1 MODERN MARKETING AND ITS DEVELOPMENT-AN INTRODUCTION At a very basic and elemental level everyone understands what marketing

is. Most rudimentary ideas being to tell people about something that you are selling[ mrs Kebopetswe`s definition]. The rudimentary definition is not off the mark as it focuses on some key aspects of modern marketing viz: Focus on the customer Availability of a product to offer. What this definition does not capture which is encapsulated in the modern marketing concept is the focus not on what you or an organisation has to offer but rather what your customers needs are and if your organisation can meet those needs. We can thus argue that modern marketing is more focused on the customer. In a way it makes sense to think about the end product life as there is more competition with many substitute products. Contrast this with the traditional way of doing business where organisations were more focused into production and cost management. This school of thought believed in the production of a commodity with a belief that it will sell. Back then it did make sense as the product range was narrow with long life cycles. The ideas raised in this paragraph and the preceding one will be illustrated later with the product of choice. Marketing formal definition: Marketing Concept: The achievement of corporate goals through meeting and exceeding customer needs better than competition (Jobber etal 2009.p3) There are three fundamental components to the marketing concept. These are: ( Jobber etal 2009.p4)

DESCRIPTION OF THE CHOSEN PRODUCT Compaq computers originally formed in Texas is the largest manufacturer of personal computers since 1982. The name Compaq was derived from compatibility and quality. This was and is a clever name as I will illustrate below. At the time Compaq was found it was meant to run all softwares developed from IBM the leading company then hence compatibility. The customer was not far from the then employees of Texas Instruments minds-quality. From the on set Compaq was positioning itself strategically with its bold forward looking approach. In its quest to remain relevant and claim market share through the retention of its old customers who had been using its first 1982 compaq portable and the acquisition of a new client portfolio, transformed into a full IT service company and also acquired Tandem computer and Digital Equipment corporation. We will see later that by combining its strength and the strength of other players in the Industry Compaq manages to stay on competitively in the face of the strong competition it faces from its competitors more especially from Dell. 2.THE BRAND 2.1 SPECIFICATIONS OF THE COMPAQ LOGO(www.Compaq.com) The Compaq logo is the keystone of our brand identity, an expression of our tonality and our basic values. It represents quality reliability and leadership......to communicate most effectively a minimum amount of space is to be left clear of text, symbols logos and other extraneous graphic elements. In no O.Kebopetswe:Acc10-700 Page 1

2 instance should the a line of text or any visual element overlay the logo...... So reads the specifications of the logo from the Compaq official site.(official web address). The question is why would a company go to these extents and the answer is branding-the process by which companies distinguish their product offerings from competition( Jobber 2009 etal p133). Branding creates associations and makes it easy for the buyer to make a choice. The power of branding to affect the way a product is perceived cannot be under estimated since not only does it[branding] allows differentiation it may also affect the pricing strategy- e.g premium pricing. Branding offers the following benefits: Company value Consumer preference and loyalty Barrier to competition High profits My interest in this list is mainly on consumer preference and loyalty and barrier to competition as these will be illustrated in the following sections[ not arranged in the order of appearance]: The Market and Consumer behaviours Market Segmentation Brand Positioning Marketing Mix -4ps Staying Relevant and Gaining the competitive Edge.

2.2 THE MARKET AND CONSUMER BEHAVIORS When customers, who want to continue to purchase in our category, become dissatisfied with our offerings (because of price, relative quality, or the way they are treated) they really have two choices. They can Exit begin to buy from one of our competitors, or they can exercise their Voice-keep buying, but complain. Where there is a good competing product, most customers simply exit. It is much easier. There is little cost for them in switching. The suppliers often have no clue as to why their customers are leaving.( Albert Hirschman :Extract from: Exit, Voice and Loyalty: circa???). To retain customers usually the first reaction is to offer customers a discount for fear that price may be giving competition an edge. Of course in most cases this does not solve the problem. What really needs to be done is to build a marketing data base. A marketing data base will help give an insight into customer needs thus allowing the company and customer to forge relationships that will pay off when needed. A marketing data base will not only measure customer retention but also will help the company to learn reasons people are abandoning a product and to understand the role played by the interaction of price, quality and customer needs. This can be illustrated by what Compaq did when it started losing sales dramatically around 1991. They reduced prices dramatically. And it worked. The Compaq sales turn around cannot be solely attributed to price reduction only. But to a combination of the following factors coupled with the reduction: Reputation for quality and services, boosted Compaq to a leadership position in a field that is highly saturated with substitutes and cloned products O.Kebopetswe:Acc10-700 Page 2

3 Trust through their policy. Product offerings of the company These and other later innovations that were introduced around 1995 worked well for Compaq in the face of the stiff competition it was and is still facing from Dell and IBM now Lenovo and Acer. Most of the introduced operations seemed to be shadowing Dell`s approach to selling and Marketing and could have been arrived at through an interaction with the PC users-customers. The greatest challenge in the PC industry is the core product itself. There seem to be little or nothing that can be done to the basic product for an average user since all specifications are almost all the same regardless of the brand and it performs as desired. The question then is how does a PC company retains its market share in such a cut throat competition? Dell has made it largely by maintaining its position a s a direct sales supplier. It first started by connecting with people by telephone, word of mouth and then tapped into the internet through its site Dell.com. By 1996 Dell claimed to be reaching more than four million people through its site visits.Compaq responded well to that as evidenced by the following clip from Cnet.com: LAS VEGAS, Nevada--Compaq (CPQ) has expanded its core desktop product lineup to include new efforts such as NetPCs, network computers (NCs), portable PCs, and handheld devices.Mike Winkler, the head of Compaq's PC products group, bared the company's plans for network computers and laid out the future strategy for Windows CE devices in an interview with CNET at Comdex. Compaq's core desktop products have now expanded to comprise five areas, according to Winkler: traditional PCs, NetPCs, NCs, portables, and Windows CE devices. Compaq will deliver in 1997 a computer based on the NetPC specifications announced at the end of last month as well as a separate network computer, Winkler said. Compaq's NetPC will essentially be an Intel-based PC optimized for the network, while the company's NC would be a "wholly different" device comparable to a dumb terminal, IBM 3270 replacement, he added. Read more: http://news.cnet.com/Compaq-looks-beyond-the-desktop/2100-1023_3-249413.html? tag=mncol;2n#ixzz1McdkmpFh

These were not the only innovations that Compaq brought along. Compaq sells primarily through the indirect channel reaching its customers through an elaborate network of resellers but in 1997 it started operating the ODM( Optimised Distribution Model). The ODM has three characteristics: Build to Order Configure to order Chanel Configuration partner program That was not all from the Compaq corner like I stated above they seemed to shadow every move made by Dell. In November 1998 Compaq introduced its direct selling programme over its DirectPlus website and the results were overwhelming as the following insert will show: Compaq Computer (CPQ) today reported record sales of $6.5 billion for its third quarter, reflecting a strong start for its build-to-order model. The company also announced a 3 cents per-share quarterly dividend and a two-for-one stock split. After the stock split, the quarterly dividend becomes 1.5 cents per common share. For the quarter ending September 30, sales increased 31 percent over the same period last year. Revenue in the year-ago quarter was $4.48 billion. Net income increased by 54 percent to a record $562 million or O.Kebopetswe:Acc10-700 Page 3

4 71 cents per share, excluding a $44 million or 6 cents per share non-recurring charge for mergerrelated costs. Net income after the non-recurring charge for the merger related costs was $517 million or 65 cents per share. Analysts expected the computer maker to report profits of 68 cents a share, according to First Call, up from earnings of 50 cents per share for the same quarter a year ago. "Our new distribution focus has enabled Compaq's volume to grow more than three times the industry's rate while increasing profitability," president and CEO Eckhard Pfeiffer said in a statement. Compaq has seen strong demand for its build-to-order desktops, Richard Chu, an analyst at Cowen & Company, said in a recent report. He estimated that total commercial desktop unit volumes in the third quarter grew more than 75 percent and 30 to 35 percent sequentially. Going forward, Chu said, a new round of build-to-order models, which include Intel's Pentium II, should bolster the fourth quarter. He also noted that the back-to-school season has driven sales of Presarios. http://news.cnet.com/2100-1001_3-204305.html#ixzz1McipZyqg

3.0 MARKET SEGMENTATION AND RESPONSES TO THREATS Targeting a segment of the market can be a powerful strategy. Its the concentration of marketing effort to dominate a market niche. Market segmentation is the process of identifying and targeting groups of individuals who are similar to one another. Markets can be segmented in many different ways: by product or service needs, by sensitivity to price, by geographic area, by demographic segment, or by psychographics and lifestyles. Successful segmentation depends on understanding what consumers need, how groups of consumers differ from one another, and how consumers decide among products. "What we are doing, and what we believe all will do long term, is specializing our Unix in select markets," said Steve Kirchoff, vice president of strategic marketing for Compaq's Enterprise and Services group. "We are seeing this need...so we are moving early." http://news.cnet.com/Compaq-changes-server-strategy/2100-1001_3-228190.html? tag=mncol;1n#ixzz1MctwXZVy This was said by the Compaq boss in 1998 when Compaq was unveiling its plans to focus the Tru64 OS on a handful of specialised markets while expanding Linux1s presence on its Intel-based Pro Liant servers. The move could be read as a way to maintain its high volume market strategy for Windows NT. This shows how strongly inclined to business to business Compaq is. But then again this cascades down to B2C as Compaq will launch promotions to push its sales whether the customer is buying directly from Compaq or through their many supported resellers. The PC industry seems to thrive through bundling and loss leader pricing methods and the [ now i will get ahead of myself] HpCompaq relation ship is no exception. The same products are offered across the whole client spectrum but with support activities tailored to suit from a stand alone PC in a household to a multi Network of their computers and Servers.

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5 In 1999 Compaq announced its intention to have a share and a say in the schools market segment and their Presario line was meant to just do that. The success of the Presario can be highlighted by the way it was left intact during the restructuring and rebranding periods after the acquisition of Compaq by HP which i will discuss shortly. The fact that Compaq systems can be remodified to user specifications brings a segmentation on its own which is preferential. The methods of sales, the developed technologies and the speed with which these innovations effect is suited to people in the It industry or the young adults in the 18-25 range who are technosavvy and prefer shopping while watching a soccer match. Scientific advancement coupled with convenience will to a larger degree depend on the spending habits and spending ability of customers-an example of demographic segmentation. 3.1 RESPONSE TO THREATS THE HP MERGER The PC industry seems to be full of duplicity. What ever the other person is doing every one else copies except the none QWERTY Apple which seems to be on its own space and time. So in the face of declining sales and possible price wars Hp acquired Compaq. At the time of acquisition in 2002 HP was: Ranked number 13 in fortune 500 companies Second largest computer manufacturer Leader in desk top manufacturers, servers etc In a precarious leadership in server manufacturing with IBM trailing closely(lost to IBM in 2003). Both Compaq and Hp had a high level of advocacy loyalty and purchase loyalty(http://businessoverbroadway.blogspot.com/2008/). And so it looks like to make itself relevant and competitive Compaq always partners with other players. The Hp-Compaq merger had many implications some of which are ethical considerations. All these are beyond the scope of this paper. 4.0 KEYDRIVER ANALYSIS This analysis measures and orders attributes based on their influence on the outcome of interest, such as likelihood to purchase or likelihood to subscribe. The attributes included in the analysis frequently arise from these areas: Opinions of the brand (image) Cost relative to other brands Experience relative to expectations Value for the money etc. SUMMARY OF THE TABLE AND GENERAL OVERVIEW The table accentuates the point raised in 3.0 above. The level of familiarity and ability to pay(consumer habits,P1) There seems to be not so many unique things that Compaq is doing that the competition is not doing in terms of the, price, the place, the promotion and the product. This is natural in an industry with little or no differentiation like the PC industry. The fact that Compaq sells both directly and through retailers has an implication in their pricing strategies.

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BIBLIOGRAPHY 1. 2. 3. 4. 5. Donna R( 2011) Branding And Marketing You First Edition Creda Communications Jobber D and Fay J(2009) Foundations of Marketing McGraw Hill Marketing strategy and competitive(2005) Hendry Long ltd http://www.Cnet.com www.Compaq.com/

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Fig1:Questionnaire Results Feature Brand Aesthetics price Usage ability[beg] UA intermediate UA advanced Depends on specs x Age<26 Depends On specs Age had nothing to do x >26 x x

Availabilty of Software Technical Specs Compatibility with other gadgets Durability x

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Questionnaire to Establish Use and Preference of desk top Brands in house holds in St Joseph`s College
Q1. Do you have a pc in your house?_____________________ Q2 What is the brand of your pc if yes above?_____________ Q3 What led you to that choice? Tick from the following choice list: Aesthetics__________ Brand Name__________ Price____________ Availabilty of software_____________ Price of your Pc_________________ Technical Specifications please specify Memory capacity Hard drive Graphics Wireless technology

Bluetooth IR Compatibility with your cellphone Compatibility with other gadgets Q4. Please specify your age____________________ Q5 Please specify your profession________________ Q6 How would you rank your computer skills: Basic/Learner Intermediate Advanced

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MARKET IN ACTION-SEMESTER PAPER ASSIGNMENT1 SUBMITTED BY: OMPHEMETSE KEBOPETSWE ID NUMBER: Acc10-700 NUMBER OF WORDS EXCLUDING CHARTS AND TABLES:2500

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