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Part 1
INTRODUCTION
Part 2
Sales Growth
Annual sales grew by 114%; CAGR: 104% Households: 44% of the market growing at 150%, Businesses: 56% of the market growing at 93%
Brand HP Dell
Q1'07 4.608M 3.228M 3.415M 2.399M 1.473M 1.275M 0.891M 0.796M 1.281M
Q1'08 6.460M 4.683M 4.527M 2.890M 2.321M 1.612M 1.433M 1.330M 1.321M
Y/Y Change 40% 45% 33% 20% 58% 26% 61% 67% 3%
Acer
Toshiba Lenovo Fujitsu / Fujitsu-Siemens Apple Asus Sony
14.6%
9.3% 7.5% 5.2% 4.6% 4.3% 4.2%
Others
Total
3.759M
23.124M
4.529M
31.108M
21%
35%
18.8%
100%
Government policies
Laptops are covered under Information Technology Agreement-1 (ITA-1) and have enjoyed exemption from basic customs duty on import. Excise duty: complete exemption for local manufacturers from excise duty. imported computers subject to additional customs duty (levied in lieu of excise duty) equivalent to 7 per cent. VAT: computers have a concessional rate of 4 per cent (importance attached to the IT sector in India). Tax changes: Goods and Services Tax (GST) regime to take place in 2010. GST would ensure a simpler and more transparent tax regime, and address issues concerning cascading of taxes, multiple compliances, etc. The Finance Bill, 2008 has proposed to include computers, including laptops, under the MRP regime of excise.
Part 3
MARKET SEGMENTATION
Based On Geography
PC consumption in both West and South grew by 39% each; in East it grew by 10% while in North it declined by 13%
Based on Gender
Global information technology giant Hewlett-Packard (HP) is set to launch its special lines of products, targeting women and the youth in India. "Women usually look for easy mobility and sleek looks, so the women's product line will be based on those premises. Texture of the body of the laptop is another factor that women take into consideration while purchasing, so our products will reflect that.
Though much market has not been created, there is lot of scope of exploring this segment.
Part 4
Hewlett Packard
Strength Leadership Position. Consumer Centric Brand. Strong after sales service. Design Strategy: looks. Cost Strategy. Weakness Low Flexibility: Unlike Dell, HP does not have high customization available. Decline in digital entertainment market. Software Service.
Opportunity Threat PC business. Pricing pressure. Service Industry: Bought Component pricing. Worlds no.2 service provider, Slow revenue growth. EDS.
HP : Market Strategy
Maintain Status Quo as market leader, and continually innovate to strengthen position. Products: Notebooks, Tablet PCs, Desktops, Gaming Systems, Printers, Toner, Paper, Scanners, Monitors, Servers, Software, Networking, Accessories. Pricing: Oracle's Siebel technology reducing marketing spends by 15%. Cut notebook prices by 15 to 20% creating a volatile price war. Promotion: Innovative word of mouth marketing called the 31 days of dragon. Associates with various Hollywood themes to target movie going audience. Place: Uses online method for booking. Has outlets in major cities. Product Development: HP has launched aggressively into the Indian market. Ease of availability. Diversification: M&A: In August 2001 HP and Compaq came together to merge by a 25 billion $ stock deal.
Dell
Strength Inventory turnover rate is 6 days. Revenue Growth at 100%. Cost efficiency. Direct to customer business model: minimum credit risk. Latest technology Customization. Internet sales leadership: $5M everyday, worldwide. Opportunity Network service in B2B. Strong potential in China and India. Low costs and advanced technology. Growth in business, education and government markets. Weakness No proprietary technology. High dependency on component suppliers. Lack of Software Support for customers.
Threat Dells market share very less. Price range considered premium. Currency fluctuation. Political instability. Tariff trade barriers.
Lenovo
Strength National Image (China) Knowledge about local market: Lenovo excels in its strategy for the Chinese market. Strong R&D: Taken over from IBM. Mass manufacturing capability. Quick Responsiveness. Opportunity Import barrier. Increasing global demand. Internet boom. Growing wireless pc market. Governments association. Weakness Poor global brand perception. No pure electronic sales Low inventory turnover: About 40 days. Poor After sales service. Limited knowledge of global market. Threat Heavy competition. Industry reaching maturity. Software piracy and clone market. Little firms growth.
Part 5
UNFULFILLED NEED
Up gradation of Laptop
We are expecting that the up gradation of laptops will be one of the most important requirements of the people owning laptops. If the laptops are made compatible enough to integrate these up gradations and also done at a reasonable price, it will attract more customers to the product.
Product: The new product launched will have a better Battery management and heat controlled Laptops. The Laptop will have an inbuilt TV tuner card and also will have a light weight. Additional feature provided will be keyboard lighting. Full customization will be provided for customers. Price: The survey results indicate that the price of the laptops preferred by respondents is ranging from 30,000 to 50,000 Rs. A low pricing strategy can also be used by selling laptops lesser than competitors Laptops. Promotion: Television and Radio advertisements can be used to introduce the product in the market. Primetime advertisements with taglines such as you need it, you have it can be used as this new product is introduced catering the unfulfilled needs of the product. Also advertisements should be shown on news channels and sports channels as the target market is students and professionals. Online, Newspapers and magazines can be used to support the initial promotion. As we are targeting professional and students these mediums should be effectively used as this is the easiest way to reach our target audience. Place: Very effective distribution techniques should be used. As we have identified the unfulfilled need of up gradation, then the process of up gradation should also be very easy and less time consuming. In metros free home delivery of the parts can be done and engineers can go house to house to upgrade the Laptop. In small towns all the laptop sellers can have a separate department for up gradation and all the up gradation related queries and installations can be handled there separately.
Part 6
CONCLUSION
ROAD AHEAD
notebook industry is the future of personal client PC market. Based on predictions, the mobile computing notebook devices market are subdivided as ultra mobile sub notebook PCs and notebook PCs. Innovative educational laptops like, $100 laptops are also looked at as the products which rule the future of Indian notebook market. Laptops with extensive multimedia features continue aiming to gain more personal, home notebook users, whereas notebooks with longer battery life and higher performance will continue to cater the needs of business professionals. Gaming industry being itself in very nascent stages. There are several series in Dell and HP which cater to this group already. High speed connectivity and low weight notebooks generally are most demanded ones today. HP being top performer in multimedia and personal computer section should try to concentrate more towards capturing large organizations, and dell the vice versa. Though notebooks are seen as the replacement of desktops most of the times, it is still a long way before notebooks sales overtakes that of desktops in number of units sold.
REFERENCES
www.mait.com [manufacturers association of information technology] for Market Segmentation graphs policies.gov.in for government policies india.gov.in/govt/policies.php for government policies http://www.intelliquest.com/resources/technical/MarketSeg mentationOverview_MBIQ_June24.pdf for Market Segmentation http://www.utdallas.edu/~tskim/Lecture%20Note%206.pdf for Market Segmentation
Thank You.
Questions.