HP PAVILION dv2700t
TEAM LJ-GROUP 2
S3183684-LE ANH TUAN
S3192550-LUU DUC MINH
S3176190-KIM JU YEON
S3192322-TRAN THI THANH NGA
LECTURER: KIERAN TIERNEY
TABLE OF CONTENTS
Executive summary 3
Current market situation 3
Market analysis 5
Micro environment 5
Macro environment 6
SWOT analysis 8
Corporate objectives 11
Financial objectives 11
Marketing objectives 12
Segmenting consumer market 12
Perceptual Map 15
Marketing mix strategies 17
Action Programs 24
Control Programs 27
HP is one of the world leaders of products, services and solutions in IT area. During 14 years working in Vietnam, HP always shows the professional of administration and management together with satisfying customers in order to improve the company brand awareness. Therefore, HP occupies highly the Vietnamese market share with the number of 23% in 2008 and becomes the leaders in Vietnamese market.
In this report, HP figures the company’s objectives in a short period of 9 months for releasing a new series HP Pavilion dv2700t starting in August, 2008. Firstly, in the 1st quarter of 2009, HP’s targets are achieving $36 million of sales and 18% of that number is profit margin. HP also expects to increase the market share by 20%. To achieve the targets, finance department decides to do market research quarterly to identify consumer buying power then assist for marketing department. Secondly, marketing department states to maximize consumer satisfaction and build loyalty and goodwill in Vietnamese consumers by offering superior products and excellent after sales services. In addition, there will be the first release of HP official e-commerce website to let customers purchasing online and give their feedbacks. Finally, all of promotion activities and public relations are well-prepared under the control programs in order to increase HP’s sales.
CURRENT MARKET SITUATION
HP was established in 1939 in Palo Alto, California, US working in IT area. Since then, HP now has become one of the leaders in manufacturing laptops, printers, software, and others technological products. HP first entered Vietnamese market in 1995 as a distributor of IT product and provide solution for banks, finances, telecommunications, and aviation.
Recently, Electricity-IT magazine co-operating with Market Research Center iScan have run a survey to have an overview about customers’ favorites, expectations and evaluations to some specific products including our brand HP. This primary research was running based on the consumers who have bought and used those products. It was taken at some particular well-known IT-centers, resellers and stores in Hanoi, for instance, Tran Anh, Phuc Anh, and in Ho Chi Minh City such as, Nguyen Kim, Idea by 200 of 20-question samples. The result essentially was not out of our forecast, that our brand is becoming the most favorite brand in the Vietnamese laptop market. According to the survey, our recent market share is approximately 22.7%, which is the highest at this time (figure 1) in comparison with that same period in 2006; our firm’s rank was no.4 with 6.8% of market share. These figures prove that our company has made a breakthrough in Vietnamese market and made an impression in consumers’ goodwill by making hi-quality and well-design products.
Figure 1: Vietnamese Laptop market share in 2nd quarter 2008
(Source: http://www.dientuvietnam.vn/index.php/cong-nghe-thong-tin/con-so-biet-noi/64-con-so-biet-noi/1429-nhung-con-so-biet-noi-072008, viewed at 10th August 2008)
As the figure of the previous part has shown, HP has approximately 23% of the Vietnamese market share. In this period of time, when the digital technology has been growing significantly, the demand of using computers and laptops not only in the world but also in Vietnam is increasing as well. By having hi-quality and professional products such as DV Pavilion and Compaq Presario, together with extra customer services both before and after buying, HP satisfies almost every kind of customers in Vietnam now.
IBM-Lenovo and Sony are the most 2 “dangerous competitors” of our company. IBM has ThinkPad that is used much by businessman. The products of this series have some special functions such as “HDD anti-shocked”, “HDD special recovery” etc. which help users to protect and recover their information. On the other hand, Sony Vaio is famous for light and magnificent design, which is also a comfortable and portable device. In addition, HP also needs to pay attention on “indirect competitors” such as HTC mobile and T-mobile. PDA-Personal Device Assistance with beneficial features increasing day by day from these firms may affect laptop market.
Since HP entered Vietnamese market, we have been opening 5 showrooms, two in the north, two in the south and one in the middle. They are not only showrooms but also the retailers and customer services, where customers will be assisted and problem resolved.
Recently in Vietnam, the number of people using computer has been increasing significantly. Their purposes might be different, some of them use for educating, some use for chatting and gaming, some use to support their works. In the previous few years, computer was rarely used in few offices by the directors or some well-trained engineers. However, recent research has shown that in Vietnam computer is now being used popularly by every kind of people. The most users now are young people who are from the Generation Y - people who was born in the period of 1977-1994 (Kotler, P, 2005). Therefore, Vietnam is becoming a potential market of PC distributions at this time.
Economic environment is one of the most important factors which possibly affects to our profit. In Vietnam, the personal average income is below $1000/year, therefore, if our products are too expensive, it will be not an efficiency investment even there are also a big number of Vietnamese successful businessmen. In addition, it is obvious that “urban Asians, as well as Vietnamese people, are typically richer than their rural counterparts” (Kotler, P, 2005). This will result in the different buying power between these 2 areas.
General Department of Vietnam Customs recently has been decreasing the import tax of laptops from 10% in 2006 to 8% in 2008 (http://www.customs.gov.vn/Default.aspx?tabid=670 ). As prediction of experts, there will be no more import tax for this product in 2012. This policy will positively affect to the laptop’s market, when both consumers and producers’ surplus increase.
The new trend of producing laptop is light-weight, fashionable and integrates more technology for example Webcam and microphone built-in, bass and booster enhanced, remote control, etc. to satisfy customer needs and wants.
• Magnificent design together with strong processors built-in (www.notebookreview.com , 2008).
• Innovative features such as “HDD quickly recover tools”, “Environment friendly system”.
• Customer loyalty
• Wide distribution channel with five showrooms and many distributors
• High price.
• Limited models in the same product line are distributed to Vietnam.
• Quite heavy.
• Decrease tax and tariff since Vietnam joined WTO.
• The demand for using laptop is increasing.
• The income level of Vietnamese people is increased gradually by 14.9% per year (General statistics office of Vietnam, 2007)
• The developing of the new technology has become more rapidly.
• Attract more customers to buy the new series.
• The quality of the new series is a guarantee for the consumers to buy and use the products.
• Open new showrooms in new areas to expand the current market. WO Strategies
• Consider to lower price to compete with other rivals
• Using the new technology in order to make innovative design for the new series.
• Distribute more models of the new series in Vietnam market.
• Direct competitors: Sony, IBM, Dell, Acer, Apple.
• Indirect competitors: HTC, T-mobile
• High inflation rate may reduce the buying power.
• Many steps of the bureaucracy of Vietnam policy can make HP hard to expand the market
• Consumer behavior: Vietnamese people tend to buy cheap products.
• Using the new features of the laptop series to compete with the competitors as a competitive advantage.
• Expand the market share by focusing on different segments WT Strategies
• Reduce price by minimizing the labor costs and all unnecessary costs in the production process.
• Making the cheaper model in the new series (which still keep the main configuration parts and design features of the series).
• Promoting and advertising in order to change the consumers’ behavior about using cheap products.
To earn customer loyalty by providing highest quality of products, services, and solutions.
To make sufficient profit (18%) to reinvest in business opportunities and company’s growth.
Changing in market is our great opportunity to grow with innovative products.
To motivate and care for our employees with providing the best work environment
To share our success in Vietnam by contribution to charities and growth in employment.
Achieve the 18% of profit margin over sales volume of $ 36 million in Vietnamese market in mar, 2009.
Increase the sales of HP pavilion dv2700t by 200% in 1st quarter of 2009 in comparison with 2008.
Maximize the satisfaction of customer by providing the excellence in products.
To make our products to be more attractive and competitive over other companies, the price will be reasonable and affordable.
Continue emphasize the company brand name to all of Vietnamese customers.
Increase the market share up to 20% by 2009.
Strengthen the competitiveness of our commodities in the Vietnamese laptop market by becoming the most favorite brand.
Establish online service center to listen their opinions and build closer relationship
SEGMENTING CONSUMER MARKET
The series of the HP Pavilion dv2700t is one of our revolutions in the laptop technology. Our products aim to assist every customer from upper middle to high class. To facilitate delivering our services and products to the customers, we have divided the segmenting consumer market into four main fields as: geographic, demographic, psychographic and behavioral segmentation.
HP targets the market mainly in the urban areas where people can afford such products like our laptop. In the other words, it is possible to say that, HP aims to the class of people with the high living standards who are seeking for the self-esteem and self-actualization levels of needs. Especially, in the big cities as: Hanoi, Hai Phong and Ho Chi Minh are the three our market’s concentrations.
To have a good segmentation, we clearly evaluate some factors as customers’ age, income and occupation.
Ages: The new laptop series is aiming at not only young people but also businesspersons (at the middle-age) so the target customers of HP are people at the age from 18-54 that is consisted of 65% of the whole 82.7 million Vietnamese people (Morley, C., 2007, ‘Consumer fact pack’)
Income: people whose income more than 7 million VND
Occupation: HP divides their customers into many classes from students, white-collar workers and designers, businessmen, officials.
In this section, we more concern about social class, lifestyle.
Social class: The new laptop series of HP is aiming at people in high class in the society. According to the statistic from Nielsen, it will be mainly in the class A which will be about 31% of the population.
Lifestyle: suitable for different people, from young people who prefer active, stylish, modern lifestyles to professional businessmen.
Behavioral: youngsters prefer stylish design, more features on entertainment. Meanwhile, businessmen favor elegant and formal design and improvement in official tools and applications.
Occasion: HP extends their product promotion for special events such as School opening day, Independent day, Christmas and New Year’s Eve.
Basically, the high income people gather in the urban as: Hanoi, Hai Phong, Ho Chi Minh, Da Nang, and Vung Tau. Due to this perception, HP aims to expand its brands in these urban areas because of high and potential purchasing power.
HP products will be suitable people from upper to high class based on different prices and qualities. The customers will be favor with the products based on its performance and design.
HP focuses on customers who have the passionate with high quality products and in outstanding performance laptop.
Hp Pavilion dv2700 is produced to help the customers match with the developments of technology and fashionable standards. Our products can satisfy the customer’s demands and needs due to the breakthrough technology and impressive design. With Hp Pavilion dv2700, you can show who you are and where are you in the society. Thus our slogan is “let’s make others look at you with HP Pavilion dv2700”.
Low price High price
HP Pavilion Dv2700t 17,300,000
Sony Vaio VGN-CR32G 18,500,000
Apple MacBook MB403ZP 27,700,000
Acer Asprie One A150 6,800,000
IBM-Lenovo Y410 15,500,000
Dell Vostro 1400 13,000,000
MARKETING MIX STRATEGIES
Product and service decisions
Processor, operating system and memory
Processor • Intel® Core™ Duo processor T8168
• 2.2 GHz level 2 cache 2 MB, 533 MHz Bus speed
Operating system Windows Vista® Home Premium
Memory 4 GB DDR2 667 MHz
Internal hard disk drive 120 GB
Wireless technologies Intel® PRO/Wireless 3945 802.11a/b/g Integrated Wireless LAN
Wireless capability Bluetooth® wireless networking
Speakers and microphone Altec Lansing® speakers
Webcam HP Pavilion Webcam with integrated microphone
Weight 2.54 kg
< http://www.notebookreview.com/default.asp?newsID=4245 viewed 29th august, 2008>
HP is a well-known brand among the laptop producers not only in Vietnam but also all over the world. The brand name of HP can guarantee for the quality of the new series in the consumers’ views. Moreover, the design of the dv2700t series is based on the original design of the dv2000 series which is considered as one of the best laptop design in the market at this time (www.notebookreview.com 2008).
(Kotler P et al, 2005, ‘Principles of Marketing An Asian Perspective’, Prentice Hall Publish, Pearson Education, pp. 237)
HP should use the brand extension strategies in order to promote the new series to the market. The well-known brand name of HP can gain the faith and belief of the customers about the new products when they make decisions whether to use or not about the new series.
The new series dv2700t has its own package’s way. Laptops are now packaged in cotton bags which has two versions, one version for young people (that is designed to make the customers look stylish and actively), one version for business people (that is designed to show the elegant and precise of the users).
Keep the traditional HP logo in the middle left.
After sales services
Customers of HP will be provided with the best and professional customers’ services. The warranty for the series is 2 years (1 year longer than other products of HP). Furthermore, the customers can pay $65 to extent warranty for each year more. Besides, HP also has 3 support centre in Vietnam which are operated 24/7 to answer and support any questions and problems from the customers.
Product mix pricing
Product line pricing
In the new series, HP divides it into many models with different configurations and designs. Each model is assigned in four different sub-series (ordinary series, limited series with unique design, entertainment series and ultimate series) in the series dv2700t and they follow four main price levels: $1100, $ 1400, $1700 and $2000 (for the 17 inches).
Entertainment series Unique design series Ultimate series
Besides offering different models to fit with the needs of customers, HP also uses the optional-product pricing strategy. HP welcomes customers to add features to upgrade for their laptops. They can choose to increase the RAM capacity (from 1GB to 2GB) or they can choose to change their HDD capacity (from 120GB to 250GB). The price of each item varies from $30 to $150
HP will discount for customers who buy the new series in the first week of September. The discounting will be 500,000 VND for ordinary series, limited series and entertainment series and 1 million VND for customers who use the ultimate series.
• Discount on holiday: in occasion of special events such as Independent day, Christmas and New Year’s Eve, customers can spend less money than usual about 15-20% to own the same products with the same quality.
• Promotion campaigns: together with these events above, HP will offer free maintain service for customers. Customers will just need to bring their laptops or PCs to HP care centre and HP will check all the products for free.
Horizontal marketing system
Up to now, HP has three main distributors (first-class) and many other second-class distributors in Vietnam. In 12/2007, HP also opens 5 showrooms, two in Hanoi, one in Da Nang and two in Ho Chi Minh City. HP has a wide distribution channel all over Vietnam which can help the customers find it comfortable to buy or research about the products. The distributors of HP, for example, Phuc Anh or Tran Anh is very well known desktop and laptop retailers in Vietnam market.
Hybrid marketing system
HP combines between selling their products through their retailers, distributors and through the internet. Customers can come to any retailers of HP in Vietnam to buy the new laptop series dv2700t or they can order through the internet. The new e-commerce official website of HP is in progress of design and will be published in September, 2009.
• In order to promote the new series to the customers, we plan to use a massive advertising campaign to attract users to the products. We will advertise the series dv2700t on the newspapers, magazines and the internet.
• Newspaper and magazines: Advertise on most viewed IT magazines such as PC world, E-chip magazine; and popular newspaper e.g. Lao Dong, Tuoi Tre, Tien Phong. These advertising channels are suitable with HP’s customers segmentation.
• The internet: HP decides to promote the new laptop on raovat.com-the most popular website for trading, thegioiso.com- where people have their passion in technology always search for newest information and 24h.com.vn-the biggest entertainment website.
• Customers who buy a dv2700t laptop can join in the special customer program (which was usually charge for $100 fee to join in the program). They will receive discount for the next purchasing, free update software with license, etc.
• Retailers and distributors of HP will receive point for each laptop they can sell and at some specific level (like 10 points, 20 points, 50 points and more); they will be granted with some valuable presents. Besides the presents, the retailers will also receive discounts for 15% if they can sell more than 200 million VND products per month.
HP plans to hold Press conferences to announce our new product lines, answer question coming from public media before launching our product campaign. At the end of 2008, there will be another conference holding for our annual report of company performance.
Action Responsible 2008 2009 Budget
8 9 10 11 12 1 2 3
Advertising and Promotion
Newspapers: Tuoi tre, Tien Phong, Lao Dong 150,000,000
Magazines: PC world, e-Chip 350,000,000
Internet: raovat.com, 24h.com.vn, thegioiso.net 100,000,000
Opening day 1st 80,000,000
Published 1st e-commerce HP website
Independent day’s ceremony, sale off 15%
Sponsor: RMIT sweetheart 96,000,000
Sponsor: Voting for Ha Long bay become Natural world wonder 100,000,000
X-Mas and New Year’s Eve, sale of 20%
Distribution and Development Administration department
Distributing to resellers and showrooms
Developing customer database R&D 80,000,000
Market research 80,000,000
Hire staff and workers HR x 60,000,000
Salary & Wages 300,000,000
Showrooms rental x 270,000,000
Decoration for special event 50,000,000
Quarter overviews Finance department
Total expense: 1,768,000,000 VND
Number of sales
Tells us whether our marketing plan is working properly or not.
Keep on monitoring the flow of sales to adjust our plans based on it. (E.g. plan for more promotion for low sales)
Can give useful information which helps us to evaluate our product’s performance and competitiveness in the market.
We have to make sure that retailers provide enough information about our product and right price to customers.
The degree of customers’ satisfaction is the primary determinant of succeed of our marketing plan.
We should try to improve the quality of products/services based on what customers complain about.
• Kotler P et al, 2005, ‘Principles of Marketing An Asian Perspective’, Prentice Hall Publish, Pearson Education
• http://support.openview.hp.com/news_feb_05.jsp?jumpid=reg_R1002_USEN ,
viewed 29th August, 2008
• Morley, C., 2007, ‘Consumer fact pack’, slides presented to Your consumers from Head to Toe seminar, Ho Chi Minh City, 22 May 2007
• http://www.notebookreview.com/default.asp?newsID=4245, viewed 1st Sept, 2008
• http://www.gso.gov.vn/default.aspx?tabid=417&idmid=4&ItemID=4284, viewed 1st Sept, 2008
• http://www.customs.gov.vn/Default.aspx?tabid=1, viewed 1st, Sept, 2008
• http://www.dientuvietnam.vn/index.php/cong-nghe-thong-tin/con-so-biet-noi/64-con-so-biet-noi/1429-nhung-con-so-biet-noi-072008, viewed at 29th August 2008
• http://trananh.vn/maytinh/?a=CATE&hdn_category=2, viewed at 29th August, 2008
• http://www.advertisingmedia.com.vn/paperpricelist.php, viewed at 29th August, 2008