VeriFone, Inc. manufactures the credit or debit processing box that reads the magnetic strip on a bank card. The company was founded in 1981. At the time, retailers had to get a telephone authorization on most transactions, and there was little specialized equipment for immediate processing of transactions on the market. VeriFone had reached more than half the market for retail transaction processing terminals by 1990 and had become the industry leader in new products for specialized markets. The company is today believed to have about 65 percent of a market that is continuing to expand into new areas. Revenue projects for 1993 are $270 million. In recent years VeriFone has found new markets internationally and in retail sectors that have not previously used transaction processing. In 1992, international sales were up 58 percent from 1991 and accounted for 21 percent of VeriFone's total consolidated revenues. In the first quarter of 1993, international sales were up 70 percent (Carlsen, 1993, 10A). The following is an analysis of the marketing structure of the company, analyzing the action programs that have been instituted and the ways in which the company is marketing its products in new markets and old.
Market Definition, Background, and Product Description
The market for the VeriFone products is large and growing larger. The company was founded by William Melton in 1981. Melton started an earlier company in Hawaii to write software for real estate agencies, and this was an early entrant into the computer business before the PC revolution which started in the 1970s and changed the nature of the business. Melton sold his original company in 1980 for $3 million, and he used this money as a stake to found VeriFone to provide local retailers with access to the names of writers of bad checks over the phone. In a short time, Melton had spread his sales and technical staff all over Hawaii so that they would be able ...