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BUS 120 - Essentials of Marketing

CASE 4

Name Mobile No. Email

Samridh Raheja 7508441497 samraheja.r1@gmail.com

Navleen Kaur 8360321103 navleenhundal@gmail.com

Hundal
Ekamraj Singh 9988506655 Ekam3737@gmail.com
Mehta
DUE DATE –24 September 2018
DATE SUBMITTED- 24 September 2018

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TABLE OF CONTENT

Serial No. Title Page No.

1. Acknowledgement 3

2. Certificate of 4
Originality
3. Introduction 5

4. Summary 6

5. Questions & Answers 7

6. Original Research 14

7. Relationship to 18
Concept
8. Conclusion 21

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ACKNOWLEDGEMENT
In performing our assignment, we had to take the help and guideline of some
respected persons, who deserve our greatest gratitude. The completion of this
assignment gives us much Pleasure. We would like to show our gratitude Mr
Shyam Vyas, Course Instructor, University of the Fraser Valley for giving us a
good guideline for assignment throughout numerous consultations. We would
also like to expand our deepest gratitude to all those who have directly and
indirectly guided us in writing this assignment.

In addition, a thank you to Professor who introduced us to the Methodology of

work, and whose passion for the “underlying structures” had lasting effect

Many people, especially our classmates and team members itself, have made
valuable comment suggestions on this proposal which gave us an inspiration to
improve our assignment. We thank all the people for their help directly and
indirectly to complete our assignment.

Ekamraj Singh Mehta Navleen Kaur Hundal Samridh Raheja

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CERTIFICATE OF ORIGINALITY

This is to declare that:

1 We have used only my words.

2 We have not copied.

3 We have not plagiarized.

We have cited all sources from where we have quoted or adapted

Ekamraj Singh Mehta Navleen Kaur Hundal Samridh

Raheja

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INTRODUCTION

HP was started by William “Bill” Redington Hewlett and Dave Packard in

1939. They both were engineering graduates from Stanford university. The
first product offered by HP was an audio oscillator. Then as time passed by
the company started producing a line of electronic devices. HP grew to be a
public company in 1957. In 1961 HP was listed on the New York Stock
Exchange. In 1962 HP entered the Fortune 500 listing at position 460. HP
entered the Asian market in 1963. In 1964, Dave Packard was elected as the
CEO and Chairman of the Board and Bill Hewlett was elected as the
President. Today, HP specializes in growing and manufacturing PCs,
networking hardware, pc storage and handing over services. HP’s product
line consists of PCs, servers, networking products, storage devices,
software, printers and imaging products. There are greater than 3,17,500
personnel in the company globally. 1

1 https://successstory.com/companies/hewlett-packard

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SUMMARY
H-P, which was established in 1945 in California’s Silicon Valley, is a granddaddy
among the more than 1, 000 different computer-related organizations residing
in the Valley. Both of its founders – William Hewlett and David Packard – were
engineering graduates from Stanford University. Technology has been the
watchword of the company. H-P’s first product was an audio oscillator, a gadget
for measuring sound waves. Studios ordered eight of these oscillators and used
them in creating the special sound device for the movie Fantasia. In 1968 H-P
delivered its first minicomputer, which straight away found wide industrial
application. Four years later the company started out producing the versatile H-
P 3000 computer, which generated strong sales. Through the years H-P had
introduced countless models of personal computers, but none of them had
made a tremendous impact in the market. H-P remained the leading marketer
of hand-held calculators selling for $50 and more. These products have been
developed for the mass market, which H-P had earlier abandoned. In the past,
H-P engineers employed two unique techniques to determine products and
markets – ask co-workers what was wanted or build a laptop for one consumer
and market it to others. This resulted in the manufacturing of a giant range of
tailor-made products that were directed to particular customers. This strategy
permitted H-P to charge high fees for a differentiated product. Dealers have
been particularly pleased when H-P commenced offering higher charge terms
and large quantity discounts. All this success with distribution community
resulted in greater sales, extra satisfied intermediaries, and extra profits. By
1987, computer systems and peripheral equipment accounted for over 65
percent of H-P’s income and profits. Government was a strong consumer
segment and even in 1987 nearly 10 percent of the company’s output was
offered to the U.S. government. The H-P 150 was rejected by using shops
because it was not IBM-compatible even although the unit had more speed
and memory than the IBM- PC. A small retailer could solely expect to obtain a
30 percent margin, while chains could anticipate about 40 percent. In contrast,
sellers could recognize almost forty five percent margins on different
competing private computer systems because they could be sold with high-
margined extras such as disk drives and monitors. The outlets for that reason
were kind of unhappy selling H-P 150. There have been different marketing
driven modifications at H-P. H-P is trying to achieve market share and to
become a market leader by engineering its private computer line for affordable
mass production. For many years, the company had observed co-founder David
Packard’s maxim that market share is not an object, but a reward.

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QUESTION/ANSWERS

Ques 1 What is the core Marketing Concept? Please explain whether H-P has
adopted the marketing concept? What does your group think? & Why?

Answer – HP is one of the leading IT companies in the whole world. Bill

Hewlett and Dave Packard founded HP in 1945 in California’s Silicon Valley. HP
introduced several products according to the needs of the customer. In order to
do that it has adopted the core Marketing Concepts – consumer oriented,
stressing on long term profitability rather than short term sales, and integrating
all departments with marketing to provide consumer satisfaction.
 CONSUMER ORIENTATION- HP has always been consumer oriented.
It always listens to its customers and then reacts. It launched
several products like audio oscillator, electronic testing devices,
minicomputers, HP-3000, hand held calculators, Portable, Laserjet,
Thinkjet, and Hp-150. HP takes feedbacks from its co-workers and
customers and thus makes differentiated products specially
according to their needs. After HP-150 was rejected by the retailers,
it launched the new Portable Model that was compatible with the
IBM PC. Moreover, Hp provided better payment terms and large
quantity discounts, that made both dealers and customers happy.
 STRESS LONG TERM PROFITABILITY RATHER THAN SHORT TERM
SALES- HP has always tried to focus on long term profitability rather
than its short term sales. After the rejection of HP-150, it designed a
new product Portable Model that was compatible with IBM PC. HP
offered better payment terms and large quantity discounts that
made both dealers and customers happy. This improved their
dealer relations and they were able to increase the number of their
full time retailers from 350 to 750 in a short period of time. HP split
its operation in two businesses- printers/computers and imagining
in 2013 that increased the revenue to 52 billion according to the
forbes article.
 INTEGRATE ALL DEPARTMENTS WITH MARKETING TO PROVIDE
CONSUMER SATISFACTION- HP has always worked in unison with
other departments when it comes to consumer satisfaction. It had
two separate sales forces – one selling testing instruments and the

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other marketing computers. A sales force department created a

single sales force that now sells all H-P products rather than isolated
machines. Moreover, in order to gain greater consumer acceptance
and to create a brand family, HP started giving names to its
products rather than numbers. Now, HP marketing executives are
recognizing that the IT industry is also a market driven business like
any other automobile industry.

Ques 2 What must H-P do in order to develop a marketing orientation?

Answer- MARKET ORIENTATION: A business strategy or philosophy that

focuses on identifying and meeting the stated or hidden wishes or wants of
customers. Developing a market-orientated corporation is a complicated task.
An organization's market orientation is reflected in its ability to fulfil its
customer's needs. The enterprise must look outside itself and undertake a
flexible response to changing needs.
Marketing its products and purposes is a crucial aspect of HP’s strategic plans
according to the HP Corporate website as of June 2014. Mike Spanbauer, a
principal analyst for company networking and records center technology, wrote
about it in a report for the Current Analysis Inc., website in 2012. It stated HP
emphasizes its capability to provide low priced solutions for varying IT needs of
customers throughout the global markets.
The starting factor for building a marketing lifestyle in an corporation is quite
simply to ‘think customers’. Perhaps one of the most critical ways in which the
extent to which the management of a company is ‘thinking customers’ can be
assessed is in how it defines what enterprise the organization is in.
The things that HP can do to develop market orientation are-
 THE USE OF SOCIAL MEDIA- Market-oriented businesses take
advantage of social media as a tool to communicate with potential
customers and ask them what they desire or need. Facebook,
LinkedIn and Google+ can be used to build a roster of customers to
communicate with on a ordinary basis.

 CUSTOMER SATISFACTION- Customers who find the right products to

meet their individual needs are more likely to be satisfied with their
purchases and emerge as repeat customers.

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 STUDING ABOUT THE BUSINESS ENVIRONMENT- HP can constantly

scan the business environment to observe the shifts in customer
preferences, needs and purchase behaviors. This will help HP to take
out solution to address these changing customer needs first.

Ques 3. How has H-P altered its marketing mix in an effort to become more
marketing oriented?

Answer-Marketing mix is combination of product, price, place and

competition. Each firm must choose right constituents to win over competition
and achieve its objectives

 Product - H-P has changed its offering many times to overthrow the
competition. The early products included audio oscillators to
calculators, from Printers to Personal Computers. HP launched
several products in market including the HP 3000, but none had a
significant impact on the market. HP made many tailor-made
products. The HP-150 (aka HP Touchscreen or HP 45611A) was a
compact, powerful and innovative computer made by Hewlett-
Packard in 1983. It was based on the Intel 8088 and was one of the
world's earliest commercialized touch screen computers. The
machine was not IBM PC compatible, although it was MS-
DOS compatible2. But the product failed because of lack of
compatibility with IBM 150 and lack of incentive s to retailers.
Ultimately, HP came up with a new Portable Model which became a
success. Now a days, 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. Service packages including AMC’s are
available for interested customers by the company. The products
include printers, digital cameras, scanners and calculators.

2 https://en.wikipedia.org/wiki/HP-150

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 Price- HP had the first mover advantage over its competitors and its
products gained a lot of popularity. But after competition entered the
market like in form of calculators by Texas Instruments, the price of
HP products nosedived and making HP drop low priced units and go
for selling high end products to engines or analysts. HP produced
many tailor-made goods which were directed to specific customers
and charged higher prices for differentiated product. The HP-
150 (aka HP Touchscreen or HP 45611A) was a compact, powerful
and innovative computer made by Hewlett-Packard in 1983 and was
sold for a tag of $2995 with included benefits. has been designing
products that have features according to the tastes and desires of the
consumers. It first undertakes a 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.

 Place- HP uses a 2/3 chain level of distribution in which

intermediaries are involved in form of retailers before product
reaches the end consumer. It 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.3 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.

 Promotion- The earlier HP 150 models were rejected because of lack

of incentives HP used sales promotion techniques with its new
3 https://www.marketing91.com/marketing-mix-of-hewlett-packard/

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Portable Model. It gave a bundle which included a built-in hardware

and software. Also, Advertisement budgets were doubled and more
commissions to the retailers. 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.

Ques4 Identify similarities between the marketing of hot water geysers, cars,
and the marketing of personal computers. What would make marketing effort
successful in marketing of these product categories?

Answer- According to me, the most common similarity between the

marketing of hot water geysers, cars and personal computers is that they are
meant for majority of audience and cater needs of almost all people and are
meant for end consumer. Secondly, Geysers, Computers and Cars are
commonly found in almost all households and are available easily at locations
feasible to all. Also, they all can be easily marketed and advertised easily on
prominent places like Television and Radio or Social Media platforms.
Marketing for all these products involve interaction with customers and taking
regular feedback from customers on quality. These products are highly
changed by word of the mouth marketing, A bad review by any customer
causes bad impact on prospective computers and sales as well. A strong
similarity in all products is they have strong competition for prices and market
share and involve heavy expenditures on marketing and advertisement. All of
these products are dependent on the research and development and their
product quality needs to be better than competition to survive in the market.

The Marketing of these products will only be successful when the products
are created according to needs of customers which come down to following,

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cost effective, better quality and provide after sales service because it brings
in prospective customers. Also, these products need to approach new
customers and be actively involved in CSR activities. These products need to
approach new customer segments so as to generate more revenues.

Ques 5- Please evaluate the general environment of business as prevalent

today – and comment on the success factors (ingredients) that may contribute
to a successful marketing effort by ANY company – in ANY product category?

Answer- PESTEL ANALYSIS is a framework or tool used by marketers to analyse

and monitor the macro-environmental (external marketing environment)
factors that have an impact on an organisation. The result of which is used to
identify threats and weaknesses which is used in a SWOT analysis. It has 6
constituents Political, Economic, Social, Technological, Environmental and
Legal.

1. POLITICAL- The political section centers on the role of governments in

shaping business. This segment consists of elements such as tax policies,
changes in trade restrictions and tariffs, and the stability of governments.

2. ECONOMIC-it tells us about the economic conditions within which an

organization operates. It includes interest rates, inflation rates, growh or
decline of an economy and some more things related to economy.

3. SOCIAL- Social elements consist of trends in demographics such as

population size, age, and ethnic mix, as well as cultural traits such as
attitudes towards obesity and consumer activism

4. TECHNOLOGICAL- it includes all the factors which are provided by

science that can help business. It consists of factors like, advance
machines, improvement in product development because of new
machines that makes work easier and cheaper.

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5. ENVIRONMENTAL- it consists the physical environment in which the

organizations operate. It includes factors as pollution level, natural
disasters etc.

6. LEGAL- it focuses on how can court orders can affect the businesses.
Some important legal factors that effect the working of businesses are
health and safety regulations, antitrust laws, discrimination laws etc.

The general environment of business as prevalent today is dynamic. The

business environment is ever changing. Every other day there are some
changes like new legal orders or new innovations. Consumers nowadays are
becoming more and more sophisticated. The companies need to change their
products and workings not only on daily basis but on hourly basis according to
the current environment and trends. The companies who refused to
accordingly ended up very badly.
An example of a company that did good marketing effort and took the
advantage of changing business environment is- WALMART
Walmart’s 2014 decision to stock merchandise from organic supplier Wild Oats
garnered interest and reward for increasing access to organic foods at extra
low-priced prices. That accompanied a 2013 update to its chemicals policy,
which focused on both enhancing ingredient disclosure and changing 10
hazardous chemical substances with safer alternatives. Even earlier, Walmart
committed to exclusively selling sustainable seafood.
In addition to the increasing sales Walmart was able to open approximately
3800 stores worldwide. Walmart’s organic products buoys the industry and
creates extra demand for the products. This is an example of how a company
took the advantage of business environment and changed its product
accordingly which thus resulted in growth of the company.4

4 https://www.allbusiness.com/10-big-companies-setting-great-environmental-
examples-102601-1.html

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ORIGINAL RESEARCH

1. H-P split into 2 businesses in November

2015 thereby, separating the enterprise and
servers business from printers and
computers imaging business.

The India business was even split on same

day into HP India Sales Pvt. Ltd. And
Hewlett Packard Enterprise India.
HP Inc had a bad start in 2015 after the split,
but has seen good run in last five quarters.
(Suman Layak,2017)

2. With annual revenues of $52 billion, HP is now ranked at number

58 on the Fortune 500 list of the largest industrial companies in
America. HP CEO says he expects the momentum to continue and
that’s why he recently raised the profit outlook for 2018. 5

3. We conducted a market research using google form in which we took

a survey and we got 33 responses on Marketing & Sales Survey for
various laptop brands in market. The following questions were asked
o What brand of Laptop do you use?
o How would you rate HP’s advertising practices on a scale of 1-5?
o What characteristics make your HP a good choice?
o Where do you rank your HP after sales services?
o Would you recommend HP as a better choice?

We received a total of 33 responses and the following pictorials

depict the results.
5 http://fortune.com/2018/06/22/hp-strong-2018-growth/

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QUESTION 1

The chart clearly depicts that HP is the most commonly used

laptop brand followed by Apple and Dell. Lenovo and Acer
have a small share.

QUESTION 2

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HP advertisements are highly liked by customers and they have rated them 4
out of five. The advertisements target all age groups and mostly commonly
seen advertisements are for printers and laptops.

QUESTION 3

Most people consider HP for their laptop due to their quality and budget. Their
after sales service and accessories are a reason for their sales

QUSTION 4

Most people are satisfied by HP’s after- sales service. After sales service helps
in retaining customers and attracts prospective customers.

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QUESTION 5

Since, majority of people surveyed were happy with the quality of product and
satisfied with service, they were more likely to recommend HP to other people.

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RELATIONSHIP TO CONTEXT

MARKETING MIX- PRICE, PLACE, PRODUCT, PROMOTION

THE 4 P’S
PRODUCT PRICE PLACE PROMOTION
HP has a huge HP has a very fair HP has a very HP uses both
range of products and a vast distribution online and offline
including competitive channel. It sells mehods to
printers, digital pricing policy. It its products to promote its
cameras, laptops, takes into both individual products like
desktops and consideration the customers and websites with
other IT costing, business videos and blogs
products. The distribution, etc; enterprises, about the
brand has a good it undergoes directly and product or
customer base as market research indirectly. It also different types of
the products are and estimates the has online advertisements.
durable and amount that the distribution
reliable, consumer is method.
willing to pay.

SWOT ANALYSIS

 STRENGTHS
 Brand Valuation- HP has an excellent brand equity and its brand
valuation is worth 19.3 billion dollors, that’s much ahead than
most of the other companies.
 Production Excellence- HP has a dominance is shipping and
distribution secor, it ships two personal computers and two
printers every second.
 R&D- HP spends highly on research so that it can stay ahead on
the technology curve and thus focuses on key growth areas.

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 Differentiated Products- Over the period of time HP has always

launched products that are different and better than its
competitors, for example the HP Spectre is a fantastic piece for
a laptop.
 WEAKNESSES
 Declining Demand- the net demand for printers and personal
computers is decreasing day by day thus affecting the revenue
of the company. Smartphones are fast overtaking laptops.
 Weak Financial- Due to decreasing demand, there has been a
decline in the revenue and operating profits that thus lead to
weaker financials.
 OPPORTUNITIES
 3D Printing- the 3d printing technology is expected to take a
high growth and will reach a value of 30.2 billion by 2022 with
a CAGR of 28.5%.
 Electronics Market- HP is an electronics market and living in
this century people are tech savy, so that leads to thr growth of
the company.
 THREATS
 Competition- HP is facing a lot of competition from its rival
companies like Apple, Dell, etc, and this is greatly affecting the
sales.
 Smartphones- Due to rise in demand and popularity of
smartphones, PC’s are taking a slowdown. It is not only
affecting the revenue but the total volume of shipment will
also reduce.

LRO CONCEPT- LISTEN, REACT, OFFER

HP follows the LRO concept. In the case, the company listens clearly to
the tastes and preferences of its co-workers and customers and thus
react upon the situation, and decide to offer differentiated products
according to the needs of the people.

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Even nowadays, HP takes regular customer feedbacks to keep itself

MARKET PRODUCT
PENETRATION DEVELOPMENT
MARKET DIVERSIFICATION
DEVELOPMENT
updated with the ever changing customer demands.

ANSOFF’S GRID

HP follows three quadrants of Ansoff’s Grid.

 Market Penetration- in the last paragraph of the case, it has been talked
about how HP is attempting to gain market share and is trying to become
a market leader by engineering its personal computer line for low cost
production. Market shares are very important for any company and thus
every marketeer wants greater in, in the market.

 Product Development- HP tries its best to be in pace with the ever

changing demands of the consumer and thus tries to modify its products
according to the tastes of the customer. It keeps on developing and
innovating its products.

 Diversification- HP follows diversification as it first started with audio

oscillators and testing machines, then shifted to personal computers and
calculators, and thus launched printers. Thus it kept shifting in its
products previously. Whereas now it solely produces computers, laptops
and printers.

ORIENTATION
HP believes in “PRODUCTIVITY, NOT PROMISES”, thus the marketing concept of
HP is Product Oriented. The main idea of HP was to provide a variety of
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products that satisfied the needs of its customers. It launched the audio
oscillator, testing devices, HP-3000, minicomputers, calculators, etc. HP
constantly showed innovation and creativity in its products. After sometime HP
understood that the IT industry is just like an automobile industry and thus it
requires marketing. That was the point when it started becoming marketing
oriented.

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CONCLUSION
H-P has seen humble beginnings to be a global leader in personal computers
and printers. H-P changed its policies from producing tailor-made computers to
producing products for mass sales. H-P also launched premium products like
spectre for high end purposes. Such policies helped H-P to become a success.
H-P changed its marketing strategies as well to achieve its level it enjoys today.

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