buliding home segament

8/13/2019 buliding home segament

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Case studyuilding Home browsing PC Segment

Introduction

The world is becoming more networked with the passing of time. There is an increase in

the interconnection amongst individuals, businesses, and governments and also

increased in recognition of connectivity.

New technology is adopted by the next generation to enhance the connectivity by using

Wi-Fi and WIMAX. WI FI technology is used to connect the organization indoor and short

range inside the organization.

Internet use increase the demand of mobiles ,pc computers at on global scale .so

cutting edge in technology which are essential for organization to sustain their

competitive advantages in the global scale .Pc industry has huge potential to the Indian

market although India is slowing down the connectivity.

According to update World Economic Outlook (WEO) of international Monetary Fund

(IMF) released in July 2008, global real GDP growth on a purchasing power expected is

5.0 per cent and in 2007, 2008, 2009 GDP is 4.1, 3.7, and 3.8 respectively. Inflation has

become the global problem .inflation pressure raised serious concerns in emergingmarket economics and supply and demand become imbalance.

Senior policy makers recently survey conducted by the World Economic Forum (WEF)

assess the risk assessment the result shows that the increase in the risk which will be

resulted in the increase in the inflation rate and resulted in poor economic growth and

slow down in the countrys economic growth

It is expected that corporate spending on technology will divide and people will spend

lesser amount of money on computer hardware. This will be great threat to the pc

industry market but FMCG companies decided to cut the freebies in the festival seasons

and concentrate on customer service and product innovation owing the high customer

demand in the Indian market


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ndian Pc MarketIn Indian market IDC estimate that pcs are formed 40% branded category and rest 60%

unbranded category. Individuals were among biggest buyer of unbranded pcs. But on

the commercial side buyers were increasingly choosing the multinational brands.

Pc sale in India is increased last few years by 20%. In 2006 sale is 5.6 million and

currently sale is 6.5 million .notebook pc previous sale is 980,000 but now reaches to

1.8 million. Sale of notebook, desktop pc, consumer PC commercial client pc is increased

by 81, 7, 23, and 19 per cent respectively .HP computers are market leaders in the India.

Sale of white box is growing very slowly 1-2 % per year but in the other hand customized

PC market is growing and consumers are shifting from CRT TO TFT or LCD monitors. The

market for printers actually shrank with 82 per cent decline for line printers, 24 per cent

for dot matrix, 9 per cent for lasers and 2 per cent for inkjet. Falling of laptop pricescatalyst in the soaring sales of notebook/laptops. Expected client pc growth in 2010 is

40%.

The used laptops have caused in the peripheral market which directly sells bundled

products .IIT Mumbai and Indian institute of science build the world's cheapest laptop

that will be priced at $100.the innovation of new laptop prove to be breakthrough

device that could solve the problems of low computers literacy and e learning in India.

IDC study presents an updated look at the worldwide PC marketplace going forward.

This study provide forecast and growth figures for PC shipments at the world wide level

and key regional market .latest forecast growth rate is 11.1 % which is equal to 252.9

million units .

In 2006-2007 the IT industry growth rate is 32% in rupee terms and in dollar term 30%

.

Export earnings of RS.153,744 crore

Domestic market of RS.73,135 crore

Contributed to the revenue of Rs 226,879 crore.

Export revenue increases 35% and domestic market at a consistent 27.2 % ,


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According to the DQ top 20 annual survey the IT industry oh India exports crossed the

trillion rupee. After the consistent 30% plus growth for over three years ,this

achievement marks a truly a proud for the India IT's Industry .

The top 20 players accounted for as much as 77% of the software services exports by

growing at 44.2% the highest in the first seven years of the millennium. The top three

players are:

Tata Consultancy Service(TCS)

Infosys and

Wipro

These player raised the growth up to 134% and the next 20m players contributed 11.4%

to the growth .The Dataquest study noted that application development and stillcontributed nearly two -third of total software export revenues . Infrastructure services

and engineering services contributed 5 % and 4 % of the revenues ,respectively .

The Company

It is a mid-sized PCmanufacturer based in India . Ramesh GM marketing , CFOManoj Bayan , MarketingManager ashutosh are worried about thedipping

demand of pcs in Indian market and try to find out the reasons of dipping

demand .

Decline inDemand

PCsales in India during the first quarter of 2008-09 decline by 4% In next fiscal quarterit is estimated that demand would be decline by the 12.5% White boxes has 40%market share so it's the time for company to make new

plans

Factorscontributing to decline demand

The branded PCmanufacturers lacking the value to the customer. Distribution channelsneeds to be tuned according to the needs of the customer. Lacking of the aftersales service by PC manufacturers


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Home PC browsersegment is clearly neglected about 1.8million PC are sold in2007-8 and one third of the PC are found their way to theinternet parlous.One

of the main reasonis that there is no channel which will cater the needs of the

home PC browsing segment.

Needs andcomplaints of the home PC segment

Most of the owners ofhome pcs complain that service engineers do not respondpromptly and somedealers do no give them free service.

Home PC browserneed a reliable after sale service from the vendors. These are the mainreason that people opt for local manufacturers and white

boxes.

Another maincharacteristic of the home user is the fear of obsolesce thatpeople want thosechips which will remain last for minimum next 5 years and

support the upgraded soft wares.

Subdividing the home PC segment

Ashutosh marketingmanager of the company sub divided the segment intothree groups according totheir differentiated need, which iscurrently served as

same needs by distribution channels.

Segment 1 Segment 2 Segment 3


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Segment 1

These people are notknowledgeable about computers ,affordability and price is

most sensitive.The thing they requirethe most is reliable after sale service.

Not knowlegable about

computers Somewhat knowlegableabout computers Very knowledgeableabout computers

Needs reliable ,prompt,

after sale service Needs prompt ,reliableafter sale service and onways to upgrade

Does not needafter-sales

service

Needs training Does not needtraining Does not needtrainingAre willing to paylittle Are willing to pay a

premium for these

servicesVery price sensitive


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Usuallythey purchase computers for their children's learning in schools.The feel

comfortablebuying pcs from nearby shop

Segment 2

In this segment

customers wants availability, broad

assortments, multiplebrands and reliable after-sales service and are willing to sacrifice some price

benefits to get them.Computerspecialist are ideal for servicing these people.

Segment 3

This consist of peoplewho are very well-versed about computers and are self-

reliant, but who areprice sensitive and therefore buy from gray market.These

peoples enoughknow about computers to service smallfaults in their own.

What aquamarina do next..

Prepare macroeconomicforecast projecting inflation, interest rates, consumerspending and othervariables.

Asurvey of buyers. Take demand estimates from sale representatives, dealers and trade

associations.

IdentifyWhich segment is easyto serve.

Conclusion

Company had to grow inorder to survive in the recession andhere was the

home PC browsing segment that had been neglected and that ought toexplode

in the years to come, with increasing awareness about pcs increasingthe buyer

power and the advent of the internet.


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Questions

1. How did Ramesh , GM marketing of aqua marina technologies decide on whichhome browsing segment to enter, taking into account the potential and

capabilities available or to be made available to the firm?

Answer:

Ramesh should keep in mind things like purchasing power of each segment,number of rivals exist in each segment, potential interest of users and aligning

them with company existing capabilities. Because aqua marina is mid-sized

company, segment 2 might be correct option for aqua marina because they are

willing to pay premium for services.

2. Explain the various dimensions of PC industry analysis like actual and potentialindustry size , growth opportunities available for small technology-based firms,strategic options available to them by analyzing industry market potentials and

usage gaps among home browsing segments.

Answer:

PC sales in india is growing from last few years by 20% and laptops are becomethe first choice of first time users. Immense potential available for small or mid-

sized companies because people are more cautious about price and want to

have more sale service , small firms can interact with users more effectively and

can cater their needs. As we see there is a gap between the needs of three homePC browser segments, a mid sized company cannot invest heavily but could

provide training and after sale service to the customers. By this way they can get

market share which lead to revival from recession due to economic forces.

3. Comment on the relevance and significance of five forces model for Aqua MarinaTechnologies for understanding the PC industry.

Answer:

Again the 5 forces model is highly important for the Aqua Marina to analyze theindustry environment. Substitute product offering is immensely high in the

industry many choices are available to the Aqua Marina, supply of finishedand

semi finished goods is high many suppliers available due to market saturation its

an opportunity for the firm.


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Buyer bargaining power is also high in this industry because buyer have manyoptions readily available and they can switch to one brand to other brand which

is an opportunity and threat to the firm that one can attract others customer by

offering differentiated product in market.

Potential for new entrants is low because industry is currently saturated andnew investor might not invest in this industry due to financial losses.

buliding home segament

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