I.

Current Situation

A. Internal Analysis: HP INC.

1. Company Profile
HP INC, formerly Hewlett-Packard Company (HP),
incorporated on February 11, 1947, is a leading global
provider of products, technologies, software, solutions and
services to individual consumers, small- and medium-sized
businesses (SMBs) and large enterprises, including
customers in the government, health and education
sectors. The Company offers IT industry's broadest
portfolios of products and services that bring infrastructure,
software, and services through innovation to enable its
customers to create value and solve business problems.
The Company designs its solutions to provide foundation,
in the areas of security, cloud, mobility and big data, by
leveraging the breadth of its offerings and the strengths
and capabilities of its individual business units. The
Company’s operations are organized into seven business
segments: Personal Systems; Printing; the Enterprise
Group (EG); Enterprise Services (ES); Software; HP
Financial Services (HPFS), and Corporate Investments.

Personal Systems
Personal Systems provides commercial PCs, consumer
PCs, workstations, thin client PCs, tablets, retail point-of-
sale (POS) systems, calculators and other related
accessories, software, support and services for the
commercial and consumer markets.
Printing
Printing provides consumer and commercial printer
hardware, supplies, media, software and services, as well
as scanning devices. Printing is also focused on imaging
solutions in the commercial markets. These solutions range
from managed print services to areas such as industrial
applications, outdoor signage and the graphic arts
business.

Enterprise Group
The Company’s Enterprise Group provides a broad
portfolio of enterprise technology infrastructure solutions for
a variety of operating environments that address a wide
range of customer challenges, including the need to
increase agility and accelerate innovation in order to drive
revenue, manage risk and lower costs.

The Company’s Technology Services provides support

services and technology consulting, focused on cloud,
mobility and big data and provides IT organizations with
advice, design, implementation, migration and optimization
of EG's platforms: servers, storage, networking and
converged infrastructure.

Enterprise Services
The Company’s Enterprise Services provides
technology consulting, outsourcing and support services
across infrastructure, applications and business process
domains. ES delivers to its clients by investments in
consulting and support professionals, infrastructure
 technology, applications, standardized methodologies and
global supply and delivery. ES also creates opportunities to
sell additional hardware and software by offering solutions
that encompass both products and services.

Software
The Company’s Software provides IT management,
application testing and delivery, information management,
big data analytics, security intelligence and risk
management solutions for businesses and enterprises of all
sizes. Its software offerings include licenses, support,
professional services and software-as-a-service (SaaS).
Application Delivery Management is part of HP's IT
management offerings, provides software that enables
organizations to deliver high performance applications by
automating and testing the processes required to ensure
the quality and scalability of desktop, web, mobile and
cloud-based applications.

HP Financial Services
HP Financial Services provides flexible investment
solutions, such as leasing, financing, utility programs and
asset management services, for customers to enable the
creation of unique technology deployment models and
acquisition of complete IT solutions, including hardware,
software and services from HP and others. HPFS partners
with customers globally to help build investment strategies
that enhance their business agility and support their
business transformation. HPFS offers a wide selection of
investment solution capabilities for large enterprise
customers and channel partners, along with an array of
 financial options to SMBs, educational and governmental
entities.

Corporate Investments
Corporate Investments includes HP Labs. It also
includes certain cloud-related business incubation projects
among others. The Company competes with Lenovo Group
Limited, Dell Inc., Acer Inc., ASUSTeK Computer Inc.,
Apple Inc., Toshiba Corporation, Samsung Electronics Co.,
Ltd., Canon U.S.A., Inc., Lexmark International, Inc., Xerox
Corporation Ltd., Seiko Epson Corporation, The Ricoh
Company Ltd., Samsung and Brother Industries, Ltd.,
International Business Machines Corporation, EMC
Corporation, Cisco Systems, Inc., Oracle Corporation,
Fujitsu Limited, Inspur, Huawei Technologies Co. Ltd.,
NetApp, Inc., Hitachi Ltd., Juniper Networks, Inc., Arista
Networks, Inc., Extreme Networks, Inc., Brocade
Communications Systems, Inc., VMware, Microsoft, Google
Inc., Rackspace Inc., Amazon.com, Inc., IBM Global
Services, Computer Sciences Corporation, Accenture plc.,
Wipro Limited, Infosys Limited, Tata Consultancy Services
Ltd, CA Technologies, Inc., BMC Software, Inc., Adobe
Systems Inc., Open Text Corporation, Symantec
Corporation, Intel and IBM Global Financing.
 2. Current Position of the Company/Brand in
the Market (Market Shares/
Sales Volume / Sales and Profit Trends)

According to IDC, a market research company, just four companies

provide close to 90% of the printers, Multi-Function Devices (MFD) and

digital copiers in the global; HP, Cannon, Epson, Brother, and Samsung
HP Inc., profitability ratios

Oct 31, 2014 Oct 31, 2013 Oct 31, 2012 Oct 31, 2011 Oct 31, 2010 Oct 31, 2009
Return on Sales
Gross profit margin 23.88% 23.08% 23.24% 23.35% 23.76% 23.59%
Operating profit margin 6.45% 6.35% -9.19% 7.61% 9.11% 8.85%
Net profit margin 4.50% 4.55% -10.51% 5.56% 6.95% 6.69%
Return on Investment
Return on equity (ROE) 18.75% 18.75% -56.38% 18.31% 21.66% 18.91%
Return on assets (ROA) 4.86% 4.84% -11.63% 5.46% 7.04% 6.67%
Source: Based on data from HP Inc. Annual Reports

Source: www.stock-analysis-on.net
Copyright © 2015 Stock Analysis on Net
Ratio Description The company

Gross Gross profit margin HP Inc.'s gross profit

profit indicates the percentage
margin of revenue available to
cover operating and other
expenditures.
margin deteriorated from
2012 to 2013 but then
improved from 2013 to
2014 exceeding 2012
level.

Operating A profitability ratio HP Inc.'s operating profit

profit calculated as operating margin improved from
margin income divided by 2012 to 2013 and from
revenue. 2013 to 2014.

Net profit An indicator of HP Inc.'s net profit margin

margin profitability, calculated as improved from 2012 to
net income divided by 2013 but then slightly
revenue. deteriorated from 2013 to
2014.
ROE A profitability ratio
calculated as net income
divided by shareholders'
equity.
ROA A profitability ratio
calculated as net income
divided by total assets.
3. Company/Brand Strengths and Weaknesses
Analysis
Strengths
1. Strong presence in China
2.Brand reputation
3.Diversified product portfolio
Opportunities
1.Expand services and enterprise
solutions divisions
2.Increasing demand of cloud based
services
3.Acquisition of more technology
related patents
HP Inc.'s ROE improved
from 2012 to 2013 and
from 2013 to 2014.
HP Inc.'s ROA improved
from 2012 to 2013 and
from 2013 to 2014.
Weaknesses
1.Poor competency in acquisitions
2.29% of income comes from
personal systems division
3.Poor presence in tablet market
Threats
1.Retaliation by incumbent firms
in software services
2.Slowing growth rate of the PC
market
3.Rapid technological change
Strengths

1. Strong presence in China. The economy of China has been

growing at a steady more than 8% rate every year. The growing
economy accelerates corporate spending and HP is well
positioned to benefit from it. The company has increased its
investments in the market and expanded product and service
offerings, especially its enterprise business and services
divisions. These divisions offer the most profitable HP’s products,
including cloud computing services and enterprise solutions.
Strategic expansion into Chinese market may result in a strong
competitive advantage for the business in the near future.

2. Brand reputation. HP is the world’s leading PC vendor with more

than 15% market share. It is also one of the major providers of
service network products. The company has a significant market
reach all over the world in nearly all of the markets it operates.
This has resulted in a strong brand reputation. According to Inter-
brand, HP’s brand was value at $26 billion in 2012 and was
among top 15 most valuable brands in the world.

3. Diversified product portfolio. Although slowly, HP has been

diversifying its product portfolio and moving from its main
Personal Systems business to more profitable and lucrative
enterprise solutions and services business. The company now
offers thousands of different products and services. In addition, its
product portfolio is more diversified than competitors’ portfolios,
which make HP less susceptible to changes in the different
industries and markets.
Weaknesses
1. Poor competency in acquisitions. Over the last 10 years, HP
has acquired at least 50 technology companies. Some of the
acquisitions added new skills, products and increased business’
revenues but the rest acquisitions were either of no value or even
detrimental to the company. Most notably, Autonomy Corporation,
which was acquired for $11 billion and was a complete failure. HP
bought a highly overvalued company and had to write down $8.8
billion value of its books. This acquisition has revealed how
incompetent HP was when acquiring the company. No other HP
competitor has experienced such an acquisition failure in the
decade.

2. 29% of income comes from personal systems division. HP

still heavily depends on sales from PC, especially laptops. The
market for PC has matured and is expected to grow very slowly or
even decline after a few years. Combining this with ever
decreasing margins on computer hardware products, HP’s largest
Personal Systems division becomes a weakness for the
company.

3. Poor presence in the tablet market. The tablet market has been
growing and is expected to grow in double digits over the next few
years. Most of other technology businesses have successfully
introduced their products in the tablet market and have enjoyed
huge income and profit growth. Although HP had its TouchPad
tablet model and later introduced its Slate series tablets into the
market, the company has failed to offer an attractive product for
consumers. As a result, the business experiences losses and is
unable to compete successfully in this lucrative market with
companies like Samsung and Apple.
Opportunities

1. Expand services and enterprise solutions divisions. HP

provides various services (cloud, security and infrastructure) and
enterprise solutions (servers, networking and storage), which are
the most profitable HP’s businesses at the moment. The company
should focus on growing these divisions as they promise better
growth opportunities and higher profit margins.

2. Increasing demand of cloud based services. The cloud

computing market is expected to grow by an average of 22% each
year from 2011 to 2020. By 2020, the market is expected to reach
$240 billion value. Currently, HP is offering many services related
with cloud computing and is well positioned to benefit from the
growing market.

3. Acquisition of more technology related patents. R&D is

expensive to engage in and the best alternative to that is to acquire
patents from other companies in the market. HP has a lot of free
cash that could be used to acquire companies holding the
necessary technology patents. With strengthened patent portfolio,
HP would be able to compete with the rival firms in the table
market.

Threats

1. Retaliation by incumbent firms in software services. Profit

margins are high in the market of enterprise software solutions and
HP might face stronger than expected competition from incumbent
firms such as Oracle or IBM.
2. Slowing growth rate of the laptop market. Growth rate of the
computer market is slowing down and in the near future the
markets will become saturated. The company faces intense
competition from rivals like Acers, Apple, Dell, Lenovo or Samsung
in terms of price, quality, brand, technology, distribution channels
and range of products. Besides, customer needs are changing and
now customers are keener to buy tablets or smartphones than new
laptops. Therefore, it will prove hard for HP to compete in personal
computers market and continue to grow its market share.

3. Rapid technological change. The serious threat that HP and the

other tech companies are facing is a rapid technological change.
Companies are under the pressure to release the new products
faster and faster. The one that cannot keep up with the competition
soon fails. This is especially threatening for HP as the company is
already behind its rivals in terms of quality, price and technological
advancement of some of the products.

4. Brand Consumer Profile

a. Identified Market Segments

HP Inc. segmented its market by Psychographic

variables such as social class, which includes middle to
upper class and lifestyle and personality, those who are
technology dependent, techy-savvy, and brand and quality
conscious.

b. Market Needs Being Addressed

The need for a high quality inkjets and toners, laptop,
netbooks, desktop, scanner and printers with sophisticated
design that meets exceptional performance at an affordable
cost without compromising its life span.
 c. Buying Patterns
Complex buying behavior is the buying pattern of the
target market, characterized by high-consumer involvement
in purchase and significant perceived differences among
brands. HP offers gadgets that are infrequently or risky to
purchase because it is expensive, which typically makes the
target market to learn about each product category of the HP
through a learning process, first developing beliefs about the
product, then attitudes and then making a thoughtful
purchase.

d. Usage Habits

5. Present Marketing Strategy

a. Target Market
HP Inc. provides products, technologies, software,
solutions and services to individual consumers (student,
teacher, professional), small- and medium-sized businesses
(SMBs) and large enterprises, including customers in the
government, health and education sectors.
Specifically, HP is rolling out new printers and its first
mobile scanner targeted at the small business market, with
new features intended to simplify the out-of-box experience
and reduce customer costs, including the purchase price and
power consumption, and the primary target customer market
for the HP OfficeJet Pro and OfficeJet Pro X is Small and
medium business which is designed to meet the demanding
and unique needs of small and medium sized businesses.
b. Current Brand Positioning (Points-of-Parity (POP) and
Points-of-Differentiation (POD))
HP Inc. together with their direct and indirect
competitors, manufacture gadgets such as laptops,
desktops, mobile phones, scanners and printers of different
models which are uniquely designed for the consumers
need. HP Inc. is the world’s largest PC manufacturer. It’s
what sets them apart from their competitors and is
encapsulated in their value proposition.

c. Competitive Strategies Employed

At HP, sustainability is their competitive advantage that
extends beyond global citizenship. It supports the business
strategies and helps them meet their customers’ needs,
engage and develop their people, and deliver profitable
growth and business stability over the long-term. In support
of this approach, they engineer and deliver ground-breaking
solutions with sustainability in mind. These solutions help
them strengthen their communities; minimize the
environmental footprint of our customers, operations, and
supply chain; and act with integrity and respect for human
rights around the world. Their actions and investments ignite
innovation that creates a brighter future for everyone.

HP holds annual securities analyst meetings where they

come up with new strategies for reaching global markets and
to allow the company to progress. They currently have a
multi-year restructuring that is designed to realign their cost
structure and create investment capacity to drive innovation
against their strategic priorities and strengthen marker
 leadership. The company has said that they expect their
revenues to grow in line with GDP, with operating profit
growing faster revenues, industry-leading margins and
disciplined capital allocation by 2016. HP has a very
powerful set of assets, a culture of engineering innovation
and a trusted brand and now they focus on bringing great
assets together in order to deliver to their customers.
Hewlett-Packard has a specific plan for the company to
reach global market which include HP Enterprise Services,
which means that they bring together their industry leading
server, storage, networking, management software and
technology service that offers to deliver converged
infrastructure solutions for enterprise customers. With this
strategy they expect to increase revenue and market share.
They were the first large company to announce this service
and by 2015 they will represent 15 percent of the global
server market.

Their second strategy is foreign outsourcing, this means

that they contract with foreign suppliers to produce their
products, usually at a fraction of the cost of domestic
production. They depend on China and Taiwan to produce
some of their products.

d. Marketing Mix (4 or 7 P’s)

Product

Hewlett Packard provides outsourcing of business

process, infrastructure technology, maintenance and support
of technology, support and development of applications,
networking resources and products, integration services and
 consulting services, soft wares, hardware, services and
products related to printing and imaging.

Hewlett-Packard is known for its excellent printers

and scanners as well as for its digital cameras, laptops,
desktops and other IT products. The products are known to
be reliable and hence the brand has a good customer base.

In the year 2007, Hewlett-Packard launched “Touch

Smart PC” with a display of touch screen and later it
introduced a PC that was a consumer tablet with touch
screen facilities. In the year 2008, Hewlett Packard brought
in to the market a mini-notebook called “HP2133Mini-Note
PC”. This was designed especially for the education sector.

The company also produces ‘ProLiant’ that is an

affordable tower server for small size to medium size work
groups.

“IPaq Glisten Smartphones” is one of Hewlett

Packard’s high profile products that have many features like
the ability to send emails, texts, photos and managing
contact list.

“Linksys WRT54G2 Wireless-G router” is a home-

networking product that enables internet connections with
high-speed.

Service packages including AMC’s are available for

interested customers by the company. The products include
printers, digital cameras, scanners and calculators.

Price

The pricing policy of Hewlett Packard is fair pricing as

well as competitive pricing. The company takes into account
 all the relevant factors related to costing, distribution,
promotion, prices of adversaries and then decides on a
suitable selling price.

Hewlett Packard has been designing products that

have features according to the tastes and desires of the
consumers. It first undertakes a thorough market research
and estimates the amount that a consumer is willing to pay
for the commodity. Then it makes that product in that price
frame to suit its personal needs as well as the needs of the
customers.

Hewlett Packard had launched an innovative utility

pricing scheme called first-in-pay-per-use. In this scheme,
the company offered the customers to pay for only the time
they have utilized the services. However, over the long term
this pricing strategy was shelved due to the tough
competition in the IT segment.

Place

Hewlett Packard has a well-placed distribution

channel. It sells its products to the individual customers and
business enterprises, directly and indirectly.

It has an online distribution method where the orders

are placed either in the official website or in other shopping
websites. The official website of Hewlett Packard offers
service such as partner locator that is sorted by small
business and large business and the products needed.

The company has hired retailers and technology

vendors for supply of their products. Hewlett Packard has its
own exclusive outlets where it provides various products and
 services also. Trained and well-mannered individuals are
hired that deal with the customers directly and efficiently.

Hewlett Packard has many subsidiaries that are

located in Geneva, Ontario, Singapore, Miami, Tokyo,
Victoria, Houston and Rivonia. Hewlett Packard operates a
global program for the system integrators, developers,
software vendors that is called “Developer and Solution
Partner Program” (DSPP). The company has a direct link
with its partners that include suppliers, logistic service
providers and manufacturers so that the network continues
to run smoothly.

Promotion
Hewlett Packard has launched an initiative “One
Voice” to promote its brand name and image along with
its various consumer electronics products and hardware
products. The company has taken the help of vehicles
to flaunt and display its numerous products and services
that comprises the inclusion of a website, arranged by
business application.

Employees are encouraged to engage in topics

such as servers, networking and storage. A “Trade- in
Program” is active where the consumer can make a
trade of old product with new product in lieu of
discounts.

As promotional activities, some services within a

period are provided free. Periodic discounts on many
products are announced as part of the company’s
 strategy. Hewlett Packard has formed many tie-ups and
sponsorship deals with various companies.

It has sponsored the shirts of “Premier League

Club” and also sponsored “BMW Williams Formula 1”
team and later “RenaultF1”. It has also acquired the
naming rights for the HP Pavilion at the place San Jose.

III. Identified Market Opportunity

The need for a gadget that would give a conducive and easy way of
summarizing information from any source and built-in storage device
serves as one of the market opportunities in developing a wireless digital
highlighter.

Another one is the large market share of HP Inc. It has the largest
market share which is 40% in the printers, multifunction devices and digital
copiers in global. With this CoñoScan can improve its market share
because it represents the HP’s brand. The target market of the CoñoScan
is expected to increase by 14.60 % in 2016, 29.49 % in 2017 and 44.70 %
in 2018, using 2015 target market as a base year. Thus increasing trend
of target market will increase the revenue of the product.

Another opportunity is the technological advancement (promotional

outlets for customer awareness). Nowadays, technological factor that is
emerging is the digital technology. It enables immense amounts of
information to be compressed on small storage devices that can be easily
preserved and transported. It initiated the biggest change in the lives of
people. It has gone so far that developments made its way to the
innovations ranging from smart phones, laptops, internet to software and
applications. These improvements raise the level of expectation from the
consumers therefore the proposed product must adapt to change.
 On the process of the development of digital technology, technologies
such as OCR. and USB gain popularity in the market. It is an opportunity
for CoñoScan because it contains the Optical Character Recognition
technology (OCR) and Universal Serial Bus (USB) technology. OCR is the
mechanical or electronic conversion of images of- typed, handwritten or
printed text into machine encoded text. New researches show that OCR
continues to improve. Another is the Universal Serial Bus (USB)
technology which connects computers with peripherals, or input/ output
devices. It serve as an opportunity if the product adapt to the development
of USB because it improves through time and offer better product qualities
to the customers thus, results to positive user experience. The customers
are not left with what is available but encourages them to try the new one.

IV. Proposed Target Market

The CoñoScan wireless digital highlighter is targeting high school to

post graduates students belonging to middle and upper class studying in
the key cities in the Philippines. These consumers are easy going, have
access to computers and have awareness about technological and social
trends. They have lot of paper works and study materials and need a
multi-purpose gadget that allows fast and easy transfer of data from the
printed source directly to any electronic device, play music and store data.

V. Financial and Marketing Goals/Objectives

a. Financial Objectives
To generate revenue of ₱ 259,221,527 by 2016.
Price: ₱ 1,699 x 152,573 = ₱ 259,221,527
b. Marketing Objectives
To capture at least 5% (152,573 students) of the target market by
2016.
Target Market: 3,051,452 x 5% = 152,573 students
VI. Marketing Strategy

e. Marketing Strategy

The CoñoScan wants to perceive itself as an expert, at the same time

professional, in providing convenience, ease, and comfort to the people of
the academic field especially in studying and learning aspects through the
use of digital technology. The company will target the individuals from high
school to post-graduate education level who have been studying in a
traditional and old-style way and then introduce to them the new, modern,
and “high-tech” way of studying and learning.
To accomplish this objective, first, the product awareness should be
broadcasted among the target customers through the use of aggressive
online advertising and direct marketing with the use of major social
networking sites like Facebook, Twitter, and Instagram, web-based email
service like Gmail and Yahoo, and company’s own website. The company
will also upload videos containing vital information and features about the
products on YouTube and its website.
The marketing strategy that the company will be using is product
development. The strategy involves continuous product development and
technological innovation of the company‘s products through customer
feedbacks and suggestions, introduction or innovation of new technology,
and commitment towards societal welfare. In line with this strategy, the
company also commits itself in giving excellent customer service and
continuously improving environment-friendly methods and processes. The
strategy aims to build long lasting relationship to the target customers
The company will be using the combination of product differentiation
and cost leadership as a competitive strategy. To substantiate, the
company will offer products that have unique features and speculations
and selling prices that are relatively low compared to those of the
competitors.
 f. Brand Positioning
i. Target Market

The target market is students in secondary to post graduate

education level who study in the Philippines, belong from the middle to
upper class level, and have device(s) or gadget(s) like smartphone, tablet,
and personal computer.

ii. Competitive Frame of Reference

The ConoScan is the only wireless and inkless digital highlighter

that has multiple functionality like mobile scanner, Universal Serial Bus
storage, audio player, and Bluetooth.

iii. Points-of-Difference and Points-of-Parity

One of the ConoScan’s points-of-parity (POP’s) is the Optical

Character Recognition (OCR) technology which scans symbols,
characters, and graphics on printed materials (e.g. newspaper, textbooks,
magazines) then retypes them in gadgets like PC’s. Other points-of-parity
are the Barcode Recognition technology which provides data from
barcoded materials and Quick Response (QR) Code Reader technology
which gives information about the item where QR code is attached. The
compatibility with Windows and Android editing applications like Microsoft
Word, Excel, Notepad, and the USB technology are some same features
that other competitors also have. The wireless capability is another point
of parity.
One of the Wireless Digital Highlighter’s point-of-differences (POD’s) is
the built-in Audio Player and Speaker that plays MP3 and other audio files.
In connection with it, the product has 3.5 mm Audio Jack or Headset Port
in case of studying in silent zones or some other purposes. It also has
Bluetooth v4.0 that transfers data at an overwhelming speed but
consumes little energy1. Another unique feature of the product is its
compatibility with iOS gadgets like iPhone and Mac. The ConoScan is also
a proudly Filipino-made product. It does not necessarily need a
transformer since it is Filipino-made and other abroad-made digital
highlighters may need a transformer since the number of volts varies from
each country. It has also a cheaper selling price and incurs less “add-on”
costs like freight or shipping and taxes. It is available nationwide in the
Philippines. It is also located to a well-known local marketing
intermediaries in the Philippines. It has also a three-month product
warranty and warranty or return process is simpler and takes shorter time
compared to that of the competitors. Its parts (e.g. battery, charger) are
readily available, obtainable and accessible compared when customer
bought abroad. The delivery time of the product is also shorter compared
when customers buy abroad.

iv. Value Proposition

v. Support or Reason to Believe

The ConoScan uses Optical Character Recognition (OCR)

technology which scans symbols, characters, and graphics on printed
materials (e.g. newspapers, textbooks, magazines). It has also an audio

1
player for a conducive way of summarizing information and Universal
Serial Bus (USB) technology for storing purposes.

To sum the above mentioned, for the students, from high school to
graduate school (target) wireless multi-purpose digital highlighter is the
only gadget (frame of reference) that would give a conducive and easy
way of summarizing information from any source with built-in storage
device (compelling benefit) for it is an inkless highlighter that uses Optical
Character Recognition (OCR) technology which scans symbols,
characters, and graphics on printed materials (e.g. newspapers,
textbooks, magazines), it has also an audio player for a conducive way of
summarizing information and Universal Serial Bus (USB) technology for
storing purposes (reason to believe)

g. Marketing Mix

Product Strategy

1. Product objective

The ConoScan’s product objective is to provide an affordable and

efficient digital highlighter that gives a conducive and easy way of
summarizing information from any printed source, to ease the life of
Filipino students, who have a lot of paperwork, by providing fast and easy
transfer and transformation of data from any printed source directly to any
electronic device, at the same time, play music and store electronic data,
to save time and effort in retyping information from printed sources to
computers and smartphones, and to provide a product with multiple
functions.

2. Product Strategy

a. Components of the Market Offering

 ConoScan is an inkless highlighter that provides a more little-effort-
requiring, time saving, and technology-eased way of studying, primarily in
the summarizing aspect, than the cumbersome word-by-word manual
retype. Its main function is scanning text and symbols from printed
sources like textbooks, magazines, and newspaper, then transferring them
to electronic devices like computers then transforming or converting them
into an electronic file like document and worksheet. The transfer rate of
information is made agile and quick through the use of the latest version of
Bluetooth. The studying process is made more amusing through the
product’s audio player.

The CoñoScan’s body is made up of Polypropylene (PP), also

known as super-strength polypropylene, a durable, perdurable, and steel-
strength plastic2. This kind of plastic has a high melting point and does not
absorb water like other plastics. It is lightweight and very flexible. It has a
low level of electrical conductivity as well which is highly effective as a
main component of electronic products.3

2
(n.d.). Retrieved November 28, 2015, from
http://www.sciencedaily.com/releases/2012/06/120607141644.htm
3
(n.d.). Retrieved December 4, 2015, from
http://composite.about.com/od/Plastics/a/What-Is-Polypropylene.htm
 Figure 1.CoñoScan Side View

Figure 2. CoñoScan's Top View

The product has been designed ergonomically. It has a thin and

slender design that fits perfectly for highlighting. It has a soft rubber that
provides a comfortable usage for users’ fingers, thus eliminating hand
strain and cramps that may hinder or lag the study process of the
students. It is also visually ergonomic because it provides a peripheral-
free and proper angle for vision or line of sight, thus eliminating eye strain.
Its overall design and structure encourage good posture, which can
improve academic performance in children and students. It is also
lightweight that gives the assurance of not making the hand muscles tire
too quickly and makes the gliding or highlighting very gratifying.

Optical Character Recognition (OCR) is the one that does the

primary function of the product. It is a software that scans texts and
graphics on printed information sources like textbooks and magazines.
Then, it transforms scanned and then retype them on different editing
applications like Microsoft Word, PowerPoint, and Excel. It can also do the
same process with Android and iOS editing applications.

The product has the Bluetooth spec. version 4.2. The technology
has a data transfer rates that will be up to 2.5 times faster, with a tenfold
increase in packet capacity over the previous versions as per the SIG. To
quote SIG, “Over-the-air firmware updates for a Bluetooth Smart device
are up to 250% faster and more reliable”4. Simply stated, this version of
Bluetooth transfers data swiftly without draining a lot of energy.

Figure 3. Bluetooth v4.2's features

4
Bluetooth 4.2 Announced: Here's What Is New | Redmond Pie. (2014, December 3).
Retrieved December 4, 2015, from http://www.redmondpie.com/bluetooth-4.2-
announced-heres-what-is-new/
 Figure 4. Bluetooth v4.2's features 2

The product’s energy source is a cylindrical-shaped and

rechargeable lithium-ion battery. It has a carrying capacity of 15000mAh
or 5.6Wh. It has also a nominal voltage of 3.7 volts.

Figure 5. ConoScan's Lithium-Ion Battery

The product has a 3.5 millimeters Audio Jack which is also known
as the headset port. In line with this, the product has provided a headset
that is 133 centimeters long suitable for listening to music while gliding the
highlighter.
 The product has also a standard micro USB 2.0, which is also
known as the charger port. In line with this, the product package includes
a travel charger which has an AC100-240V 50/60Hz 120mA input and a
DC5.0V-500mA output. It also includes a 95 centimeters long USB cord.

Figure 6. ConoScan's Travel Charger and USB Cord

In terms of after sale service, ConoScan also offers 3-year repair

service and 1-year replacement period. Wireless Multipurpose Digital
Highlighter pledges to either repair or replace the defective product with
the same or equivalent value have free back and forth shipping of the
product in the course of repair and maintenance.

In terms of customer support, there are social media sites like

Facebook, Twitter, and Instagram, web mailing services like Gmail and
Yahoo, and the website. There, customers can ask anything that concerns
the operation and handling of the product.

In terms of product support, there are support help desk, YouTube

tutorials, and the product’s user manual.

a. Branding Objective and strategy

 The branding objective is to perceive ConoScan as the only
Filipino-made product that pioneered the most “advanced” and
sophisticated way of studying through the usage of information technology
and other state-of-the-art scientific inventions and innovations.

In line with its objective, the ConoScan should be generally and

publicly aware. This objective can be taken place through the aggressive
online advertising, word of mouth, and creative ads. There will be a
YouTube and Facebook ads that show the amazing features of the
product. There will be a massive persuasion of changing or replacing the
traditional and old-fashioned way of studying that includes long writing and
many papers. The ads and advertisings may include the economic,
academic, and environmental advantages of using the ConoScan.

b. Packaging strategy

The company is one with the individuals who aim to have a

“greener” and sustainable society. In line with objective, the ConoScan’s
product packaging is 100% made up of recycled and environmentally
friendly materials.

Its secondary packaging is made up of paperboard made from the

recycled post-consumer waste, materials discarded after consumer use,
like old magazines and newspaper. The water-based aqueous coatings
will be used as the covering to the paperboard box. They are water-based
and provide good protection on par with other liquid-based coatings.
However, they are shinier and smoother, have higher abrasion and rub
resistance, and more environmentally friendly compared to varnishes. In
addition, they dry faster than varnishes5.

5
— Paper Coating Types —Paper Coatings - UV, Aqueous and Varnish Coatings Used
in Commercial Printing. (n.d.). Retrieved November 28, 2015, from
https://www.summitprintingpro.com/resources/paper-coatings.html
 The dimension of the secondary packaging is shown on Figure 5.

Figure 7 Dimension of the Secondary Package

The volume of the packaging will be 3,591,000 cubic millimeters6 or

3,591 cubic centimeter.

6
70mm*190mm*270mm
 Inside the secondary packaging, there is a divider that separates
the parts of the products. It is still made up of paperboard made from the
recycled post-consumer waste. However, it does not have the coating.

Expect from the secondary packaging, the ConoScan’s primary

packaging is made up of colorful banig that is Ilonggo made. It is has a
cylindrical shape that can serve as ConoScan’s portable mini bag. It is
also available in different style, color, and design.
 Figure 8. ConoScan's Primary Packaging and the Design No. 6

Figure 9. ConoScan's Primary Packaging Design Selection

 Labeling strategy

Figure 10. Frontal View of the Packaging

 c. Support services
ii. Price (Cost) Strategy
1. Pricing Objective

The price objective is to maintain price leadership, and gain 5% of the

market share.

2. Strategy

The new-product pricing strategy that will be used is penetration

pricing. The company will, first, set the selling price low to attract
customers, thus increasing the market share. The profit of the product is
only 29% of the selling price. The penetration pricing will keep out the
possible entrance of the foreign competitors and possibly, the market
leader for mobile scanner and digital highlighter in the Philippines.
The product-mix pricing strategy that will be used is captive product
pricing. This pricing strategy will penetrate the market to buy the product.
The ConoScan can be paired with history and science books since these
courses contain a lot of information to be summarized.
 3. Product Costing

Direct Materials
Php
1 piece Polypropylene case 86.00
Php
USB flash drive 73.10
Flat Braided USB Cord Php
Cable 21.07
Php
Travel Charger 32.25
Php
Sound IC Electronic Chip 51.60
Electronic PCB chip and Php
wires 301.00
Php
Small LED lights 43.00
MNKE-IMR-18650-20A- Php
1500 Battery 129.00
Php
Pan Head Screw 0.77
Php
GHS Plastic Dye Solvent 20.00
Php
Organic Silicon Coating 12.90

Direct Labor
IT Specialist and Php
Programmer 125.00
Php
Electrician 100.00
Php
Assembly and Design 75.00

Manufacturing
Overhead
Php
Electricity 30.00
Php
Others 100.00

Php
PRODUCT COST 1,200.69
 iii. Place (Convenience)
1. Place Objectives

The place objective is to sell and to have access of the product

nationwide through major distributors and web-based services.

2. Place Strategy

The company will employ major distribution channels like the

National Book Store and web-based services like the online retailer, the
social networking sites, and the website.

3. Trade Channels

There are four potential trade channels that will put ConoScan in
the forefront of its industry.

The product’s own website is one of the trade channels. This

serves as a proof of being a legit seller, therefore establishing credibility.
Anyone can access the Internet in case of product information. The
website can also serve as a virtual medium between seller and buyer. It
can also be accessed 24/7 with the need of internet connection.

The Cono Scan has also widely known social networking accounts
like Facebook, Twitter, and Instagram. Through them, customers can
access the application. Their massive popularity has the capability to
spread information quickly and serves as virtual medium between seller
and buyer.
 The Cono Scan has the biggest online retailers like Lazada and
Amazon. They can provide ease of buying for customers for their
accessibility. They are also exposed to large number of potential buyers
due to its strong brand image.

Customers can place their order to these online retailers 24/7

through internet connection.

Distribution Scheme

Figure 11. ConoScan's Value Chain

The product is shipped from the warehouse to all the marketing

intermediaries. Through the marketing intermediaries, customers can buy
the product there. If the customer happens to order via the internet, the
product is shipped from the warehouse to delivery services in order to
reach the destination. If the customer happens to order via online retailers
like Lazada and Amazon, these retailers themselves have their process of
payment and its corresponding freight cost.

iv. Promotions (Communications)

1. Promotions/Communications Objectives

The promotions or communications objective is to dominate the

Internet through aggressive online advertising and marketing and
interactive social media platforms.

2. Promotions/Communications Strategy
a. Push and Pull strategies

The strategy that the company will be using will have elements of
both the push and pull promotional methods.

For push tactics, since the company is starting a new business and
intend to sell a product through retailers, there almost certainly a need to
persuade outlets to purchase and stock your product. Outlets can raise
brand awareness and start building valuable word of mouth referrals. It will
also

For pull tactics, the massive online advertising and other

promotional activities will be used to encourage customers to buy to where
ever the product is available or can be accessed.

b. Communications mix

There is a massive investment on creating online advertising and

ads, since almost all regularly access the internet. They may
include the YouTube and Facebook ads. There will also be the
product’s website to cater all the services that the customers
needed. There will also be Facebook page and Twitter and
 Instagram accounts. There will also be TV advertisements to further
reach the massive public.

v. People

Employees-since it is retail, there should be people in charged to

promote the product on designated areas. Like for example in national
bookstore, there should be a sales man or lady to explain he product to
potential buyers and assist in the process of purchasing.

Management- there should be a proper organization of individuals

so no overlapping of function happens.

Culture-wide open to different cultures especially within the regions

in the philippines when taking orders via mail. Specifically in dealing
with them. Make sure that the words you are using is just with their
beliefs.

Customer service- 24/7 via website. Ofcourse Monday to Sunday

on nbs during mall hours.

vi. Process

The payment can be made process through direct

cash payment to all of the intermediaries of
ConoScan. Some of the intermediaries can process
the payment via debit or credit card. If a customer
places an order via the internet, it can be process
through sending the payment to Palawan Pera
Padala. Shipping or freight costs should be included.