These products are usually promoted in local newspaper articles, leaflets, magazines websites, and banners and sometimes on the television. I think that the product would be advertised in the newspaper more than on Television due to the cost of advertisement. It is also because more people are liable to view the advertisement of the product in the newspaper rather than on Television as there are many channels therefore there is a high possibility that not lots of people will view the advertisement. Another from of promotion is posting leaflets to the local area, this is usually done so many people will be able to view the advertisement.
The products are sold in main computer stores such as PC WORLD/TIME/TINY. But there are more ways the product are sold. Computers can be brought over the Internet. They can be also brought by over the phone.
In overall my research showed that the products in the market now are very similar and are at a price range in-between £800-£1300. There are many companies that sell the product, but they set different prices, and promote the product differently.
Hewlett Packard
Products
These are the products that are on sale from the manufacturers Hewlett Packard.
Mid range products
High range products
Product Information taken from
Pricing
Hewlett Packard (HP) seem to have a pricing strategy that involves setting a price to the product depending on the quality of the product, therefore the company has two main sections for there products which are known as the mid range and high range.
On the website they did not show the prices for some products, but said ‘see store for price’. This probably was because the manufactures wanted the consumer to get a look at more of the products.
Product
There is a mid range and a high range of products, this is so in my opinion the product is suited for more of the market segment. For example there is a mid range of products that may contain only the relevant hardware and software needed to write a book using Microsoft Word. But there also is a high range of products that contain all the necessary hardware and software that will enable the user to play computer games.
Promotion
This is widely used within companies, because promotion is about communicating with potential customers about the product. Promotion can be used to attract customers to purchase the product. When promoting a product, it should be:
- Informative
- Persuasive
- Reassuring
The ways in which HP promote there product are by:
- Newspaper articles - articles based on the products that are being sold by HP
- Magazines – articles based on the products that are being sold by HP.
- Television – Advertisements on the quality/price of the products being sold.
- Internet – Banners providing information such as ‘sales’. Websites providing information based on the products and the company.
Place
The ways in which the product can be brought are straight from the manufacturers by over phone, Internet and in person. Other ways in which the product can be brought are by going to shops that sell HP products.
The lines of distribution the products go through to reach the customer are by:
Manufacturer → Consumer
And
Manufacturer → Retailer → Consumer
I think these lines of distribution are being used because of the advantages of the use of these lines of distribution will help the company modify the 4 P’s therefore the company can reach profit maximisation for the product.
Compaq
Pricing
The prices for these products are high therefore Compaq have came up with an idea that will be open to more of the market. The strategy is so that the consumer can pay monthly a certain amount of money that will eventually be enough to purchase that product, but the product can be taken home as well.
As Compaq are selling high quality laptops, the prices are high therefore they had to use the monthly pay pricing strategy, so the product does not need to have been paid for all at once. This however will open the products to more of the market therefore there is a higher possibility that the product will be purchased more.
Product
Most of the products are of high quality therefore the products are mainly based for people who are in need of better quality hardware and software. I think that the products are mainly highly quality because in the market research they may have received incite that more people were liable to purchase a product of high quality than a product that lacks quality.
Promotion
The methods of which Compaq use to promote their product are similar to Hewlett Packard as they also use:
- Newspaper articles - articles based on the products that are being sold by HP
- Magazines – articles based on the products that are being sold by HP.
- Television – Advertisements on the quality/price of the products being sold.
4. Internet – Banners providing information such as ‘sales’. Websites providing information based on the products and the company.
Place
Compaq also use the same lines of distribution, therefore they both gain the same advantages and disadvantages from using the same lines of distribution. Compaq also use similar retail stores to sell their products such as PC World.
Task Three
Choosing the Target Market
- What is your Age?
10-19 20-29 30-39 40+
- What Gender are you?
Male Female
- What is your salary range?
10-19k 20-29k 30-39k 40k+
- What class are you?
Working class Middle class Higher class
- Are you interested in buying/replacing your Laptop?
Yes No
Deciding on the Target Market
From theses results, it appears that the majority of males and females are in need of laptops. These results show that females and males aged between 20 and 29 are in need of laptops more than any other age group. Then the people aged between 30 to 39 also are in need of laptops.
In overall the majority of males and females that are between ages 20 to 39 are in need of laptops, more than people aged 10 to 19 and 40+.
Therefore the target market for my product will be both males and females aged from 20 to 39. Therefore I will attempt to make my product appealing to both males and females from the age 20 to 39.
Task Four
Product Development
Questionnaire
- What colour would you prefer the casing of the laptop to be?
Please state the colour……………………………………….
- Would you like they’re to be a design on the casing?
Yes No
- What price would you be willing to pay for the product?
£800-£999 £1000-1199 £1200-£1399 £ 1400+
- Were would you like your product to be sold?
Please state the store…………………………………………
- What ways would you like to be able to purchase the product?
Going to store Over the phone Internet
other…………………………..
- What ways of advertisement do you think is ideal for the laptop?
Newspaper Billboards Internet Radio Television
- Would you like a DVD facility?
Yes No
- Would you also like a touch screen facility?
Yes No
Analysing my results
Design on Casing
From the 30 people from the target market that were surveyed, 15 people said ‘Yes’ that they wanted a design on the casing of the laptop, and the other 15 said ‘No’ they do not want a design on the casing of the laptop.
This signifies that when I market my product I will have half of them to have a design on the casing and the other half not have a design on the casing. This is so it will appeal to both segments of the target market.
Colour of casing
This bar Chart shows that the most popular colours that the target market wants for the casing of the laptop are silver and blue. The least popular colours are orange.
Therefore the colours of the casing will either be silver, blue, black or purple. I may also add an extra feature that will enable the user to change the whole casing. This is because we may introduce other cases with extra features, which will appeal more to the market.
Price
This graph shows that more of the target markets were willing to pay a price from only £800 to £999, but an average number of people willing to pay a price from £1000 to £1199 and £1200 to £1299. Unfortunately there were only a few willing to pay a price from £1400 and over.
I will market one product with no extra features, which would be set at a low price, I will make another product, which will have only a few extra features, and I will market another product with many more extra features. This is so I will save money rather than sell a product at a low price, which costs a high price to produce. This is called product differentiation.
What place shall I sell the product
This graph shows me that the most popular shops the target market thinks I should sell my product are mainly Dixon’s, PC world and tiny. The least popular shop I should sell my product is time. I think this is because these shops have a good reputation as for their customer services and prices.
Therefore the shops that I will sell my product will mainly be PC World and Dixon’s. This is because the target market would like to purchase my laptop at those shops.
Popular way of purchasing the laptop
The way of purchasing the product, which is more appealing to the target market is by the Internet and phone. This is probably because the target market does not like to go to shops or they find using the Internet and telephone more convenient for purchasing products.
Therefore I will purchase a web domain, were I will create a website for the shop were the consumer will be able to purchase the product by online. I will also enable the audience to purchase the product by phone, as it is a popular way of purchasing the product.
Promotion
The most popular ways of promotion is the Internet because the majority of the target markets use the Internet. This is probably one of the best ways of promotion because I will be able to provide more information about the product and company etc.
The second most popular way of promotion is the newspaper. This is probably because many people purchase the newspaper.
The least popular ways of promotion are the radio and television. This is because there are so many channels and frequencies that the attended target market may miss the advertisement. I will have to remember to include the amount of money needed for promote my product in the fixed costs.
DVD facility
This bar graph shows that more people agreed that a DVD facility should be included on the laptop. Only a few people disagreed to having a DVD on the laptop. I think the reasons for the few people disliking the DVD facility idea is pricing, as they may have known that the price will increase if that particular feature has been added.
I think that a DVD should be included as an option, but then this will affect the pricing of the product. If the DVD is not included on the laptop then the price will remain low but if the DVD is included then the price will boost up because the initial cost of a DVD system is high. This is so the product will appeal to most of the target market.
Touch screen facility
This bar chart also shows that more people desire to have a touch screen facility on the laptop. I think the reason behind this is because it is a rear feature used on laptops, as it is expensive. However, a few people dislike the idea of touch screen on the laptops, this maybe because they know the price of the laptop will increase if the feature is added, Therefore I will also make the touch screen feature optional.
Summary of research
From the information I have gained from my research I have decided that I will market a variation types of laptops. This is so it will appeal to more of the target market.
I will be selling laptops with a variation of colours, which some of them will have a design and the others will not. The product will be sold at PC World and Dixon’s.
The ways in which the product can be brought will be by the Internet, phone and by going to the shop. I will be promoting the product by the Internet and Newspaper as that is what the target market recommends. There will also be three main types of laptops due to the price of production and selling cost.
One type of the laptop will not have any extra features, which will be sold at a low price. One will have a few extra features that will be sold at an average price, and another with many extra features will be sold at a high price.
Task 5
Pricing
This is the calculation for the unit pricing for my product. The fixed costs are the rent for the building including the heating and lighting, wages and rates etc. The variable costs are the costs of materials, power for machinery and transport etc.
The price that I will be charging for my product depends on what product it is. This is because I will be selling three similar products. One will not have any extra features, the other will have a few extra features and the last will have many extra features.
For the product with no extra features I will charge a price in-between the range: £800 to £999. With the product that has a few extra features I will charge the price in-between the range £1200-1399 and the laptop with many extra features I will charge a price above £1400.
The strategies I could use are:
- Penetrating – setting a low price to guarantee entry into the market.
- Price differentiation – selling the same product at different prices.
- Price discrimination – to modify the product to meet the need of different market segments.
My competitors have been using the pricing strategy ‘Price Discrimination’ therefore their aims must have been to reach profit maximisation.
The strategy ‘Penetration’ will enable me to build market share and to strengthen long term profit potential, however this is not my objective. Therefore this strategy will not help me to reach my objective.
The strategy ‘Price discrimination’ will help me achieve my objective by maximising my takings from every segment of the market; therefore I could use this strategy. There is also another strategy called price differentiation
The pricing strategy that I will use is price differentiation, this is because I will be able maximise profits from different segments of the market. For example if people in Manchester are willing to pay over £1000 for the laptop with no extra features, I would charge the price higher there than in London, were people are willing to only pay a price in between £800 to £999 for the laptop with no extra features. This strategy will also help my product to survive longer in the market, because I will be always modifying my product to suit the needs of people from all the market segments.
Task Six
Advertising and Promotion
The advertising budget for my product is £500,000. This budget is quite high but this is how I will make the audience be aware of my product and from my advertisements I will attempt to persuade the target market to purchase my product.
I will advertise my products in the newspaper along with computer magazines. The advantages of this are because there will be a large audience that will view the advertisement, and is also a cheap method of advertising, therefore the company will save money. I will also advertise my product on the Internet. The advantages of this are because the banners that will be promoting my product will be on all sorts of websites including computer relates websites. Therefore a large section of the market will view the advertisements. This method is very cheap and sometimes can be also free depending on were the advertisement is posted.
These two ways of promotion are the best ways of promoting the product. Other ways of promoting the product such as on television or the radio are not efficient because of their being many channels on television and frequencies on the radio. This makes it inefficient because the majority of the target markets are liable to miss the advertisement because they may be on a different channel or frequency. Therefore this channel is inefficient and also very expensive because many people do not bother to watch Television adverts, and the adverts do not allow the inclusion of very much detail.
The main aim of advertisement is to attract the target market to the product. In doing so you may cause problems, as there are constraints. Legal constraints are rules and boundaries that companies should never cross. The main constraint within advertising is not to abuse other similar companies.
This is very common in advertising because if one company has competition, they will attempt to make it appear that their company is better than other companies, therefore they may abuse the other companies in attempting to look better.
Our competitors use various ways of advertisement including using the television and radio, but because of this they may not be gaining much revenue. This has not influenced me into to using the television or radio to promote our product.
So in my advertisements I will not cross the rules and boundaries of legal
Constraints, for example in my advertisements I would not say our competitors products are crap, or that they are unreliable etc. But I will attempt to make my company and product more appealing by stating that we have lower prices than other companies, therefore attracting the target market to my company and product other than our competitors.
Task seven
Place
The most reliable and in my opinion best-suited way to transport the products to its destination would be by road. This is because it is not as expensive as other ways of transportation such as by air or sea.
As there is no airport near the location we need to transport our products, we would not use this form of transportation, but this way would have been a quicker process. We will be using this form of transportation if our company forms into a multinational company.
Other ways of transporting goods are by:
Air - is a way of transporting goods in a short period of time to its destination.. This method is used if goods are needed urgently and fast, as this method is a fast method of transporting goods abroad, but is also very expensive
Sea - This way transports goods over seas although this method could take time to reach its destination.
But these methods are irrelevant as will take a long period of time for Transportation and are very expensive.
The product will be sold at well-known computer and electronic stores such as PC World, Dixon’s and tiny. This is because the majority of the target market said they would rather purchase their products from these stores. The products will also be able to be brought by over the phone or the Internet, therefore the product is open to more of the market
The channels of distribution the product will go through will be:
Manufacturer → Retailer → Consumer
Or either:
Manufacturer → Consumer
Our competitors also sue both these ways of channel of distribution, and they do seem to gain many customers, therefore they have influenced me into also using these forms of transportation.
Both of these channels of distribution are good for different purposes, the manufacture → retailer → consumer is good because we will gain feedback concerning the product. The manufacturer → consumer is good because the product will be sold at a faster rate.
Conclusion
The product that I have created was a laptop. This product was an ideal product to make, as I would be able to gain lots of profit. I brought the materials that were need to produce the laptop in bulk to save the money, and produced the product at a low cost. I produced three different types of the same product, one had no extra features, the other had a few extra features and the last had many extra features. I have set a different price for them all.
I have used the pricing strategy ‘Price Differentiation’ so I would reach profit maximisation from all segments of the market. We would also be able to adapt our product to meet the needs of more of the market segment.
I have chosen to advertise and promote my product by newspapers/magazines and on the Internet, this is because the advertisement is more likely to be viewed as many people read the newspaper, and many people use the Internet.
I have chosen to sell my product in the stores: PC World, Dixon’s and Tiny, this is because the target market mainly recommended them. I will also be selling the product directly from the manufacturers. This is because the products will be brought at a faster rate. I will appeal to the market by giving them a choice of which way they would like to purchase the product. This is so it appeals to a wider range of the target market, so more of the product is brought.
In this project I think I have chosen a good product to manufacturer and market. I think I have also chosen the correct pricing strategy so we would attain profit maximisation. I have also chosen 3 ways of which I will be advertising my product to attract more of the target market. In overall I do not think I have made mistake about the marketing mix and this whole campaign.
As I am beginning my company as a partnership I will not be able to gain as much as advantages as I would have as a multinational company. Therefore I am attempting to form my company into one.
