PPM Case Study Answers

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Product PositioningCase Study

Answers of the five questions of the case thenthe summary with graphs, calculations and

Smart Arts.

2009

Mohamed Kadri

3/22/2009



Wednesday, March 25, 2009 Case Study Marketing Management

Mohamed Kadri 2

1. As the marketing management of PPMcomputers, what segment should you

concentrated on?

PC

a) The most Important Segment

b) Another Influential Segment

G e o g r a p h i c

UK

D e m o g r a p h i

c 30 years

old.Male.

Better offfinancially

SmallBusiness P

s y c h o g r a p h

i c

Working ormiddle class

Technological -Oriented

Thinker B e h a v i o r a l

Changingtheir PC

Concernedabout type ofthe machine

Simplicity

Reliability

Manuals

Attachments

Consumables

Service

Price

G e o

g r a p h i c

UK

D e m o g r a p h i c

YoungPeople

Children

FewFinancialCommitm

ent P s y c h

o g r a p h i c

Social Class

Lower-Upper

Middle

Life StyleExcitementTechnological Seeking

B e h a v i o r a l

Readinessto buy theProduct

Occasion

SummerVacation

Attitude

Enthusiastic

Benefits

Games andUtility

Amusement




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Network (i.e. X system)

Workstation(i.e. Y system)

D e m o g r a p h i c

Medium sizedcompanies

Financial

UK O p e r a t i n g v a r i a b l e s

Technologicalprefrences

Service

Power

OS

Network P u r c h a s i n g A p p r o c h e s

Financially-Domi nated

Highly trainedSales Force

Connectivity

Service

S i t u a t i o n a l F a c t o r s

SpecificApplication

CustomerService

Ease of use

D

e m o g r a p h i c

UK

High SpeedEngineering

Design User O p e r a t i n g V a r i a b l e s

TechnologicalPrefrences

Speed

Power

SpecializedSoftware

P u r c h a s

i n g A p p r o a c h e s

Engineeringdominated

Reliability

Servicesupport

Price




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2. What are the crucial product benefitsthat you should be supplied?

PC

• Introduction of another core product rather than PC640

because the trend in the market is towards faster machines

as the price of Microprocessors and Memory Storage is

decreasing that leads to rapid growth in Software,

Multimedia and Graphics and the company have to

concentrate on building brand name by other varieties.

Moreover PPM should update PC640 with Microprocessorand Memory storage.

• PPM has to focus on the improvement of SERVICE as a main

component in its development along with, RELIABILITY,

SOFTWARE, and MANUALS.

• PPM should give warranties as an Augmented Product.

NETWORK

• PPM has to improve CUSTOMER SERVICE AND

CONNECTIVITY because it covers the main criteria

essential for the Financial Sector which is the most potential

customer in this product range.

WORKSTATION

• PPM has to maintain its market share in this sector by the

same product but it has to improve the POWER,SPECIALIZED SOFTWARE AND SERVICE SUPPORT.




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3. How should you reach thesecustomers?

Place

PC

• PPM has to concentrate on UK market because it is its main

market but it is preferable to penetrate other markets by

Subcontracting with Agents abroad because PPM has felt

resources and it had continued to have marginal growthfrom 1% to 6% in the last 5 years.

• PPM has to have Wholesalers in this sector to solve two

major problem:

1. Saving the company from subcontracting the entire

PC operation.

2. Solving the stock problems.

• PPM should penetrate new market which is Direct Mail as

none of the current companies used it.

• PPM should focus on Independent Specialist and

Specialist Computer Multiple as the value of these

two outlet had increased from 1990 to 1995 .

NETWORK

• ONE STATEGIC ISSUE IS VERY IMPORTANT IS TO CUT THE

ARRANGEMENT WITH DEALERS. • The most important thing in this sector is to make direct

sales from factory as Apricot – 60% direct sales – and this

will lead to marvelous increase in profit as the cost

difference between the Dealer(58) and the




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customer(100) is very high because the Variable

manufacturing cost is (32).

From the findings,PPM’s Dealers Sales is 85%.

Moreover, they require support of about 24 SalesRep. as mentioned in Calculation (P9) in the brief

Summary and Analysis for this case study.

WORKSTATION

• PPM should maintain its direct sales because the

company can’t withstand the margin for the

distributor especially the manufacturing variablecosts remained high and the company want to drop

in the following year but it has to support it with

highly trained sales forces to establish contact with

the main customers to demonstrate and install

systems to customers’ specifications.

Promotion

PC

1. Personal Selling

• Increasing Sales Rep. can assist the high street outlets as

they represent the bulk sales for PPM (85%) and

corresponding with the market trend (40%).

• Professional training for this sales team is prerequisite.

2. Advertising

• Promotional investment in mainstream computer

magazines like Olivetti and Tandon because it was




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considered that press and magazine advertising were

more appropriate for the product aimed at the mass

market. The best one is PERSONAL COMPUTER as its

name is relevant to the sector that we are focusing on.

Moreover it has high circulation rate 470,000 with

reasonable price £4,500.

3. Events and Exhibition

• Concentrating on exhibitions included stand, personal

and demonstrational equipment. It costs around £15,000

per day with 102 days in the UK only then it has to be

activated by the follow up of the professional Sales Rep.

4. Sales Promotion

• Focusing on sales promotions with some add value

according to the market trends such as printers and

software at the same package.

NETWORK

i. Personal Selling

• PPM has to build effective sales forces who are

capable of consulting for the software

programming because this sector is very tough

and sophisticated (i.e. Business to Business).

• New recruitment to Support firms which are the main

consumer for the network products by increasing the

number of Sales Rep. and effective training.

• Reallocation of the three Sales Rep. to cover the firmsinstead of the dealers.

One of the strategic decisions which should be taken is

to withdraw those dealers and PPM should supply

directly.

ii. Advertising






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competitors with premium quality so that to rebuild their

brand (P6 Summary).

PPM should update PC640 with Microprocessor with slight

rising in the existing price 120-130 to maintain its competitive

advantage in this sector over other competitors and restore

profit in this sector.

NETWORK

There is much lower price elasticity in this range than in PC so

PPM should do the following:

• PPM has to Maintain its core product X912 in this sectorand improving CUSTOMER SERVICE, PERFORMANCE AND

CONNECTIVITY which may cost the company a little then

the company can introduce it with price up to 130 (P6

Summary) which is below the average price of all

competitors and we will introduce Software Package with

this price.

WORKSTATIONThere is much lower price elasticity in this range than in

NETWORK so PPM should do the following:

• Maintaining its core product Y4000 in this sector and

improving POWER OF CALCULATION, SPECIALIZED

SOFTWARE AND SERVICE SUPPORT with a premium level

which may cost the company a little then the company canintroduce it with price up to 205 (P6 Summary) which is in

the average of the two main competitors. Moreover, PPM

will introduce Software Package with this price to satisfy

their customer need.




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4. What information should you have tocontrol the progress of the marketing

plan?

We should know much more about the marketing environment.

We already have a lot of information about the

microenvironment and some information about the internal

environment but we have to collect data about the macro

environment

The macro

environmenT

•Economic factor

• Socio-cultural factor

• Technologicalfactors

• Political factor

The microenvironmenT

Consumers

Suppliers

Stackholders

The inTernal

environmenT

Men

Money

Machinery

Material

Minutes




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Internal environment

For example, we should know about the machinery, material

and money of the organization.

Micro-environment

PPM can use SWOT analysis or Five Force Analysis to

make control of the marketing plan.

• Threat of new entrants:

For example, will new laws of export and far manufacturing be

introduced that will weaken our competitive position?

• Bargaining power of Buyers:

For example, will the wholesalers have the ability to purchase

bulk PC products?

• Threat of substitute products:

For example, Will other products be introduced as substation to

the current ranges?

• Bargaining power of suppliers:

For example, how much will it cost the dealing with Software

Suppliers?

Macro-environment

It is called also PEST analysis. It is very important that an

organization considers its environment before beginning the

marketing process. Environmental analysis and information should

be continuous and feed all aspects of planning.




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• Political Factors

The political arena has a huge influence upon the regulation

of businesses, the spending power of consumer and other

businesses. For example:

Will government policy influence laws that regulate or tax

PPM business?

Is the government involved in trading agreement?

• Economic Factors

PPM need to consider the state of a trading economy in theshort and long-terms. For example:

Interest rates.

The level of inflation employment level per capita.

PPm

Political

Factors

Economic

Factors

Socio-cultural

Factors

Technological

Factors




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Long-term prospects for the economy GROSS

DOMESTIC PRODUCTS (GDP) per capita.

• Socio-cultural Factors

The social and cultural influences on business in UK

For example,

How much time do consumers have for leisure?

What are attitudes to foreign products and services?

• Technological Factors

This is one of the core issues which should be considered

by PPM as it is the floor of its products and one of the vital

things to build competitive advantages.

5. How can you build competitiveadvantage?

PC

As the growth in Software is increasing more rapidly along with

peripheral growth (25%-25%) so Consumer Buyer Behavior will be

targeted towards PCs which have additional software implications.

1. Sales Promotion:

o We can give customer free accessories and

multimedia programs for their PCs as there ismarvelous growth in the peripheral devices

(25%i.e.20B) and Multimedia Software (from

0.2B to12B).

o From June to September, PPM can make special

offer for their PCs to make special package




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with the newest and fashionable virtual reality

games to nourish this seasonality decline as in

this season, the prospectus segment of young

people and children is likely to be in their

summer vacations so this offer may encourage

them seriously.

2. Software Exhibition:

PPM can be a sponsor to one of the most popular

Software Exhibitions to increase the awareness of

PPM brands.

3. Telecommunication Companies Collaboration:

PPM can make compatible software with one of theleading companies in the field of Telecommunication

4. Internet Advertising Companies Collaboration:

PPM should make deals with Internet Advertising

Companies like Yahoo and Google to increase the

awareness about the company and its brands.

5. Online Auction:

PPM should publish their products on the Online

Auctions like eBay to so that e-commerce can beinitiated for the company’s products.

6. Graphics and virtual reality games Collaboration:

PPM should know the criteria of Microprocessor, Data

Storage and VEGA cards which are compatible with

Graphics Companies spectacular growth in these

fields and PPM can arrange activities with these

organizations.

7. Direct Mail:

PPM should exploit this way of promoting their PC as

the competitors didn’t use this toll before and the

company may contract with IT Company to arrange

this innovative promotion for the PC range.




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Network (i.e. X system)

1. Sales Promotion:

PPM can make package consisted of Financial Software compatible

with X system to the top 10 customers as it is the most potential

market in the Network range.

2. Alliances with Electronic Mail Companies as they are

one of the most important software that corporate

use its software according to the survey’s findings.

This can benefit the main customer-Financial Sector-

along with other Manufacturing, Retail andTransportation sector.

Workstation (i.e. Y system)

PPM can make package for other Design users of this range by

combining Design System Software with their workstation.PPM could make Peripheral Devices customization such as

Keyboards and Mousers for the potential customers of workstation

to augment the input speed for their stations.

Documents

PPM Case Study Answers