Hp Case - Deskjet

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MARKETING CHANNELS

EXECTIVE SUMMARY
This case study deals with Hewlett-Packard (HP), a famous manufacturer of computers and peripherals. In the early 1990s, HP faced a socalled “Inventory/Service-Crisis” concerning one of their high volume products, the DeskJet printer. Despite growing inventory levels at the distribution centers in Europe and Asia-Pacific, customer service levels were unsatisfactory. Affected by growing competition this problem had to be handled quickly.

EXECTIVE SUMMARY
• Brent Cartier, Manager for Special Projects in the Materials Department of HP Company’s Vancouver Division, had tried his best to find the possible solutions of the issues related with inventory of DeskJet printers that were arisen at world level especially, at Europe. He had short time for these tasks because preparation was needed to be done for Monday’s meeting with Group Management on worldwide inventory levels for the DeskJet Printer product line. • Finally opinions and reactions of different company divisions concerning the implementation of DC localization are analyzed. The solution of problems is the reconfiguration of key strategies related with channel’s management.

Improvement during the early 1980s
– Manufacturing cycle time reduced
» 8-12 weeks ==> 1 weeks

– Average inventory reduced
» 3.5 months ==> 0.9 months

– All finished goods inventory eliminated – Importance of response time and transportation time increased – Further improvements should be made on supply chain

Improvement during the early 1980s
– Manufacturing cycle time reduced
» 8-12 weeks ==> 1 weeks

– Average inventory reduced
» 3.5 months ==> 0.9 months

– All finished goods inventory eliminated – Importance of response time and transportation time increased – Further improvements should be made on supply chain

Improvement of supply chain in 1990
Comparison of Response Time (months)
6 5 4 3 2 1 0
Europe & Asia NorthAmerica

– Time between order and delivery reduced
» Europe & Asia: 5.25 months ==> 1.25 months » North-America: 4.25 months ==> 0.2 months 19901990+

5.25 4.25

1.25 0.2

– Importance of transportation time increased
» Europe & Asia: 1% ==> 12% » North-America: 20% ==> 80%

ANSWERING THE QUESTIONS
• • • • • • • • • • • No.1 (a) Types of consumers to whom HP sells printers Business Personal Computer users in Offices Personal Computer users in Homes No.1 (b) Consumer’s Need:  The primary need of all consumers is to print something in the form of images or  text. Three option are available for the customers of HP. Dot Matrix Printer Inkjet Printer Laser Printer Prior to 1989, most customers were not aware of inkjet technology. However,  customers were discovering that inkjet print quality was almost as good as laser  print quality at a much affordable price. Laser printer and other printer related products of HP don’t necessary require the  online selling. Because customer were discovering that inkjet print quality was  almost as good as laser print quality at a much affordable price. 

ANSWERING THE QUESTIONS
• • Q No.1 (c)Consumer’s needs met with channel structure or not: HP led the inkjet market in US. Means in USA, HP facilitate its customers  and consumer’s needs are met by current channel structure. But in other  areas of the world especially in Japan and in Europe HP faces certain  issues while satisfying customers needs. the problem is only in terms of product availability. Channel structure is  poorly designed especially, in Europe there is no information flow  between channel members and lack of commitment. There is no product availability in some countries while others have access  inventory (in terms of finished goods; printers). Between 80s and 90s HP was the market leader of Inkjet printer but now  days HP’s DeskJet printer in on sixth position in ranking. Waiting time is  high in Europe and Asia and availability is low in Europe....
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