Market Penetration Strategy

The second strategy HCL- Axon can pursue would be Market Penetration. HCL –Axon as
mentioned before may be a strong player, however it is not the Market Leader in terms of
market share around the world. Thus, HCL-Axon can focus on building their position in
the market aiming to increase market share and try to encourage customers from its
competitors to switch towards HCL-Axon.

Table %: Recommended Marketing Mix for HCL-Axon for Market Penetration.

Marketing Mix Market Penetration Strategy

Product Product improvement: focus on product innovation and standardisation to

reduce customisation cost and yet maintain acceptable quality.

Price Lower pricing campaign: in response to current economic environment, and

also utilising a penetrative strategy.

• Customer endorsement ( established customer’s testimonials):

Promotion
attracting new customer
• Sales promotion: Customer retention ( long term customers are able
to obtain discounts for repeat purchases)

Place Increase the number of local consultant agencies within strategic places
along regions: to create faster and efficient delivery of services

People Hiring experienced SAP consultants to ensure proper implementation as

well as to build trust among customers and establishing a more dedicated
support team.
 Upgrading and establishing a more professional consulting firm for
Physical evidence
customers in strategic regions ( eg Singapore for Asia-Pacific)
Improve website design

Process Delivering: (SAP, Oracle, Microsoft & HCL- Axon) strategic alliance, to
ensure efficient and effective transformation of product.

Global delivering centre: consultant selection.

Web conferencing, better understand client before serving customers.

The table above shows the possible marketing mix that HCL-Axon could implement for their
market penetration strategy. Firstly, for product, HCL –Axon could invest in product
improvement, as in focusing in innovation since innovation is the main force driving growth and
quality, and also customers are becoming more sophisticated, thus innovation plays a big role in
their decision making process. Secondly, HCL-Axon could also focus on product
standardisation, as in creating a platform and service system that have minimal customisation
and is able to solve similar problems for most of its customers, by doing this HCL-Axon could
be able to lower the final price of its product and services as well as target more consumers in the
market which in return will have an increase of demand by consumers.

As for pricing, HCL- Axon would be recommended to utilise a modified penetration price
strategy, whereby utilising to the product standardisation and innovation benefits to help lower
the final cost of the final product and yet still able to yield an acceptable profit margin. By being
able to offer lower prices than its competitors, HCL-Axon could be able to capture more
consumers in the market and also encourage switching by its competitors as they are able to get
similar quality services within a more affordable cost and HCL-Axon profits is not harmed much
as they are able to garner probably more if not same amount profits from larger sales volume
rather than focusing on higher profit margin per customer as the trend of today’s firms are
focusing on cost saving measures in lieu of the current poor economic condition and also the
push for more efficient and effective practices .

As for promotion, HCL-Axon could focus their IMC activities theme on building loyalty and
attracting new customers. Firstly, for attracting new customers, HCL-Axon could use
endorsements by publishing their well established customer’s such as well known MNC’s and
Government agencies that uses HCL’s product testimonials and success rate, this will help to
motivate new customers to patron HCL-Axon as because , it creates an image of HCL-Axon
being very reputable company in order to have established companies patronising them, this
will also help to reduce the risk and dissonance of new customers wanting to try out HCL-Axon
for their first time. Finally for retaining current customers, HCL-Axon could implement a
discount system for repeat purchases as loyal members such as having cheaper consultation fees
for more repeat purchases and HCL-Axon’s advertisement themes and phrases should emphasize
on building brand equity. This in return will increase brand awareness and also build loyalty
among new and current customers.

As for placement, HCL- Axon should be able to increase the number of local consultant agencies
within strategic places along regions in order to create faster and efficient delivery of their
services towards their customers which would be in line with their tagline “accelerating value”,
besides, that this will contribute to availability aspect where it is convenient for customers to
attain HCL-Axon’s services where it plays a big role in market penetration as convenience is
also a key feature that consumers are seeking nowadays.

As for people, HCL- Axon could remain with their current strategy in hiring experienced SAP
consultants as partners to implement their services, as it experienced consultants are able to be
more productive, dedicated, cost less on the longer run (due to relationship building and less
training fees needed) and also being able to maintain consistent or improve service quality over
the years. For the, physical evidence mix, HCL-Axon could consider upgrading and establishing
a more professional consulting firm for customers in strategic regions ( eg Singapore for Asia-
Pacific )and also in the mean time improve website design. By doing this two, it well help to
portray an image where HCL-Axon is a dedicated company in providing quality services to its
customers worldwide.

Finally for process, HCL- Axon should continue with their current strategy of forming strategic
alliances with good partners such as Microsoft and Oracle to learn their ways and also ensure
smoother and more efficient service upgrades and delivery as because not all of HCL-Axon’s
new and current customers have the HCL’s product only, as some of them have already
subscribed other competitors software such as having ERP systems by Oracle and SAP, thus it
will make switching and implementation of HCL’s product difficult. By doing strategic alliances
in product development, HCL-Axon is able to understand its competitor’s systems and make the
transformation process easier for its customers and able to leverage on other firms customers.
Finally, HCL- Axon could improvise and upgrade on their web conferencing system enable
better delivering on values on a global scale being able to reach and support customers around
the world at almost anytime and anywhere.

Implication of strategy

Table %: Implications of this strategy

Implications Market Penetration Strategy

Financial R&D costs High

Implication

Promotional expenses High

Renovation costs High

Managerial Human Resource Hiring more experienced SAP consultants to cope

Implication Support with larger consumer based.
 Resources Resources needed for opening and upgrading new
stores

Marketing Market Research Includes current position of the firm, consumer

Implication insight and competitor analysis.

As observed from the table above, high costs are incurred in this strategy. Firstly, R&D costs are
high due to the fact that product innovation and standardisation has to be carried out. Secondly,
endorsement and sales promotion program can create high promotional expenses and lastly,
change of store layout in strategic outlet requires significant amount of renovation costs. Apart
from that, HCL- Axon has to hire more consultants and devote resources for opening new and
upgrading current stores. Also, market research has to be conducted to fully understand the
current position of the firm, consumer insight and its competitors.