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TMP - 14756 84180326 Marketing Plan HP 1326765348
TMP - 14756 84180326 Marketing Plan HP 1326765348
Executive summary
This report aims to make a mid-term (3-year) marketing plan for HP in the printer market. HP has
already been the market leader in the printer industry and is attempting to sustainably maintain its
leading position. The current printer market is monopolized and takes on three trends such as the
increasing demands of multi-function printer, color printer and green printer. Three major market
leaders in the printer industry such as HP, Canon and Epson have their own strengths, weaknesses,
opportunities and threats. Based on the market trend, a new product idea of Paper Saver is
proposed. Then, marketing objectives and strategies are formulated for the marketing of the new
product. Finally, it is predicted the sales, profits and costs in the following three years.
Table of Contents
Executive summary..................................................................................................2
1.0 Introduction..................................................................................................4
2.0 Company analysis..........................................................................................4
3.0 Market analysis.............................................................................................5
4.0 SWOT analysis..............................................................................................6
4.1 Strengths...............................................................................................6
4.2 Weaknesses............................................................................................7
4.3 Opportunities..........................................................................................7
4.4 Threats..................................................................................................7
5.0 Competitor analysis........................................................................................8
6.0 A new product idea for HP...............................................................................9
7.0 Marketing objectives and strategies....................................................................9
7.1 Objectives............................................................................................10
7.2 Product strategy....................................................................................10
7.3 Pricing strategy.....................................................................................10
7.4 Place strategy.......................................................................................10
7.5 Promotion strategy.................................................................................10
8.0 Financial forecast.........................................................................................11
9.0 Conclusion.................................................................................................12
References...........................................................................................................13
Appendices..........................................................................................................15
Appendix 1: Brand Value of Top Ten Companies in 2010..........................................15
Appendix 2: Printer Market Share in the 2nd Quarter of 2010......................................16
Appendix 3: Printer Market Share in the 3rd Quarter of 2010.......................................17
1.0 Introduction
Marketing plan is almost one of core plans for all the organizations and a right marketing plan
always makes the most fundamental contributions to the success of an organization (Ferrell &
Hartline, 2010). Based on this, the importance of a marketing plan for an organization is self-
evident. The purpose of this report is to make a marketing plan for HP in the next three years. The
report will firstly analyze the company situation. Secondly, it will analyze the market situation.
Thirdly, it will carry out SWOT analysis of HP. Fourthly, it will analyze the major competitors of
HP. Fifthly, it will provide a new product idea for HP. Sixthly, it will set marketing objectives and
marketing strategies. Seventhly, it will conduct financial forecast including profits, sales and costs.
HP was established in Palo Alto of California Silicon Valley in 1939, which now is the worlds
second largest PC and office facilities manufacturer next to IBM. Every day, more than 1 billion
people are using the technology of HP. (Malone, 2007) According to the brand value ranking list
published by Interbrand in 2010, the brand value of HP reached to 26.8 billion dollars ranking in
the 10th place (Appendix 1). As a global technical solution provider for personal user, all types of
businesses and research institutions, HPs products cover IT infrastructure, personal computing
and access devices, global service image and printing equipment, including desk computer and
working station, laptop and tablet PC, multi-function printer, pocket computer, scanner, projector,
digital video, storage device, server, network devices, consumables, and accessories and so on. In
particular, HP is the world first-class printer supplier and formulates technology, performance and
reliability standard for printer, including HP LaserJet and DeskJet printer, DesignJet large format
According to IDC, HP further expanded its market share in the American and even the global
printer market. The appendix 2 is the market share of top five printer manufacturers in the second
quarter of 2010. According to the statistics, the world market share of HP has increased to 44% in
the third quarter of 2010 with the sales of 13,422,936 (Appendix 3). Based on these, it can know
that the most major competitors for HP in the printer market are Canon and Epson, following by
Samsung, Lexmark and Brother. IPG (Interpublic Group) as a member of HP has made great
contributions to the revenues of the company for a long time, but it was meeting some challenges
after following IBMs approach and had to carry out a new round of adjustment. Seeing from the
promotion of HP ePrint in 2010, it can see that IPG is putting more energy on the development of
solutions. (Huang, 2011) That is to say, the development trend of HP is to become a software and
At present, HP has already led the world printer market. However, the goal of HP is to long-term
place in the dominant position in the Chinese printer market as the most important market in the
Asian-Pacific region. 4Ps (product, price, place and promotion) strategy of HP has the following
each consumer group and the product quality is high. From the perspective of price, low price is
not the price strategy of HP. Therefore, HP is always weak in attracting those consumers sensitive
to price and paying little attention to brand. (Marketing Teacher.com, 2011) This is also one
problem of restricting the sales of HP. From the perspective of place, HP is famous for its
distribution management while Dell eliminates middleman with all its strength (Zell, 2001). From
the perspective of promotion, HP adopts advertising strategy and appeals to giving HP with more
Based on Appendix 2 and Appendix 3, the top five printer manufacturers have already occupied
more than 80% of the market share while HP takes up almost 50% of the market share. Moreover,
a handful of international multinational companies have formulated special business model for the
printing industry. They sell printers with high technical content and high manufacturing difficulty
at a low price and then make profits by selling printing supplies at a high price. Meanwhile, they
have applied thousands of technical patents about printers and supplies so that printer and supplies
industry become an industry with high technology, high risk, high investment and high patent
protection. (Tsuji, 2001) It can see that the printer technology and market is highly monopolized.
Fuji Xerox predicted that the global printer market would have about 7% of compound growth in
the future next years and the overall market size would increase to 36 million units in 2014 from
28 million units in 2010. Moreover, it is mainly attributed to the quantity purchasing and using of
multi-function printer (MFP) and the growing demands from China and other emerging markets.
(The Edge Financial Daily, 2010) According to this, one trend in the printer market is the
promotion of MFP. So far, the MFP in the market not only promotes the overall operating
efficiency but also improves the reliability of the device. It is reported that the sales amounts of
MFP in the laser printer market of the European and American developed countries has being
Secondly, the demands on color printing are expanding with the development of modern office
(Anonymous, 2011). However, data capacity that needs to be dealt with will increase for
improving color gradation and image solution, which will ultimately result in the decreasing of
print speed. Owing to this, manufacturers provide different solutions. Among them, AcuLaser
Technology used by Epson in color laser printing is one of relatively successful solutions. Based
on this trend, the era of low-end color laser printer has already come. Meanwhile, the inkjet printer
market is gradually shrinking. In particular, due to the limitation of function and print effect of the
lowest-end inkjet printer will be more and more unpopular in the public. (Tsuji, 2001)
Finally, green office is an irresistible trend of designing and manufacturing office automatic
component module. At present, the nonmagnetic one-component imaging system laser printer
conservation, energy reducing and miniaturization (Anonymous, 2011). With the mature of the
technology and the decreasing of ink powder, and the expansion of application, the nonmagnetic
one-component imaging system laser printer will become the mainstream product in the future
market.
4.1 Strengths
Technology leadership: Printer market different from PC market needs a mass of R&D
investment. Competitors have better had their own technology for achieving victory. In this
regard, HP has a clear advantage. HP has already had 17-year R&D experience and owned
Brand advantage: HP is the market leader in the printer industry all the time. The brand has
been deeply rooted among the people. When consumers want to buy a printer, they will
firstly think of HP. Speaking of HP, they will initially think of its printer.
distribution channel so as to avoid the cutthroat competition in price and stock and so on. In
4.2 Weaknesses
High R&D investment and high cost: Every year, HP inputs 1 billion dollars in R&D as a
result of high cost (Malone, 2007). Consequently, it is difficult for HP to reduce product price
like some other competitors so as to lose some market shares in the low end market.
4.3 Opportunities
Brand promotion: The brand promotion strength in the market is very great. For example,
Cost control: HP will not lose the market share by controlling the cost of products in the low
Technological opportunity: HP can win the market and consolidate its market position by
4.4 Threats
Low end market: The low end market is encroached by some new entrants such as Dell. As
a result, some customers are sensitive to price and insensitive to brand turn to its competitors.
The competitor analysis mainly aims at Epson and Canon. Epson is the market leader of stylus
printer and inkjet printer while HP is dominant in inkjet printer and especially laser printer market.
Canon has achieved good performance in laser printer and especially inkjet printer market. (Tsuji,
Y. S. 2001) In addition to business area, Canon has already put more and more efforts in
household printer domain. Moreover, Canon promotes printer by utilizing its advantage in image.
Different from the marketing strategy of Canon, Epson and HP are looking for differentiated
competition. For example, Epson launched black and white inkjet printer under the prevalence of
color printer. (Global Data, 2011) The following table summarizes the strengths, weaknesses,
resource
2. Lacking high-density
advertisement
Opportunity 1. The popularization of PC and 1. The transformation of HP
technology
potential
Threat 1. Price competition 1. Market trend: the elimination of
2. Market trend: the elimination of inkjet printer
According to the section 3.0, the current printer market is mainly presenting three tendencies, that
is, the increasing demands on MFP, color printing, as well as green printing. In order to
accommodate to the market trend, the new product idea will cover these three aspects. The
following sentences will describe the idea in details. The new product will be named as HP Paper
Saver. It will consist of four major functions such as scrapping paper, reproducing, printing, and
photocopying. Seeing from the function of printing, HP will use color laser printing technology
while keeping high speed at the same time. In addition to printing and photocopying, the most
distinct feature is that the paper saver can reproduce a brand-new paper after scrapping paper. In
this way, it can help users save a lot of costs in purchasing new papers. Whats more, the function
of paper reproduction is favorable for protecting the environment and fully utilizing resources so
as to reduce resource wastes. Based on the functions of the new product, the product positioning is
The paper saver will have two versions. One version is facing high-end customers and the other
version is for normal users. Moreover, it will target at companies, schools, families and all the
users who need to use paper. In the past, the sales of printer mainly targeted at business market.
However, it is found that students especially university students are usually asked to hand in a
paper with printing format. At that time, the print shops surrounding the schools are very busy.
The profit is considerable though each paper may only earn a few cents. It can see that student
market is a market with huge potential. For this reason, this new product will pay particularly
attention to such a segment market, which is major reason for creating two versions.
7.1 Objectives
SMART is the acronym of specific, measurable, achievable, realistic and time-bound, which is
usually used to set goals (Dibb, et al. 2005). Next, the marketing objectives will be established
Product strategy mainly refers to product utility, quality, appearance, brand, package,
specification, and service and so on (Ferrell & Hartline, 2010). The new product is used to scrap
paper, reproduce, print and photocopy. It will continue to use HPs high quality and excellent
service as product strategy. In addition, the product will be small sized for meeting current
Price strategy mainly includes basic price, discount price, time of payment, terms of loan, and etc.
(Ferrell & Hartline, 2010). HP will not employ unified price for the new product. For high-end
users, it will adopt high price strategy. For normal users, it will employ low price strategy. The
funds used for researching, manufacturing and marketing will be sourced from risk investment,
Place strategy means all kinds of activities implemented by the company for making its products
enter and arrives at target market (Ferrell & Hartline, 2010). The new product will be sold
primarily by store and then by Internet. For controlling cost, TV will be the least major channel.
Promotion strategy usually contain advertising, personal selling, sales promotion, and public
relation (Ferrell & Hartline, 2010). Advertising and personal selling are two promotion strategies
for this new product. Because the product idea is quite new, it is necessary for our employees to
introduce the functions of the product. And this strategy is mainly provided for enterprises and
schools. Then, the advertisement is mainly used to attract families and individual customers.
Financial forecast plays a significant role in improve organizational business management level
and economic benefit, and thus is quite necessary (Dibb, et al. 2005). The financial forecast for
HPs new product is a middle-term forecast and will be from the aspects of sales, profit and cost.
It is predicted to sell 300,000 units in the first year and each unit is 1000 for high-end market
(200,000 units) and 700 for low-end market (100,000 units). Therefore, the expected sales
income for the first year will be 200,000 X 1000 + 100,000 X 700= 270,000,000. It is
predicted that the variable cost of each unit in low end market and high end market is 900 and
600 respectively. The large investments in product R&D, promotion and other aspects may
bring about the loss of 185,000,000. The break even analysis can reveal that HP will begin to
make profit after the sales amount reaching 500,000 units in the second half year of 2013.
First-year fixed cost: 50,000,000 (including product R&D and design, production facility, daily
Based on the above assumptions, the formula about break even analysis should be: 50,000,000 /
The following chart is the budgets for HP Paper Saver in the next three years.
10%
Costs
Advertising 7,000 7,000 7,000 21,000
Manufacture 3,000 3,000 3,000 9,000
Material 10,000 10,000 10,000 30,000
Staff salary 3,000 3,000 3,000 3,000
Total 63,000
9.0 Conclusion
HP, Canon and Epson occupy most of market share in the printer industry, but each of them has
advantages and disadvantages. The new product idea is based on the market trend of MFP, color
printing and green printing. The product strategy focuses on function, quality, service and size.
The price strategy is different to customers at different levels. Store is the most major distribution
channel for the sales of new product, following by internet and TV in sequence. Finally, the
promotion strategy includes advertising for families and individual customers while personal
selling for companies and schools. In a conclusion, HP will make profit from the sales point of
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