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
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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.