Marketing Major, Management Major

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CONSUMER TECHNOLOGY INDUSTRY JANELLE IRONS MARKETING MAJOR, MANAGEMENT MAJOR Z23154652 GLOBAL STRATEGY AND POLICY MAN4720 PROFESSOR HARRY SCHWARTZ SEPTEMBER 30, 2014 POWER OF THE BUYER HIGH • Many of the products in this industry aren’t much differentiated. “Buyer switching costs are low, and it is generally quite difficult for the players to differentiate themselves because, as a rule, the products players stock are purchased from the same manufacturers. Players therefore compete on service, and only very rarely on product.” (MarketLine Industry Profile) • There are a lot of alternate suppliers because the products are pretty standard so the user doesn’t have a defining feature to cling to, making it hard for the supplier to charge any price without repercussions. • In Business to Business the buyer has power because there is a variety of other suppliers that make computer chips or rechargeable batteries for less. • In the phone category, the biggest difference is in operating system (iOS, Android, Microsoft) pushing the supplying industry to make a phone with an operating system that is user-friendly, or the buyer will look elsewhere. • Buyer income also plays a role. Consumers with a low income are very sensitive to price changes and will often look around in great detail before deciding on a product. The decision is less about features and uniqueness but based more on price. Phone shoppers often sacrifice features for price. • “A new gadget is not exactly a
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