Dell Company and Hewlett-Packard's Marketing Strategies - Assignment Example

Running Head: MARKETING Name Course Lecturer Date Executive Summary Usually, selling centers around the needs and wants of the seller and marketing focuses on the needs and wants of the buyer (consumer). The purpose of marketing is to get as well as keep a customer. As such, various marketing approaches are used in creating and keeping a customer. Personal computer industry is one of the fastest growing industries in the whole world. The need for computers is increasing day by day. Dell Company and Hewlett-Packard (HP) Company are two of the biggest manufacturers of personal computers in the world. Both of them are based in the United States but trade globally. The report discuses how these two companies use marketing approach and concepts to market their products globally. Industry and company background of these companies are provided. The macro and micro environmental factors such as price, political, economical, technological, promotion, price and environmental influencing these companies are discussed. In addition, the SWOT analysis is discussed in details. Target markets have been identified; market segmentation, positioning and target strategy are as well discussed. The report concludes by providing recommendations of how the companies can improve and apply market approaches to their advantage. Table of Contents Table of Contents ii 1.0 Introduction 1 1.1 Alienware (DELL) 1 1.2 HP Pavilion HDX Entertainment Notebook PC series 2 2.0 Industry Background: The PC Industry 2 3.0 Company Background 2 4.0 Macro Environment Forces 3 4.1 Economic Factors 3 4.2 Technological Factors 4 4.3 Environmental Factors 4 4.4 Political Factors 5 5.0 Micro Environmental Forces 6 5.1 Product 6 5.2 Price 6 5.3 Promotion 6 6.0 SWOT Analysis 7 6.1 Strengths 7 6.2 Weaknesses 8 6.3 Opportunities 9 6.4 Threats 10 7.0 Market Segmentation 11 8.0 Target Markets 12 9.0 Targeting Strategy 12 10.0 Positioning Strategy 13 11.0 Recommendations 13 12.0 Conclusions 14 12.0 References 15 1.0 Introduction This report provides a comprehensive market approach of two companies, Dell International and Hewlett-Packard (HP) Company. It relates the key concepts and discuses how these companies use marketing approaches. Dell Company was founded by Michael dell in 1984 at Austin while he was a student at university of Texas, it is headquartered at Texas. The company is one of the largest personal computer company and the fastest growing computer technology company. it has a vision of producing computers to make computer system that accommodates individual requirements. 1.1 Alienware (DELL) Dell aliens are not aliens in the true sense, but Dell's Alienware laptops and Dell desktop aurora nicknames; The Dell laptop models with extraordinary graphics performance, called a powerful gaming laptop. You can also experience the unparalleled scalability, performance and compatibility while enjoying desktop quality images. So powerful, it is amazing. Recommend M17x about $2,799 (Alienware 2013). Hewlett-Packard (HP) company was founded in 1939 and headquartered in California's Silicon Valley city of Palo Alto, 2002 merger with Compaq, IBM is the world's second only to the computer and office equipment manufacturers. Hewlett-Packard Company attaches great importance to research and development, pay attention to research and development often want to combine. 1.2 HP Pavilion HDX Entertainment Notebook PC series Wrapped up in HP’s brand new Imprint pattern – “Dragon” – this sleek, powerful notebook offers a first class home theatre experience, high performance computing, HP’s first 20.1-inch display and a stylish, innovative design. Featuring genuine Windows Vista® Home Premium for superior digital entertainment and advanced features. The pavilion HDX series about $2,999 (Hp 2013). 2.0 Industry Background: The PC Industry Electronic digital computers moved out of science fiction and into reality during World War II. Less powerful than a modern pocket calculator, the first real job for these massive machines was to speed up the calculation of artillery firing tables. Thirty years later, computers had firmly cemented themselves in the public imagination. They were huge boxes, covered with blinking lights and whirring reels of tape. Banks and big corporations all had computer rooms, closely guarded by a priesthood of programmers and administrators. Science fiction novels and movies imagined impossibly brilliant supercomputers that guided spaceships and controlled societies, yet they were still room-sized behemoths. The idea of a personal computer, something small and light enough for someone to pick up and carry around, was not even on the radar (Ars.technica by Jeremy reamer 2005). 3.0 Company Background Dell Company is the world's leading IT products and services provider Dell, listens to customer needs, providing customers trust and innovative technology and services. Benefit from the unique direct business model, Dell sells more systems globally than any computer manufacturers, and thus ranked No. 25 on the Fortune 500. Dell has been able to continue to consolidate its market leading position, because of its direct sales has consistently adhered to standards-based computing products and services and to provide the best possible customer experience. In the past four quarters, the company achieved a turnover of $ 57.4 billion. Dell currently has about 75,100 employees worldwide (Dell 2013). Hewlett-Packard (HP) company was founded in 1939 and headquartered in California's Silicon Valley city of Palo Alto, 2002 merger with Compaq, IBM is the world's second only to the computer and office equipment manufacturers. Hewlett-Packard Company attaches great importance to research and development, pay attention to research and development often want to combine. HP Company Investment in research and development each year for more than 4 billion U.S. dollars. HP Labs has the world's advanced level, almost all of its research into the forefront of world science. Laboratory Director chaired by a senior vice president (Hp 2013). 4.0 Macro Environment Forces The environment consists of uncontrollable factors that directly and indirectly influence a company's ability to achieve its goals and its desired results. Macro environmental factors present both threats and opportunities to a company. 4.1 Economic Factors Dell Company: The instability of interest rates in the market affects dells operations. The instability is due to huge fluctuations arising from the upheavals of financial situations. In addition, inflation all over the world continues to rise and has surged at all time high. The US government’s expenditure on war terror in Iraq increased inflation to unexpected rates. Some countries in the world continue to record very low GDP growth resulting in stagnation of per capita income. These factors influence Dell Company in achieving its desired results (Holzner, Steven, 2006). HP Company: The industry expects growth of about 10 percent. The company's economic situation will determine it wills growth with this industry rate. Changing rates of inflation and fluctuations in currency influence the profitability of the company (Billington et al., 2012). 4.2 Technological Factors Dell Company: The advent of information technology has changed and made the world a global village. Dell Company is leading in innovating exciting opportunities in advancement of technology. The company's technology enables persons and organisations to enjoy better quality and low cost advantage (Kirkpatrick, 2002). HP Company: Computer industry is experiencing the fastest growth in technology development. Companies in this industry are investing heavily in research and development in order to innovate. Production of shorter product lifecycle is also significant. 4.3 Environmental Factors Dell Company: The interest of Dell Company is ahead of the government regulation directive. It has a vision of creating a culture in which the environment care is second nature. It places high priority on minimising wastes, reuse programs, recycling and prevention of pollution. As such, the company continuously improves its product environmental friendliness to meet applicable regulations and industry standards. HP Company: Taking care of the environment is very important for technology companies due to the disposal of their products. The company has put in appropriate measures to ensure that it takes care of the environment in which it operates. It complies with the relevant government regulations concerning the environment. 4.4 Political Factors Dell Company: Dell Company provides local and state governments with information technology. The need for these governments to provide state-of-the-art services, be transparent and protect citizens makes the governments to seek solutions to modernize, innovate and simplify their infrastructures. IT is such a toll that dell company provides to these governments. The events terrorism in September 2001 has affected the market conditions, political instability in many countries in world affect the company in its performance. The company's industrial development agency estimates that the tax rate in US is 39.5 percent. The US government have restrictive policies that hinder foreign companies from entering the US markets HP company: Legal issues and government regulations have taken toll on this company. They set conditions under which companies have to do their operations. Political instability inhibit smooth running of production and business operations. Foreign countries have strict measures for foreign companies in order to protect the local industries. 5.0 Micro Environmental Forces 5.1 Product Dell company products are considered to be among the best in the market. The company has devoted itself in continuous improvement of its products. Importantly, it has differentiated its products from those of the competitors (Serwer, 2005). HP company products are unrivaled in the market. This enables it to supply the products all over the world. However, several customers have questioned the quality of their products across the world. 5.2 Price This is a very sensitive aspect of Dell Company. The company keeps on reducing the price of its product to gain more market share. In addition, the presence of cheap substitute products forces the company to cut prices in order to keep up with the market trends (Strauss et al., 2006). The HP Company charges prices according to the demand of their products. They set the prices depending on the demand. This enables the company to take advantage during high demand to make more income. 5.3 Promotion Dell Company uses promotion as a strategy to reach its customers. It has continued to use corporate social responsibility to make awareness of its products. It also uses heavy advertising and online promotion. Unlike Dell Company, HP Company uses suppliers and retailers of their products to create awareness of their products. The company emphasizes more on creating customer loyalty for purpose of creating repeated purchases. 6.0 SWOT Analysis This technique is used to match these companies’ weaknesses and strength with environmental threats and opportunities to determine their right. They has spelt out purpose for which they are suited. 6.1 Strengths Dell Company The fortune magazine report 2010, listed Dell Company as the 38th biggest and largest company in US and the 5th in Texas State by total revenue. The company is ranked as the second largest personal computer maker globally as of 2010 and the largest is the world in terms of economies of scale. Others are; Strong brand recognition Marketing strategies that are customer oriented In fortune 500, it is ranked as the fifth most admired company in computer industry It deals directly with customers Huge internet presence, 70 percent of its sales are make online. Cheap labour and lean supply line Strong customer support strong service reputation Hewlett-Packard (HP) company Strong product presence in the market Big market share Product availability Strong regional representation 6.2 Weaknesses Dell Company Poor door-to-door delivery in emerging countries Quality concerns from some market segments Commoditization Weak relationship with computer retailers Over reliance on suppliers Management and power revolve around one person, Michael dell Hewlett-Packard (HP) company Loss of government contracts Weak integration of market segments Lack of presence in market segments Job insecurity for the employees Expensive trade protection measures disruption of manufacturing infrastructure Breach of data security Unfavorable tax audit outcomes and other compliance factors 6.3 Opportunities Dell Company Maintenance of excellent lead taken by the founder diversification strategy, many new products range in different markets Cost reduction Widening its presence in Europe, china, India, Bangladesh and Pakistan. One stop shopping abilities Growing and increasing income Hewlett-Packard (HP) company Broad portfolio of capabilities A top provider of x86 systems Expanding its presence in cloud computing. This is a new delivery for IT services. Expanding and improving printing solutions and imaging Launch of many retail photo printing services and solutions. 6.4 Threats Dell Company Competition rivalry in personal computer market worldwide New entrants in the market Fluctuations in world currency markets, changes in exchange rates High costs of research and development Highly competitive environment Availability of substitute products at lower prices Fierce competition from Acer, Intel, IBM and Hewlett Packard Aggressive marketing by competitors Hewlett-Packard (HP) company Poor customer service Decrease in IT markets Hyper competitive environment Enterprise competition Problems with laptop screen and desktop monitor Problems in setting up dual monitor Dishonor of warranty as well as complete cover Political instability and frequent changes in regulations 7.0 Market Segmentation Dell Company has well developed market segments; it has outlined it very well on its home page. It segments its products along five product lines. It has home offices, medium and small businesses, large businesses, solution links and education, government, life and healthcare sciences. The aim of this is to make customers aware that the company has a wide range of products available in store and online. It puts more emphasis on complementary products and accessories (Kotter, 2008). The company has two main segments namely transactional (less frequent buyers) and relationship (customers who buy repeatedly). HP Company has similar market segmentation as Dell Company. The company emphasizes more on the benefits of its products to its customers. It also has extensive drivers and support to assist its customers. The company highlights one big benefit to its customers, the endless possibilities of its products (Nagali et al., 2008). 8.0 Target Markets Dell Company has various target market for its products. Mostly, it targets people in the age between 18-50 years. This is because; these people are heavily involved in running organisations. Young people are as well ahead in getting information for entertainment and academic purposes. HP Company has not specific target markets for its products, rather, the company uses regions and manufactures products for their specific regions. The company opening various branches globally as production centers evidences this. 9.0 Targeting Strategy Dell Company engages customers using telesales and direct sales teams. They use configured websites specified to customer account. As such, they are able to track orders, place specifications, place orders and look status of their customers (Doyle & Stern, 2006). Unlike dell, HP Company uses point-to-point strategy to reach its customers. The company's management considers this effective because they are able to reach to as many customers as possible. The company is also well placed online. 10.0 Positioning Strategy Dell Company uses distribution, price and promotion as its positioning strategies. Using these strategies, the company creates a distinct impression to its customers. It is able to influence the market by introducing new prices and specific promotion methods. On the other hand, HP Company creates a good perception of its products to customers. Preston (2001) explains that, the company focuses on competition and packaging strategies to create a lasting impression to customers. As such, it is able to survive in market place, which is highly competitive. 11.0 Recommendations There are shortcomings regarding operational and other aspects. Based on the above analysis, these are the recommendations; Dell Company should continue to improve their products. Global economic conditions would continue to improve and therefore consolidating and reinforcing its market position is very important (Guide et al., 2005). The company should leverage extensive domain experience. This will ensure that it is well positioned with global and local regulations. The management should gain insight in to the company's existing technologies and processes and know which additional processes and technologies that carry the greatest potential in achieving its results. Add more security works services that are flexible to address consumer requirements especially security challenge The company should monitor their online experience as much as possible They should build their reputation with online search engines such as Google They should develop technology that supports phones Dell Company should know its Achilles heel to give chance to its customers (Zell, 2007). They should extend warranty for their products especially desktops They should continue to create greater online experience To gain market share, they should cut prices of their products Adopting and using best practices in social media marketing is very important for these companies. 12.0 Conclusions Dell and HP companies have applied various marketing approaches to their success. As discussed above, the report outlines how each company has been successful in application of the marketing approaches. As one of the largest computer manufacturers globally, the two companies have grown enormously since their inception. Decline in economic conditions is a common factor that has affected both companies. Their ability to realize pipeline of opportunies disruptions in supply chain and adverse product pricing has been very important in achieving their desired results. The current trends in the market of personal computer industry are driven by changes in consumer needs, demand and wants. As a result, companies in personal computer industry are forced to be in a state of adaptation so that they can satisfy their customers. 12.0 References Billington, C., Lee, H. L., & Tang, C. S. (2012). Successful strategies for product rollovers. Sloan Management Review, 39(3.1998). Doyle, P., & Stern, P. (2006). Marketing management and strategy. Pearson Education. Guide, V. D. R., Muyldermans, L., & Van Wassenhove, L. N. (2005). Hewlett-Packard company unlocks the value potential from time-sensitive returns.Interfaces, 35(4), 281-293. Holzner, Steven. (2006). How Dell Does It: Using Speed and Innovation to Achieve Extraordinary Results. New York: McGraw-Hill Kirkpatrick, David. (October 28, 2002). “Can anyone compete against Dell?” Fortune, Vol.146 No 7, pg.42 – 48 Kotter, J. P. (2008). Corporate culture and performance. SimonandSchuster. com. Nagali, V., Hwang, J., Sanghera, D., Gaskins, M., Pridgen, M., Thurston, T., ... & Shoemaker, G. (2008). Procurement risk management (PRM) at Hewlett-Packard company. Interfaces, 38(1), 51-60. Preston, L. (2001). Sustainability at Hewlett-Packard. California Management Review, 43(3), 26-37. Serwer, Andy. (March 7, 2005). “The Education of Michael Dell.” Fortune, Vol.151 No.4, pg.50 – 56 Strauss, Judy; El-Ansary, Adel & Frost, Raymond. (2006). E-Marketing. (4th International Edition). Upper Saddle River, New Jersey: Pearson Prentice Hall Zell, D. (2007). Changing by design: Organizational innovation at Hewlett-Packard. Cornell University Press. Read More