ACER – IDENTIFING MARKET SEGMENTS AND TARGETS

GROUP’S MEMBERS

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Mamunur Rahsid

Nguyen Tan Nhat Duy

Do Nguyen Yen Nhi

Huynh Tan Tai

Batty ViVi

CONTENT

• The brief history of Acer• Market Segment• Global Brand – Local Touch• Market Target• Conclusion

THE BRIEF HISTORY OF ACER

• Acer was founded by Stan Shis and his wife and five other people in 1976. Initially Acer was a very small company, with only 11 employees.

• The company’s name originally was Multitech and renamed Acer in 1987.

• Initially, it was primarily a distributor of electronic parts and a consultant in the use of microprocessor technologies, but over time it began to develop as a PC manufacturer.

THE BRIEF HISTORY OF ACER

• In 2000, Acer spun off its manufacturing operations as Wistron Corporation, to focus on sales and marketing of their core brand.

• By 2002, they were referred to as the pan Acer Group, and were employing nearly 40,000 people who provided support to distributors and dealers in over 100 different countries.

• The Acer Group is a family of four brands --Acer, Gateway, Packard Bell and eMachines.

THE BRIEF HISTORY OF ACER

• By the year 2005, the company employed almost 8000 people throughout the world all while still maintaining a tight global service and sales network.

• On August 27, 2007, Acer announced plans to acquire its US-based rival Gateway Inc. for US$710 million.

• In January 2008, Acer announced that it had acquired a controlling interest of 75% of Packard Bell.

THE BRIEF HISTORY OF ACER

• Acer also get into the sport sponsorship field,– 2000, pondering the BAR-Honda formula

one racing team back in – 2001, they provided a sponsorship for the

Prost Grand Prix Formula one team and even the teams Ferrari engines had Acer badges.

– Currently, they are sponsoring the Ferrari Formula 1 team.

– In January of 2009, Acer became partnered in an agreement for the 2010 Vancouver Olympic Games and the 2012 London Summer Olympics.

MARKET SEGMENT

• Acer Inc manufactures and markets personal computers for the consumer and home office markets as well as chips, monitors, keyboards,..

• Just as hungry consumers will shun a restaurant that serves warmed over food, most computer buyers want the absolute latest technology

MARKET SEGMENT

• However, because of the fast of Technological change in the computer industry, Acer’s PCs sometimes became absolute by the time they were shipped to their destinations.

• Shih realized that one of the key to McDonald’s success was the company’s system of delivering beef patties, buns , and other ingredients to local restaurants, where they are assembled into sandwiches as needed.

MARKET SEGMENT

He decided to decentralize computer in nearly three dozen locations around the globe and use a combination of locally purchased component plus components shipped in from Taiwan.

MARKET SEGMENT

Shih decided to change the company name because the original name was too long. And It didn’t convey the image of technical innovation the way names like Sony, BMW and Honda do. Shih spent 2 years searching doe a new name, a consulting firm helped generate some 20000 possible alternatives. From the short list of finalists, Acer was the top choice for several reasons: it mean “sharp” in Latin and implies “energetic” and “capable”.

MARKET SEGMENT

• Once the name change had been implemented, Shih made a number of deeper changes. He developed a policy of “global brand, local touch”, a break from the traditional Asian preference for hierarchical, top-down corporate structures and corporate cultures that stress deference to authority.

MARKET SEGMENT

• Shih realized that hierarchies couldn’t act quickly enough in the fast-moving computer industry.

• Now Acer is organized into strategic business units for manufacturing and regional business units for marketing.

• Acer’s local management teams in individual country or regional markets are empowered to make decisions on a wide range of marketing mix elements.

MARKET SEGMENT

Acer America, for example, is a wholly owned subsidiary, but Marketing Vice President was afforded free reinto target the home-user market segment by distributing Acer’s sleek and stylish Aspire line through the Best Buy chain.

Positioning/Product Strategy: Acer has long positioned it-self as a

follower (first assembling for OEM) High quality but affordable products

(innovative but seldom pioneer) Progressive product diversification: focusing

on value-added segments Building a global brand

GLOBAL BRAND – LOCAL TOUCH

Production Strategy: Decentralisation Centralized R&D and (large scale)

manufacturing of value-adding components in low cost countries (economies of scale, low cost structure)

Decentralised assembling process, together with local marketing and distribution operations (low inventory cost, „just-in-time“)

GLOBAL BRAND – LOCAL TOUCH

Production Strategy: Decentralisation Local politic of joint ventures and

partnerships (good knowledge of local markets)

GLOBAL BRAND – LOCAL TOUCH

Management/Ownership strategy: Decentralized and highly independant

management (flexibility to demand) Locally highered operationnal and managerial

workforce (local expertise) Participation of local shareholders: 21 in 21.

Break up Acer into a borderless networkof 21 independent companies that maintain close ties with Taipei.

GLOBAL BRAND – LOCAL TOUCH

GLOBAL BRAND – LOCAL TOUCH

GLOBAL BRAND – LOCAL TOUCH

MARKET TARGET

• In the United State, Acer’s market share fell from nearly 15 percent in 1995 to only 5 percent by the end of 1997.

• “In the United States and Europe, we are relatively weak. The local players there are very strong. The problem is that we don’t have good experience in marketing in this those regions. It’s a people issue, not a people issue.

The Aspire line of home PC failed to achieve profitability in the face of aggressive price cutting by Compaq and other competitors. In 1997, Acer America shifted its communication emphasis from brand-image advertising to product-oriented advertising. Shih hope to achieve more success by targeting small and medium-size businesses with a new modular desktop PC called Acer Power.

MARKET TARGET

Shih has discovered that building brands in the business-to-business market is easier than building brands in the business-to-consumer market”. Because “business-to-customer” brands have more value but also face more challenges. People involved in business-to-business are usually rational but consumers in business-to-customer are usually emotional in choosing their brands.

MARKET TARGET

In the consumer electronics industry in Japan, Shih hopes to move beyond PCs and attain leadership in next-generation low-priced “information appliances”. One new product is the Acer Basic, a computer that provides Internet access when hooked up to a television set.

MARKET TARGET

• In 1999, Shih decided to pull out of the United States altogether and focus Acer’s manufacturing and marketing on a vast. Fast-growing market much closer to home: China.

• Acer and other jey players in Taiwan’s high-tech industry stand to benefit from closer economic ties with China

MARKET TARGET

• Shih wants to convert Acer Inc. from a top 10 global PC manufacture into a “marketing and services power house”. He envisions Acer marketing its PCs and IT expertise to greater China and expanding from there to the rest of the world.

• Shih believes that if greater China becomes the company’s “home” market, Acer will capture critical economies of scale that will allow it to develop innovation new products that will succeed in China as well as the rest of the world.

MARKET TARGET

• “The challenge for this region is really the poor image that is often associated with products here”

• Shih believes that it is necessary for all all companies to be stable and secure in the local market before pursing regional, then global markets.

MARKET TARGET

• Acer’s chief technology officer, anticipates that Acer’s knowledge of China’s market will help the company achieve its growth and market share objectives.

• One of advantages of Acer in China is that China and Taiwan share not just the same language and culture, but a lot of Taiwanese suppliers are already in China.

• Ronald Chwang, Acer’s chief technology officer said that “We can take our brand global by building a strong home market”

MARKET TARGET

• A cornerstone of Acer’s strategy for the mainland is its first PC made in China from start to finish. This new model, the Acer Aspire, is comparable to currently available Legend products in quality and price.

• Acer in China use its global brand as a advantage to gain more market share. Beside that, Acer will be able to compete with better-known global companies that are entering China because Acer is more “local” than them.

MARKET TARGET

CONCLUSION

• Acer try to become a global brand • Hierarchies couldn’t act quickly enough in

the fast moving computer business.• Acer was organized into strategic regional

business units for marketing. • It use the “local touch, global brand” policy

to achieve the goal in each market around the world.

• “Acer was providing the customer with the freshest technology at the most reasonable price”

• In each market, it produce a different product under its brand to make the advantage in competition. A product that is appropriate to local user and combined with a global brand.

• Acer decentralized computer assembly in nearly three dozen location around the world.

• Local management teams were empowered to make wide range decisions of marketing mix elements.

CONCLUSION

• Organized into strategic regional units for manufacturing.

• Local touch using a combination of local and Taiwan components.

CONCLUSION

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