CASE ANALYSIS

COMAPQ COMPUTERS: FOCUS GROUPS

❖ SUMMARY OF THE CASE:

This case involves focus group research for a new notebook computer aimed at
the consumer market conducted by Compaq Computer Company. In the fiercely
competitive consumer computer market, Compaq's consumer division only had a
3% market share, significantly behind market leader Toshiba's 60% share.
Compaq created the Shark notebook computer to strengthen its market position.
Its size, weight, and battery life were all carefully considered, and it had a huge
screen and an auxiliary base that could be snapped on to add a CD-ROM, modem,
and floppy drive. To improve the product's pricing points and marketing message,
Greg Memo, the project leader for the consumer notebook design, ordered a series
of eight focus groups, four of which were held in Boston and four of which were
held in Atlanta.

The 64 participants had been chosen based on their recent or future plans to
purchase personal computers. The focus group meetings, however, saw an
overwhelmingly unfavorable response from the participants. They revealed
strong preferences for other companies like Toshiba, IBM, and Apple while
criticizing the Shark's style, weight, and functionality. Memo and his crew were
shocked by how strongly the participants' reaction was negative. Compaq
officials made the choice to launch the Shark notebook as planned despite the
focus group's unfavorable findings, expecting that its distinctive features and
cheaper price point would appeal to consumers. The Shark, however, fell short of
sales projections, and Compaq eventually decided to cancel it, incurring a sizable
loss.
The situation serves as a reminder of the value of market research, especially
focus groups, in creating new goods and comprehending consumer preferences
and demands. It also emphasizes the dangers of launching a product that is out of
step with market trends and neglecting customer input.

❖ FACTS OF THE CASE:

1. In 1995, Toshiba held a 60% market share, greatly exceeding the 3%
market share held by Compaq Computer Corporation's Consumer
Division.
2. The division had created a new notebook, code-named Shark, with a
huge screen and a single attachment for a CD-ROM, modem, and
floppy drive that was optimised for size, weight, and battery life.
3. The new notebook was slated to go on sale in time for the back-to-
school rush.
4. The Shark notebook's size, weight, and battery life were all optimised,
and it came with a single adapter that contained a CD-ROM, modem,
and floppy drive.
5. With the introduction of products within the customary retail selling
seasons of back-to-school, holidays, and graduation, the new design
marked a significant shift in Compaq's relationships with retailers.
6. In order to build the new machine, Greg Memo, the project leader for
consumer notebook design, convened eight focus groups of eight
participants each in Boston and Atlanta.
7. The 64 participants were chosen based on whether they had just
purchased or planned to purchase a notebook.
8. The design team leader had commissioned a set of focus groups,
consisting of eight groups of eight people each in Boston and Atlanta,
as part of his attempts to create the new machine.
9. Among the form factors examined in the focus groups were:
a. A conventional laptop with a CD-ROM and floppy drive.
b. A conventional notebook without a floppy drive and a CD-
ROM
c. A thin laptop without a CD-ROM or floppy drive
d. Removable keyboard, CD-ROM, and floppy drive for a
convertible tablet computer. Two more form factors are
described in Exhibit 1 as follows
 e. Netbook without a CD-ROM or floppy drive and a 10.1-inch
screen
f. A thin, 12.1-inch laptop without a CD-ROM or floppy disc.
These form characteristics, however, were not examined in the
focus groups.

❖ PROBLEMS OF THE CASE:

1. Toshiba dominated the consumer notebook market, with Compaq having a
small market share.
2. The market had not yet tested the new notebook, and it was up against stiff
competition.
3. It's possible that the focus groups won't offer trustworthy or practical insights
into customer behaviour and preferences.

❖ ALTERNATIVES OF THE CASE:

1. As scheduled, introduce the new notebook and anticipate commercial
acceptance.
2. Postpone the introduction in order to carry out more thorough market
research, such as user testing and surveys, to make sure the new notebook
satisfies consumer demands and preferences.
3. Reevaluate the new notebook's functionality and design in light of
feedback from focus groups and other market research.

SUBMITTED BY: Rashmi Rathi

REGISTRATION NUMBER: 22221065
SUBJECT NAME: Research Methodology