Gateway Inc, Marketing, College Term Papers.com


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Gateway Inc

Gateway Inc Gateway, Inc., founded in 1985, started with two people working out of an Iowa farmhouse. With a “keep it personal, make it simple” philosophy Gateway, Inc. has grown rapidly since it went public 8 years after the company started. Today, Gateway is a 7.5 billion Fortune 250 company that has 19,000 people on its payroll and prides itself on building lifelong relationships with its customers.4 The company operates sales and technical support centers on four continents and has manufacturing facilities in the United States, Malaysia, Singapore, and Ireland.4 The following vision, values, and mission statements best state the core of this company, which has led to its great success: Vision: To be the leading marketer of personal computer products in the world.2 Values: Respect, caring, teamwork, common sense, aggressiveness, honesty, efficiency, and fun.2 Mission: To profitably grow our business faster than the competition by better understanding and serving the desires of our customer and aggressively marketing the highest value directly to our chosen markets.2 In the following, I will be detailing how Gateway has risen to power based almost solely on its innovative marketing technique and reviewing the company’s current and past figures. Gateway has been very successful the last five years. Since January 1995, the value of a share has risen roughly 700%. Gateway has heavily outperformed the S&P 500 as a whole. In 1998, Gateway had a global revenue of $7.5 billion as it shipped 3.54 million systems during the year.5 Gross profit for last year was $1.545 billion.5 So far this year, sales are up with a six-month total of $4.0 billion with 2,089 million systems sold.5 $2.1 of this year’s sales were to the consumer segment, with the remaining $1.9 billion to the business segment.5 Consumer sales are up 31% and business sales are up 10% from last year.5 Gross profit for this year is up 26% from last year to $421.4 million.5 Gateway, Inc. tries very hard to portray themselves as a small hometown business. One of the many ways it does this is by using the spotted cow motif. Across the United States, the black spots on the white background will almost instantly be recognized as a Gateway product. Gateway also started the trend of creating personalized systems. Each system is personalized for each client, from the consumer to the large business customer. On average, 11,000 of these systems are built to order each day. Uniquely, Gateway sells PCs without the merchandise, which in turn gives the consumer more options.3 Another aspect that has helped propel Gateway to such success is the increase in global marketing. They have active markets in the United Kingdom, Ireland, France, Germany, Belgium, Luxembourg, Switzerland, Austria, Sweden, Netherlands, Japan, Australia, New Zealand, Singapore, Malaysia, and China.2 A mere five years ago, Gateways were only sold in three countries. A big factor in their seizing of the global market, is the opening of the manufacturing facilities in Ireland, Singapore, and Malaysia. Gateway has also recently targeted K-12 Schools and school-aged children with its new Your:)Ware for Education (SM) program. This program involves offering training, totally customized software and hardware, and dedicated support to K-12 school systems.7 Your:)Ware for Education also includes a help line for teachers that is staffed partially by former teachers. The line is reserved to assist teachers with technical difficulties during school hours. The action of creating this system falls directly in line with the new U.S. Department of Education’s Technology Literacy Challenge, which includes equipping schools with modern computers, offering curriculum-specific software, and training teachers on software application.7 Gateway went across the country surveying teachers, technology coordinators, and school administrators before creating the education program. Another new strategy Gateway has come up with is targeting Hispanics, who are the fastest growing population in the United States. To attract this target audience, Gateway is running advertisements in Spanish, adding bilingual sales and technical staff, and offering computers equipped with Spanish software and keyboards.8 In recent surveys it was found that 36% of Hispanics had internet access in their homes, compared to 34% of white households.12 Initially the company is spending $2.5 million on television advertising targeted at Hispanics.12 One of the main reasons Gateway has launched this marketing plan, is due to recent surveys that have shown Hispanic communities are underserved by computer and internet companies. The main marketing strategy, and the most successful, is the Gateway Country stores. There are currently 240 of these locations around the world, in which almost every store is located in the same proximity as a competitor such as CompUSA or Circuit City.3 A major key to the success of the Gateway Country Stores is that it allows clients, particularly first time clients, to try the systems before they make a purchase. Also, when a customer makes a purchase of a system they receive several free software packages and software samples, as well as free internet service for a year. These centers have become the popular way for the Gateway company to introduce their products to the public and the stores carry a wide array of items promoting Gateway such as bags, T-shirts, day planners and so on all carrying the Gateway logo, which helps promote brand recognition. Because Gateway is so dedicated to making the customer feel like a part of a family, the Gateway Country stores have enhanced that feeling with its face-to-face contact. Gateway honestly believes that it works the hardest of any of its competition on building relationships built on trust and complete personalization. Customers have responded to that relationship with repeat purchases and by recommending Gateway to their friends, family members, and business associates. This has helped rank Gateway #1 in customer loyalty.3 To place themselves at the top of the industry, Gateway has expanded the services provided at Gateway Country stores. Gateway has been able to pick-up a lot of the small to medium business market through these stores by implementing new services. Gateway introduced the plan of setting up Business Solution Centers in each of the Gateway Country stores.6 The centers help solve the computing needs of small and medium business owners; federal, state, and local government organizations; and educational institutions located in the store’s service area.6 Combining a local point of contact, a face-to-face experience, and a complete solution, Gateway Business Solutions Centers will now provide the personalized technology that only large corporations typically receive from most vendors. Gateway has also introduced the plan of Gateway Business Network Specialist program. This new program provides a list of service providers who will assist Gateway Country business customers with complete, all-in-one solutions, including Gateway hardware, installation, and networking.6 Gateway Business Solutions centers are now teaming with numerous local systems integrators who provide these services in each Gateway Country store. Gateway provides products and services to the small and medium business with local sales, installation, and support – no other major PC vendor offers the local presence and personalized approach that Gateway does now.6 There is a need for local technology competency centers designed for small and medium businesses. While the reseller community serves this function within specific project areas, there is a value in a single, local organization that ties this together to provide strategic value. The service and expert advice provided at the Business Solutions Centers, Gateway feels, are vitally important to the success of small and medium businesses. Gateway wants them to feel that they deserve it. Essentially there is one marketing tactic that has carried Gateway. The personalization strategy has helped set Gateway apart from all of its competition. The Gateway motto is “Humanizing the Digital Revolution” and it shows. Gateway has worked very hard to create an image, and people have responded by buying their products by the millions. Bibliography:

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