Class Discussion 2 - HP.doc
Case I – Marketing on the 1-500-021
Instructor: Clare Sham Rev. March 22,2000
HP Consumer Products anization:
Distributing Printers via the
In spring 1998, Pradeep Jotwani, vice-president arid general manager of the Consumer Products anization of the Hewlett pany (HP), was contemplating the increasing ess of eCommerce and its implications for his division. The consumer products group had started selling refurbished printers through an outlet center in December 1997, but Jotwani was now considering a move to sell new printers directly to consumers via this new eChannel. If he were to make such a move, he wondered which products to sell online at what prices, and how municate this strategy to the channel partners without damaging the existing distribution structure. mented:
Channel inflections are very challenging. The last time we faced a similar situation was when we had to transform ourselves from being a predominantly business-to-pany that sold printers through value added resellers [VARs] to a consumer pany that had to reach consumers through the retail channel. Even then there were the doubters, but not only did we make the transition essfully, but we also emerged stronger. The challenge today is to decide on the level of strategic emphasis on distribution so that we emerge stronger after the transition, rather than just defending our position.
The decision plicated by several factors. Companies like Dell have shown that the direct model can work quite well. However, all of our current sales are through retailers and any direct selling efforts may lead to conflict with our retail partners.
Bill Hewlett and Dave Packard founded HF in 1939 in a Palo Alto garage. One of HP’s first clients, Walt Disney Studios, purchased eight audio oscillators to develop a new sound system for the movie “Fantasia.” In the 1940s, the needs of WWII created a demand for HP’s electronic instruments.
HP also began signing with sales representatives to market products throughout the United States. During the 1950s, pany mastered the internal effects of growth, defining corporate objectives and developing a path toward globalization. By 1962, HP was ranked number 460 in the Fortune 500. pany enjoyed growth in the test and measurement segment and introduced itself to related fields, such as medical electronics and analytical instrumentation.
Innovation continued in the 1970s with the release of the first scientific handheld calculator, the HP 35, which made the slide rule obsolete. The 1980s were critical to HP’s ess, as it became a major force in puter industry and printer market. Both the ThinkJet (inkjet) and the LaserJet printers were introduced in 1984. In 1985, HP’ revenue was $6.5 billion and pany had 85,000 employees.
With the continuous release puters, peripherals, and related products in the 1990s, HP became known as one of the anizations that was able to marry puting,