ACER LAPTOPS ASSIGNMENT OF PRODUCT AND BRAND MANAGEMENT ON ACER LAPTOPS

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SUBMITTED BY:

NAME ROLL NO DEGREE REG.NO SUBMITTED TO :-

SUJIT KUMAR SINGH R1801A15 B.Tech-MBA 10808783 Mr.PRANAV RANJAN

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Table of contents:
1.Executive summary

2. Category Analysis a. Aggregate Market factor b. Category factors c. Environmental Factors d. Competitor Analysis e. Customer Analysis f. Planning assumptions 3. Objectives 4. Product/Brand Strategy 5. SWOT Analysis 6. Market development 7. Supporting marketing programs 8. Financials 9. Contingency planning 10.Conclusion

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1. Executive Summary: Acer Group is a Taiwanese multinational electronics manufacturer which is involved in selling laptops, computer, computer hardware and software, and providing IT business services. The Acer Group is a family of four brands Acer, Gateway, Packard Bell and eMachines. It ranks as the worlds third-largest company for total PC shipments and is No. 2 for notebooks.Acers new product is entering a marketplace crowded with offerings from Hewlett-Packard, Dell, Lenovo and other pc suppliers. Reconstruction In January 2008, Acer announced that it had acquired a controlling interest of 75% of Packard Bell. In 2009 Acer acquired E-TEN and 29.9% of Olidata. In October 2009, Acer passed Dell as the world's number 2 PC makers.

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2. Category Analysis: A. Aggregate Market factor (a) Category Size

The size of laptop market is about 35% and it is about $76.2 million.

(b) Category growth They have adopted a price based strategy, where they can be easily differenciated. It has been an approach of constantly innovating on product design, yet being affordable, and to reach out to consumers in a language that connects to them that led to their success.The overall
growth was primarily driven by the laptop market which grew 17%.

(i) The NASSCOM - McKinsey report on India's IT industry According to a NASSCOM-McKinsey report, annual revenue projections for Indias IT industry in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled services, and e-businesses thus creating a number of opportunities for Indian companies. In addition to the export market, all of these segments have a domestic market component as well. (ii) India IT Software and Services Industry US$ billion Other key findings of this report are:

Software

&

Services

will

contribute over 7.5 % of the overall GDP growth of India

IT Exports will account for 35% of the total exports from India

Potential for 2.2 million jobs in IT by 2008

IT industry will attract Foreign Direct Investment (FDI) of U.S. $ 4-5 billion.

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(c)Stage in Product life cycle

Maturity(Acer) Decline Growth

Introduction As laptops are highly technology sensitive, so demand for them will be continuously their. Therefore Laptops in India are currently enjoying a stage between growth and maturity. According to product life cycle it is clear that acer is in maturity stage.depending upon the different variety and series of laptops.

(d) Sales cyclicity Sale cyclicity for laptop is average. It indicates category is attractive for investment. (e) Seasonality Laptop market is not generally affected by seasonal variation. It is quite stable having demand throughout the year, which again indicates the category is attractive for investment. However there is increase in sale during some festivals time due to discount etc. being provided by saler. Overall market is stable. f) Profits: Profits in IT industry are generally good. When you come with new technology, you can come with marketing skimming strategy easily to earn more profit. Only negative side here is obsolescence of technology rapidly. Overall category is attractive.

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B. Category factors
Overall attractiveness: Medium - High

a. Threat of New Entrants (High) Capital cost is moderate. High Entry of many foreign and global players due to removal of qualitative restrictions by government.

b. Bargaining power of Buyer (High) High bargaining power of buyers due to high notebook company No switching cost Lack of substitute product, net book can be substituted but at the low level.

c. Bargaining power of Supplier(Medium) Suppliers have medium bargaining power. For Hard Disk Company they have medium bargaining power due to the limited main supplier (Samsung, Western Digital, and Seagate).

d. Threat of Substitutes (Very High) Very close Substitutes. Threat from large usage of mobile phones ,tablets & i-pads.

e. Current category rivalry (High) High competition because there are a lot of company in the market Lack of Differentiation Entry Barriers are low Industry growth rate is high.

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C. Environmental Factors: (a) Economic factors: This is one factor which will affect IT industry most. As India has been one of the best performers in the world economy in recent years, but rapidly rising inflation and the complexities of running the worlds biggest democracy are proving challenging. Growth had been supported by markets reforms, huge inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market.So India is good market place for our product .

(b) Technological factor: The technology has a major impact on the business. It affects the business prospects, cuts down the profits and forces the management to change the course of the business operations. Any change in technology changes the work cultures, the methods and the systems. It affects the speed of the operations and gives a boost to the productivity of the production systems. It makes your product useless if technology goes outdated. . We have to compete with rapid technology change. The transfer of technology is essential for attaining a high level of industrial capability and competitiveness.

(c) Social factors: Social factors are generally encouraging in case of laptop industry. Trend is in favour of this in industry.

(d) Legal factors: Various legal formalities regarding entry in the market create some problems. But they are not so serious.

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D. Competitor Analysis: Acer is a well known brand in India and we can say acer is having many advantages over other brand as a price leader, their price is relatively low. ACERs major competitors in the global computer industry are:

Hewlett-Packard/Compaq provides personal computers and laptops to both individual and enterprises customers. The company, founded in 1938 and based in Palo Alto, California, has a presence in 170 countries across the globe. HP maintains excellent account management for its largest global enterprise. HP is setting the standard in the notebook industry with the best combination of advanced features and extremely competitive prices.

Lenovo Group Limited is the largest personal computer manufacturer in the Asia-Pacific region. The company has executive headquarters in Beijing, China and in Morrisville, North Carolina, USA. Lenovos consumer strength and market leadership in China can let Lenovo and IBM successful in the world fastest growing IT market. IBM will be the preferred services and customer financing provider to Lenovo. The promise Lenovo brings to the channel is of a well-capitalized company with low production costs that can go toe-to-toe with Dell.

Dell Computers is a multinational information technology corporation based in Round Rock, Texas, and United States that develops, sells and supports computers and related products and services. The company is one of the largest technological corporations in the world, employing more than 96,000 people worldwide.

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E. Customer Analysis (a) Customers & Potential Customers: All youth and corporate user will be our potential customers. We will try to offer the product matching the need of each individual specifically.

(b) Segmentation of customers: It will be based on following factors: Pricing Professional Youth High technology loving

Acer divides its market depending on economy.Three types of market economies can be labeled as developed, emerging, and surviving. Developed markets are comprised of people with the purchasing power to fulfill all of their needs, approximately 1 billion of the earths population.

F. Planning assumptions The sales are expected to grow at the current market growth rate. Technology will not completely obsolete in near future.

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3. Objectives:
(a) Corporate Objective The corporate objective is to provide quality at a competitive price, growth in diversity, and continue to contribute in local market by being the market challenger so enhancing the profitability of business. (b) Divisional Objective To deliver superior quality and value to all its customer. Acer has adopted the differentiated market for their products as its products are characterised in age, gender and desire for image (c) Marketing Objectives To sell 800 units per month, so total 9600 units in year 2010-11 in each of city entered. To attain quantitative and qualitative leadership in the sectors. Maintain constant positive sales growth every year than the other competitor. Increase the market share by market development. To modify the existing market areas. To increase product awareness as well as sales by persuasive promotional activities.

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4. Product/Brand Strategy
A. Target Market The potential markets are separated into two segments; Corporate User and End User. The primary marketing opportunity is selling to these well defined and accessible target market segments that focus on investing discretionary income in these areas: (a) Corporate User: Corporate users are the users who buy the NOTEBOOK for their official purpose only. The MD, GM, DGM, CEO are the main corporate level users. (b) End User: End users are the users who buy the NOTEBOOK for their personal use. Teachers of University, Students of private University, businessman etc are the End users.

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B. Strategic alternative: (a)Penetration strategy: Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share. This strategy is most often used businesses wishing to enter a new market or build on a relatively small market share. This will only be possible where demand for the product is believed to be highly elastic, i.e. demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy more of the product as a result of a low price. A successful penetration pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. The effects of economies of both scale and experience lead to lower production costs, which justify the use of penetration pricing strategies to gain market share.

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5. SWOT Analysis

(a) Strength Acer has many innovations like the Aspire One laptop that let the user connect to the Net almost anywhere with 8 hours of battery live. Acer main factory is located in Taiwan which has low-cost labour and distribution advantage in the US market and Asian market. Acer price its products with low competitive prices to compete with the strong rivals and acquire the low-priced laptop market share.

(b) Weaknesses The laptop markets are extremely competitive and require frequent innovations to keep up or exceed the customers expectations. The laptop customers expect new functions and improved computing power at least once every year. Innovations and changing market demand needs strong and flexible supply chain to execute the successful innovations and deliver them to the market before the competition.

(c) Opportunities Acer had competed on delivering a reliable laptops at a competitive price. Similar market entry model would be useful to enter the iPad market.Acer was successful in acquiring Gateway, e-machines and pockard bell.This success will help Acer to integrate its existing assets or set up new manufacturer to produce similar products that does iPad functions. Acer can also compete in the Asian market by using its low price model. The Asian market is huge and would consume many of Acers products if marketed well.

(d) Threats The laptop is extremely competitive. It needs management support to invest in the Research and Development departments. Research and development departments would consult between each other to produce new competitive products that can be produced from the current integrated ability for Acers subsidiaries. The innovation will continue as long as the workers are compensated and the subsidiaries are willing to compromise for the sake of benefiting the holding company.

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6. Market development: A market development strategy involves selling present products or services in new markets. Managers take actions like targeting promotions, opening sales offices and creating alliances to operationalize a market development strategy.Acer also want to expand the market for their product, so it will also follow this strategy. A. Positioning Acer laptop will acquire good position in market.The position will be achieved by quality product, competitive price, and according to consumers demand and delight consumers.

ACER

HP

DELL

LENOVO

POD

Price, Performance

Design, Quality, Features, Performance.

Design, Quality, Performance, Delivery

Price, Performance, Quality.

POP

Quality, Performance, Price.

Quality, Performance, Price.

Quality, Performance, Price.

Quality, Performance, Price.

TAG LINE

Empowering People

Lets do amazing

The power to do The power of more ideas

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B. Strategies: (a) Cost/price (value) strategy: Acer will try to offer product at appropriate price so that customer can get value for their money. It is very cost efficient brand with very low cost. So due to the pricing strategy of acer the customers prefer acer as compaired to te competitors. (b) Consumer awareness: Acers main primary marketing strategy will seek to first create customer awareness regarding the products. (c) Other marketing strategy are Practicing Total Quality Management (TQM) Consumer Orientation Produce and market international standard products To increase the product line and length as per the expectations of the consumers To serve the consumer with competitive prices To ensure the availability of the product

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7. Supporting marketing programs: A. Marketing Mix The product marketing mix of acer is comprised of the following approaches to price, distribution, advertising and promotion, and customer service.

Product
Brand Name Variety Quality Design Features

Promotion
Advertising Personal Selling Sales Promotion Public relation

Packaging Services
Marketing Mix

Price
List Price Discount Allowance Payment Period Returns

Place
Channels Coverage Assortments Location Inventory Transportation

Credit Terms

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Logistics

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(a) Product The Product range of Acer consists of Travel Mate notebooks Ferrari Notebooks Net books Acer Aspire

(b) Price Aspire will use cost base method to derive its prices. They will add a 65% profit margin to the cost of the product to gain efficient revenue. In this way, price creates perception of quality. High price attract an image of quality. This will allow Acer Aspire to increase its market share (c) Promotion By promoting the Acer Aspire, this will satisfy the needs of the customer and business. Consumers will gain better understanding of the product and how it can satisfy their needs, but on the other hand will help Acer Aspire increase their profits and market shares. (i) Advertising Acer will spotlight on a successful advertising campaign comprising of magazine and television ads. In additional to traditional forms of promotion it promotes its products through Sports Marketing.It has an association with Ferrari for formula one championship. It was official technological partner for Beijing Olympics games and also Vancover winter Olympic Games (d) Place Distribution channels Acer Aspire will use indirect distribution where an intermediary organisation will be involved in the process. The intermediaries will provide functions such as: Fragmenting bulk supplies of inventory

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B.Marketing Research: Research is very important for any company to know about current market and predict future needs. (a) Information is collected through the customers through questionnaire. Question It will help us in knowing customer responses like as How did you hear about product?. Based on the answer we will take our promotional activities. Customer suggestion We will take customers suggestions to gain additional information. We want to know from the customers aboutWhat suggestion do you have to improve our product? Why do you need a laptop? In this Questionnaire we have asked about the services,features,price processor according to different brands that is the brand of Acer itself and also about Dell ,Lenovo,HP i.e the main competitors.I have used liquard scaling to rate between 1 to 4.

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(b) Use of SPSS to anlyse the questionnaire

In this graph it is clearly seen that the different competitor lie at certain point and Acer is very near to the constant and the pricing of the acer Laptops is very ood rather important factor for the brand Acer.

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8. Financials This section will offer the financial overview of Acer laptop, related to marketing activities. It will address break even analysis, sales forecast and indicate how this activity are link to the marketing activity. A. Break-even Analysis The break-even analysis below illustrates the number of single sales, or units, that we must realize to break-even. This is based on average sale and costs per transaction.

Fig:Monthly Break-even Point

Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Selling Price Average Variable Cost per month Estimated monthly Fixed Cost

700 Unit. Rs. 3,64,00000

Rs. 52,0000 Rs. 42,000 Rs. 70,00,000

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B. Sales Forecast: Acer Laptops estimates that the sales forecast will be achieve into the into the four main revenue streams; Travel Mate notebooks Ferrari Notebooks Net books Acer Aspire

It will steadily increase sales as the advertising budget allows, although the target market forecast listed all of the potential customers divided into separate groups. The forecasted customers group divided into 2 categories: Corporate Users and End Users.

Graph analysis:
Months Sales(Rs.) 3,50,00,000 3,45,00,000 2,75,00,000 5,25,00,000 4,40,00,000 3,80,00,000 2,90,00,000 5,40,00,000 4,35,00,000 2,50,35,000 2,01,00,920 3,75,00,000

Sales Forecast
60000000 50000000 Sales TK. 40000000 30000000 20000000 10000000 0 July September November January March May Series1

July August September October November December January February March April May June

Month

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(a) Marketing expense budget Marketing Expense Budget News paper Handbills/Leaflets Magazines Internet Billboard Total marketing expenses 2010-2011 65,00,000 7,00,000 5,00,000 17,50,000 15,00,000 1,09,50,000 2011-2012 90,00,000 10,00,000 10,00,000 30,00,000 36,25,000 1,76,25,000

C. Implementation The following identifies the key activities that are critical to our marketing plan. It is important to accomplish each one on time and on budget. Milestone July Aug Newspaper Billboard Internet Magazine Handbill/ Leaflets Yes Yes Yes Yes Yes Yes Sep Oct Nov Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Dec Jan Feb Mar Apr May June Yes Yes Yes Yes Yes Yes - Yes Yes Yes Yes Yes Yes - Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes -

Yes Yes

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9. Contingency planning
A. Contingencies likely to arise: Failure to attract customer by the new brand Failure of financial plan

B. Companys Strategy to deal with the same: Creating value preposition and continuous updating of product Communicating value to the customer Extra money in liquid form for contingency.

10. Conclusion:

For Acer to achieve its global market aspirations it should be noted that making profit and maintaining control of headquarter and subsidiaries are challenges to tackle with a sustainable policy pricing.

Proper global strategies and a sufficient consideration of cultural differences are crucial for the survival of multinational companies like Acer. To compete globally is no easy thing. While Acer is going to gain a pretty strong foothold on the computer market in the global market thanks to Shih's vision, it is also planning to launch new products such as TV.

With the evolving nature of technology, ACER with its breakthrough innovations will definitely continue growing stronger and stronger living up to its nick name: The Rampaging Giant of Taiwan.

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REFERENCES:

Web portals http://www.acer.com http://www.acer-group.com/public/ http://www.writing-a-business-plan.org/Product-Life-Cycle.html http://en.wikipedia.org/wiki/List_of_laptop_brands_and_manufacturers http://www.businessweek.com/adsections/indian/infotech/2001/growth.html

Books
Brand Management by Harsh V Verma 2nd Edition 2008

Product management 4e-tatamcgraw-hill

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