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It's all started in 1939 when Bill Hewlett and Dave Packard created Hp when they worked on an audio oscillator in a garage in Palo Alto, California. After Walt Disney bought several of these oscillators for their latest movie, Fantasia, the company was off and running. HP began as a company that produced all sorts of electronic products; their focus was on test products like counters and voltmeters. Later on in the 60s, Ho ended up becoming the founder of Silicon Valley. They got into semiconductors in the early 60s and by 1966; they entered the computer market with Hp 2100 and the HP 1000. These were sturdy models that lasted for a good twenty years before more advancement saw screen keys and the HP 2640 rise to the occasion.
1984 saw the emergence of their first HP inkjet and laser printers. These were meant for the desktop. Later on in the 90s, Hp rose in popularity, marketing their computers to the average customer and opening an online store to help reach them. Now, Hp printers lead the country in reliable printing supplies and devices. Many different models are available making the suitable for home, small business and corporate use. It is pretty easy find a household with an HP computer, printer, offers everything a person might need for their office.
This year, HP release the new touch-cable laptop which is called the Touch Smart tm2 that follows on the footsteps of HP's original touch cable laptop which was the Touch Smart tx2. The 12.1 inch capacitive touch screen display allows use as both a finger-enabled devices and as a tablet using a digital pen. The screen rotates to lie flat on top of the keyboard in tablet mode or opens up for use as a laptop. Multi-touch gestures are supported including zoom, scroll and rotate. The Touch Smart tm2 focuses on extending battery life using a CULV processor with HP claiming 8 hour with the standard 6-cell battery.
Current Market Situation
Current Market Situation presents relevant background data on the market, product, competition, distribution, and macro environment. (Kotler P., 1993)
Hewlett-Packard, the world's largest PC vendor, officially releases its fourth quarter earnings, which showed that while HP's revenue increased, the company net earnings slipped. In the fourth quarter, HP reported that its revenue for the fourth financial quarter stood at $33.6 billion, an increase of 19 percent from a year ago.
HP also reported that the company is expecting earnings of 84 cents a share this quarter or $1.03 per share when those numbers are adjusted. HP saw earnings of 86 cents a share a year ago. However, HP did report that its net earnings dropped 2 percent year over from $2.2 billion in 2007 to 2.1 billion this quarter.
HP releasing the new Multitouch notebook called Touch Smart tm2 series convertible Tablet PCs, unveiled on January 17, 2010. Customer can now ordered it from HP's online shop, with the price of $949. HP estimated around 10 days for building and delivering a customized device. This product will be available in Austria at the end of February at price of 899 Euro.
This Touch Smart tm2 comes with new touch applicants: Bump Top, a touch-enhanced 3D interface for organizing or sharing photos and documents over social media networks as well as over e-mail; DigiFish Dolphin, and an interactive 3D screensaver. The Touch Smart tm2 will come with standard Intel Core 2 Duo SU 9600 processor and 4GB of DDR3 memory. There are options available to an Intel Core 2 Duo SU7300 CPU and/or up to 8GB DDR3 memory. It also comes with a 500GB, 7,200rpm hard drive.
The target market for this Product is adults at the age 18 years old and above. This product is not included as luxury goods, so people with normal income can also bought this product. The multi-touch notebooks and a new features added value to this product that will grab people attention to it.
ASUS Battalion Touch Cz-11
IBUYPOWER just announced the latest in their gaming notebook lineup, the Battalion CZ-11. IBUYPOWER put in a faster CPU, more RAM, a better video card, and added the option of getting a Blue-ray drive with the price of $1100.(further information refers to Appendices)
Multi-touch functionality is one of the newest features being added to notebooks and tablets alike. It offer screen manipulation of objects, whereas notebooks get limited multi-touch through touchpad with the price of $1,999.(further information refers to Appendices)
Toshiba announce the new Satellite U500-1EX- a portable laptop with multi touch screen. It utilizes Microsoft's Touch Pack for Windows 7, enabling users to easily flick through files and folders simply by touching the screen.(further information refers to Appendices)
Private ownership is the dominant market system in the United States. Moreover both and private business are granted the authority for decentralized decision-making. The free system in the American business sector is made evident by the amount of the production and output of private business.
The activeness of the US economy is mainly attributed to its rich and diverse business sectors. Hp actually under the industrial machinery sector where computer as well as engines and other equipment are produced.
Untied States considered as one of populated country in the world. In addition to size, the United States is said to be pluralistic society. This indicated that the country's inhabitants are highly diverse terms of religions, races and nationalities.
Being one of the countries who were able to use the computer and the internet for the first time, the American society is more adapted to technology. In, statics suggested that the employment sector is continuously using computer and related gadgets in their work activities; this greatly contributed to the growth of the computer industry.
- Hewlett-Packard is a strong and well-established brand name within the computer and printer industry. It is useful in market positioning, gaining new buyers as well as increasing profits margins.
- The company has an access to major distribution channels which allows it to market its products in the most effective way.
- The company holds the majority of the computer and printer market as compared to other competitors. By means of this large market coverage, the company can continuously gain profit as well as acquire the capital to support its project plans and business strategies.
- For the HP product, Touch Smart tm2 have attractive design, brushed metal casing, excellent build quality and have very good battery life.
- The company has the ability to acquire useful customer data; however, due to volume, the company is unable to analyze all of the valuable information. It must have the team that will sorts market details and construct them into usable concepts.
- The company had gone through times when it unable to sustain constant growth.
- Some drivers of HP Touch Smart tm2 could use bug fixed to handle glitches like twitching login field when it wakes from hibernation/ failure to re-init the fingerprint scanner in tablet mode
- The company can use other means of distribution like internet retailing, which can possibly augment its sales and market access.
- The continuous use of computers and printers by office workers and home owners alike suggests that these gadgets will be in demand for several more years.
- The ability of the company to acquire pertinent consumer data allows it to develop products that are based on current consumer needs and preferences. This enables the company to develop new products as well as established customer satisfaction and loyalty.
- Various marketing risks are also considered as threats for the company. Though HP can apply any marketing strategy, its effect on the market can vary. These effects must be analyzed throughout as it could greatly affect the business outcome.
- The computer and printer sectors are both highly competitive industries. In computer industry major companies producing similar products. There also some rivals of HP in printer industry.
This balance sheet summary shows HP as a healthy company where the total assets higher that the total liabilities. It shows also that there is only slight increase for the total assets from 2008 to 2009 with the increase of 1,468 in millions dollars compare to 2007 to 2008 with the amount of 24,632 in millions dollars.
The total liabilities also increase in 2008 when there is a global recession over the world that also effect the total liabilities on 2009 with only slight difference and for the shareholder's equity of HP keeps rising because the shareholders believe this company is strong in the market.
From the Income statement, shows that their operating profit have a slight decrease from 2009 to 2008 with the amount of 724 in millions of dollars. So the company still remains strong after the global recession, even though there is also decrease for the total net income with the amount of 669 from 2008 to 2009.
From the summary, HP cash operating decrease in 2009 where on previous year there are significant increases with the amount of 4,976 in millions of dollars. Cash at end of period remain strong as it is increase in 2009 after there is a significant decrease from investing activities for operating subsidiaries and investment for equipment. Although the cash at the end of period is good, from financing activities shows that the company spent more in buying back its own stocks.
Objectives for the First and Second Year Market Entry
The objective for the first year market entry is to introduce and promote this new product and able to compete in the market to become a well-known product in the future.
Then, after that the company able winning the competition in the market and able to get their main target profit.
Product is every want or need-satisfying attribute a consumer receives in making an exchange, including psychological as well as physical benefits. (Kinnear, T., Bernhardt, K., 1990).
HP Touch Smart tm2 consider as an actual product that people can touch and use. It have a good quality where it has been updates to the latest version, it also have new features provide, good packaging and especially the well-known brand that added the value of the product.
When the Product Touch Smart tm2 enter the market, HP create an advertisement in PC magazine and internet to let people know about it
After the previous multi-touch notebooks release, now HP added new features and updates in Touch Smart tm2 to increase the demand of this product and also the company make this product available in most of the country to increase market shares.
With the normal price of this product of $949 dollars and different features in it, the company can remain strong in the markets.
As sales decline, HP might look at reduce it costs the possibly offer it to a loyal niche segment or at last they can stop producing this products and research and develop new products.
Hewlett-Packard is using a conception or having a development to the product. The company create new multi-touch notebook by replacing Touch Smart tx2 with the Touch Smart Tm2. The company have build new feature and have latest updates for this new multi-touch notebook that increase of the quality of the product.
Understanding how to set prices is an important aspect of marketing decision-making, since the price is a major determinant of profitability, developing a coherent pricing strategy assumes major significance. (Jobber D., 2007)
Hewlett-Packard have cost based pricing where the company offering the right combination of the quality of the goods with the fair price at $949 to accomplish their target profit.
Hewlett-Packard also uses market penetration pricing in which the company set the price lower than the previous product. With this method, it will grab people attention and people will prefer to buy this product because it's cheap, strong band, with good quality.
Touch Smart tm2 based on Product line pricing where the cost of this product different with the other, it is also have a new and different features in it, and also the price can compete with the other competitors. Psychological pricing also occurred where the price determine the quality of the product not the price of it.
Promotion is the communication mechanism of marketing designed to inform and to persuade consumers to respond to the offered product or service. (Kinnear, T., Bernhardt, K., Krentler, K., 1995)
Hewlett-Packard promotes Touch Smart Tm2 by using the pull strategy or encouraging purchase. Pull strategy is used to attract customer and gain customer using an advertisement such as PC magazine and newspapers, also HP website and YouTube that customer can browse from internet. By doing this customer will notice that the Hewlett-Packard have released the new product and customer want to buy it.
Distribution is a central concern to the manufacturer seeking to make his hoods conveniently accessible to buyers. (Enis, B., Cox, K., 1988)
For distribution intensity, HP prefers a selective distribution using limited outlets in a geographical area to sell the products. This distribution work well where customer have a preference of the particular brand or price and will search the shop that sells the products.
For the channel intermediaries, HP use internet because it has a geographically market that will lead product to reach a wider audience and also the use of e-commerce technology for payment and online shopping.
3 extended marketing mix
HP recruiting a quality staff and by creating a carrier network that begins with the recruitment of diverse people in terms of their skills and personality and then promotes horizontally, as well as vertically throughout the company. Typically, HP employees move through four to six functional areas in the course of the carriers. This creates broad knowledge of the company and foster the kind of teamwork other companies covet. All of these will ensure the service that the staff will give to customers
Service Delivery Platform helps HP to communicate with the customer online, by providing an information, answer question about the product from the customer, the at last deliver the product to the customer after everything has been accepted.
HP creates an advertisement of Touch Smart tm 2 to show customer how the product looks like. It also can ensure the customers that they choose the right video by showing it in the form of video that looks attractive for them.
Conclusion & Recommendation
Author conclude that the new product Touch Smart tm2 is one of the product that have a chance to succeed on the market after improving the previous the multi-touch notebook.HP product, price, promotion, distribution and another 3 extended marketing mix can attract consumer and make them gain interest then buy the product.
For recommendation, I think that it would be better for HP to fix some weaknesses of this product and always improve it to make it better and better.
- Kotler, P. (1993) Marketing Management: Analysis, Planning, Implementation, and control. 9th ed. Prentice Hall.
- Kinnear, T. & Bernhardt, K. (1990) Principles of Marketing. 3rd ed. Scott, Foresman & Co.
- Jobber D., (2007). Principles and Practice of Marketing. 5th ed. McGraw-Hill Education
- Kinnear, T., Bernhardt, K., Krentler, K. (1995) Principles of Marketing. 4th ed. Harper Collins.
- Enis, B., Cox, K. (1988) Marketing Classics: A Selection of Influential Articles. 6th ed. Prentice Hall.