The Laptop Industry

Marketing Management 1, Group Suzlon, B1

Part 1

INTRODUCTION

Indian Laptop Industry
• In sync with global trends. • Reasons for growth:
– Lifestyle of consumers – Affordability – Better Legislation

Part 2 CURRENT MARKET SCENARIO .

Sales Growth • Annual sales grew by 114%. • Businesses: 56% of the market growing at 93% Notebook sales: 2002-2008 . CAGR: 104% • Households: 44% of the market growing at 150%.

Sales: City Spread • Notebooks are fast penetrating beyond the top 4 metros. growth rate 152% .

8% 100% Table 1: Q1’08 Top Nine Brand Notebook PC Shipments .Global market share Rank 1 2 3 4 5 6 7 8 9 Brand HP Dell Q1'07 4.890M 2.433M 1.529M 31.8% 15.608M 3.399M 1.5% 5.1% Acer Toshiba Lenovo Fujitsu / Fujitsu-Siemens Apple Asus Sony 14.6% 4.473M 1.2% Others Total 3.796M 1.527M 2.460M 4.228M 3.415M 2.683M 4.3% 4.759M 23.321M Y/Y Change 40% 45% 33% 20% 58% 26% 61% 67% 3% Q1'08 Share 20.612M 1.330M 1.6% 9.891M 0.3% 7.281M Q1'08 6.124M 4.275M 0.108M 21% 35% 18.321M 1.2% 4.

Indian market share .

etc. • Excise duty: complete exemption for local manufacturers from excise duty. under the MRP regime of excise. multiple compliances.Government policies • Laptops are covered under Information Technology Agreement-1 (ITA-1) and have enjoyed exemption from basic customs duty on import. GST would ensure a simpler and more transparent tax regime. • Tax changes: Goods and Services Tax (GST) regime to take place in 2010. 2008 has proposed to include computers. and address issues concerning cascading of taxes. including laptops. • VAT: computers have a concessional rate of 4 per cent (importance attached to the IT sector in India). • The Finance Bill. imported computers subject to additional customs duty (levied in lieu of excise duty) equivalent to 7 per cent. .

Part 3 MARKET SEGMENTATION .

Notebook Consumption in Businesses . however in small enterprises it declined 10% .By Employee Size • Overall consumption in the business grew by 41% • Consumption in large and medium enterprises grew by 66% and 61% respectively.

to medium enterprises by 11% • Sales declined in small enterprises by 7% .Half-Yearly Notebooks Enterprise Market • Overall consumption growth in the Businesses Segment was 16% • Sales to large enterprises grew by 25%.

SEC Profile of Household Notebook Buyers • Overall household market increased by 164% • Sales to SEC A increased by 161% and to SEC B by 296% • Sales to SEC C in H1/2007-08 were negligible .

in East it grew by 10% while in North it declined by 13% Notebook sales: City-spread .Based On Geography • PC consumption in both West and South grew by 39% each.

so our products will reflect that”.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. Texture of the body of the laptop is another factor that women take into consideration while purchasing. • "Women usually look for easy mobility and sleek looks. . so the women's product line will be based on those premises.

0 Learning Laptop • Though much market has not been created. there is lot of scope of exploring this segment. Some of the laptops in market are: – – – – Star Wars Darth Vader Laptop VTech Double Vision Notebook VTech Nitro Notebook Hot Wheels Accelerator 5.Based on Age and Life Cycle • Kid's laptops are very popular nowadays. .

Part 4 MAJOR PLAYERS AND STRATEGY .

Hewlett Packard • • • • • Strength Leadership Position. Opportunity Threat • PC business. Strong after sales service. EDS. World’s no. • Service Industry: Bought • Component pricing. Weakness • Low Flexibility: Unlike Dell. Cost Strategy. • Decline in digital entertainment market. HP does not have high customization available. .2 service provider. • Slow revenue growth. • Pricing pressure. • Software Service. Consumer Centric Brand. Design Strategy: looks.

Products: Notebooks. and continually innovate to strengthen position. Gaming Systems. Accessories. Desktops. Cut notebook prices by 15 to 20% creating a volatile price war. Has outlets in major cities. Monitors. Place: Uses online method for booking. Networking. Scanners. Product Development: HP has launched aggressively into the Indian market. Software. Toner. Ease of availability. Tablet PCs. Promotion: Innovative word of mouth marketing called the 31 days of dragon. Printers. Associates with various Hollywood themes to target movie going audience. Diversification: M&A: In August 2001 HP and Compaq came together to merge by a 25 billion $ stock deal. .HP : Market Strategy • • • • • • • Maintain Status Quo as market leader. Pricing: Oracle's Siebel technology reducing marketing spends by 15%. Servers. Paper.

High dependency on component suppliers. • • • • • • • • • Threat Dell’s market share very less. education and government markets. Tariff trade barriers.Dell • • • • • • Strength Inventory turnover rate is 6 days. . • Revenue Growth at 100%. Low costs and advanced technology. Price range considered premium. Weakness No proprietary technology. Opportunity Network service in B2B. Latest technology Customization. Internet sales leadership: $5M everyday. Growth in business. • Cost efficiency. Strong potential in China and India. Currency fluctuation. Lack of Software Support for customers. Political instability. worldwide. Direct to customer business model: • minimum credit risk.

Dell : Market Strategy • • • • • • Products: PC. Merger and Acquisitions: By 2000. Increase product line: New products like a PDA. Market Penetration: Continue to do more of the same. editorials. the external storage market was growing at 23% per year. Place: Direct from Dell: On-line. telephone. storage. Premier Pages. New International Market Development: Enter new markets with existing products. catalogues. sales reps. By acquiring an innovative leading company like the EMC Corporation. direct mail order. laptops. but had no presence in the mid-range server market. special training and certifications. By 2001. pricing below competitors. Dell was the market leader in entry level servers. Product Development: Pursue Mid-Range Server Growth. Dell can effectively enter the external storage and software market • • • . mail-order. customer service. and auxiliary services. reviews. Pricing: Direct Model approach. and awards. Promotion: On-line model. workstations.

Mass manufacturing capability. Strong R&D: Taken over from IBM. Industry reaching maturity. Threat Heavy competition. • • • • • • • • • • • . Government’s association. Little firms’ growth. Increasing global demand. Software piracy and clone market. Internet boom. Poor After sales service. • • • • • Weakness Poor global brand perception.Lenovo • • • Strength National Image (China) Knowledge about local market: Lenovo excels in its strategy for the Chinese market. Opportunity Import barrier. Growing wireless pc market. Quick Responsiveness. Limited knowledge of global market. No pure electronic sales Low inventory turnover: About 40 days.

Part 5 UNFULFILLED NEED .

If the laptops are made compatible enough to integrate these up gradations and also done at a reasonable price.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. . it will attract more customers to the product.

.Secondary (Second Hand) Market • People buy second hand. It is expected that given the chance of buying the laptop second-hand with proper provisions of warranty and reasonable price exchange people will buy it. because it is very easy to change the parts of a PC.

An interesting result was that most of the people who used the laptops gave ratings as “good” and “very good” to the performance of the products they had used. Unfulfilled needs – Battery management Heat Control in the laptops TV tuner card Light weightiness Keyboard Lighting • • • • • • • • • . strive to provide the best possible customer experience. Demography: The age group was primarily 18 to 35 years. Almost all had used a laptop or possessed a laptop. An open ended question on the features required on the laptop gave an amazing insight into the needs. The respondents were majorly students and professional. Dell was the first runner up followed closely by HP. Around 15 percent of the respondents were from USA. This is an interesting insight to the user preference and can prove handy to laptop manufacturers when constructing a laptop for the target audience. pricing: Respondents were ready to pay a high price for quality and sturdiness. The hardware specifications are the first choice for the users when choosing a laptop. Need: upgrade the laptop. Design and Bundled Software follow suit. A majority number of respondents were from the Indian subcontinent. Mobility. Warranty & Services. The second choice is the brand name followed closely by price. The respondents wanted an Apple laptop when given a choice for the “dream laptop”.Survey & Analysis • • • Main areas and features a company should concentrate on should be. About one – third of the respondents do not want an upgrade of their laptop.

Online. A low pricing strategy can also be used by selling laptops lesser than competitors Laptops. As we have identified the unfulfilled need of up gradation. 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. Place: Very effective distribution techniques should be used.000 Rs. Also advertisements should be shown on news channels and sports channels as the target market is students and professionals. Additional feature provided will be keyboard lighting. . Newspapers and magazines can be used to support the initial promotion. Full customization will be provided for customers. you have it” can be used as this new product is introduced catering the unfulfilled needs of the product. then the process of up gradation should also be very easy and less time consuming. The Laptop will have an inbuilt TV tuner card and also will have a light weight.Meeting Unfulfilled Need • 4 P’s to be catered: • • • • • • Product: The new product launched will have a better Battery management and heat controlled Laptops. In metros free home delivery of the parts can be done and engineers can go house to house to upgrade the Laptop. As we are targeting professional and students these mediums should be effectively used as this is the easiest way to reach our target audience. Primetime advertisements with taglines such as “you need it. Promotion: Television and Radio advertisements can be used to introduce the product in the market. Price: The survey results indicate that the price of the laptops preferred by respondents is ranging from 30.000 to 50.

Part 6 CONCLUSION .

There are several series in Dell and HP which cater to this group already. the mobile computing notebook devices market are subdivided as ultra mobile sub notebook PCs and notebook PCs. Based on predictions.ROAD AHEAD • • • notebook industry is the future of personal client PC market. Though notebooks are seen as the replacement of desktops most of the times. HP being top performer in multimedia and personal computer section should try to concentrate more towards capturing large organizations. whereas notebooks with longer battery life and higher performance will continue to cater the needs of business professionals. home notebook users. • • • . High speed connectivity and low weight notebooks generally are most demanded ones today. it is still a long way before notebooks sales overtakes that of desktops in number of units sold. $100 laptops are also looked at as the products which rule the future of Indian notebook market. and dell the vice versa. Gaming industry being itself in very nascent stages. Innovative educational laptops like. Laptops with extensive multimedia features continue aiming to gain more personal.

pdf for Market Segmentation • http://www.com [manufacturers association of information technology] for Market Segmentation graphs • policies.gov.mait.php for government policies • http://www.com/resources/technical/MarketSeg mentationOverview_MBIQ_June24.in/govt/policies.edu/~tskim/Lecture%20Note%206.utdallas.in for government policies • india.pdf for Market Segmentation .intelliquest.gov.REFERENCES • www.

. Questions.Thank You.

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