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PC I ndustry and Advertising . Yanyan Gai Celine You Sheng Chen Edipo Cravo. Agenda. Introduction Industry Analysis Advertising Strategy Recommendation. Industry Definition. - PowerPoint PPT PresentationTRANSCRIPT
PC Industry and Advertising
Yanyan GaiCeline You
Sheng ChenEdipo Cravo
Agenda Introduction
Industry Analysis
Advertising Strategy
Recommendation
Industry Definition “This industry manufactures, designs, or assembles
personal computers (PCs), laptops, handheld computers and servers. Operators typically purchase computer components from dedicated manufacturers in other industries.”
---IBIS World
Introduction Industry Analysis Advertising Strategy Recommendation
Why This Topic
Why we choose this industry?Who doesn’t have a computer?Other than sleep, how many of you think you spend more time doing something other than looking on your computer?
Computer are very relevant to our generation and important to our daily
life.Introduction Industry Analysis Advertising Strategy Recommendation
Background
Major Products
Desktops
Portables
ServersIntroduction Industry Analysis Advertising Strategy Recommendation
Background Major Markets
Government Agencies Large Enterprises Exports Consumers SMB
Introduction Industry Analysis Advertising Strategy Recommendation
Competition Large Number of firms
Top 5: 2011 market share of units shipped
Company Market Share 2011
HP 17.2
Lenovo 13
Dell 12.1
Acer Group 11.2
Asus 5.9
Other 40.7
HHI: 771.5CR4: 53.5
Introduction Industry Analysis Advertising Strategy Recommendation
Competition
Entry / Exit
Rivalry
Popular Brands
Differentiation
Introduction Industry Analysis Advertising Strategy Recommendation
Competition
Asustek Computer IncHewlett-Packard CoLenovo Group LtdToshiba Corp
Asustek Computer IncHewlett-Packard CoLenovo Group LtdToshiba Corp
Number of Television Ads Dollars Spent on Television Ads
Toshiba: 10.7 MMHP: 53.4 MM
Introduction Industry Analysis Advertising Strategy Recommendation
HP (Red) Vs Toshiba (Orange)
Afternoon Dayti
me 1
Afternoon Dayti
me 2
Early
Fringe
1
Early
Fringe
2
Early
Morning 1
Early
Morning 2
Early
News 1
Early
News 2
Late F
ringe
Late N
ews
Morning Dayti
me 1
Morning Dayti
me 2
Overnigh
tPrim
e
Prime A
ccess
1
Prime A
ccess
2
Saturday
Afternoon
Saturday
Early
Fringe
1
Saturday
Early
Fringe
2
Saturday
Morn
ing
Saturday
Prime A
ccess
Sunday
Afternoon
Sunday
Early
Fringe
1
Sunday
Early
Fringe
2
Sunday
Morn
ing
Weeken
d Late
Fringe
Weeken
d Late
News
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
Introduction Industry Analysis Advertising Strategy Recommendation
Government Role Supporting policies for industry growth and
competitiveness Japan (strong support) China (State R&D access, Quasi-state owned
enterprises) USA, Korea, Taiwan, Singapore…
Introduction Industry Analysis Advertising Strategy Recommendation
Interesting Facts from 2011 TV commercial data
HP was the only company to advertise Desktop Computers on TV in all of 2011
Apple Computers, had the largest advertising budget out of any competitors, but spent 0 dollars advertising their desktops and laptops.
Introduction Industry Analysis Advertising Strategy Recommendation
Organization
Several Large famous companies+ Many small companies
Many large companies just assemble products manufactured by other companies.
Introduction Industry Analysis Advertising Strategy Recommendation
Advertising Strategy
Introduction Industry Analysis Advertising Strategy Recommendation
Primary Advertising Methods
Informative
Persuasive
Comedy
Celebrities
Online Ads
SocialMedia
Outdoor Ads
TV Ads
Radio
Introduction Industry Analysis Advertising Strategy Recommendation
HP PC is a personal reflection of consumers' desires
and needs.
From informative advertising to persuasive advertising( brand building)
Celebrity, opinion leader
Big event marketing ( Super Bowl, GRAMMY® Awards)
Introduction Industry Analysis Advertising Strategy Recommendation
Advertising Expenditure VS Total Revenue
2007 2008 2009 2010 20110
100200300400500600700
Advertising Expendi-ture($Million)
2007 2008 2009 2010 2011105
110
115
120
125
130
TotalRevenue($ Billion)
Resource: Internet Resource: IBIS WorldIntroduction Industry Analysis Advertising Strategy Recommendation
HP
HP-Advertising-to-Sales Ratio
2007 2008 2009 2010 20110
0.2
0.4
0.6
0.8
1
1.2
0.940.79
0.61
0.84
1.05
Advertising % TR
A low ratio may indicate that the advertising campaign generated sales.
Resource: Mergentonline
Introduction Industry Analysis Advertising Strategy Recommendation
HP
"You+hp"
“The Computer is Personal
Again"
"Let's Do Amazing"
“Everybody On”
2003 2007 2010 2011
From informative advertising to persuasive advertising( brand building) A theme every 1-2years From product advertising to integrated marketing campaign
Introduction Industry Analysis Advertising Strategy Recommendation
HPPrint
Online Ads
RadioOutdoor Ads
TV Ads
Launching during Super Bowl XLI----Orange County Choppers
Highlighting celebrities: Jay-Z, Gold Medals, Mark Cubanhttp://www.youtube.com/watch?v=fsE0g-8CDQo
www.hp.com/personal
2007 "Personal Again"
Introduction Industry Analysis Advertising Strategy Recommendation
HPPrint
Online Ads
RadioOutdoor Ads
TV Ads
The amazing things Do-ers do with HPCelebrity+humor: Dr. Dre and comedian Rhys Darby;
TV ads and Online Ads
2010 “Let’s Do Amazing"
Introduction Industry Analysis Advertising Strategy Recommendation
HPPrint
Online Ads
Social Media
Outdoor Ads
TV Ads
Music stars (Alicia Keys ) and passionate individuals
$33.3 million for Google advertising Television: 53rd Annual GRAMMY® Awards+
13-time Grammy Award winnerhttp://www.youtube.com/watch?v=KAQatcfVrSs
2011 “Everybody On"
Introduction Industry Analysis Advertising Strategy Recommendation
Dell
Target customersRelationship buyers:Large business/governmentEducational institutions
Transaction buyers:Small and midsize businessIndividual consumers
2007Introduction Industry Analysis Advertising Strategy Recommendation
Dell• Informative advertising of direct selling model and
low retail prices
• advertisements have appeared in all types of media
• New On-line media advertising
• Combative advertising is increasing
Introduction Industry Analysis Advertising Strategy Recommendation
Dell2000 "Dude, you're gettin' a Dell!”
2006 Campaign for the XPS line of gaming
2007 Campaign for he Inspiron and XPS lines. "Work it Out” and slogan "Yours is here”
2009 Dell Ramps Up Twitter Advertising Efforts
2010 Take your own path
2011 "More You" advertisements: “Dude, you’re getting a lifestyle brand”
Introduction Industry Analysis Advertising Strategy Recommendation
Dell
2011 2010 2009 2008 2007
1.19 1.17
1.331.38
1.46Advertising to sales ratio
Introduction Industry Analysis Advertising Strategy Recommendation
Apple Apple uses its own operating system Mac OS X
Niche Market
art professions; premium-price differentiation
Introduction Industry Analysis Advertising Strategy Recommendation
Apple Brand image centered
“Jobs wanted Apple to be a cultural force”
High advertising expenditure
In 1984, they spent 2.5 million on a 39 page print ad
Combined TV commercial and Print advertising
TV, Mainstream/Fashion/Popular Magazines
Combative + Catchy Slogans
“The ultimate all-in-one design” “It just works”
Introduction Industry Analysis Advertising Strategy Recommendation
Apple Apple used the contemporary art and feature icons
as specific themes to differentiate it with other brands.
Key words and information: ease of use, industrial design, technical elegance
Introduction Industry Analysis Advertising Strategy Recommendation
Advertising Expenditure Advertising expenditure
1 2 3 40
100
200
300
400
500
600
700
800
2007 2008 2009
2010
Apple Inc. Advertising Expenditure (in million $)
Introduction Industry Analysis Advertising Strategy Recommendation
Advertising Expenditure
1 2 3 40
1000
2000
3000
4000
5000
6000
20072008
2009
2010
ad expenditurerevenue
Advertising Expenditure/Revevue (in million $)
Introduction Industry Analysis Advertising Strategy Recommendation
18 page Apple brochure, Bill
Gates as a feature
39 page Macintosh
promotion in Newsweek2.5 million
“what’s on your powerbook?”
celebrities tells their experience with mac
“Imagine That” Apple’s response to
Windows 95
“1984” super bowl commercial, 1min
900,000“Lemmings” super bowl commercial
“Pencil Test” TV sitcom
“Crowd Control” Apple’s response to
Windows 95
“Think Different”, featuring Einstein,
Ghandi, Amelia Earhart, etc.
“Think Different”, in Newsweek and Time
etc.
1983 1984 1985 1988 1990 1995 1998 2006 2010
Apple’s evolution
“Get a Mac”
Timeline
Introduction Industry Analysis Advertising Strategy Recommendation
Recommendation
Introduction Industry Analysis Advertising Strategy Recommendation
Personal Investment: Buy AAPLCompany Stock Price on Jan
07 2011Stock Price on Apr 13 2012
Gain / Loss
Apple Computers 336.11 605 0.80000595RIM 61.68 13 -0.78923476B&N 15.99 13.67 -0.145090682Sony 36.04 17.36 -0.518312986HP 45.09 24.57 -0.45508982
Introduction Industry Analysis Advertising Strategy Recommendation
Personal Investment: Buy AAPL
Desktop ComputersNotebook/Laptop ComputersTablet Computers
Acer IncAmazon.com IncApple Computer IncBarnes & Noble IncHewlett-Packard CoMotorola IncResearch In Motion LtdSamsung GroupSony CorpToshiba Corp
Desktops: US$ 14.98 MillionLaptops: US$ 62.51 MillionTablets: US$466.78 Million
Apple Computers: US$220.49 MillionBarnes & Nobles: US$46.57 MillionRIM: US$ 47.88 MillionSamsung Group: US$ 54.4 Million
Introduction Industry Analysis Advertising Strategy Recommendation
Personal Investment: Buy AAPL Apple expected to dominate tablet market
maintaining above 50% market share through 2015
Tablet market sales expected to grow to 60% of PC sales by 2015, eventually expected to surpass PC sales.
Introduction Industry Analysis Advertising Strategy Recommendation
VC and PE investments High competition, high cost of failure
Enter Market by acquiring underperforming brand, and invest heavily into an image and advertising
Software over hardware
Disruptive innovation
Introduction Industry Analysis Advertising Strategy Recommendation