Current Company and Industry Situation and Challenges - Computer Village - Essay Example

?Running Head: MARKETING PLAN FOR COMPUTER VILLAGE Marketing Plan for Computer Village [The of the will appear here] [The of the writer id will appear here] [The name of the course will appear here] [The name of the course number will appear here] Table of Contents Part 1: Current Company and Industry Situation and Challenges …pg 3 Computer Village …pg 3 Industry Information …pg 3 Relevant Competitors …pg 5 X-Engineers …pg 5 Repairs and Mods …pg 6 VM-Tech …pg 6 Di-No …pg 6 Mobile PC Pros …pg 7 Beyond PC …pg 7 Comparative Product Research and Analysis …pg 7 Target Market …pg 8 Risks and Challenges …pg 9 Part 2: Assess Potential and Future Demand …pg 10 Consumer Need Analysis …pg 10 Market Segments …pg 11 Part 3: Marketing Mix Program …pg 11 Team Objective/ Aim/ Goal …pg 11 Target Market …pg 12 Proposed Product Value Offering/Service Offering Information …pg 12 Proposed Image and Positioning …pg 13 Proposed Pricing Strategy …pg 13 Proposed Promotion Strategy …pg 14 Proposed Distribution Strategy …pg 15 Part 4: Exhibits …pg 16 SWOT Analysis …pg 16 Detailed Description of Target Market …pg 17 Use of Primary Research Analysis …pg 18 Perceptual Map …pg 19 Comparative Analysis of Competitor Products …pg 19 References …pg 22 Part 1: Current Company and Industry Situation and Challenges Computer Village Computer Village is a retail and sales company focusing on the IT industry selling used and new computers and accessories along with providing necessary services such as network administration, assembly maintenance and system analysis. The company began its operations in 1988 and is based in San Dimas, Los Angeles. The company is owned and operated by a Certified Microsoft Systems Engineer who serves as an expert in the IT industry. Computer Village is an IT based retailers and service provider that has developed partnership with its client to provide technical assistance in form of affordable products, their servicing and other IT related services. The company has developed business partnership with leading technological corporation such as Microsoft, Apple, Dell, HP etc. to better serve its clients and their business needs (Computer Village, 2013). Industry Information The computer retail and service industry is a booming industry not just in California but around the entire globe. This is because the need for computers and even their servicing and repair has increased significantly in the last few decades. The IT industry and specifically the computer industry is enjoyed a growth phase in today’s world. With the increase in the number of sales of computers worldwide, the computer retail and service industry also enjoys a phase of growth (Franchise Help, 2013). The computer retail industry, while a growing industry, faces competition from three sides. It faces the biggest competition from computer manufactures who directly sell to the end consumers. Consumers, at times, prefer to buy directly from the computer manufacturers and eliminate the middle men. The second competition that the computer retail industry faces is from wholesale companies. Retail chains such as Wal-Mart and Sears offer computers and other accessories to the consumers at discounted range while providing a wide range of selection to choose from. The industry faces its third competition from computer retail companies like itself that develop a one-on-one relationship with the end consumer, thereby having a loyal customer base. Small retail computer companies, while selling computers, also provide a wide range of services to their customers. These services include repair and maintenance; network support services; IT services and internet services. In the recent years, there has been a strong demand for computer repair and maintenance services. This is because of the fact that consumers prefer to repair or even change parts rather than investing in buying a new product. The recent recession has rather positively impacted the company as businesses and users would rather have their computer parts repaired rather than investing in new machines (Brennan, 2013). This change of preference is oriented towards becoming cost effective and saving the time and money in investing in a new machine which would then require software and hardware installations. Also most users and businesses usually invest in a new machine very rarely. They would not consider buying a new laptop only because microphone or speaker is not working. It would be more feasible in repairing the part therefore this industry is booming given the penetration of computers in all industries and even homes. Network support services are also a booming industry given the recent surge of outsourcing and remote workers. For businesses to be able to function effectively, they need to be connected to the internet and whereby comes in the role of network support. Also as the field of IT is advancing, other IT services are becoming increasingly in demand. These include software installation and design; system management; software training and consultation and computer programming etc. Most companies do not wish to open up their separate IT departments because they find it more feasible to invest in outside experts rather than create a new team that they may not be able to manage. The IT service industry is also a booming industry in US and most parts of the world. Companies pertaining to this industry provide services related to IT which includes internet services, consultancy regarding installation of hardware and software, repair and troubleshooting for computers and laptops, installing security software and maintenance of these software, data warehousing, training and system planning. The main purpose of IT service companies is to improve the efficiency of the computers so that communication and efficiency of the business is improved. In the recent years, this industry faced a downturn because of the economic recession but its back towards growth as businesses have begun to realize the fact that in order to improve their productivity and efficiency, they do not just need a proper IT system but also an efficient one; thus the need for IT service company arises. According to Hoovers (2010), for such companies to succeed, they need to have technical expertise, good marketing strategies and innovative services. Small businesses, such as Computer Village, have better chances of growth and profitability when they focus on one particular niche or they develop partnerships with big companies to improve their range and quality of services. For example, in case of installation of anti-virus system, companies that offer a wide range of software to choose from would have a stronger demand. Relevant Competitors X-Engineers X-Engineers is one of the prime competitors of the company. They began as a small computer company and have spread to over fifteen stores in California. The products and services offered by the company rival that of Computer Village. X-Engineers offer computer and laptops along with their part. Services offered by the company include repair services for computers, tablets and cell phones. They also offer website design and hosting services along with data back and recovery. Software and database development is also included in one of the services offered by the company. The company focuses on both residential and commercial users. Just like Computer Village, they have developed partnership with reputed computer companies including Dell, Apple, Toshiba, Microsoft etc. The main attraction that the company offers is the money back guarantee of the best service for its customers. Repairs and Mods Repairs and Mods is another small computer shop located in San Dimas that offers basically the same range of products that Computer Village offers. It also offers mobile phones and gaming consoles such as Xbox and Nintendo along with their repair services.. However, the company has not developed partnership with any technological company. However, the company has not developed any partnerships with computer brands such as Apple or Dell. While the company provides basic repair and maintenance service to its customers, its services are limited. They do not extend to networking services or design services. VM-Tech VM-Tech is another competitor whose offerings are limited to services. They do not offer any products. The company targets both the home users and businesses. For businesses, it offers to fulfill all IT needs and for home users, it targets their repair and maintenance of computers and laptops. The company also offers online services. Di-No Di-No is another certified technician who only deals with Apple products and their repair. These services and products are quite limited. However, they have good experience in their field and have limited themselves to one brand. Mobile PC Pros This company also offers the standard PC and mobile services to its users. They provide these services at good value. However, their range of services is only limited to repair and maintenance. Beyond PC Beyond PC is another repair service provider. While the range of services for the company is again limited, the computer offers to repair and maintain all kinds of computing and gaming devices including computers, laptops, gaming consoles, mobile phones etc. The company however is not an accredited repair service provider. Comparative Product Research and Analysis Comparing the products and services offered by Computer Village with its competitors, we reach the following conclusion: Less Diverse but more focused: Computer Village offers all kinds of computer products including graphic cards and cases for computers. While the competitor’s range of products may not be as diverse in terms of computer products, the competitors have diversified their range by adding mobile products and also office supplies; Deals in Used Computer and its parts: Computer Village, however, is the only company that offers used products for sale. This allows the computer to target consumers who have limited money to buy the actual product. Also, when a potential customer is realized, the company would have frequent relationship with him in terms of repair and servicing; Price: In terms of price, the local competition is basically offering the products and services in almost the same price range. Partnership with Brands: Computer Village has been able to develop partnership with technological brands such as Apple, Dell, and Toshiba etc. The rest of the competitors except X-Engineers have not been able to do this. This means customers would be more confident when buying from Computer Village. Target Market The current target market for the company is not well defined. It caters to all the customers who want computers or computer services. These could be businesses or individuals wanting the product or service for their personal or family use. However, businesses are the main priority since the services offered by Computer Village are more suited to business. These include website design services, cloud computing services, client/server operating systems and virtual private network. Computer Village also targets businesses by developing partnerships with them for their servicing needs. Therefore the current primary target market for Computer Village is small to medium businesses while personal users are the secondary target market. Risks and Challenges The computer retail and service business is in its growth period which is known as the best time for any industry. However, there are certain risks and challenges inherent in this business that every company should look for and try to avoid. Computer Village also faces its risks and challenges. One risk that the company faces with respect to hardware is being driven out of business by big wholesale computer providers. These include retail stores such as Wal-Mart and Best Buy. Such retailers buy products in bulk and therefore can offer more competitive prices as compared to small retailers. Furthermore, each week a new product is released in the market which makes the old products outdated. Computer retailers such as Computer Village do not have a large amount of spare cash to invest in new products and when they invest in buying a product, they run the risk that the product can become outdated. The challenge for the company therefore is to buy products in limited quantity and sell them as quickly as possible. This means that they cannot buy in bulk quantities and therefore price increases for the end consumer. Also introduction of new products means that the company would have to constantly upgrade its knowledge of the current systems. Therefore the technicians have to constantly learn new services and upgrade according to market demand. This is one reason for the downfall of small retailers around the world and specifically in the US. The challenge for the company here is to develop long lasting relationship with existing and potential consumers so that these consumers become loyal consumers. This is done through exceptional and timely service. Therefore, the focus of the company should be on servicing rather than selling its products. The company also faces risk from existing competitors. New computer shops are opening throughout the region because the startup cost of such shops is quite low. Often these shops are run by people who have gotten certificate courses in computer repair and servicing. The presence of so many customers kills the profits for the company. The challenge here is to build a strong loyal customer base that is not willing to switch to other providers. Also the company should stress on the fact that it is an accredited company as compared to other new providers that have recently sprung up. Part 2: Assess Potential and Future Demand Consumer Need Analysis If we are to analyze the current consumer need, we will find that most consumers and businesses have their own computer setup. While consumers constantly upgrade their computers, investment into a computer system is a one-time investment. According to ACE IT Solutions, businesses usually buy a new computer for three reasons: when they want to improve productivity, want to manage support costs or because of new software requirement. The average life of a desktop PC is 43 months while that of Mobile PC is 36 months (ACE IT Solutions, 2011). Most businesses avoid periodic replacement of their computers because their working computer has a lot of data based and they shy away from transferring data from one machine to another. Therefore it is not the computer or laptop that is in demand but rather their parts. Most consumers usually prefer certain part repaired or changed rather than buying a new machine. This is not because computer is an expensive machine but rather because transferring data is tedious and one finds it difficult to switch machines. Also when one wants to buy a new computer, they usually turn towards wholesale shops such as Best Buy or Wal-Mart because the perception of the consumers is that these shops offer products at better prices. Consumers shift towards small retailer and service providers when they want better service. This is because wholesale retailers are not known for their exceptional and timely service. Market Segments Right now, computer retailers and service providers mostly focus on two types of consumers: the small businesses and the home users. Small and medium sized businesses usually do not have their own separate IT departments and therefore are keener on outsourcing this job. Here computer retailers come to their service when they provide repair and maintenance services, networking and other internet related services. If computer retailers develop relationship with these businesses, they can hope for a continuous cash flow into the business. Home users also represent another good target consumer. This is because computer and internet services are the need of every home. These consumers, though, usually require basic services, but they represent a large chunk of the consumer market. Part 3: Marketing Mix Program Team Objective/ Aim/ Goal The goal of the Marketing Plan is to promote the computer services offered by the company to small and medium sized businesses. These computer services include website design services, Cloud Computing Services, Computer Repair and Maintenance, Networking Services among many others. Though Computer Village is both a computer retailer and service provider, the marketing plan is to focus on the services offered by the computer. This is because most businesses already have invested in computers and usually computers are a one-time investment. It is servicing of the computer that is an on-going job and once the company develops a strong position as a computer service provider, it can also benefit from increased product sales also. Target Market The target market for the company is basically small and medium sized businesses that continue to require computer services such as repair, cleaning, software and hardware installation etc. as long as they are in operation. The focus would be on businesses that realize the importance of developing an online presence through websites. Therefore, the target market would be businesses that are technologically driven. Such small or medium sized companies usually do not have their own IT departments and rely on outside vendors to provide for their IT needs. Computer Village would be targeting these businesses. Another target market for the company are individual users who represent a large chunk of the market. These home users may not frequent the computer shops often but they become loyal to one shop and continue relations over a long period of time. Also loyal customers are quick to recommend the service to their friends or acquaintances. Proposed Product Value Offering/Service Offering Information The value proposition that Computer Village would be offering to its customers is partnership that would allow the business to function without an IT department effectively and efficiently. In this partnership, the business can choose its own customized plan according to its need. While the company also offers computer products and its parts for sale, it should focus more on the services. The company should introduce service plans for their customers. These service plans would be divided into four basic groups: basic, standard, loyal and premium. These groups are further elaborated in the following table Basic Standard Loyal Premium Home Repair Service Home Repair Service Home and Pick up Repair Service Home and Pick up Repair Service Networking Services and Setup Networking Services and Setup Networking Services and Setup Networking Services and Setup Complete Virus and Spyware Removal Complete Virus and Spyware Removal with PC Tune Up Complete Virus and Spyware Removal with PC Tune Up Hardware Cleaning in Store Hardware Cleaning in Store Hardware Cleaning at your place of convenience PC Speed Optimization Data Backup 10 GB Data Backup 20 GB with data recovery Security against Hackers, Spams and Virus Security against Hackers, Spams and Virus Proposed Image and Positioning Right now, Computer Village is yet another computer retailer in San Dimas. It is positioned as another retailer that individuals and businesses can buy from. This marketing plan will help position the company as one catering to small and medium sized businesses. Computer Village will focus on the fact that it has Certified Microsoft Engineers along with having partnerships with leading technological companies such as Apple and Dell. The company will also benefit from developing this particular image is because it current service offerings are more suited to the targeted market. Proposed Pricing Strategy Since the company is targeting primarily businesses and not individuals, it will sell its products and services at a higher price than the competitors. The company can justify this pricing based on the fact that small and medium sized businesses cannot tolerate any hitches in their IT departments. They cannot have their computers being hacked or being important data accidently removed, therefore they need reliable backup plans and strong security. For this, they would be willing to pay a little higher if they are assured that the retailer and service provider is better than the rest and is a professional. Also the services offered by the company are the most extensive as compared to other competitors. The company can also charge higher prices because the technician is a certified Microsoft Engineer. For home users, the company can introduce budget friendly packages where the prime focus is not only timely and efficient service but rather on price. The company should offer discounts for these users also. Proposed Promotion Strategy The promotion strategy would be to contact existing business customers and propose them to buy monthly packages instead of paying for every service. The business would promote through local channels such as distribution of flyers, in store promotion, direct mail to existing and potential business customers. Proposed Distribution Strategy The distribution strategy for the company right now is working. The company also allows its customers to avail their services at the company shop or at the convenience of their homes. Therefore, consumers do not have to travel with their computers if they wish to have them repaired or upgraded. Also customers can avail the product and services on the company website if they want. Part 4: Exhibits SWOT Analysis Strengths Loyal and Satisfied Customers; A wide range of services offered; Computer and its parts are also offered; One-on-one relationship with consumers; Certified Microsoft Engineer as the owner; Partnership with reputable brands including Apple, Dell, Toshiba etc. Weaknesses Not very strong financially; Limited to one geographic area; No strong marketing plan. Opportunities The economy is finally flourishing after the recession which means added business from small and medium sized businesses; Computers are penetrating every home which increases the consumer market for the company Threats Wholesale retailers such as Wal-Mart and Best Buy can offer services and products at very competitive prices which would make it difficult for small retailers like Computer Village to compete with; Startup cost for the business is very small and thus competitors can spring up any time making it harder to get the consumer share of the market. Detailed Description of Target Market The primary target market for the company is business users. This is because the company offers specialized services that are mostly in demand by small or medium sized businesses. This target market is willing to pay more if they are reassured that their computers and laptops are in the right hand. Time is important for these businesses as their sales and thus profits would be hindered if the service is not provided in a timely manner. This target market is also more concerned about the security of their data because if this data is caught in the wrong hands, it could negatively affect the business. Business users are strict about not letting their computers leave the office premises therefore they expect the service to reach them rather than they going over to get the service. The secondary target market is personal users. These users, though price conscious, are more in number as compared to the business users. These users are willing to compromise on the quality but they want good prices. Also these users usually want the standard services of repair and maintenance. They are not looking for website design and hosting services. Personal users usually do not develop partnership with their local retailers but they prefer one service provider and therefore are loyal to their computer service provider. Most personal consumers look for computer retailers near their area. They do not want to travel long distances for get their computer repaired and want the reassurance that their computers are near. Use of Primary Research Analysis In order to conduct the research, consumers of Computer Village and their competitors were selected. They helped in understanding the retail market from the consumers’ point of view. Because it is the consumers that the company serves in the end, understanding their needs is most imperative. The primary research analysis in this report was conducted in the form of a survey. The survey categorized the consumers according to their behavior; that is, whether they were personal users, family users or business users of the company. Next the survey aimed to understand what makes them chose a particular service. For instance, do they chose based on the quality of service, timeliness of service, price of the service or the attitude of the sales person. Perceptual Maps Wide Range of Services Low Quality High Quality Low Range of Services Comparative Analysis of Competitor Products Computer Village X-Eng Repairs and Mods VM-Tech Di-No (Only Apple Products) Mobile PC Pros Beyond PC Repair Services Computer Repair v v v v v v v Mobile Repair v v v v v Gaming Console Repair v v Products For Sale Computers and Laptops v v v Mobile Phones v v Gaming Consoles v Other Services Website Design v v Networking Services v v v v v Remote Support v v Server and VPN Setup v Software Installation v v v v v v Cloud Services v Data Recovery v v v v v Surveillance and Security v v Database development v v Software Development v Value Added Services Website v v v v v v v Certified Engineers and Technicians v v v v Online Shopping and Services v v v v Multiple Stores v Partnership with Reputable Brands v v v v References ACE IT Solutions (2011) PC Replacement Cycle: Is it Time for a New Computer?, Retrieved from http://www.itconsultingnj.com/pc-replacement-cycle-is-it-time-for-a-new-computer [Accessed 27 October, 2013] Brennan, A. (2013) Electronic and Computer Repair Services in the US: Market Research Report, IBIS World Industry Report 45391Electronic Computer Village (2013) Home, Retrieved from http://www.compvillage.com/ [Accessed 7 October, 2013] Franchise Help (2013) Computer Services Industry Analysis 2013 – Cost & Trends Retrieved from http://www.franchisehelp.com/industry-reports/computer-services-industry-report[Accessed 9 October, 2013] Hoover (2010) Information Technology Services Report Summary, Retrieved from http://www.hoovers.com/industry-facts.information-technology-services.1119.html[Accessed 27 October, 2013] Vered, A. (2007) Tell A Friend -- Word of Mouth Marketing: How Small Businesses Can Achieve Big Results, Retrieved from http://books.google.com.pk/books?id=LUhjfr4Tk9sC&printsec=frontcover&dq=marketing+mix+word+of+mouth&hl=en&sa=X&ei=dL5ZUumfL6vQ4QTBpIHIDA&ved=0CDMQ6AEwAQ#v=onepage&q=marketing%20mix%20word%20of%20mouth&f=false [Accessed 10 October, 2013] Repair Services in the US: Market Research Report Read More