Marketing Case Study Group 7

7/31/2019 Marketing Case Study Group 7

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5/27/12 Group 7 : HP - Distributing

HP : Distributing Printersvia Internet

Group 7

Gaurav Parewa GauravChandwani

GauravKejriwal

Gokul Suresh

Hemant Himanshu Naik


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Contents

Group 7 : HP - Distributing


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5/27/12 Group 7 : HP - DistributingGroup 7 : HP - Distributing

BACKGROUND

1998 - HP sold five categories of products. ConsumerProducts, Service and Support was its major segment

HP led the printer industry and printer supplies business in90s

Exponential Growth from 60s to 90s.

Retail accounts comprised 90% of sales.

Growth slowing down in 1997 due to lower margins and in-store service by retailers was not satisfactory

HP is contemplating use of e-commerce business.Should it enter online retail ?


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At-home markets

First time buyers Researched buying cycle;influenced by in-store demonstrations; tend to buy inbundles

Repeat buyers Shorter shopping periods; sight-unseen buying, mail-order popular channel; largersegment;

Prefer Inkjet printers which covers 70% of total sales

SOHO Markets (Small Office Home Office)

More deliberate buying than At-home markets, price andGroup 7 : HP - Distributing

CONSUMER BUYING BEHAVIOUR


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MARKET AND COMPETITION

Source: (i) Morgan Stanley Dean Witter Estimates, Internet Quarterly: The Business of the Web,September 23, 1997


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SWOT Analysis


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VALUE CHAIN

Technology

Developme

nt

Marketing Distribution

Service

HP Organizational Value Addition

Technologicalinnovation.

IntroducedInkjet andLaserJet

ProductQuality

C0-Marketingefforts

Strongretailerrelationship andaccountmanagem

Multipledistributionchannels

Initiatedonlineselling ofrefurbished

products

Differentchannelpartners toprovide

service


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Evaluation of Alternatives

Advantages

1. HP already sellingrefurbished printersonline

2. Growing internetconsumer base

3. Youth dominantconsumer group

4. Increasing acceptanceon indirect mail-orders

5. Success of Dell and

Disadvantages

1. First time buyers preferretail buying

2. Security concerns foronline transactions

3. Challenge of after-salesservice

4. Large investment ,uncertain ROI

5. Limitation of offering

promotional packages.

1. Expanding offerings online


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Evaluation of Alternatives

Advantages

1. Enhanced customerreach

2. Avoiding channel conflict3. No first mover risk4. Compete in online

domain

Disadvantages

1. Lowering of margins dueto possibility of highcompetition

2. Loss of control over userinformation as comparedto option 1

2. Online retailers

Advantages

1. Maintains currentrelationships

2. No first mover risk3.

Can join at a maturestage

Disadvantages

1. Ignoring online marketand loss of potentialmarket share

3. Wait and See


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RECOMMENDATIONS

Hybrid Channel

Online selling Major Focus due to immenseopportunities. Retailers used for distributionRetailers Continue this channel andslowly reduce dependencyOnline Retailers Use this channel in the shortterm and base future strategy on marketresponsivenessE-Tailing - Ignore


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RECOMMENDATIONS

ROADMAPChoice Of Channels

1. 90% market through

retail accounts, hencethis channel is continued

2. Distribution throughretailers, avoids channelconflict and shorterdelivery period

3. Lower margin forretailers for online orders

4. *Personalized marketingossibilities throu h data

RelationshipManagement

1. Adopt Efficient ConsumerResponse(ECR)

2. Variable incentive for

retailers.3. Increase push through

better in-store display,motivated sales

personnel, increasedservice support.


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RECOMMENDATIONS

ROADMAPMarketingCampaign/Strategy

1. 24X7 tech support(online

chat and email) andcustomer care

2. Online loyalty programs WOM, incentivize online

sales3. *Business ties with

strategic partners forafter-sales service

4. Tracking consumer

behavior through data -

Balancing risks andopportunities

1. First mover strategy

would strengthen thebrand image and onlineretail also mitigates itsrisk

2. After-sales serviceweakness in retailchannel balancedthrough online marketing


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RECOMMENDATIONS

Managing additionalcosts

1. Through saving on

commission2. Greater economies of

scale achieved due tohigher PC and printer

demand3. If needed - Long Term

Debt for new channel

Contingency Plan:

Future options to beexplored

1. Co-branding with other

PC leaders

2. Special bundlingpackages with its ownPCs

3. New product variantssuch as portable printers,networking option inInkjet printers etc


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THANK YOU !!

Questions ?

Group 7 : HP - Distributing

Documents

Marketing Case Study Group 7