Product Positioning Case Study PPM Computers

Mohamed Kadri

2009

EL- ZOHOOR ST, EL-MOHANDESEEN,CAIRO

Sunday, March 22, 2009

Case Study Marketing Management

Marketing Plan.
Product benefit Customer segment Distribution channel

Sales force number and skills

Marketing Plan

Product pricing

Promotional planning

Creative components

Distribution Channels for PPM

High Street Outlet Direct Sales Direct Mail

Specialized Distributors

Mohamed Kadri

Sunday, March 22, 2009

Case Study Marketing Management

Product ranges
There was a decline in Growth and Profitability at the PC. Market although there was an increase in Sales. Sales and Profitability of PPM in million
80 70 60 50 40 30 20 10 0 PC Network Workstation Sales Y1 Profit Y1 Sales Y2 Profit Y2 Sales Y3 Profit Y3

The International Market and main Competitors

The Market during the last 10 years

Workstation and PC

Mainframe and Minicomputers

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Sunday, March 22, 2009

Case Study Marketing Management

Price

Microprocessor and Memory Storage

Leaded to rapid growth in

Software
Peripheral Electronic Publishing 5.5 B to 11B Multimedia 0.2B TO 12B

Graphic

Hardware Growth Software Growth

10%

25%
Lead To

Peripheral Growth

25%(20B)

Expansion of Games
New Market especially in PC (Consumer Sector) due to

Business Application Surveys show that the Corporate Software is:

Graphics Communication

Electronic Mail

Design System

Mohamed Kadri

Sunday, March 22, 2009

Case Study Marketing Management

Current Product Range

1. Export is too limited due to felt resources But PPM
1% to 6% in last 5 years

2. PPM vs competitors in UK
140 120 100 80 60 40 20 0 PC PPM Network Competitors Workstation Column1

3. Seasonality in all sector within UK market

JAN

JUNE TO SEPTEMBER

DEC

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Sunday, March 22, 2009

Case Study Marketing Management

Drawbacks
There are three core products only in each product range which is PC 640, X912 and Y4000 respectively. The company used Far East manufacturers so there are significant fluctuations in stocks. There are Limited Services as its Distribution Outlets and Subcontractors handled the majority of problems especially for the PC range at this year(5%decline).

Competitive Advantages
The pricing against competitors in all ranges shows that PPM has a major competitive advantage.

250

200

150 PC 100 Network Workstation 50

Mohamed Kadri

Sunday, March 22, 2009

Case Study Marketing Management

Current structure of Directors of PPM to handle the situation

CEO Founder Director Sales Director Marketing Director Distribution Director

Current Distribution
o The main Distribution Channels for the three products
PC Network Workstation

High street outlet Haulage subcontractors

Distributors

Mail Orders

o The next graphs show the following opportunities according to the market trends: 1. The Company was broadly in line with others at PC distribution.

Mohamed Kadri

Sunday, March 22, 2009

Case Study Marketing Management

2. There is an opportunity for the Network products to make sales direct from factory (as Apricot 60% of it sales directly). 3. Investing in highly trained sales force to demonstrate and install systems at the Workstation range instead of reliance on mail order (i.e. direct from factory).

Network Distribution for PPM

5% 10% 0% 15% 0% 85% 85% 0%

High Street Outlets Dealers Mail Order Direct From Factory

High Street Outlets Dealers Mail Order

High Street Outlets Dealers Mail Order Direct From Factory

o The pattern of Distribution for PC. PPM should focus on Independent Specialist and Specialist Computer Multiple.

30 20 10 0 Electrical goods retailers Independent specialists Specialist computer multiples Mail order 1990 1995

Mohamed Kadri

Sunday, March 22, 2009

Case Study Marketing Management

Supporting the Distribution Channel

o PC supportive tools:
1. Promotional investment in mainstream computer magazines. 2. Sales support for dealers (their sales is marginal 5%) so we could neglect them if their support is expensive. 3. The five sales rep. can be forwarded mainly to the high street outlets as they represent the bulk sales for PPM and corresponding with the market trends. 4. Professional training for this sales team.

o Network supportive tools:

Supporting firms which are the main consumer for the network products Increase the number of sales representative. New recruitment to support dealer.

Calculation 12000 firms as dealer in Network range. Service corporate customers by one sales rep. for every 100 potential customers. If we assort it by 80%-20% theory, we have at least 2400 potential firms. It is preferable to appoint 24 sales rep. to cover these potential clients.
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Sunday, March 22, 2009

Case Study Marketing Management

o Workstation supportive tools: Increasing the numbers of sales rep. to correspond with Trade Sources as stated that each sales rep. should focus on 60 clients. Calculation 3000/60=50 sales Rep. should be appointed to cover the clients of Workstation.

Sector analysis PC
Geographic UK Demographic 30 years old Male Better off financially Small business Psychographic Working or middle class Technological oriented Behavioral Changing their PC Type of the machine Benefits*

*The Benefits required for this segment are compared with other competitors on the next graph.
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Sunday, March 22, 2009

Case Study Marketing Management

8 7 6 5 4 3 2 1 0

PPM

Amstrad

Olivetti

Tandon

IBM

Is it preferable for the company to upgrade the current microprocessor? o Yes, the trend in the market is towards these faster machines. o It may have certain cost implication if we go with the market trend. o Short term plan for sales improvement is to modify the simple changes of these benefits. o Long term plan for sales improvement is to adjust the re-engineering modifications throughout the next six months.

Mohamed Kadri

11

Sunday, March 22, 2009

Case Study Marketing Management

Is it preferable for the company to subcontract the entire PC operation? o No, if the company sells under a label, it will lose its brand name. o Even though the company hasnt got a wellknown brand name, it is preferable to have a brand name for the future of the PPM Company. o The problems of the stock will be exaggerated if they transfer the entire production.
Promotional Expenditure of PPM and its competitors

40 35 30 25 20 15 10 5 0 PPM Olivetti Tandon Y1 IBM Y2 Amstrad Y3 Apple

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Sunday, March 22, 2009

Case Study Marketing Management

NB. The press and magazine advertising were more appropriate for the PC sector.

There is an opportunity which should be exploited in the PC market. Concentrating on exhibitions included stand, personal and demonstrational equipment. It costs around 15,000 per day with 102 days in the UK only then it has to be activated by the follow up of the professional sales rep. o Advertising through magazines.
o

Practical Computer 300,000 cir. 3,000

Computer 470,000 cir. 4,500

Computer World 250,000 cir. 2,500

Global Computer 150,000 cir. 2,500

o Mailing direct to promote their PC as the competitors didnt use this tool. o Focusing on sales promotions with some add value according to the market trends such as printers and software at the same package. Financial Issues PC has its own profit centre
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Sunday, March 22, 2009

Case Study Marketing Management

Fixed cost 12 million, Variable manufacturing cost 35 Retail price 100, Wholesaler 65 The PC sector has high price elasticity and there was an increase in price competition throughout the past 3 years.

Network (i.e. X system)

Main Segment in this sector:

Main Purchaser

Other Purchaser
Manufacturing

Purchase Criteria of all Purchaser

Service

Mediuum sized company

Retail

Power Easy to use

Financial Sectors Trasportation

Operating System Network Cost

Quality analysis in the Financial Sector:

Mohamed Kadri

14

Sunday, March 22, 2009

Case Study Marketing Management

10 8 6 4 2 0

PPM

Apricot

DEC

Xerox

Financial Issues
Customer Service Performance Ease of use Operarting System Connectivity

0.3 million

0.4 million

1.0 million

1.0 million

0.5 million

Trend key elements for success in this sector:

Building an effective sales force:

Business to Business I.e. sophisticated b

Consultation for Software Programming

Expenditure in Higher media in Millions:

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Sunday, March 22, 2009

Case Study Marketing Management

2.5 5 0.3

-------Participation in publications and exhibition:

circulation cost average 80,000 3,000.00 300 800.00 40,150 1,900.00

Its role is to identify prospects and generate business. Initiating Direct Mail as it is market trend for most companies.Moreover, it isnt expensive and it will reduce the cost difference between the Dealer(58) and the customer(100) as the Variable manufacturing cost is (32) . Price elasticity is much lower than in PC market. Improving services will satify the customers enormously. Sales Promotion may encourage sales rather than others as they dont use this promotional tool.

Workstation
Main Segment in this sector:
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Sunday, March 22, 2009

Case Study Marketing Management

High Speed Engineering

Design Users

The basic requirement for this sector:

10 8 6 4 2 0 Speed Power Reliability Specialized Software Service Support Price PPM HP DEC

Costs for improvement of the basic requirements in Workstation Market:

Speed Power of calculation Reliability Specialized Software Service Support

7M

0.8M

2M

1.2M

0.7M

Mohamed Kadri

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Sunday, March 22, 2009

Case Study Marketing Management

Sales force is the most important key factor in this segment . the ideal percentage is 1:120 = sales:client Price elasticity is lower than that for the network market. Creation of effective MIS. Continuity on direct sales because the company cant withstand the margin for the distributor especially the manufacturing variable costs remained high and the company want to drop in the following year.

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