You are on page 1of 22

Executive Summary

In any industry always encounter many problems such as low bargaining power of suppliers, the threat of new entrants, threats of substitute products, competitive rivalry and bargaining power of customers. Therefore, a business wants to succeed in the market is very difficult. It requires that business to set up a comprehensive marketing plan and increases its strengths while decreases its weaknesses. In fact, in its financial statements, HP has earned high profits in recent years. This is due to the reaction and appropriate in the company marketing plans. Moving forward, HP will adopt aggressive marketing strategies will be analyzed in the following posts to maintain and grow its profits.

Table of Contents
List of Figures ................................................................................................................................ 3 List of Tables ................................................................................................................................. 3 1. 2. 3. 4. 5. 6. Companys History and Background of the Plan ............................................................... 1 Brief information about the product/brand of the plan ..................................................... 1 Situation Analysis .................................................................................................................. 2 Marketing audit ..................................................................................................................... 3 Marketing objectives ............................................................................................................. 4 Marketing strategy ................................................................................................................ 5 6.1. 6.2. 6.3. 7. Segmenting ....................................................................................................................... 5 Targeting .......................................................................................................................... 6 Positioning ....................................................................................................................... 7

Marketing Mix ....................................................................................................................... 8 7.1. 7.2. 7.3. 7.4. Product ............................................................................................................................. 8 Price ................................................................................................................................. 9 Place ............................................................................................................................... 10 Promotion ....................................................................................................................... 11

8.

Tactics and action plan........................................................................................................ 12 8.2. 8.3. Tactics ............................................................................................................................ 12 Action plan ..................................................................................................................... 12

9.

Projected financial statement ............................................................................................. 14

10. Evaluation and control ........................................................................................................ 15 10.1. Key performance indicators ........................................................................................... 16 10.2. Control ........................................................................................................................... 17 References .................................................................................................................................... 18

List of Figures
Figure 1. Positioning map: Laptop market in Singapore ................................................................ 8 Figure 2. Strategic Marketing Evaluation and Control ................................................................. 15 Figure 3. Example of using cost per lead KPI .............................................................................. 16 Figure 4. Example of using social interactions KPI ..................................................................... 17

List of Tables
Table 1. Porter five forces ............................................................................................................... 2 Table 2. SWOT analysis ................................................................................................................. 3 Table 3. Marketing audit for HP in Singapore market.................................................................... 3 Table 4. Major Segmentation Variables for Consumer Markets .................................................... 5 Table 5. Segmentation for HPs lap top consumer market ............................................................. 6 Table 6. Targeted market niche ...................................................................................................... 7 Table 7. Focused features of Product .............................................................................................. 9 Table 8. Focused features of Price ................................................................................................ 10 Table 9. Focused features of Place ............................................................................................... 11 Table 10. Focused features of Promotion ..................................................................................... 11 Table 11. Action Plan throughout the year of 2014 ...................................................................... 13 Table 12. Projected Budget ........................................................................................................... 14 Table 13. Income statement for project ........................................................................................ 15

1. Companys History and Background of the Plan


Hewlett-Packard Company was established in 1939 by David Packard and William R. Hewlett in the US. It provides a wide range of products and services to individual customers, from small and medium-sized to large organizations in many areas such as governments, education and financial institutions worldwide. The main products of HP comprise of personal computing, services, software, information and technology infrastructure, with the total revenues of more than 100 billion US dollars (HP.com, 2013). The main objective of this paper is to create an annual marketing plan for HP companys laptop products to Singapores markets, and the plan will be prepared for the fiscal year of 2014. The main targeted customers of HP in 2014 are people with high and medium income. Thus , the marketing strategy would be set up for the introduction of a high quality product line. Singapore is a developed country with a strong purchasing power for high-tech products, therefore an efficient marketing plan is essential for HP to increase sales and reserve its customers from strong competitions of other firms.

2. Brief information about the product/brand of the plan


A laptop is a personal portable computer, which integrates most features of a desktop computer such as a keyboard, a screen or a pointing device. A laptop is powered by an AC adapter and can be used without an outlet using the battery. Normally, a battery can provide energy for the laptop for 3 to 5 hours, depending on different situations. The HP company produces various types of laptops, notebooks and tablet PCs for many purposes. They range from high performance types for watching movies and playing music purposes to powerful notebooks for playing games. The company also offers some product lines for business office needs such as ultra-portable laptops and netbooks. For each type of lifestyle, the company offers its customers an appropriate choice of laptops.

3. Situation Analysis
In order to succeed in any industry, a company needs to understand the environment it is conducting business in. An effective marketing plan can only be made when the firm knows where its power is lying in a business situation. This paper will analyze the companys situation using SWOT analysis to see what the company is facing with and how to bring its strengths into play. To succeed in any industry, a company needs to understand the environment it is conducting business in. An effective marketing plan can only be made when the firm knows where its power is lying in a business situation. This paper will analyze the companys situation using Porters five forces model and a SWOT analysis: Table 1. Porter five forces

Table 1 shows high competitive forces in the technology industry, which can result in lower profitability for the company. It is important to conduct a SWOT analysis as shown in table 2 to improve HPs marketing strategies. Table 2. SWOT analysis

4. Marketing audit
Based on the HPs marketing plan, marketing audit is analyzed in the table below: Table 3. Marketing audit for HP in Singapore market Components Competitive environment Audit Score 7 Comments The technology industry is highly competitive. The market shares of HP in current are 7.2% (Eric and Jim, 2009). HP has always set out the particular marketing plan to achieve the goal of revenue growth.
3

Market trend

Clear marketing plan

However, for the Singapore market, HP needs to have a more clearly marketing plan of this market. The target market characteristics of HP are well defined. HP is targeting multiple and diversification segments. HP has a well position in Singapore market. HP has a huge range of existing laptop products Products 8 and new products that could lead to internal competition (HP, 2013). HP offers its products at flexible and reasonable prices. HP has significant growth in retail outlets in Singapore. HP always has the promotional marketing plan for the purpose of attracting more customers.

Target markets

Market focus

Product positioning

Price

Distribution

Promotion

5. Marketing objectives
Along with HP's efforts in 2013, this report will briefly set up HPs goals and objectives in 2014: Ultimate goals: to increase and even increase double the market shares in the computer wholesale market from its current 7.2% (Eric and Jim, 2009). Product objective: HP is looking for the target market for the professional business people as well as large companies. HP realized that nowadays people are trying to balance their busy lives between work and everyday life. People want their computers to transfer software more easily.
4

Therefore, capturing the customer's desires, HP has been developing his computer software combined with utility customers. With its product lines, customers buy HP computers do not need to buy the software separately (Emilio, Nicole, and Corey, 2012). This is one of the important objectives of HP products that are trying to develop in current and future. Customer Objective: to improve awareness of large companies so they know that investment in HP is the most efficient. Collaborator Objective: to set an agreeable price so that both collaborators and the company (HP) can benefit from their sales. Competitive Objective: to create barriers for competitors by ensuring the safety of their inventions through patents and non-disclosure agreements.

6. Marketing strategy 6.1. Segmenting


There are many types of variable on which the company can use in segmentation: Table 4. Major Segmentation Variables for Consumer Markets

Source: (Kotler & Armstrong, 2012) Strategic marketing for HP's laptop line will start in 2014 with continued successful development of the previous year (Hewlett-Packard, 2013) (Hewlett-Packard, 2012). More specifically, in segmentation, the following variables will be used for segmenting consumer market:
5

Table 5. Segmentation for HPs lap top consumer market Variables Classification Low (S$499 S$799) Income Medium (above S$799 S$1,499) High (above S$1,499) Ultraportable Lifestyle High Performance Everyday Computing TouchSmart Generation Non-TouchSmart Globalization and the development of social awareness in the laptop market is step by step erasing the difference in terms of a number of variables such as age, gender, geographic location, etc. The variables selected for the segmentation selected through market research as well as feedbacks from customers who have previously used HP laptop. In particular, for the Singapore market where consumers have high educational level and social life, the development of market segments as mentioned above is appropriate.

6.2. Targeting
With its position as one of the leading manufacturers in the industry and laptop personal computers combined with available resources. HP has many strengths to focus on all the segments have been identified. However, for the Singapore market, we need to have a more strategic focus for the specific characteristics of this market. It means that we must target some market niches.

Table 6. Targeted market niche Variables Income Lifestyle Generation Targeted market niche Medium and High Ultraportable and High Performance Both TouchSmart and Non-TouchSmart

Income Because Singapore has a developed market economy, social and Singapore living standard is on the top of the world (Rediff, 2012), focusing on that cheap segment especially electronic and technology goods is not a good choice. Lifestyle HP products are usually divided into three of its laptop line based on the lifestyle of customers in the market. This is a reasonable strategy and should be promoted because in modern society, there are many specialized needs of different consumers (Goode, 2011). Therefore, with the ability of the technology as well as existing reputation, HP can develop all products in the product line laptop. Generation: Forming the product line TouchSmart HP is the tools to meet the needs of the younger generation when technology products are inclined tend to touch. However, this trend was not really clear on personal computers and laptop, therefore HP should developing both two product line in order to reduce market risks.

6.3. Positioning
To locate the HP product in the market, one must first mention the competitor's current HP. Because Singapore is a country with a developed economy, all famous manufacturers in the field of laptops are available in the market (Apple, Dell, Asus, Acer, Vaio). With quality and reputation of HP products, we will temporarily have a positioning map as follows.

Figure 1. Positioning map: Laptop market in Singapore

Previo us year

Plan for 2014

The plan set out in 2014 is to move HP brand on positioning map to fit the missions and visions that HP was proposed. The world economy is recovering rapidly after a series of crises happening and premium segment is a logical step. There will be high probability that HP brand can not shift its position immediately in 2014 but it is time that we start.

7. Marketing Mix 7.1. Product


Based on the current analysis, Hewlett-Packard (HP)s product line of personal computer (PC) is considered in a threatened by product replacement such as tablets as replacement. In order to get a better position as planned, HP should vary their product that provides more features such as notebook with last longer battery life. In addition, the suggestion plan that should be taken ahead

is to create personal computer product that can be used as hybrid of tablet that can be brought out from home and notebook with keyboard when user is using at home. The main purpose of the plan is to satisfy the demands from customer that requires more convenient technology. Hence, HP should also create feature such as ultrathin hybrid notebook with similar weight compared to the current tablet product. HP is currently spending in significant way in their research and development concerning their new component and products features. We believed that this marketing plan would not create any barrier for HP to outperform its competitor like Dell and Toshiba. Besides that, HP will also be significant competitive because of its acquisition of other organizations that give them advantage of pursuing new technology and knowledge. (Spanbauer, 2012) Table 7. Focused features of Product Focus on product features Performance quality of the Notebook Customer Demand on product convenient Suggested Plan Provide last longer battery life Create hybrid notebook with the

features of tablet and personal notebook with keyboard at the same time Create notebook product with light weight

7.2. Price
Customer Perceptions of Value HP will be setting its pricing marketing mix for the products in the future based on the significant R&D towards consumer perceptions which had beenconducted from different market. The purpose is to understand the pricing key of the buyers perception to create further target in goods value pricing which targets at fair price with certain combination of quality and services. In order to deliver the customer value, HP should not worry about its pricing target compared with Toshiba and Asus. Plan suggestion of HP pricing marketing mix should be set higher
9

compared to mentioned competitor as the features provided to customer deliver higher value. Thus, HP pricing for its product should be focused on medium classification range at (S$799S$1,499) instead of low classification of S$499 S$799) (Hewlett-Packard, 2012) Cost-Plus, Internal and External consideration Pricing of PC product in the industry is at very intense condition, thus consideration on cost willbefully analyzed by HP because the price setting should be minimized in the market. To take the internal and external consideration, the pricing will be set to its lowest in the future to the consideration of massive R&D cost to compete with existing competitors and preventing new entrants as the internal and external consideration. (Hewlett-Packard, 2012) Table 8. Focused features of Price Pricing Focus Medium Classification Cost Consideration Suggested Plan Product pricing range place at S$799S$1,499 Research and Development cost is closely analyzed and considered into pricing of products Create certain margin to give some opportunity to create promotional feature to attract customer

7.3. Place
HPs marketing mix in place will be managed and organized based on consumer and group of customers based on different business segment. For plan suggestion, HP should be setting its channel coverage for sales and distribution at more convenient place.For example in Singapore, HP should have its own retailer shop in the well-known shopping mall around Singapore (like Vivo city and Ion Orchard).(Blauvelt, Ciasullo & Hawkins, 2012) The purpose is to have direct selling of its product with delivering certain significant information and knowledge about the products to customer as well. Besides that, HP can also use this opportunity to generate constant feedback and respond about visiting customer at the store regarding their old product in order to improve their products. (Hewlett-Packard, 2012)
10

Table 9. Focused features of Place Marketing Place Customer coverage Suggested Place Have its own retailing shop at shopping area around Singapore for closer relationship with customer

7.4. Promotion
Based on HPs effectiveness and efficiency in tracking their cost, HP are able to estimate their future revenue deduction to certain. In the future, HP should have the promotional marketing plan for the purpose of attracting more customers. One of the most significant promotional that HP should be offering is by using discount method to attract customer in the first place. After that, further promotional strategy can be used to convince customers to purchase their notebook. For example, for each purchasing of notebook customer tends to gain advantage of life warranty promotional method to make the higher price paid worth more. (Blauvelt, Ciasullo & Hawkins, 2012) The main focus of the promotion strategy can be used to generate more sales for the organization and also to build customer relationship and deliver customer value to the existing and new users in the future. Besides that, the customer service branches discussed earlier can also be included as one of the promotion mix tools which considered as the direct marketing tool. Branches placed at the entire regions will make HP easier to obtain responses from individual customer like feedbacks, consulting, and complains counter. In addition, HP should be using the personal selling online platform like what has been created by Dell selling system. This can help HP to save their distribution cost and help their productivity in the market(Tandon, Chakraborty, Srinivasan, Shroff, Abdullah, Shamasundar, Sinha, Subramanian, Hill & Dhore, 2013) Table 10. Focused features of Promotion Promotional Features Discount and service method Suggested Plan Firstly, using discount method to attract the number of visitors at the retailers then use service promotional method that will be provided to customer to convinced the buying of the product

11

Direct Selling method

Using its own staff to convinced customer will be more reliable of with the help of promotion rather than using other distribution channel like general personal computer store

8. Tactics and action plan 8.2. Tactics


When new product is up in the market, then HP can use the massive marketing tool like social media to advertise the new product and deliver its important information. Based on pricing tactics, HP should set up its profit margin to the extent of 30% from the cost. The tactics is to create massive market share of attraction from customers. The purpose of 30% profit margin set to the new product is to leave some space to the promotional tactics where maybe it can be reduced up to maximum 15% of profit margin with the deduction are taken as discounted price to customers. For example, price of notebook of S$800 will be accounted to 15% of profit while the other 15% is actually discounted to customer as promotion. The promotional strategy should be applied for the first two months once the products have been introduced to the market and can reapply it once it has reach peak season like middle of the year and end of the year. Besides that, marketing mix tactics of place should be rented at the place of shopping where most of the technology stores are placed. For example, normally stores like apple, Samsung and Nokia will be placed closely to each other, thus what HP can do is to occupied place nearby these environment.

8.3. Action plan


The action plan of the marketing strategy and marketing mix will be shown at the timeline below where it concerns about time required to apply the certain strategies accordingly.

12

Table 11. Action Plan throughout the year of 2014 No. Action Plan 1 2 3 4 5 6 7 8 9 10 11 12 Setup on marketing Objectives Situational analysis of the industry Research and development for new product Creating and designing new products Set up of strategies in the marketing mix Apply marketing strategy plan of segmenting and targeting Set up action on the tactical plan for product pricing and promotion Set up action on the tactical plan for renting a place at the shopping mall Introduction event at several countries Observation of business activities in the market Evaluation of business activities Controlling of business activities 1 2 3 4 5 6 7 8 9 10 11 12

13

9. Projected financial statement


Table 12. Projected Budget

No 1

Activity Research and development Environmental analysis Product component analysis

Budget (S$000) 8,000 15,000 300 360 1,500

Remark

2 3 4 5

Hosting an event Renting retail shops (6 stores) Building platform Advertising TV advertisement Radio advertisement Banner advertisement

Understanding market situation Understanding of customer demand Introducing new laptop product Direct sale to consumer For online selling Social media

17,280 7,200 8,640

30 sec/time, 6 times/week 1 min/time, 6 times/week 200 banners 1 mouse and carry case for targeted sales of 800,000 units 15% from marginal profit (only for on sale period of 480,000 units with average price of 1150/unit with profit margin of 30%) S$150/customer (20% of 800,000 customer)

Promotional cost Additional products 2,000

Revenue reduction

82,800

Service maintenance cost Total

24,000 167,080

14

Table 13. Income statement for project


Income statement item Projected (S$000) Change from 2013 financial statement Revenue Cost of sales Gross profit Selling, general and administrative expenses Finance costs Other expenses Profit before tax Income tax expense @ 17% Profit for the year (758.52) (500) 46,831.48 (7,961.35) 38,870.13 No change No change 30% increase 30% increase 837,200 644,000 193,200 145,110 10% increase 10% increase 10% increase 5% increase

10. Evaluation and control


Figure 2. Strategic Marketing Evaluation and Control

The figure above generally describes the evaluation and control process which we plan for HP in the 2014. The evaluation process will be based on using Key Performance Indicators (KPIs)

15

10.1. Key performance indicators


This method is based on the data collected through marketing period in order to measure and analyse the project performance Return on Investment: This indicator answers the question "Are we recouping what we spend on marketing in new sales?" This value will provide an approximate figure to evaluate performance of marketing campaigns. Success indicators is that incremental sales are greater than campaign investment Cost per lead: The cost per lead metric used to show the effectiveness of the ability to control costs while generating revenue. In fact, every purchase funnel should have similar metrics associated with it such as cost per visitor or cost per win. The success indicator is a low cost per lead with a high volume of quality leads. Figure 3. Example of using cost per lead KPI

Social interactions: The social interactions KPI for measuring the effectiveness of social media tools to interact with customers and markets. A strong measure of effective communication will help companies make the interaction with other targets, such as website conversions or new wins. A success indicator will include a high level engagement that corresponds to the completion of key marketing objectives, viral posts that require little or no nurturing on your behalf, sustained engagement over a long period of time

16

Figure 4. Example of using social interactions KPI

10.2. Control
The ultimate goal of the assessment or evaluation is the active control to bring the plan to achieve the objectives set out or even planned changes Due to the significant changes in the market. The major changes in the marketing plan in Singapore if the market will be reported to the head office in the U.S. to require additional support (if necessary)

17

References
Blauvelt, J., Ciasullo, P. & Hawkins, O., 2012. Hewlett-Packard. Griffin Consulting Group. Emilio, V., Nicole, W., and Corey, J., 2012. Marketing Plan for Hewlett-Packard, New York: s.n. Eric, M. L.; and Jim, G., 2009. Hewlett-Packard: Sustainability as a Competitive Advantage, s.l.: s.n. Goode, W. J., 2011. The Dynamic of Modern Society. 1st ed. New Jersey: Atherton Press. Hewlett-Packard, 2012. Annual Report, California: Hewlett-Packard Company. Hewlett-Packard, 2013. HP Online Store. [Online] Available at: http://h20386.www2.hp.com/SingaporeStore/images/sghpshop/ols/category.html#for-hometablet-laptop/ultraportable [Accessed 30 12 2013]. HP.com, 2013. HP history. [Online] Available at: http://www8.hp.com/us/en/hp-information/about-hp/history/history.html [Accessed 31 12 2013]. HP, 2013. HP. [Online] Available at: http://www8.hp.com/sg/en/business-services/index.html [Accessed 3 1 2014]. Jason, B.; Paul, C.; and Owen H., 2012. HEWLETT-PACKARD, s.l.: s.n. Kotler, P. & Armstrong, G., 2012. Principles of Marketing. 13th ed. New Jersey: Pearson. MBA Skool.com, 2013. MBA Skool.com. [Online] Available at: http://www.mbaskool.com/brandguide/it-technology/4350-hp-hewlett-packard.html [Accessed 3 1 2014]. Rediff, 2012. Rediff Business. [Online] Available at: http://www.rediff.com/business/slide-show/slide-show-1-30-countries-with-bestliving-standards/20120910.htm#2 [Accessed 30 12 2013]. Spanbauer, M., 2012. Hewlett-Packard, Europe: Current Analysis Inc. Tandon, R. et al., 2013. Hewlett Packard: Delivering Profitable Growth for HPDirect.com Using Operations Research. Interfaces, 43(1), pp. 48-61.

18

Wheelen, T.L. and Hunger, J.D., 2012, Strategic Management and Business Policy, toward Global and Sustainability, 13thedn, United States of America, Pearson.

19