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Marketing strategies of computer hardware company

Product Mixes can be tangible and intangible products. Tangible products are the countable or measurable products while intangible products are the non-countable or non-measurable products.

According to Compu-zone website, they are offering those custom built computer internal hardware. Customer can choose which brand and manufacturer to build onto their computer. Then customers will send to the customer service center. Finally the Compu-zone will fix or build the computer according to the preference of the customer. They are also selling notebook rams and hard disk

Not only Compu-zone is selling custom-built hardware, but they are also selling computer external hardware. Computer external hardware which they are selling such as high definition player, external hard disk, Liquid Crystal Display (LCD) monitor, modem router, printer, keyboard, mouse, speaker and many more. These are also called as computer accessories.

Hence, they are selling pre-built computer which some of the computer includes keyboard and mouse. There are many pre-built computer such as basic computer for users to work on office application and internet users, gaming computer and the latest products are three dimension computers which require three dimension shutter glass in order to watch three dimension movies, games and many more.

Furthermore, they are selling other manufacturer’s or brands notebook such as ASUS, Compaq, HP, Toshiba, Lenovo and many more. They are selling apple products such as Apple notebook, Apple desktop, Apple IPAD, IPOD, Apple MP3 player and other Apple accessories.

They are selling original software like Antivirus product, Microsoft Windows product, Office Product and also application product such as Adobe products.

As for intangible products, they are offering services for the faulty computer, any problems occur in the computer. They are offering free installation for newly custom built computer to the customers. For warranty matters, certain products have yearly, monthly, and daily warranty. Customers can claim their warranty in their outlet or the manufacturer’s service center.

Price Strategy

These are the factors that influence pricing decisions are customer factors where customer perception of value of the product, their price elasticity demand and price sensitivity (Lau, 2007). As it can see in the Compu-zone company, they are selling products in the market value and sometimes they are selling at the promotional price as stated in the brochure. Customer towards the perception value of the products is very low because customer wants cheap, affordable market price value. As seen, the price elasticity of demand also affects the Compu-zone company. This is where demand of the product is high and the price of the product is low, while demand is low, price of the product is high. Consumer will decide whether the product price is right for them or not. When setting the price, compu-zone must consider the consumer perception of price and how these perceptions affect the consumer’s buying decision.

They set both sales outlets in the same pricing products. Products that are selling in the compu-zone are based on the market value.

Distribution strategy

Based on the distribution strategy, Compu-zone has sales outlet in Digital Mall and also Plaza Low Yat. They are providing technical support to the customers can serve as service centers after sales service. Sales outlet can also serves as a selling product item. They provide technical support through emails. Customers can email them anytime regarding problems of computer. Service charge involve when the customers go to sales outlet to repair their computers.

Unfortunately they do not have electronic commerce system in the website. It is good to have electronic commerce system in the website like buying, selling the product itself and also payment method available in the website. The electronic commerce means modern online business that needs for organization to cut costs while improving the quality of goods and services and increase the speed of delivery of goods and services. (Goel R., 2007)

Other than that, there are also images about new computer hardware so that can attract more customers in demand. Besides images about new computer hardware, there are also banners on Twitter. Banners on Twitter usually post the updates on the price of the hardware and also promotion of the hardware and new hardware releasing.

Promotion Strategy

Marketing promotion strategy is also called as marketing communication tools which consists of advertising, personal selling, sales promotion and public relation tools that company uses to pursue its advertisement and marketing objectives. (Kotler, 1999)

What are they usually used to promote their products using communication tools are promotion through online social networking in Facebook and Twitter. They usually post the latest update on the latest product and new pricing products. It can attract more customers in demand of purchasing the products from them.

Besides that, they promote their products in the website posting new brochure. New brochure has sales promotion for products in order to attract more customers.

They have its forum to provide feedback, answer to the customer whatever customers have its service problem, hardware problem.

Environmental Analysis

The SWOT(Strength, Weaknesses, Opportunity, Threats) allows firms to create list without serious consideration of the issues and often classifying data and information. It can be a mechanism for the development of the marketing plan. (Ferrell, 2008).

Table 1.0 SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis

Strengths

Good reputation among the customers. Good customer relationship management, service installation and many more. (Compuzone, 2010)

Well known computer sales outlets among Malaysian citizen.

Many branded products are selling

They have loyalty customers-existing customers would like to buy computers from them again because of cheap price and also good service from them (Compuzone, 2010)

Allow customization of the computer-custom built computer.

Reliability and service support-service support available through email

Weaknesses

They do not have many outlets throughout Malaysia.

Lack of workforce such as fewer workers to work in the shop outlet to serve the customers.

Competitors around to compete the prices with them.

Opportunities

Advertisement available in the online social networking website such as Facebook and Twitter to attract customers

Demand of customers who like to buy computer peripherals, accessories.

Growth economy potential-demand of computer will increase; potential economy will increase due to market price. (Errion. L, 1990)

Growing population of computer users-modern technologies that allow growing population of computer users.

Threats

Competitors around to compete the prices with them

Many customers willing to buy online purchasing rather than to go to sales outlet.

The PEST framework checks the key forces of the macro-environment categories into four main steps that are political, economic, social, and technological (Birkholz A, 2007).

Table 2.0 PEST (Political, Economic, Social and Technological) analysis

Political

Employment law- government imposes an employer who employs a foreign employee within fourteen days of the employment; famish the nearest office of the Director General. (Anonymous, 1955)

Change of government budgets- government purchases increase aggregate income which induces additional consumption of expenditure like computer. (King, 2010)

Global market pressure due to weaker enterprise of computer demand, driven market which slowly sharply,efforts made to liberalize an economy that limit the government role, taxes, subsidies, tariffs and government regulation and lastly immeasurable qualitative sense, demand for an item (Anonymous, n.d)

Control of Piracy product- makes sure those government agencies to investigate and ban those unsafe computer products

Economic

Inflation that makes the prices of the product goes up

Situation economic growth in Malaysia. Growing economic increase demand of computers.

Jobs growth or unemployment affect consumer cannot afford to buy computers

Recession of work forces. Information Technology workers less due to unemployment

Slowdown economic affect the sales of computers

Changing of customer’s patterns- different income different spending patterns.

Social

Growing population of computer users

Education of school level, college level and university level who might need to do their school work and assignment

Earning capacity is high due to savings and also salary

Lifestyle changes, living standards- higher living standards and lifestyle changes to higher lifestyle affect buying patterns.

Maniac users on the attitude of work on the computers

Technological

Fast Pace of technology change- new technology new products

Technology offers new kind of system handling the business such as point of sales system, management system and many more

Technology allows the company to communicate with a new way. It allows the company to communicate with a new way by having network sharing with each of the computer to send the sales to the sales outlet for the customer to install customization of computer.

Porter’s five forces are based on the industrial organization economics and argue that all firms in a particular industry face forces within their industry and affect their profitability. (Ahlstrom D, 2009).

Table 3.0 Porter’s Five Forces Analysis

Porter’s Five Forces

Explanation

Threats of new entrants

The new entrants are high because they are easily competing with them with additional services customer loyalty and also low prices. Change major determinants of the market environment such as price, customer loyalty and also customer relationship management. New entrants would enter into new industry such as new computer shop such as pineapple computer shop, thunder match, and many more.

Bargaining powers of suppliers

They are depending on suppliers about the renovation of shop, new stock of products, and also website. Supplier’s power is how supplier’s drives price up. This is driven into the number of suppliers that they need the uniqueness of the price. . The supplier’s customers are fragmented so their bargaining power is low.

Bargaining powers of buyers

Bargaining powers of buyers is down and determine how much customers pressure on margins and volume. Customers buy large volumes so there is a concentration of buyers. Customers have low margins and are price-sensitive. . Bargaining power of buyers drives prices down and determines how much customers can impose pressure on margins and volume.

Threats of substitute

Threats of substitute are high because they are depending on suppliers to supply those manufacturer’s branded product and also relationship with customers, good services. Relationship with customers and also good services from them.If there are alternative products with lower prices of better performance parameters for the same purpose.

Rivalry among existing firms

Competitors easily enter into existing firms such as Cycom, Sri Computer, All IT hypermarket with low prices, services, time for installation and many more. High competitive rivalry between existing competitors will result in there are many competitors of about the same size, competitors have similar strategies and price of competition. The competition in an industry will be the higher, other companies would be easier to enter a new industry.

Segmentation and Targeting

Market segmentation is the process of dividing the total market for product into group based on variables with each group represents buyers with similar purchasing characteristics. (Lau, 2007). The company identifies the total market, divides into smaller segments and focuses on serving them. (Kotler P, 1999)

Table 4.0 Segmentation and Targeting strategies

Segmentation

Variable

Targeting

Geographical segmentation

Region

Northern, Southern, East, Western in Malaysia particularly in Selangor and Wilayah Persekutuan State

Demographics segmentation

Age

Gender

Family Size

Family Life cycle

Education

Age 8 until age of 70+

Female and Male

1 to 2,3-4,5-6, over

Young, Single, Married, Young, Young marriage with no children, Young or older marriage with children age 8 until the age of 70+

Graduate school, High school, College graduate, primary school,

Psychographic segmentation

Social class

Lifestyle

Personality

Average class, working class, upper class

Achievers, Believers, strivers

Compressive, gregarious, authoritarian, ambitious.

Behavioral segmentation

Benefits sought

User status

Usage rate

Loyalty status

Readiness state

Attitude towards product

Quality, service, economy

Ex-user, potential user, first time user, regular user

Light user, heavy user, medium user

Medium, strong, absolute

Aware, informed, interested, desirous, intending to buy.

Enthusiastic, positive

Differentiation

Differentiation is a meaningful difference to distinguish the companies offering from the competitors offering.

Product Differentiation

The Compu-zone is selling bundled gaming computers and three dimension computer package which is different from other competitors such as CYCOM, Thunder Match. This is to attract more customers that are interested in the gaming and also three dimension show. There are three models of gaming computers such as the newer Intel processor INTEL Core i7, INTEL Core i5 and Core i-Gaming is for INTEL Pentium.

Besides that, they also sell the ASUS rack server for the networking purpose, and also perfect energy efficient; computing performance unit-processor server platform and helps customers´ business more efficiently at an affordable price is different from other competitors such as CYCOM, Thunder Match, Aone Plus and many more.

About the price of the product, some of the hardware they are selling slightly higher than the other competitors like CYCOM, All IT hypermarket, and many other while the notebook price is slightly higher than the other competitors too.

They sell the best quality hardware money to the customers rather than the other competitors. They provide additional free items to the customers if they purchase desktop and laptop from them such as computer accessories is different from the competitors.

Service difference

In the sense of service, their installation service is efficient because they take about an hour to build up the all the computer hardware parts to serve the customers. The shop delivers all the pieces of purchase equipment rather than sending individual components to sit mid wait for the others to arrive.

Furthermore, as for delivery to customers, they deliver the bundled customization computer to customers once they fix up all the hardware parts. They usually deliver according to customer’s order and will be packed in a box. They provide delivery to the doorstep and also their delivery service is fast and efficient.

They order all various hardware from the manufacturer once the stock has been used up. This is to replace the finished stock and also to serve the customers.

They usually provide feedback through online social networking like Facebook and also forum once the customers has any problem with the service and also hardware problem.

They provide computer software tools especially for hard disk, and other tools like partition manager, power supply unit calculator, windows memory test, raid calculator, check Apple Mac Desktop, mp3 and many more, central processing unit checker

Internet Specific Differentiation Strategies

Table 5.0 Internet Specific Differentiation strategies

Internet specific Differentiation Strategies

Comments

Site Environment/Atmospherics

Easily download computer brochure from the website, Portrays accurate information about the current products and services they are selling and also the company background. Clearly shows the product and services they are offered, Menus are easily navigate when customers wants some information from the website. User friendly to the website such as ease to use, easily navigate, easy to find information and many more. Clear presentation of offering through the image of the products.

Efficiency and timeliness

Deliver what promised to the customers where installation of the computer takes one hour, and also all the parts of the computers. On time delivery for installation of the computers and bundled of computer. Efficient point of sales system where generates the receipt, invoice and many more. This will build customer’s loyalty and receive referrals from satisfied customers.

User generated content

Allow site or visitors comments on the product like twitter comment, and also the new products selling in the sales outlet. Provide space for images and also Facebook LIKE content to attract the customers where images is for new products, Facebook LIKE content where many users like the sales outlet in services, product and services they are selling.

Recommendation

Table 6.0 Recommendation Differentiation Strategies

Differentiation

Recommendation

Product Differentiation

Some of the hardware prices are slightly higher than the other competitors. It is recommended to lower down the prices and the lowest prices of all competitors so that to gain loyalty existing customers and new customers. It is not enough to sell these products. It is recommended to sell other branded desktop like Dell, Compaq, HP, and any other branded desktop and also branded laptop battery, printer ink, laptop adapter, and also other branded software so that many customers will buy from them and customers do not need to buy from the branded manufacturer’s sales outlet.

Service differentiation

It is good to have customer’s service feedback within 24 hours so that customers will know the feedback answer after they have sent the feedback question. This is to enhance better customer relationship management and also service support. It is good to have customer service training so that customers will appreciate their service, creates loyalty to the customers, provide information and advice and many more.

Site environment and Atmospherics

It is recommended to have more banner advertisement such as banner promotion, products and many more. It is recommended to have more information on promotion and also the company background such as history. It is recommended to have electronic commerce system like buying and selling in the website so that customers can receive their delivery orders, purchase, payment and customization of the computers.

Positioning

What is positioning means? It means that helps to create images for a company and its product to change the customer’s mind to purchase its product and helps to control the brand images.

Table 7.0 Positioning strategies

Positioning

Comments

Product or services attribute

They have position itself as a customization of computer maker for customers. Customization of the hardware becomes ordinarily whole set of computers. Customers can choose hardware from manufacturer’s brand and then the Compu-zone will build the sets of computer.

Besides customization of computer maker, they are also selling the size of casing for the computers whether it is small, medium or large computers. Different size they have, different design they are selling.

It positions itself as a various product brand. There are various popular and quality product brands such as AMD, INTEL, MICROSOFT, LOGITECT, NORTON and many more.

They offer full range of services like installation, maintenance of the computer, support, computer tools like hard disk tools, windows memory test, central processing unit checker and many more. They offer installation services like installation of hardware, installation of notebook and many more, maintenance of the computer if the computer having problems with the hardware and blue screen error, support through emails if there is any problem with the sales, computer and others.

Integrator positioning

Integrators provide everything a consumer needs in general. Compu-zone positions their integrator positioning which selling all kinds of computer in the sales outlet. All kinds of computer which they are selling are hardware, software, notebook, accessories, peripherals and many more.

Benefits of integrator positioning would be convenient because it is a one stop shopping market and offer much kind of computers. In addition, it can provide strategic advantage in proven ability to deliver the computers to customers. Moreover, it can get profit by selling all kinds of computers. In order words more choices to choose when they sell more computer products in advance and also more variety to be sold in the sales outlet.

Recommendation

Table 8.0 Recommendation Positioning strategies

Positioning strategy

Recommendation

Product or service attribute

It is recommended to have electronic commerce system like buying and selling in the website so that customers can receive their delivery orders, purchase, payment and customization of the computers.

Competitors positioning

It is recommended to position themselves as the lowest pricing because other competitors is competing in their low prices of hardware, desktop, laptop and also accessories. It is good to give the best quality hardware and other computer to the customers in order to compete with other competitors

Objectives

Objectives should be based on SMART approach. SMART stands for Specific, Measureable, Attainable, Realistic, and Time bound. The objectives must be concrete and more specific. The objectives are measurable in terms of time, and numbers of object that could be measured. The objectives must be achievable and realistic; time bound where should be completed by the end of the date.

The first objectives would be increase the traffic to the websites. The strategy that increases the traffic to the website is to increase the advertising methods like online social media like Friendster, myYearbook, Myspace and other popular social networking sites, online newspaper, electronic commerce website such as EBAY, Lelong, online magazines and other media websites that attract most of the people in the world. Furthermore, it is good to make friends, and influence people in an easy way to promote the website by invite friends through email about the important of the product that they are selling. It is important that improve the search engine ranking by focus the content on keywords. This will help people to find the website when they search for the Web.

The second objectives would be increase sales by 50% by retaining customers. Customer Relationship management uses technology to suggest new products to the current customers and employ other techniques aimed at retaining and growing their business. Besides that, it can also build alliance with others to be able to make introduction or to the partner with each other for the mutual benefits to the customers. It must also increase the number of purchase in order to increase sales.

The third objectives would be increase customer’s loyalty to change their purchase behavior. The strategy of this objective is to add more additional promotion such as events, mobile messaging and many more that they are having now, and increase additional customer service relationship management such as provide frequently question and answer, and also online chat rooms in order to know customer’s feedback and also comments on how to improve more.

The last objective is to increase the market share by 3% in 2012. They must increase the sales outlet relative power, uniqueness or not neglected customer relationship. In addition, to create the uniqueness of the product they must create the customization of the computer to increase the customer’s willingness to deal with them rather to bid out the contract at every opportunity. Indispensability of customer relationship is very important when they lock the customers into learning relationship and to ensure that the high end.

E-CRM recommendation

CRM stands for customer relationship management and E-CRM is an electronic customer relationship management where focuses on the future relationship with the customers using online. (Chaffey. D, 2008)

It is recommended to use website for customer development from generating leads to communicating through emails and web base to encourage purchase. They send the latest new promotion, new prices and also new products through emails to encourage more purchase. It is also important to apply automate triggered email marketing to support contract strategies aimed on the customers development to purchase, cross sell, after sales service just like Tesco.com.

It is recommended to identify data mining. Data mining is to identify new segments and also improve targeting. Furthermore, it is good to have online personalization or mass customization on computers just like Dell.com to facilitate the recommended next best products.

Besides that, it is good to provide online customer service facilities such as Frequently Ask Question, Call back and Chat support to enable customers to send any feedback to them and increase customer relationship management.

In addition, it is recommended to manage online service quality. This is to ensure first buyers have a great customer’s experience that encourage them to buy again and also manage multi customer’s experience as they use different media as part of buying process and customer lifecycle. This is where to provide the linkages and no interruption transition between online and offline or touch points as part of the relationship.

Recommendation of interactive marketing tools

It is recommended to use mobile devices as the interactive marketing tools. This is because it can change their behavior patterns of hundred millions of people and the most important ideas is to use short messaging services (SMS), multimedia messaging services to send those new promotion updates, new product updates, and new prices of computers.

Interactive TV can offer marketers a new way reaching customers. Benefits of interactive TV include wider choices, convenient shopping, and more engaging TV programs and also more advertisement in the TV programs.

Advertising method in the cinema can change customers buying patterns because C-Zone can give discount or give-away coupons to the customers to capture regular audience and increase likelihood of getting a sales. Most of the customers enjoy entertainment movies in the cinema. Every customer’s visits to the cinema will increase likelihood of getting a sale.

Direct radio can change customer’s buying patterns because it is a great direct response, increase global reach of radio, good for targeting medium, and build communities around the brand and can advertise their shops.

Sponsorships are an effective way to develop greater brand impact because they can capitalize from an existing community and associate your brand with fresh content. By customizing their sponsorships to specific areas or for specific messages, they can create an excellent platform to communicate your products and services.

An event that introduces new products and services is an effective way to generate excitement and develop relationships with potential customers. For instance, they can obtain customers’ contact information so they can follow-up after the event with promotions or introduce new products and services. As well, inviting prominent guests to the event as speakers or supporters will generate interest in the media, which can result in free publicity and bring greater exposure to their business.

Implementation of analysis

Implementation of the analysis turns marketing strategies into actions to accomplished future objectives. (Kotler. P, 1999)

Table 9.0 Implementation of Interactive marketing tools

Interactive marketing tools

Recommendation date

Remarks

Mobile device – SMS, MMS

10 days

Send latest news like latest promotion, latest product to the all customers that Compu-zone has their phone numbers

Interactive TV

1 month

Advertise the sales outlet, latest promotions, product selling in the sales outlet, latest product

Advertising in cinema

2 weeks

Give discount or give-away coupons to the customers

Sponsorship

4 days

Several fixed ad placements, advertorials, co-branded content sections, or anything the advertiser and publisher can agree on.

Direct radio

1 week

Advertise on radio about own latest promotion, sales outlet.

Events

4 days

Events on the latest products road show, products selling in the C-Zone, promotion on certain products only

Evaluation

Metrics to be used

Traffic in the Web

The metrics are number of click through the website. In addition, another metrics to be use in this website is number of visits each day. In order to increase the number of click though and also number of visits, the technique should be done such as the advertisement in the online social networking like Facebook, Twitter, Friendster, MySpace and other online social networking, update the quality of content, improve the search engine by ranking.

Sales by 50% by retaining customers

The metrics are number of order. Besides that, number of repeat purchase and the number of visits in the sales outlet are the metrics. In order to increase the number of repeat purchase, number of order and number of visits, they must have regular promotion and also services must be good in installation, maintenance customer relationship management.

Profits of 40% in 2015 by expanding customer base

The metrics are number of new customers, number of order, and the number of the visits.In order to achieve the number of new customers, number of order, and number of visits, they reduce the cost of the computer prices that are currently slightly higher than the other competitors so that they can achieve the profits of 40%.

Market share by 3% in 2012

The metrics are number of sales percentage volume, number of profits, and the performance of the workforce. In order to increase these metrics, they must have a good reputation among the customers where their service quality, customer relationship and many more, increase bargaining power of suppliers where they negotiate with the manufacturer’s suppliers.

Appendixes

Background of the company

The Compu-zone website company is the best choice for the assignment. Since 1999, Compu-zone has custom built machine for computer, hardware, and also laptop for rams and hard disk, apple notebook, ipad, and ipod. They also built elite computer for gamers and enthusiast for years before the other competitors try to compete with them. They have been focused on the best hardware value for money to the customers in order to compete with other retail shop. Their retail shops are located in Digital Mall, Plaza Low Yat. Plaza Low Yat has its headquarters and also sales outlet.

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