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Designing a New Product for IBM

Keywords: ibm product design, ibm technology design

Marketing Management Assignment

International Business Machines Organization (IBM) is one of the most significant technology giant that provides wide range of technology products and services to the global market. IBM is an expert in producing and making information solutions including computer systems, software, network systems, storage devices and microelectronics worldwide.

In this record I will devise a fresh product / service for IBM and would then create a marketing strategy with the service or product.

Devising a new product/service for IBM

IBM has got a huge market size as it offers business and it services to a large customer base beginning with small and medium size businesses to the large corporations. IBM includes clients across multiple establishments such as bank, telecommunications, automotive, engineering, consumer products, press, consumer electronics, travel and transport, federal, education and hosting services.

IT Market keeps growing very speedily as the global environment is now highly tech-savvy thus emerging new areas for IT companies for. Lots of technology and revolution attended up in IT sector during the last two decades. When it comes to devising a fresh service or product for a big organization like IBM, one becomes helpless for their considerable lines of already founded and successful products prevailing on the market. Still I suppose if IBM can provide high-tech hardware assistance to different companies for developing a cutting-edge software system of 'Paperless Proof of Purchase' that would bound to help both gatherings and the consumers of course who plays a major role for eventually making something or service successful.

Product/Service description

The 'Paperless Proof of Purchase' can be an online receipt a customer are certain to get when he/she makes a deal instead of usual printed paper receipt. The assumption is to be helpful both for the clients and the business enterprise itself. As it will allow the people to keep a track of the spending and on the other hands it can help the business to monitor each spending and also help the accountant of that particular business to reduce the billable time by giving relevant accounting information. Each end user will be provided a cards that the particular business would check before or after the exchange occurs.


Now I am going to establish a marketing strategy for the launch of 'Paperless Proof Purchase' by IBM. This online marketing strategy would help IBM to obviously identify the target customers for this specific service and reach them positively by using different kind of promotional activities. Following is the in-depth dialogue of all components necessary to develop a online marketing strategy for this service.

Segmentation of the market

Market Segmentation will allow marketers at IBM to find a group of customers with a similar set of desires and needs. IBM can gain huge returns if it's successful in segmenting the market properly. Here IBM would concentrate on Rapid-Growth market sections. In this specific product, IBM can choose for lifestyle segmentation which can only help the company to know their customers as people generally which information will finally lead to build up effective marketing announcements for their particular customer placed.

IBM can use different methods to segment the marketplace by product or service needs, by level of sensitivity to price, by geographic area, by demographic segment or by life-style of people. Geographically IBM may cover an enormous market starting from the tiny and medium businesses to the larger organizations. Another method of segmenting markets for IBM is by the customers' technological needs. IBM's customer bottom part will cover an array of customers with multiple sectors and different sizes. As an IT company, IBM will section its market to have the ability to target specific customers having technical need for the product and getting the fast lifestyle to select for this time keeping paperless technique that may save them time and inconvenience of finding old receipts in future if something will go wrong with the products.

Selecting the Target Market

The main aim for because of this service is the Retail Sector, Accommodation and Food Services Firms and essentially E-commerce. All categories will be covered for retailers beginning with small to medium size organizations and big giants too. Moreover they shall cover the marketplace both physical and technological sections in order to ensure that the aims are properly met and they're utilising their resources to the best. Wireless hardware can be utilized for restaurants and small merchants which will add a wireless handset, a radio chip and the cards to be utilized by consumers. This wireless hardware is expected to be less expensive than the one that will be needed for the bigger stores.

Product Differentiation

It is important for each and every organization to differentiate their products from those of their competitors' to be able to attract more customers and build strong customer commitment. IBM can identify this product by being more convenient as its competitors require a great deal of organization on the part of its consumers.

Moreover some of their competition with the same kind of product are working with online receipts only, which reduce their convenience level if indeed they think of broadening their services by including newspaper receipts. Whereas 'Paperless Proof Purchase' would be more convenient and effective if launched by means of a greeting card that consumers will swipe prior to their transactions. Among its most convincing features is that it would completely be paperless. All these features can make IBM, a leader in "Smarter Cleverness" and sustainability initiatives.

Positioning this product in the customers' minds

The basic objective of IBM for the introduction of 'paperless proof of purchase' must be to generate brand awareness in the prospective market so that people clearly get to know of the service and can distinguish it with the same service provided by other companies, which will depend on how IBM positions it's product in their heads. For effective and strong placement of this service, IBM can build following positioning statement:

"As companies grow, operating expenses have become harder and harder to control. In this challenging time this paperless proof purchase is a encouraging money-saving service. "

Furthermore IBM will have to focus on the product field of expertise of 'paperless proof of purchase' to their market segments that want providing special features and enhanced quality to make it stand above all other opponents. Only they would be able to achieve their concentrate on successfully.

Marketing Objectives

IBM has a vision to make information accessible to everyone regardless of any limitations to business surrounding the world. Nonetheless they try to achieve a ecological competitive advantage keeping in mind that client satisfaction is the main goal for IBM. Senior management at IBM is highly interested in diversity of the marketplace. They are focusing on newer sections including small and medium businesses to be able to increase its market show and gain a competitive advantage over its rivalry which is what they refer to as the proper mission of the IBM Team.

However IBM's basic marketing targets for 'paperless proof purchase' includes pursuing:

    • To provide economically intelligent system


  • Promising a money conserving service for businesses



  • Being fast and effective in product intro to the market



  • Gain competitive edge over other players offering the same kind of service



  • Gaining huge marketing talk about globally



  • Creating brand awareness and getting the product information to customers quickly and efficiently using affordable methods



  • Achieving high results in terms of profitability



  • Reducing time-to-market and the price tag on launching this service in the market



  • Managing the development of this service throughout the entire lifecycle from its primary design to product build to post-sale service.



  • Increased sales through longer sales life



  • Increased product devotion in conditions of client satisfaction and retention



  • Increasing brand acknowledgement and getting higher market responsiveness



  • Satisfying new or changing customer needs



  • Staying ahead of competition



  • Maintaining effective integration and coordination among multiple practical areas, including product design, planning, control, sales and marketing.


Marketing mix

Like every organization, IBM uses some collections of marketing tools to attain its strategic and marketing targets and that combination is known as 'marketing blend'. These tools represent the tactical position of IBM's products in their target market and are revised as 'four Ps' comprising product, price, place and promotion. Below I am going to explain each of these P's with reference to the precise service of 'Paperless Proof of Purchase'.


Here the product we've is 'Paperless Proof Purchase' which is basically a service dominating product. By name it is quite clear that this is expected to be the receipt of purchase without newspaper, which will be online receipt that would help with keeping an archive of transactions. It really is called paperless because it is not really a common printed paper receipt alternatively it is online receipt. It could help both customers and the business enterprise itself as it'll provide accounting information to lessen billable hours of your accountant for a specific business. It really is designed especially for the buyer convenience. This will also allow merchants and even credit card companies to trail your acquisitions.


The pricing of the service will be based upon different factors including the cost of installation at different places i. e. physical factors, average regularity of the consumers of these surroundings and so many more. However IBM will have to look what prices are offered by their competition for the same kind of services. Then depending upon the speciality with their service and considering their differentiation factors, IBM can change the pricing appropriately. In other words it could be said that IBM will determine the price of this product/service by calculating its cost, estimating the huge benefits to consumers, and checking the product, service and prices to others that are similar. Additionally IBM can provide discounts for trial goes to different suppliers by offering their service free of charge for 2 calendar months or so to their testing retail stores.

IBM can provide free hardware to the sellers in this screening period and then demand once the retailer makes a decision to keep it following the trial period. This gives the retailers an initial competitive edge over their competition. IBM can develop a rates strategy by the help of breakeven examination which is computed as 'set costs divided by (income per unit-variable costs per product)'. For example suppose that the fixed charges for producing 10, 000 devices were $50, 000 a year. The changing costs are $20. 00 materials, $20. 00 labour, and $10. 00 over head, for a total of $50. 00. If indeed they think of advertising a single device for $100. 00, then $50, 000 divided by ($100. 00-$50. 00) equals 1000 items. This is the range of devices which have to be sold at a selling price of $100. 00 before IBM will begin to make a profit.


Place is all about distribution and convenience of the merchandise and service, IBM products and services curently have unlimited dynamics. IBM will sell this product to a diverse market which include all sectors including communications, syndication, financial services, and the commercial and open public sector. IBM will always play its effective role thus covering a huge market both geographically and technologically.

The main concentrate on place where they can start the launch of this service can be the UK and USA market initially as life being very fast in these locations.


Promotion is another very essential component of marketing combination as this is where the company must use all the marketing and promotional tactics to attain and convince the mark market to start using their product. Firstly IBM should disperse the overall information about their service on the market so that folks come to learn of what it exactly is. This may be achieved by 'phrase of oral cavity advertising'. With the use of different websites like face book, twitter and Google, they can increase their person to person advertising. This would be rather free advertising and it could come from a trusted source.

Once people like the feature they will think of deploying it and they will tell other folks about this service and finally IBM will find yourself with a big customer basic which is their ultimate goal. After their person to person method starts attracting customers, they can move their marketing ways of the internet, tv set and radio. Making an advertising campaign on Internet can help them get in touch with billions and billions of folks who come online from worldwide and entice customers with their product.

Another strategy that IBM can take up is the lobbying strategy. For their retail marketplace they start lobbying business and consumer vendors to start testing their products in their stores, this may provide them with competitive edge over their competition. In case they are not satisfied by the service then IBM can lobby one of these challengers. Furthermore they can think of supplying discounts for trial goes.

In addition compared to that, they can also select for good will marketing to reach out with their customers for which they could be environmentally friendly as well by planting a tree for each and every 1000 pounds that they make.

Cost of the online marketing strategy and when to anticipate come back on Investment

IBM does not have to incur heavy costs on their online marketing strategy as the company already possess established brand name for years and have prevailed in having strong customer relationships and loyalty. However product design, development and execution calls for some cost. Again advertising calls for sizeable cost to let people know of their new service and its own unique feature that helps IBM stand before its challengers. For Tv set advertising, time of the day you advertise and commercial time duration affects the price. IBM may think of starting with small advert but with consistency i. e. if they decide to advertise in the local business journal, the price to perform in their publication for a six month term for a ј web page ad with no coloring is $10, 000 (circular number). However IBM should balance its available human resources, capital investment and available time slot machine games to match with the market demand.

However it will be cost-effective for IBM going for networking, Online marketing and public relations. Also they may think of not doing all the actions at once i. e. advertising using each one of these means may well not permit them to keep a keep tabs on and proper strategy. That's the reason the need to be adaptable enough for allocating their budget so that they can move the investment from a task that is not performing to some other that may produce a better end result.

The major start-up cost will be equipment manufacturing whereas variable cost will involve marketing expenditures, sales, repair and maintenance plus some miscellaneous start-up costs associated with administration.

IBM is likely to get a come back on the investment when they enter the market with this plan and action in place as people already wish to use products and services made available from IBM for being reliable and user-convenient. For highest come back on the investment, IBM needs to target the right publications. Then that return on investment on each marketing activity will permit them to raised determine whether to keep them jogging or stop them and try something else.

Conclusion of marketing assignment

Coming up with the 'paperless proof purchase' IBM would be supplying a cost-effective, less high-risk way of shopping for to consumers. This will also be a far more agile and reactive way of making transactions as it will reduce the longing time of getting a paper receipt and then of course it will relieve the client from keeping all the receipts safe for just about any emergency use in future as it will offer an online record keeping with the. But also for getting the strategy in right course and successful eventually IBM must understand their customers, know the competition around, be familiar with the market, review their offering frequently and get their business known and trusted by new and potential prospects in their marketplace.


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