Research Proposal on "Marketing Plan Ultralight PC"

Research Proposal 8 pages (3365 words) Sources: 3

[EXCERPT] . . . .

Marketing Plan

Ultralight PC Marketing Plan

With the rapid growth of Web 2.0 technologies (O'Reilly, et.al.) and the rise of social networks (Bernoff, Li, 36) there continues to be a proliferation of devices for accessing the Internet. The need for a more fully-featured device that has the ability to function as a laptop yet be low priced enough and functionally equipped enough to provide access to the Internet has emerged. Technologies in this area include Netbooks or Ultralight PCs (Ricadela, et.al). Market factors driving the adoption of Netbooks also include Software-as-a-Service (SaaS) models (Swiercz, Lydon, 389) and the development of low power consumption microprocessor architectures (Ricadela, et.al). What is also fueling the development of ultralight PCs is the low power consumption and the ability to stay connected to the Internet at all times through the use of Evolution Data Optimized (EV-DO) technology (Lee, Kwak, Kim, Kim, 296). This technology is revolutionary in that it allows an ultralight PC to stay connected to the Internet regardless of location. From a market differentiation standpoint, creating an ultralight PC that can stay always connected to the Internet also acts as a market innovation that will eventually lead to the consolidation of larger, more expensive laptops that require either a hard-wired connection to the Web or a WiFi spot to operate.

II. Market Analysis

The intent of this section is to analyze the market for ultralight laptop PCs globally. The most successful competitor in the netbook segment of the market today is a smaller company, Asus, which has successfully created distribution channels and service teams throughout the U.S. Asus has successfully created social networking-based marketing campaigns to recruit key bloggers and thought leaders in the Internet and PC hardware market. As a result of the exponential growth predicted by International Data Corporation (IDC) for this category of digital devices, Dell, Gateway and HP are also actively competing in this market as well (Ricadela, et.al). Their entrance into the ultralight or as it is sometimes called, the netbook market, has legitimized it and is leading to greater growth. Figure 1, Worldwide Netbook Unit Forecast shows how fast the sales of ultralight or mini-notebooks are expected to expand.

Figure 1: Worldwide Netbook Unit Forecast (Source: Ricadela, et.al)

Ultralight PCs or netbooks are also acting as a catalyst of product strategy change within the global laptop market as well. This effect on the overall market has been to accelerate the adoption of direct marketing channels (Al-Obaidi, Gabrielsson, 5) which is a major factor in the re-defining of the distribution of laptop shipments and volume growth shown in Figure 2.

Figure 2: Global Laptop Unit Volume Growth, 2007 -- 2012

(Source: Ricadela, et.al)

III. Competitive Analysis

There are nearly two dozen companies today who are manufacturing ultralight or netbook-form factor systems. What is fascinating about the competitive dynamics of this marketplace however is the fact that market leaders Dell and Hp are not dominating it through their traditional multi-tier and multi-channel management based approaches to distribution. Instead the use of entirely new approaches to competing using social networking (Bernoff, Li, 36) and the applications shown in Figure B, Web 2.0 Applications, have been used successfully by Asus to gain market share in the U.S. market. According to market estimates from IDC (Ricadela, et.al) Asus now accounts for nearly one out of every four ultralight or mini-notebooks sold. They have accomplished this by concentrating on a unique approach to managing their marketing mix and a heavy reliance on social network, thought leaders and key influencers who have strong impact on purchases of new electronics products. To see an analysis of competitors please see the Appendix for Figure C: Competitive Analysis.

IV. Market and Segment Analysis

As can be seen from the analysis of worldwide distribution of Ultralight PC Buyers by Segment, the majority are actually being used on consumers first, and secondly, education. Surprisingly only a small percentage is being sold into Small & Medium Business (SMB). This market segment of SMBs is a significant one with estimates from the total size of the U.S. market alone of small businesses being well over 12 million in total count (Doern, 3). Using market research methods to understand the needs of the SMBs globally for an ultalight would be a very significant revenue opportunity.

Figure 3:

Worldwide Distribution of Ultralight PC Buyers by Segment

Sources:

(Ricadela, 2009) and analysis from International Data Corporation

IV. Marketing Mix

A. Product

The core differentiator for the proposed ultralight PC is the combining of Solid State Disk (SSD) drives which have the ability to be accessed and used at significantly faster speed than traditional drivers, with EVDO technology

(Lee, Kwak, Kim, Kim, 296). The combining of very fast access speed, high battery life and the "always on" Internet access will significantly differentiate this product, and also create entirely new opportunities for creating channel partners as well (Al-Obaidi, Gabrielsson, 5). High tech distributors will find the modular architecture well-suited for adding in their own enhancements and also expanding the market into vertical areas including healthcare and insurance. The proposed product will also be specifically designed to support customization by users as well, so they will have the opportunity to create their own unique identity with the proposed ultralight PC. The proposed ultralight PC will also use the ability to customize its design as part of the unique value proposition, further adding to its differentiation and perceived value in the market. The use of mass customization as a differentiator in the market also accomplishing the strategic marketing goal of delivering an exceptional experience to customers as well (Swiercz, Lydon, 388). In other words, having the opportunity to customize an ultralight PC to their specific requirements and also have unique designs placed on the cases, not only will the purchasing experience be made more unique but their loyalty to the product will be enhanced as well (Swiercz, Lydon, 389). As part of delivering the total customer experience as part of the product, each ultralight will have an SSD drive which can be completely backup up online into a 25GB, 50GB or 150GB partition the customers receive with their personalization options. This will also give customers the motivation as part of their product to share how they are using their ultralight. The reason this is made part of the product concept is that for any ultralight to be integral to how customers use the Web it must enable collaboration and the ability to share information (O'Reilly, et.al.). As a result of all these features and the support for a social networking community for customers, the name of the product will be the Italian name for freedom and will be called the Liberta Ultralight.

B. Pricing

Pricing is a marketing variable that says more about a products' value and market position than much of its marketing communications or public relations, because price connotes values (Swiercz, Lydon, 387). For the Liberta Ultralight the pricing strategy needs to convey high quality, durability and reliability all at a price point that is competitive. The competitive analysis shown in Figure C. Of the Appendix indicates that there is a major variation pricing strategies of competitors in this market. A few are going for skimming pricing mostly due to their cost structures being so high and overhead being so expensive. Companies including Dell and HP are in this category. There are other competitors who are using the lowest-cost components and open source operating systems to minimize costs, attempting to use a penetration pricing strategy. It is a well-known fact that aggressive pricing does not work with high tech electronics (Mohr, Sarin, 85). In general these markets are highly inelastic and do not respond to plummeting pricing to improve sales. Of all high tech electronics markets the pricing for PCs has consistently been the most inelastic and unresponsive to major price cuts over time (Stavins, 350). This is due to the exceptionally fast rate of innovation in the PC industry, the fact that commoditization happens fast in many of its segments, and distribution channel strategies drive prices down rapidly from margin erosion (Stavins, 350). The pricing strategy then for the Liberta Ultralight needs to focus on communicating its unique position in the market as the only customizable ultralight and also the only one with EVDO technology as well. These two unique and highly differentiated features can support a more value-based pricing strategy that commands 20% or more above the median price of competing ultralight PCs.

C. Place (Distribution)

In launching the Liberta Ultralight it will be crucially important to rely on a multichannel selling strategy to quickly gain sales initially throughout the U.S. The use of multichannel selling strategies in the PC industry has proven to be one of the most effective in minimizing risk while accomplishing significant market share growth (Al-Obaidi, Gabrielsson, 5). The distribution strategy will primarily focus on getting alliances and agreements in place with distributors who have the financial capability to stock products and carry inventory they in turn will sell to… READ MORE

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