is 5.25 lbs., 1.5”; Dell Inspiron, 6.2 lbs., 1.5”; and Toshiba Satellite, 5.8 lbs., 1.6”.

Opportunities

Acer can take advantage of the following opportunities:

Increasing demand for notebooks. The demand for laptops is projected to continue to grow within the next two years. The trend of having a mobile lifestyle and the need to be able to work and communicate while away from the workplace, home, or school, are boosting demand for notebooks. Likewise, notebooks are projected to replace bulky desktop PCs. According to the International Data Corporation (India), consumers are now buying notebooks as second PCs (Josie, 2006). Moreover, many desktop PCs are due to retire in the next few years, and corporations are expected to change them to notebooks.

Increasing demand for good products at affordable prices. Indians are generally regarded as very cost-sensitive. So while the target segments will look at the product’s built-in features and capabilities, the cost will be an important factor to consider in what to buy (when choosing between desktop PC and mobile PC or notebook) and which model to choose.

Threats

Increased competition. There are now several key players in the Indian notebook market with models offering more features and benefits than Acer Extensa, but at much higher prices. Therefore, Acer’s marketing communication must stress pricing, and the availability of functions that the consumers need, not on the extras other brands carry, which the target segments may not use.

Downward pricing pressure. Heightened competition and market-share strategies are pushing notebook prices down. Still, our objective of seeking 10 percent of the market in the first year is realistic, given the lower margins in the notebook market.

Competition

Heightened competition in the notebook market has put considerable pressure on notebook vendors to continually add features and lower prices. Following are key competitors and an overview of their positions and marketing strategies:

Toshiba. Japan’s Toshiba has recently adapted the go-to-market strategy, putting in place a dedicated CSD team in Delhi to interact with channel partners “to ensure good sales revenues and efficient logistics.” The company, which has offices in Mumbai and Delhi, will soon be present in Bangalore and Chennai. Toshiba is targeting large format malls and tie-ups with retail stores. Likewise, it has revamped its existing exclusive stores (Gupta, 2007).

Hewlett-Packard. With about 40 percent share worldwide, Hewlett-Packard is the leader in the notebook market. With its dual-brand strategy, Hewlett-Packard is perceived among Indian consumers and retailers as the best brand. Like Acer, Hewlett-Packard also uses the channel-route strategy. Hewlett-Packard’s strength lies mainly in the A market. In a survey conducted by the Computer Reseller News, the brand won in almost all categories, namely: performance, service, and support (having local service posts), channel relationship (having the most number of sale/support personnel in the field), and marketing and branding (Nambiar, n.d.).

In 2004, Hewlett-Packard announced a three- to six-percent price cut on notebooks across models to further boost growth in this market (The Hindu Business Online, 2004).

Dell. Dell India Pvt. Ltd., which used to target the large corporate segment, shifted its focus on the small and medium businesses and the government sector, as well as the financial services sector. Although it slipped from being the third IT vendor in India to fifth in 2007, it has remained the fastest growing IT vendor in the same year, having grown 50 percent in revenue (Rao, 2008).

Unlike its competitors, Dell uses the direct-selling model as its marketing strategy. Just recently, it switched from being product-based to solution-based and was impaneled by the Doctorate General Supplies and Disposals, thus enabling it to be among the IT vendors who can compete in the government sector (Rao, 2008).

Product Offering

Acer Extensa has the following features:

• AMD Turion™ 64 X2 mobile technology TL-58* for AMD dual-core technology in a thin-and-light design; HyperTransport™ and AMD PowerNow!™ technologies and improved security with Enhanced Virus Protection
• 2GB DDR2 SDRAM for multitasking power
• Multiformat DVD±RW/CD-RW drive with double-layer support records up to 8.5GB of data or 4 hours of video using compatible media
• AMD dual-core technology for working or playing with multiple programs without impacting performance (AMD64 technology provides simultaneous support for 32-bit and 64-bit computing)
• 15.4″ WXGA LCD widescreen display with CrystalBrite technology and 1280 x 800 resolution
• 160GB Serial ATA hard drive (5400 rpm)
• ATI RADEON X1250 graphics with up to 896MB HyperMemory (total of local and shared system memory used by GPU); DirectX 9 support; S-video TV-out
• Built-in Crystal Eye Webcam and microphone make it easy to chat with and send video mail to family and friends
• The 5-in-1 media card reader supports Secure Digital, MultiMediaCard, Memory Stick, Memory Stick PRO, and xD-Picture Card
• IEEE 1394 (FireWire) interface and 4 high-speed USB 2.0 ports for fast digital video, audio, and data transfer
• Built-in high-speed wireless LAN (802.11b/g); 10/100/1000Base-T Ethernet LAN with RJ-45 connector; V.92 high-speed modem
• Weighs 6.4 lbs. and measures just 1.7″ thin for portable power; lithium-ion battery and AC adapter Microsoft Windows Vista Home Premium Edition operating system preinstalled; software package included with Acer GridVista, CyberLink PowerDVD, NTI CD-Maker, and more.

Exhibit 2. Comparison of features and prices: Acer, Hewlett-Packard, Dell, and Toshiba.

• ¹ Acer Extensa features.
• ² Hewlett-Packard Pavillion features.
• ³ Dell Inspiron features.
• ⁴Toshiba Satellite features.
• *Price varies according to color.

The main aspects that differentiate the Acer Extensa from the competitors’ products lie with the memory, hard drive, weight, and capacity of the card reader. As to memory and hard drive, Acer is the least powerful. As to weight and dimensions, Acer is the heaviest and biggest, although only very slightly. As to the capacity of the card reader, Acer’s is comparable with the others, except with Dell which leads the pack in this category.

In short, Acer is highly powerful but not as powerful as its competitors. But then again, it is the cheapest, and considering that it has all the things that most customers look for in a notebook at a considerably lower price, Acer can be marketed by playing upon its affordability as the main selling point.

Distribution

Acer Extensa will be distributed through a network of the carefully chosen store and non-store retailers.

Computer stores. Major office depot carrying Acer products like A1 Computer, A2Z Computer, Inc., and ACDL Computers, will carry Extensa.

Electronic stores. All electronic stores that also sell computer products will carry Acer computers, including Extensa.

Online retailers. Web site retailers like e-Bay India, its online store, will carry Acer notebooks.

Acer exclusive distributors. Retail channels that carry only Acer products will likewise distribute the new Extensa model.

Acer Extensa will initially be distributed in the major cities of India during the first months and then be made available to the other major provinces within the next two months.

Marketing Strategy

Objectives

Our objectives for the first year of product introduction are aggressive yet realistic. Our main objective is for Extensa to be the top-selling notebook of its class, and to achieve 10 percent of the overall notebook market.

An important objective would be to establish the Extensa model as the best buy in its class, it being a product of a well-regarded brand, and considering its capability and affordable cost. To achieve this, we will have to heavily promote the product as a brand that emphasizes quality and value. The marketing strategy is to play on Indian’s cost-sensitivity and appreciation of high-quality products.

While the promotions part, we must also measure the target segment’s awareness of and response to our product. We must find out if we are putting across our message, and if the Indian market is buying it. Should there be a disparity between expected response and actual response, marketing adjustments will be made at any point during the promotions period.

Target Markets

Business targets

Our main business targets are small to medium corporations whose desktop PCs are about to retire and/or need their middle executives to be always able to work and have access to critical data while on the go. We will also target entrepreneurs and small-business owners who, like their corporate counterparts, need to be able to have access to vital information and get connected while on the go.

Consumer targets

Our main consumer targets are those within the middle- to upper-income brackets who need to be always able to work and communicate with them while conducting business and or do business while on the go. This segment of the market will need to have mobile PCs with them for their product presentations, gatherings, business proposals, and so on. We will also target students, specifically those in college and graduate schools. This segment of the market will need a mobile computer to do their school activities, researchers, papers, presentations, studies, notetaking, and so on.

Positioning

We are proposing the Acer Extensa as a high-power yet an affordable model for personal and professional use. The marketing strategy will focus on the price as the main feature differentiating the Acer Extensa model from its competitors.

Strategies

Product

The Acer Extensa, including all the features in the Product Review section, will be sold with a one-year warranty plus a 20 percent discount on the laptop bag. Another strategy is to sell the unit with the same warranty plus free computer peripherals, like a flash drive or a pack of CDR-Ws.

After the first year of Extensa in the market, we will introduce a slightly less powerful but very cheap model (priced at $350, wholesale), with a minimum of 1 GB RAM and 130 GB hard drive. The target segment of the new product will still be students, middle executives, and small businesses.

Pricing

The Acer Extensa will be priced at $550 wholesale, $649 estimated retail price per unit. We might have to slightly lower the price of this model when we expand the product line when we launch another model. With the launch of the cheaper model, more segments of the market will be able to own laptops, and we will have a much bigger share of the market, and hopefully keep it that way, even if the key players in the notebook market would follow suit.

At $649 retail price, Acer is very cheap compared with competitors’ models. Acer Extensa is cheaper by at least $100 than the cheapest version of Hewlett-Packard Pavillion ($749 to $949), cheaper by at least $150 than the cheapest version of Dell Inspiron ($799 to $1149), and cheaper by at least $350 than Toshiba Satellite ($999).

Distribution

Our channel strategy is to maximize the use of reliable channels to have Acer Extensa sold through well-known and even smaller retail stores and online retailers. During the first year, we will have the Extensa available in major cities of India, and featured in all electronics catalogs and Web sites, in local televisions and papers.

In support of our channel partners, we will provide detailed specification handouts, full-color photos, and displays featuring Extensa, as well as demonstration products. We will also arrange promos and interesting terms for retailers that place volume orders.

We will also open exclusive Acer centers in some major cities in India which will have regular promotions to promote Extensa.

Marketing communications

Using all available media, we will reinforce the brand name and its best selling point, which is the marriage of quality and affordability. Research about consumer demands, preferences, and consumption will help our advertising department identify the media that will best deliver our objective, as well as the timing of promotional activities. Thereafter, advertising will appear regularly to maintain brand awareness and communicate our key message, that Acer Extensa is a smart buy.

We will also conduct public relations efforts to further boost the Acer brand. To attract market attention and encourage orders, we will offer as a limited-time premium a carry-case, a free computer peripheral like a flash drive, or a set of CDR-Ws. To maintain and motivate channel partners for a push strategy, we will use trade sales promotions and personal selling to channel partners.

And to reach a wider audience, we will utilize the Web site retailers, as well as a tie-up with local television and radio, shows to promote the product.

Marketing Mix

The Acer Extensa will be introduced in April. Here are the action programs we will do during the first six months to ensure that we achieve our objectives as previously stated.

March

We will use a $5,000,000 trade sales promotion campaign to excite the dealers of the product launch in April. We will exhibit at the major consumer electronics trade shows. Select product reviewers and opinion leaders will be provided with product samples as part of our public relations strategy as well as handouts on the features and capabilities of the product. Our training staff will work with sales personnel at major retail chains to explain Acer Extensa’s features.

At this point of the promotional period, preparations should already be made for next month’s launching.

April

We get into multi-media campaigns (print, radio, television, and Internet) targeting professionals and consumers. The campaign will focus on the benefits of owning a high-power notebook at an affordable price. The benefits of huge savings made from buying a good but affordable product will be played up in different scenarios in the advertisements. Point of sale signage and radio and TV specials will be used to support the campaign.

A well-conceptualized cocktail event or even a concert will kick off the launching of Acer Extensa. Present during the event is the image model (a local or Bollywood celebrity) as well as some of the country’s well-known personalities and opinion-makers. During the event, at least three units of Acer Extensa will be raffled off, and small computer peripherals will be given away to the first 50 to arrive at the event.

During the launch week, the endorser’s TV appearances will be heightened to promote the product. It will be best if the endorser will also have a solo project launching that will coincide with the event, say a release of his or her movie or album.

May

The massive multi-media campaign will continue, with some add-on sales promotion activities such as giving away leather carry-cases and other computer paraphernalia as premium. We will also distribute point-of-purchase displays.

Still, tie-ups with television shows will continue to maintain target segments’ excitement of the product.

June

We will roll out a national advertising campaign, with a carefully chosen celebrity endorser. On TV advertisements, the endorser will be seen using his or her notebook; on radio, the endorser’s voice will be heard promoting the product; and in print, the endorser will be using the product.

July

We will hold a trade sales contest with interesting prizes for the salesperson and retail organization that sells the most notebooks during 8 weeks. Prizes will be a unit of Acer Extensa for the winner in each category.

August

Another angle of the advertising campaign will be launched this month. New tie-up with other television and radio shows may be done to retain consumer’s awareness of the product. If the local endorser has solo projects, Acer Extensa may tie-up with the event to support the endorser while at the same time, promoting the product.

Marketing Research

We will conduct marketing research to identify exactly which of the specific features and benefits of notebooks our target market segments value. We will also want to know if they would mind having a slightly less powerful notebook but at a much cheaper price. Moreover, we want to find out which segment of the market would want to have low-cost notebooks, and how big that segment is. We will also measure and analyze how customers perceive our competitors.

Feedback from our market research will help us decide which features to add and which features to remove from the new notebook to be launched after Extensa. With our brand awareness research, we will be able to measure the effectiveness and efficiency of our messages and media. Finally, we will use customer satisfaction surveys to gauge the market reaction to our product and brand, their expectations, as well as their needs.

Financials

With a projected market share of 10 percent, we expect $ 66.5M sales by selling 121,000 units at $550 per unit (wholesale) in the first year. For the second year, with a projected market share of 37.80 percent, we expect sales of $251.5M from the sale of 457,380 units at $550 per unit.

Table 2. Financials at 1,210,000 total laptop shipment in India.

Controls

Implementation

We have to devise measures to closely monitor quality and customer service satisfaction. We like to be able to immediately react to and act on any problems that may occur. We will also closely monitor warning signs of deviation from the plan.

Marketing Organization

Acer’s chief marketing executive is the overall overseer of the implementation of the company’s marketing strategy and direction for Extensa’s entry into the Indian market. Exhibit 3 shows the structure of the eight-person marketing organization.

Questionnaire

Please put a tick mark on the blank that corresponds to your answer.

• Do you have a computer at home?
  • Yes.
  • No.
• If your answer to number 1 is yes, please classify your computer.
  • notebook (or mobile PC or laptop)
  • desk computer
• Do you have a computer at work?
  • Yes.
  • No.
• If your answer to number 3 is yes, please classify your computer.
  • notebook (or mobile PC or laptop)
  • desk computer
• If your answer to numbers 1 and 3 is no, do you have plans of buying a computer?
  • Yes.
  • No.
• If your answer to number 5 is yes, what kind of computer do you plan to buy?
  • notebook (or mobile PC or laptop)
  • desk computer
• If your answer to number 6 is a notebook, why?
  • Internet connection
  • Mobility
  • Access to information
  • Accessibility (communication via email and chat)
• If your answer in number 6 is a notebook, how much is your budget?
  • $300 to $500
  • $550 to $650
  • $700 to $800
  • $850 to $1000
  • $1050 and up
• What is the most important factor you would consider when buying a notebook?
  • budget
  • features
  • size and weight
  • brand
  • other
• Have you heard of the Acer Extensa notebook?
  • Yes.
  • No.
• What do you think would convince you to buy Acer Extensa?
  • Price
  • Brand
  • Features
  • Other
• What do you think would stop you from buying Acer Extensa?
  • Brand
  • Features
  • Price
  • Other
• Which of the following competitors would you buy instead of Acer Extensa?
  • Dell Inspiron
  • Toshiba Satellite
  • Hewlett-Packard Pavillion
• What would make you buy your choice in number 12?
  • Price
  • Brand
  • Features
  • Other
• Where do you plan to purchase your notebook?
  • Online retail sites
  • Computer stores
  • Electronic stores.

References

Acer, Inc. (2007). About Acer. Web.

AMI Partners. (2007). SMBs in India to invest $ 4 Billion in computer hardware this year. Web.

Bestbuy.com. (n.d.) Web.

Bestbuy.com. (n.d.) Web.

Bestbuy.com. (n.d.) Web.

Bestbuy.com. (n.d.) Web.

Gupta, Yogesh. 2007. Toshiba weaves new Indian plan. Channel World. November 2007. Web.

IDC India. (2007). Press release. Web.

IT Voir Network. (2008). India notebook PC market grows 59 percent. Web.

IT Voir Network. (2008). Taiwan’s Acer to launch low-cost PCs this year. Web.

IT Voir Network. (2008). IT budgets to shoot up in Asia. Web.

Josie, Priyanka. (2006). India’s craze: Laptops. Web.

Rao, Malovika. (2008). Dell India says its revenue rose by 50 percent. Web.

Rao, Malovika. (2008). Acer aims to increase notebook sales by 50 %. Livemint.com. Web.

Nambiar, KR. (n.d.). HP, the mobile moghul. Web.

The Hindu Business Online. (2004). HP cuts notebook prices by 3–6 p c. Web.

The customer’s behavior is one of the fundamental factors determining the success of the marketing strategy, product, and organization as a whole. The customer’s decision-making is affected by a number of factors, such as values, costs, risks, and situational factors (Fanning, 2020). One of the features determining the customer’s product selection and satisfaction is the level of involvement. It may vary depending on the circumstances and is essential to take into account when considering the marketing strategy (Fanning, 2020). The more the customer is interested in the product and fulfilling one’s need, the more likely they will get the product. The laptop computer marketing would differ from snack bar advertising because of the higher level of involvement in the laptop purchase.

The level of involvement and motivation is mostly dependent on the personal values and the concept of self. The personal relevance of a laptop is relatively low, as it is a standardized tool mainly used for work. The laptop specially designed for a person’s desires would have higher personal relevance and increased involvement but is rather money consuming and does not interest the general audience. The laptop also does not primarily affect the person’s concept of self. It does not change the person’s role in the community or increase the sense of self-worth unless it is a costly laptop. However, laptop purchase is still not as common and does not occur every year, so the customer usually carefully evaluates the risks and costs in the long-term perspective. The combination of these factors makes a laptop a relatively common product with routine or even limited involvement.

The overall degree of involvement in the purchase of a laptop remains at the routine involvement in the product’s design when choosing the technical characteristics. However, with the development of technology and online services, buying a laptop becomes less involved with activity with low risks associated as the customer is usually familiar with the product. The customer may only have extensive involvement in the product’s design when the computer is assembled from the parts that the customer chose explicitly. This is not usually the case for most laypeople who prefer a simpler machine for the cost of time spent choosing a laptop of the highest quality.

Computer retailers should take into consideration the typical routine involvement of the customer when buying a laptop. A careful and thorough explanation of laptop features is not needed as in extensive involvement. However, the laptop purchase is still a more significant event than a snack bar purchase and requires the customer’s attention (Fanning, 2020). Since the laptop purchase is a relatively long-term investment, the service should be satisfactory enough for the customer to return after years of laptop exploitation. A specific marketing strategy should also be followed to increase the involvement. Strategic planning of customer involvement largely determines the marketing effectiveness and potential profit. The specific type of routine involvement should be considered and applied to the buying process’s time zone to achieve success (Fanning, 2020). Implying to the person’s self-concept and the role the laptop can play to boost one’s ego or relationships in society can primarily affect the involvement and potential turnover of a prospect to a loyal customer.

The Laptop Computer Selection

A typical customer selecting a laptop would go through the three stages of searching, estimating, and selecting a laptop computer in the first time zone of the buyer decision process. As a typical customer who is not savvy in technology, I would first google “laptops for students” to see the possible options that are relevant to me. The cost is especially important, so I would sort the search results according to the price level. Next comes estimating the technical characteristics available at the lowest price level. My value is the product’s durability, so I would estimate the risks and possible adjustments or laptop repairs. Finally, when selecting one or several computer models, I would consider going to the store and having a face-to-face consultation with a retailer. Testing the chosen laptop would also be useful as the description on the website may be vague. The situational factors come in place as the service and brand or product expectations come in place and determine its satisfaction.

The level of involvement also affects the first stage of the buyer’s decision process. Product purchase involvement is the initial stage of involvement when the need and want for the product just formed (Fanning, 2020). The level of involvement for the purchase would be rather casual or even limited as the purchase of a laptop has certain monetary risks for a student and requires careful consideration. The typical customer’s expectations from a laptop should also be met for a successful purchase. The typical customers often tend to believe their acquaintances’ recommendations more than advertisements, which affects the initial purchase behavior process.

The involvement may be of a different degree varying from low to high involvement, depending on the familiarity with the situation. In the situation with the appearing need for a new laptop computer, most customers have already had a computer before. That is why most customers are usually acquainted with the standards and requirements, and the involvement may be from low to medium. However, not all users are well informed about the technological values of computers and new features so that certain situations may require high involvement and rigorous research in technological aspects and models of laptops. The want is usually to buy an upgraded version of the old laptop or change the brand and a laptop if it failed to meet the customer’s expectations. The involvement is low if the customer buys a newer model in a habitual way (Fanning, 2020). On the contrary, it is high when the customer is interested in a completely different product and researches the possible satisfactory options (Fanning, 2020). Face-to-face consultation and review of the models are often the most suitable option for satisfying the customer’s needs.

JB Hi-Fi Product Considerations

Today, JB Hi-Fi is one of the world’s leading retailers of computers, TVs, and various Hi-Fi technology. It appears to be very distributed not just in Australia but also worldwide. The company’s success makes it interesting to investigate the marketing strategy and product design to apply in other business projects. When designing and promoting a new product or marketing an already existing one, it is crucial to examine a vast number of product considerations to reach success (Fanning, 2020). The information needs to be collected about the product and its nature to tailor the marketing strategy and align it with product considerations. These features primarily affect the buyers’ decision process and overall satisfaction.

Product leadership is one of the essential product considerations that JB Hi-Fi follows. Product leadership implies providing a unique product for the target audience. JB Hi-Fi manages to succeed on this criterion as its philosophy aims at delivering a specialist range of products for the lowest prices. The retailer aims at collecting the best brands with the lowest prices and provide genuine personal service to make the customer’s experience memorable. The care for the customer became one of the primary features defining the success of the company. The following standards and company policy became the benchmark for the industry. The fast-growing JB Hi-Fi became the point of reference for the technical and entertainment industry.

Besides a defined philosophy, JB Hi-Fi also possesses an individual product strategy. They define their product’s specific value as low prices and put the main emphasis on it in their commercials and marketing campaigns. The following strategy falls under the low-price minimal augmentation criterion. JB Hi-Fi’s primary focus is on low prices and numerous discounts, so they employ the full strategy. The attractive price and bright discount tags make the product more interesting for the customer than at the competitor’s stores. JB Hi-Fi does not need to have a niche approach or carefully consider the segment suitable for the price. They already have a high production volume and meet the customer’s needs for good products at low prices. Since the market is heterogeneous, especially for such a broad specialty of products, JB Hi-Fi applies a lower-price strategy to a specific segment of the market. It is more beneficial compared to a higher price with appropriate augmentation strategy in manufacturer’s stores.

The recipient also plays an essential role as the marketing campaign is typically tailored for a specific audience. JB Hi-Fi focuses on business-to-consumer (B2C) retail but can also be considered a business-to-business (B2B) type. The retail company has to negotiate with other manufacturers to get the product (B2B) and provide it to the customer (B2C). The company carefully considers the consumer, who is the primary recipient of the product, and adapts the marketing strategy. The bright and catchy design combined with funny slogans and low prices makes JB Hi-fi an ideal niche for teenagers and geeks.

Product variability of the retail store is another critical element of the company’s success combined with a low price. One can find a massive range of products for various needs, including shopping and specialty products. JB Hi-Fi focuses explicitly on collecting the immense number of products from various brands together. The product is very heterogeneous, but JB Hi-Fi manages to provide consistently appropriate customer service.

Product Component Ranking in Amazon Computer Department

Understanding and evaluating the product components is essential for both the company and the customer. The customer assesses the product components in general and separately during the decision process to find the best option (Fanning, 2020). The company then adjusts all the components to meet the customer’s needs and adapt to the marketing strategy. The product components considered are the goods, services, ideas, experiences, people, and place (Fanning, 2020). They all come together in a complete impression from the product, and each of them may affect the sales rather radically. Amazon may be an example of a vast online retail corporation where several product components come together.

The apparent product that the customer gets after ordering at the Amazon website is physical goods. However, these goods are usually purchased to provide a service, especially in the computer department. Thus, service becomes the primary component of the product. The computer’s performance that gives benefit to the customer is the main reason for the purchase (Fanning, 2020). Computers are explicitly bought to give access to the internet, play games, or to program. The service that phones provide is the ability to call and communicate with people. The computer or electronic product’s service aims at providing the solution to the technical problem or giving satisfaction from playing video games. The service is performed by the purchased machine towards the person. The border between the service and goods product components becomes very blurry in a complex product system and the interconnectedness of the goods and their service.

The secondary in importance product component of Amazon is goods. Amazon supplies all sorts of goods online, including computer and electronics retail and states. Even the philosophy of Amazon is tailored to provide the goods for the customer. The range of goods is extensive and includes both consumable and durable goods, even in Amazon’s computer departments. Various screen filters, repair tools, cables are the goods used regularly or purchased frequently, so they may be considered consumables. The majority of the goods in Amazon’s computer department are durable goods, such as laptops, workstation computers, and displays. They are long-term utilities with different life-span and are used regularly.

Excellent customer experience is another feature that Amazon sells as a product. It increases customer satisfaction with the goods and services and is used as a strategic imperative (Fanning, 2020). The customer experience at Amazon is mainly formed through the interaction of the customer and a company. The positive cognitive experience of the customer is achieved through reviews and customer questions and answers sections. The cumulative effect builds through a friendly approach of customer service and a wide range of goods. People enjoy online shopping, and such a relaxing experience makes them feel satisfied and come back to Amazon even when they do not need a product urgently.

The ideas surprisingly can also be supplied at the computer department. The unique service and the goods that provide experience lead to the idea product component of Amazon. The idea of accessible computer products that can be shipped right to the door reflects the idea of a computerized environment. The very fact that amazon functions entirely online shows how modernization occurs and the internet takes over the market. In amazon, the computer market also promotes the idea of being environmentally friendly with its climate pledge friendly badge and product certifications. The value proposition and pricing are also the ideas that Amazon computer retail embeds (Fanning, 2020). Amazon provides a unique pricing strategy with numerous pricing options for different products to correlate the customer’s needs. The reference pricing allows the company to manage the floor and ceiling prices and increase price comfortability for the users.

Amazon’s place product component is a digital space – a website with a collection of computer products. It does not determine the product and does not create additional value. However, it creates a setting for interaction and provides the customer with the ability to shop online from any part of the world. People as a product component are also not really presented on Amazon as an online service. The service allows for asking the seller a question on the Q&A section, but it lacks real human contact.

Reference

Fanning, S. M. (2020). The marketing concept: Philosophy, theory, and application (7^th ed.) [e-book]. Web.