The Success of Gateway Computer :: GCSE Business Marketing Coursework

The Success of Gateway Computer Gateway 2000 was formed by Ted Waitt(CEO), in September 1985, in Sioux City, Iowa. The company was founded along with Senior Vice president Mike Hammond. In 1990, as the company began to blossom it was moved to its current location in North Sioux City, South Dakota. They formed Gateway 2000 with one goal in mind- to offer PC buyers a logical alternative to high markups, limited choices and inadequate support, common in the retail PC market (Gateway.com 1). These two partners started selling hardware and software to people who owned Texas Instrument computers. The placed ads in computer related publications, selling to the end user. These two guys were the pioneers of direct-marketing in the PC industry. Finally in 1987 Ted Waitt recognized the possibility of selling fully configured computers, at good prices. This idea gave Gateway a tremendous push forward into the computer industry. In 1987 the company reported revenues of 1.5 million dollars, later in 1989, it jumped to an astounding 70.6 million dollars. Finally, in 1996, they jumping into the billions with 5.04 billion dollars. In 1993, Gateway became a traded company in the NASDAQ market system under the symbol GATE. Making improvement along the way they moved to the New York Stock Exchange on May 22, 1997 and uses the symbol GTW. On June 16, 1997 the stock split. Gateway 2000 is a leading global marketer of personal computers. Although they are a leader in global marketing they have a problem with their laptop division. the laptop division holds one of the lowest market shares in the market. Toshiba the leader in market share holds 21.2 percent of the market, Compaq holding 15.7, IBM with 12.4, Dell with 6.1, Acer with 5.0, Packard Bell with 4.4, Fujitsu with 3.4, Hitachi with 3.3, Micron with 3.2, and finally Gateway with 2.8 percent. With Gateways new and improved marketing plan, they should increase to the top over the next five years. Gateway’s current target market is the home PC user. They put forth most of their energy trying to make the customer feel comfortable with its product. They also want the customer to feel as though they made the right decision buying from Gateway. This attitude will help Gateway in selling itself. They will not need to use extreme advertising because the word of mouth is the most powerful advertising tool.