Econs project- IpadBy: Avina, Deon, Fiona, Tiance, Xinru, Zhihao
DO YOU KNOW…
W
hen is the Birthday of iPad?• 27 January 2010
T
he cost price and selling price of the iPad is…?• USD320 ; USD499.
So… PROFITS EARNED! $.$
W
ho are iPad’s enemies?• Motorola Xoom: USD799 • Galaxy Tab etc
How about some Products to go along with iPad?
AND MORE iPAD CASES!!!!!!
• Some of the goods are used for protection, eg iPad Casings
• Some are just to beautify it
• Different products will meet different needs of the iPad users. Eg Some may need a Stylus, while some do not.
• Complements to the iPad.
Question: How will recent developments affect pricing and marketing decisions from a consumer’s POV and a producer’s POV???
Pricing decisionsDecisions faced by top management and marketing managers on the pricing of a good
Affected by….•competition•cost•advertising•sales promotion
Marketing decisions
• the commercial functions involved in transferring goods from producer to consumer
Producers POV- 1st perspectiveRecent Developments: Introduction of cheaper alternatives.• Using Price Elasticity of Demand (PED)• When the price of Ipad = more than proportionate change of fall in qty
dd.
WHY???• Consumers turn to cheaper alternatives (eg: ExoPC slate)• THEREFORE, Ipad is price elastic. • Furthermore, Ipad is a luxury good, this implies a small pool of consumers.
SOOOO…. WHAT DOES THIS ALL MEAN??LINK: Due to competition from other companies who have came up with
similar goods, Apple would keep price constant/decrease to increase total profits.
•
Producers POV 2nd perspective
• Recent developments: Other companies such as Griffin and Incase have released similarly iPad-compatible wall chargers.
• Using Cross Elasticity of Demand (XED)• Goods compared: Ipad and Ipad charger.• CLOSE COMPLEMENTS.
SOOOO…. WHAT DOES THIS ALL MEAN??LINK: To increase profits, and to edge out rival companies, Apple
should decrease the price of Ipad chargers!
Consumers POV 1st perspective• Recent developments: Natural disasters hit food producing
countries.• Using income elasticity of demand (YED)• Food shortage food pricesEg: Global food prices rose to a fresh high in December 2010,
according to the UN's Food and Agricultural Organisation (FAO)
• Decreasing real income as food is price inelastic .• Therefore, the iPad2, as a luxury good, will take 2nd place to
normal goods such as food.
SO…. WHAT DOES THIS ALL MEAN??LINK: It results in the foregoing of the purchase of iPad 2 to
divert their dollar votes to food.
Consumers POV 2nd PerspectiveRecent developments: Improvements to the Ipad, implemented
into the Ipad 2. (Thinner, lighter, built in camera)
• Consumers more willing to pay for Ipad (signalling function)• Demand for Ipad , and the price of the iPad 2
(supposingly)• This results in a shortage. (rationing function)• Producers increase qty output to increase profits gained.
SOOO…. WHAT DOES THIS ALL MEAN??LINK: Consumers have to fork out more money to purchase an
Ipad due to a spike in qty dd.
BUT! In reality…• Price of iPad = Price of iPad 2• iPad 2 more advanced in technology, and more holistic in
features(built-in-camera)• SO….• More COMPETITIVE!!! more ppl wants to buy iPad ( instead
of the cheaper substitutes, since
iPad is more HIGH-TECH = more WORTH IT!!!
∴consumer SATISFACTION MAXimised!!!
