Term Paper on "Marketing Segmentation and Product Positioning"

Term Paper 6 pages (1812 words) Sources: 3

[EXCERPT] . . . .

Marketing Segmentation and Product Positioning

Market Segmentation and Product Positioning

Company Background

ATC (All Technology Computer) is a computer retail stores dedicated to provide computer product and services to small businesses, and home offices across the United States. ATC is being established to provide quality computer hardware to businesses in the United States and outside the United States. More importantly, ATC focuses on network system and services to small businesses as well as providing both minicomputer server-based systems and PC-based LAN systems. The company services include design and installation of computer network system, training and support.

Recent changes that have affected the market of computer resellers across the United States have affected the market advantages of ATC. These include longer collection periods, margin squeeze and lower inventory turnovers. These concerns are the general trends affecting computer industry in the United States. Based on the challenges facing ATC market, this paper provides the marketing plan for ATC to enhance the company market advantages.

1.1: Marketing Objectives

To make sales reaching more than $10 million by 2013.

To capture 20% of the small and home business in the United States

To improve inventory turnover to 7 turn in 2013

To bring the company gross margin to above 35% and maintain that level.

2: Mission

The mission of All Technology Computer is to offer customers the highest quality computer hardware product and services. Our mission statement is to excel in the computer reseller industry. This is achieved by building a strong relationship with suppliers and customers. The company focuses on the personalized service to customers by offering conveniences and rapid service. ATC has technology expertise to assist customers in selecting products and services for their best needs. ATC develops its staff to achieve strong vendor relationships to meet customer demand within the computer technology.

3: Foreign Market Focus

All Technology Computer will start to offer its product and services to the emerging markets in India. The emerging market such as India is the second most populous country in the world with the total population reaching 1.2 billion. With recent increase in India-United States business relationships and other European countries, there has been an increase in the standard of living of many Indian citizens. Typically, India has become one of the most sought it services and many advanced countries seek for it outsourcing services from India.

For number of years, India competes with many advanced countries with reference to computer services. Report by Financial Express (2012) reveals that India market for PC (personal computer) increases by 13% in the third quarter of 2011, and the demand for personal computers grow by 29% yearly. Thus, All Technology computer will take the advantages of the increase in the computer product and services in India to offer its product in the Indian market.

B: Marketing Plan

The paper uses the 5Cs (Company, customer, competitors, Collaborators (suppliers) and Climate (economic environment) to prepare ATC marketing plan. The paper also uses STP (Segmentation, Targeting and Positioning) to achieve marketing objective.

4: Potential Audiences for a Marketing Plan

A target audience is a specific group of people within the target market that ATC aims its marketing campaign. ATC's target audience will be small businesses in the United States with special focus on the high-end home offices. The company will also focus on small businesses with 5-20 units' offices. ATC will focus on home office because there is a significant increase in the home offices across the United States. There are approximately 30 million home offices in the United States and the number is growing by 10% yearly. Many homes offices focus on the professional services, which include graphic art services. Other professionals running the home offices are lawyers, physicians and dentists. Typically, virtually home offices require latest modern computer products and services to work effectively. Thus, ATC marketing objective will focus on home office entrepreneurs and professionals who maintain home offices in the United States.

ATC will also focus on small businesses. Typically, 30-employee is the cutoff for our small business definition since larger companies prefer other vendors. The stiff competition among small and home businesses has made them to integrate it tools in their business objective. Porter (2001) argues that the integration of strategy information systems could assist businesses to achieve competitive advantages. Realization of the benefits of the it tools to gain market advantages have made million of small and home businesses to integrate it tools in their business operations. Thus, businesses will continue to need office computers, PC (personal computer), and other services such computer repair, computer upgrade, design and installation of network system and training of it personnel. The continuous need it services will make ATC to achieve market advantages since it is estimated that more than 90% of ATC potential audience will continue to request for the ATC product and services.

5: Identification of the Marketing Segment

The marketing plan identifies home offices and high-end small businesses as heavy users of ATC product and services. In the last few years, the number of potential customers from home offices and small business continue to grow with approximately between 8 and 9% yearly, and the market growth is likely to increase in the next few years. Thus, the market opportunity continues to skyrocketing with the increase in the use of computer product and services. Increase in the use network connectivity especially the LAN (Local Area Network) has been the other area that the company has recorded a spectacular growth.

Thus, the demand for PC (personal computers) will continue to grow by 14.1% in the next few years. Thus, ATC will take the advantage of the increase in the market growth of computer products and services among small and home business to focus its marketing campaign on the target audience and the strategy will make the company to achieve the market advantages.

6: Target Market and the Rationale

The target market is individual consumer. In the United States, there are more than 245.2 million internet users and the figure will continue to increase in the next few years. Based on the huge number of people who are connected to the internet in the United States, there would be an increase in the demand for the computer product such as laptop and desktop computer. ATC will take advantages of the computer awareness of people in the United States to gain market advantages.

Small businesses are the other target market for the ATC products and services. Small businesses form largest percentage of the total number of businesses in the United States. Small Business Administration (2011) defines small businesses as the organizations having less than 500 employees. Small businesses are the key to the nation's well being, and they contribute to the significant growth of the U.S. economy. Typically, Small businesses are reaching approximately 27.3 million, where 6 million were employer of labor. (Census Bureau, 2012). ATC target customer will also be the government organizations because government needs computer product and services from time-to-time basis.

7: SWOT Analysis (strengths, weakness, opportunities, and threats) for the company.

The SWOT model analyzes the strength of ATC to balance its weak position. The company is operating in a competitive market; however, the company has attractive opportunities in the area of LAN, network connectivity, the internet, software, training and services. On the other hand, the company has price oriented competitive weakness against major brand stores.

Strengths: ATC has an experience and expertise in the relationship selling because the company knows its customers one-by-one making the company to acquire direct sales force. The company also has experience and expertise on networking, connectivity, and programming. These have been the ATC major strength over its competitors.

Weakness: ATC brand is weak compared to its competitors. Moreover, ATC does not have national name that could flow into the national advertising. Typically, ATC competitors are offering products and services at lower prices because their per-unit costs are quite lower.

Opportunities: ATC has market opportunities in LAN because LAN has become a common business operation among small businesses and home offices. More importantly, LAN is part of the office network among businesses in the United States. Thus, application of LAN is more of knowledge intensive which ATC posses. The company also has expertise and knowledge in training of PC products and services, which serves as opportunities for the company.

Threat: ATC faces competitions among other companies such as ABC Chain, GHI Chain, DEF Chain, and local rivals. However, ATC is unable to offer lower prices to beat its competitors because when the company decides to offer low prices, our customer may think that we are not offering them good value.

8: Positioning for the Product and Services

The company will use the marketing concepts of 4Ps (Product, Price, Place and Promotion) to position the company product and services.

Product: ATC will continue to offer the quality product and services at fair price. The company will continue to offer products such as computer hardware and its peripheries. The company will also offer… READ MORE

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