Profit Implications to the Market Variables - Research Paper Example

Profit implications to the market variables Enterprises activities are profit oriented, and under rare circumstances does a business endure on non-profit making activities. Profits enable a company to expand, avoid chances, create employments, maximize output, and enjoy economics of scale. To acquire a profitable market share poses a challenge for a company must carry out proper research to establish the opportunities and threats. Throughout the production and delivery processes, a researcher should establish the key areas of concern. The team should determine the probable number of customers, their loyalties, and devotion to the company’s products, and the market share growth in comparison to that of the competitors. This essay entails the implications of profits to the market variables and specifically draws comparisons on Apple Company and Sony Company (Capon, & Hulbert, 2007:60). Apple company inc. wins over its close competitors by trying different strategies that seek to lure customers into the company’s loyalty team. Some of the biggest strategies that Apple endures on are product innovative, aimed at producing the best gadgets that the customer may desire in the technological world. Apple Company outlines the customers who may make a given purchase at a given price (Lamb, et al 2009:45). The company further establishes the possibility that demographic variables will act in favor of its products. For example, Apple Company designs its products to attract the high-end market with the best products possible. Most of The Apple’s product prices squarely revolve around the market skimming technique. Therefore, its prices are relatively high to meet the cost of innovation, and the upper class consumers. During the product lifecycle, Apple reduces prices to meet the demand of other consumers down the purchase module (Treacy, 2005:70). The company defines the features that customers seek in their products. Under such circumstances, the company documents on the various technological improvements that customers may be seeking in their products. Initially, Apple was the first company to introduce iPads, tablets, and iPhones in the Technological market. The technology attracted buyers to make purchases for products served the purposes of phones and computers (Aaker & Mcloughlin, 2010:68). Therefore, the company associates itself with the best technological innovations in the mobile industry not forgetting the fact that, its gadgets support other features, for example, iTunes, voice recognition, high levels of security measures, and grid directions (Lamb, et al 2009:45). Apple Inc. recites its evolution from the competitive start, when Steve Jobs developed the best computer globally beating existing companies to the current day where it develops quality products to satisfy consumer needs effectively. The products have continuously shaped Apple’s reputation in the eyes of the consumer such that, whenever the company drops a new product in the market, purchasing models of other companies’ products stagnate. Apple iPads, Smartphones, iPhones, and Tablets win over competitors since, whenever a competitor designs a similar product, customers will assume it for counterfeit and result to buying that of Apple. Over the years that Apple’s products gained acceptability, the company poses reports depicting high-income returns and shipments that exceed those of competitors. The company targets all ages, young and old alike, the educated elites, and personal computer users who would seek for effective portability of the gadget that is more convenient than that of a laptop. Recent research revealed that Apple Company ranked first in customer satisfaction, beating close competitors, for example, Samsung, Sony, Dell, and Asus (McDonald, 2011:70). It is advisable for an electronic company to relate any form of change to technological advancements. Sony Company is a global icon and at times the market leader in the electronics business. However, this does not outweigh the threat of competition but rather draws it. Therefore, Sony must ensure that it develops new products to reach existing or new consumer needs profitably. The electronics should seek to deliver customers needs effectively than their close competitors, and this will lead to market share growth (Pham-gia, 2009:68). As an electronic company, Sony must also study the prices of its new products and define whether at such a price; the customer will derive satisfaction from the purchase, and the likeliness that other consumers will get possible attraction to the product. Therefore, Sony Company will bear the ability to create new products that aim to deliver satisfaction and steer growth. However, the company tries to possess the larger market share; Apple Company remains dominant in the market, reaching all geographical aspects with the customized products it offers. New products offer opportunities as well as threats to the company’s lifeline. During product development process, teams may fail to research effectively on the prevailing tastes and preferences of the consumer. Therefore, the product may fail to win the target prospects due to lack of attraction in the eyes of the consumer. At other times, Sony may design a product but fail to reach the market effectively; this mainly results from borrowing ideas from other companies, for example, Apple Company Inc. Therefore, on failing to come up with originality, it fails in the market because no consumer will anticipate buying a counterfeit product. Pricing of new products poses as tricky issue companies may price their products and fail in essence that substitutes may be in existence. Consequently, pricing a new product much lower will not help, as consumers will assume it for a counterfeit or of inferior value (Schneiders, 2011:40). To beat competition, Apple carries out an adequate research on the needs and wants of the consumer before indulging in production of new products. The research should entail their tastes and preferences and draw conclusions on the best approach. The company is able to avoid failure as it becomes certain of the types of needs that consumers seek to satisfy, and to what extent the market can enhance the returns on investment. Apple Inc. must consider the environmental factors that surround the product and possible reactions from stakeholders. Competitors are always pursuing dominance; the company cannot assume environmental concern, as they will use it for a weapon to fail the company. The company considers this fact, and is able to tailor the product such that it tames opposition entirely (Kahl, 2012:68). Apple Company indulges in continuous product development process that originates from ideas. It considers ideas from relevant sources that surround the business environment and establish the most favorable ones. The company sources ideas from its employees and those of competing companies as well as the customers. This helps it to generate the best approach before indulging in developing the new product; for instance, when developing a new tablet, Apple researches from the customers to the rival companies of Sony, Asus, and Samsung to bring out the best without conflicting with other companies. At this point, the company stands the ability to forecast on the chances of success and the degree of customer loyalty. Therefore, it is able to calculate on the costs of developing different products and cull those that are expensive to produce, remaining with those that enable the company to thrive in the market. Through these various measures, Apple poses stiff competition to Sony, which takes quite longer to come with a new product (Clevenger, 2011:38). Sony released a series of products aiming to reach the iPad consumer market but the response remains slow. In the year 2011, the company released the Xperia Tablet that was eye catching to eyes of the consumer. Similarly, purchases reflected positively until a time when the consumer realized that, the Tablet was the Tegra 3 that only on an improved version. Although the company’s age in the electronic field has built a good reputation, this Tablet could ruin the entire image because of negligence. Customers turned against the product and felt betrayed to the extent that they had purchased a counterfeit of another unsuccessful product. The company tried to price the Tablet at a cheaper price of $400 compared to Apple’s $450 but all in vain. The customers realized the products weak point and slowly avoided its purchase. The Tablet’s major problem being complete restarting process from the sleeping mode infuriated the consumer further to avoiding a purchase (Clevenger, 2011:90). On resolving the issue, Sony assumed dominance would prevail, as consumers would weigh the Tablet’s merits over the demerits. However, the reputation varied completely from the company’s expectations, the fact being that the Tablet faced Wi-Fi disconnection problems. Conclusions are that, Apple will challenge competitors and continuously grow the market share for indulging in proper research and manufacturing the best product, and reach the consumer effectively. Currently, Apple company sees no particular threats with Sony’s products despite the fact that, they sell cheaper in the market (Pride & Ferrell, 2010:69). Bibliography Aaker, D. A., & Mcloughlin, D. 2010. Strategic market management: global perspectives. Chichester, Wiley. Capon, N., & Hulbert, J. M. 2007. 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