HCL BEANSTALK CASE STUDY

1 . What is the significance of the AIO

product for HCL? What should be the
companys strategic & operational
objectives for this product?
AIO helped in increasing sales from 11000 to 40000 units. It gave the
company 20% in revenues. Consumer shift towards low priced AIO
products.

It was also the only company offering AIOs. It gave HCL the first
mover advantage and gained brand salience. AIO will be the major
revenue earner for the next 5 years starting 2011.

Strategic Objective: to position AIO as a premium product and gain

more transaction in the niche market. To capture 10% of the AIO
market by end of last quarter of 2010.
Operational Objective: selection of target segment through the use
of geographic segmentation or by applying psychographic variables.

2. What are the key drivers

of AIO sales? Based on these
drivers define the probable
market segments for the AIO
product.
Key Drivers :

Space Constraints
Complete multimedia device; easy to use, less
cluttered and bulky
Aesthetics
Less energy consumption
Portability
Family Product; child driven
Looking beyond conventional
Flexible budget
No white box market; less competition

Market Segments for AIO Products

HCL

COMMERCIAL
SEGMENT

SOHO

CONSUME
RS

SCHOOL

CHILDR
EN
STYLE
CONSCIOUS
USERS

HOME
OFFICE
WORKING
FROM
HOME
SMALL
HOME
OWNERS

BANKS
INSURAN
CE

MALLS
IT/ITES

Market segments for the AIO product:

Consumer and small office / home office (SOHO ) segment :
School children, Professionals who worked from office, style-conscious
users, small-home owners etc.
Commercial segment: banks, insurance companies, billing counter
at malls and IT and ITES companies with a large number of
employees in customer-facing roles
70% sales came from home segment and 30% came from small
offices
andSegment
malls
Market
Percentage of quantity
shipped
Home

51

Small Office

12

Small Business

11

Medium Business

Large Business

Very large business

Education
Total

14
4
100

3. What do you think should be the

appropriate target segments for HCL
for the AIO product & why?
Target segments for HCL for the AIO product :
A. AIO awareness was highest in age group (25-35) years , followed
by age bracket (20-25) and lastly above 45 years.
consumer average monthly household income is INR 4000060000. They can spend 5000-6000 extra for an AIO instead of regular
desktop
Indian families give importance to quality education for their
children and focus on them to be smart and stylish. HCL focuses on
this demand of the families by targeting the children
B. Target the niche market and accumulate sales from smaller cities in
India(Tier I, II and III) with a low degree of competitive resistance.
HCL had a better dealer support and consumer franchise in Tier
I,II and III cities.

4. How do you think HCLs AIO product should be

positioned? Write an appropriate positioning statement.

The goal of product positioning is create positive image

in customers mind by differentiating companys product
compare to competitors product .
Positioning requires four key decisions within the
segment:
Select customer target:
Distribution : HCL used Business to Customer
channel (B2C) , Business to Business channel
(B2B), Enterprise and Commercial channel (ECC) ,
Direct to Customer channel (D2C)
Reachability : Better customer service
Influential : Retailers can influence the customer
to buy HCL AIO
Frame competitor target :
Direct competitor : AIO of other MNC like Lenovo ,
Dell , HP

 Design value proposition :

Space savings
Less bulky hence desks can be keep neat and tidy
Could be connected easily with other devices
Less weight , so Portable and can be move easily within
house
Aesthetic
Articulate reasons to believe :
Pioneer in the Indian information technology ( Hardware
service and system integration )
Offers wide spectrum of products to computing , storage ,
networking and security.
Partnership with leading global information ,
communication and technology brand ( Apple , Microsoft ,
Cisco )
Market leader in commercial desktop and significant player
in consumer desktop
1st company to launch an AIO in Indian market

Positioning statement
Positioning is not what you do to a product but

positioning is what you do to the mind of prospect

To all consumers concerned with advanced features at affordable prices, HCL AIO
can serve you best .
Task

Focus

Convince

School children, Working

Professionals small-home
owners
Banks, Insurance companies

In the context of
other alternatives

Lenovo, HP, DELL, Zenith

That they will

receive these
benefits

Because we have

Better specification of HCL

AIO compare to other AIO
( webcam/USB port )
3 year McAfee antivirus
package
Better customer service

HCL has better dealer support

Positioning
Item
Customer
Target

Competitor
Target
Value
proposition

Reason to

5. Develop an implementation plan

(marketing plan) for HCLs AIO product.
To implement the marketing plan we have to follow four steps
:
1. Situation Analysis:
HCL was the first company to introduce AIO in the Indian market
in 2007 but it had to call it off due to low sales.
A considerable portion of HCLs sales were derived from its
business to business customers who purchase computer hardware
through tendering process. Thus the demand of HCL was not
predictable as that for its competitors who focused on consumer
market. So HCL lost market share .
By beginning of 2011 , there was a market of AIO by HP, Dell,
Lenovo.
So in 2011 HCL decided to prelaunch AIO in Indian market
HCL faced challenges from global MNC players with
established AIO product lines as well as from its own existing desktop
product line.
They made lavish promo campaign:. To highlight their capability to bring the technologically advanced

Step 2: Target audience

The AIO market regained traction in late 2010 as it gained acceptance from
both, retail consumers and business consumers.
The target audience thus analyzed are:
i)
Desktops: consumers who were upgrading from heavy desktops who
were looking for a sleek compact space efficient system.
ii) Laptops: people who were migrating from laptops. These were
consumers who were looking powerful machines which did not cost a
fortune.
iii) Business consumer: these were the consumers who placed large orders
and were looking for a machine capable of handling the workload.
iv) First buyers: these were the consumers who were buying a desktop.
They had tremendous potential as their lifetime value was quite high.
They usually buy one to two machines.

Step 3: Marketing Strategies.

Element

HCL

Product

High performance desktop class of premium

quality.

Service

Fast after sales service.

Advertising

On social media and Technology magazines.

Selling Strategy

Portable, aesthetic, compact and power

efficient.

Sales Promotion

Demonstrations at malls and retail outlets.

Distribution

Retail outlet and franchise.

Price

Acceptable price point for benefits.

Step 4: Budget Size And Allocation:

Its critical in designing the marketing mix.

Prepared for modification based on corporate priorities, competitor
action and difficult economic times.

Step 5: Align cross functional support

Marketing mix programs should support the value proposition and all
elements should support one another. The firms functional areas
must support market segment strategy.
Human
Resource
s
Legal

Sales

Market
Strategy
align these
programs
R&D
Finance

Operatio
ns

Thank You