Risk-Averse Consumers Toward High Involvement Product (Smartphone Case)

Besides, there are always many new entrants enter the market with the flow of labor and capital (Laudon, 2014, pp. 124). Although the requirements for the entry to the mobile market is relative higher than others, the number of new entrants are considerable while customers are more selective. As a result, those companies like the T-Mobile in this case that are lack of competitive advantages will be omitted by customers. As for the substitute, the development of entertainment tools decrease the desire of the mobile phone although there is little instrument can replace the mobile phone

- The Threat of Substitutes is high, since mobile product-life cycles are short. For example, Motorola is currently

There are many competing brands of smart phones and Samsung has reported a decline of profits in 2014. Information from GSM arena shows than Samsung released 54 new phone models in 2014 , compared with 24 by HTC , 11 Motorola and 2 by Apple, leading to increased production costs and lack focus on a specific customer segments thereby losing some of its competitive advantage (GSM Arena , 2015).The lack of popularity of its own OS (Tizen ) and dependence on Google’s Android platform makes it vulnerable on google to develop an “ecosystem”. There are component integration issues as well as loss revenue from potential App sales (Strategic Mangement insight , 2015). Negative publicity from litigation due to patents are likely to continue as technology patents are vague and Samsung with is large portfolio is likely to infringe on some of the patents (Tibken, 2014).

Apple and Samsung are the major competitors in the smartphone field. We would, like to discuss why they’re leading and conclude which one is better. In the electronic industry these two companies fight are considered as the highest massive ever. They mainly clash for brand image and brand reputation but any consequences regarding this fight, the impact should be faced by both these companies in terms of brand reputation loss and also the loss of huge amount of money over the litigations We would like to discuss the following,

THE STRENGTHS OF BEST BUY Good customer satisfaction levels, especially with women, who have the most consumer electronics purchases in the United States. An ability to retain customer loyalty. Marketing expertise in the electronics sector.

Simplified brand loyalty describes a status in which consumers determine their selves in; out of it they become committed to a brand. Thereby they continue purchasing products or services of a specific brand. At this point consumers rather spent more money on a product of a specific brand than buying from multiple suppliers within the same category. Mainly brand loyalty is a result of consumer’s behavior, which is enforced through a company’s measurements regarding branding. Branding is a process that a company runs through in order to establish a new brand. The ambition here is to strengthen a unique name and image for a product in

When one thinks of smart phones, one will instantly imagine few famous brands that sell smart phones. The question is: why did one think of specific makers when one imagines certain items? The answer is quite simple; it is because of the media bias. Many companies, no matter how famous they are, try to have their advertisement on the television for the public to watch. The rationale behind this cumbersome action is to enchant the public. When the public sees the advertisement that has luxurious images and lexicon to describe a product, positive image is implanted in to their brain. Even though the advertisements are biased, the public will at least have more information on the product. As a result, when the consumer sees the product in a shopping mall, they are more likely to buy the product that has been advertised compare to a product that the consumer has no information

Technology is a huge impact on society. It shapes the way people talk, work, and study. They can also change our perspective on life. However, the most influential change that came across the world is cell phones. They are one of the most valuable electronic devices that made it easier for people to communicate with another person. BlackBerry is the prime example of expanding the cellular universal. It changes the way people are using cell phones due to its high quality features. However, the BlackBerry company did not always have a perfect way of being managed and market internationally. They have had to deal with issues that affected them. Furthermore, there has been a case study about BlackBerry’s business aspects. It is called “BlackBerry

The device commonly regarded as the first to realise widespread success in the smartphone market was the Blackberry. However the handset, referred to as the ‘crackberry’ (Middleton, 2007) after the feeling of addiction many users felt towards it, was quickly joined in the market by companies such as Apple and Samsung. The intriguing market seems to be constantly evolving and is still an emerging market subject to multiple market forces. Many economic theories can be applied to this market including Monopolistic Competition, Platform Competition along with Network Effects and Tipping Points. The market has seen the evolution of smartphones from a keyboard based device with closed operating systems into thin, touch

Khare, Saxena, and Tewari (2012) found there is a need to examine all the marketing mix factors beyond price in a product-brand selection. Critical factors include good environment, great reputation, attentive sales person, a full line product portfolio product, innovation/design (in a fast-paced technology driven industry), unconditional defective product return, manufacturers ' status, quality, and country of origin (due to perceived quality). The sensitivity (price or technology) of these factors may depend on the customer class while online retailers with better reputation charge higher prices.

Brand Loyalty is a concept which has both attitudinal and behavioural components. Marketers are very concerned about brand loyalty. It is not simply about repurchasing. It consists of customer’s commitment towards the brand and consumption repeatedly whenever the need arises. In addition to that, customers might also act as advocates for the brand. Hence both the entities form a long lasting relationship. The success of any brand is dependent on its capability to attract customers. It is very critical for a brand to have a loyal set of customers who will stick with the brand always. Loyal customers are more likely to buy a brand than a customer who is not. This helps in generating a stable source of revenue. Sometimes brand loyalists engage in

Aside from the impact on price, the opening of an economy attracts imports into the domestic country, which results in the provision of variety for consumers. For example, eleven mobile phone companies control 66.6% of the world market share, inclusive of Samsung, Sony, Apple, Nokia and Huawei. These companies originated in Korea, Japan, United States, Finland and China respectively (Williams, 2015). Consumer’s gain from choice and, therefore, higher utility can be achieved.

The two main economic theories I will employ are the theory of monopolistic competition and the theory of network effects. While the former will give an understanding of the first stage of competition in the smartphone market, the latter will explain the evolution of the smartphone market. Moreover, the integration of these two theories will give a clear illustration of how competitions change from physical products to platforms. At the end of the essay, we can have an insight as well as a prediction of which firm is likely to dominate in the market.

EV: Generally, the threat of substitutes is low in the smartphone industry as there are not definite products that can readily substitute the smartphone. Consumers rely heavily on Smartphone and would not be able to find a close substitute that has all the function of a mobile phone. Furthermore, Nokia is a long and established company with many loyal customers. These people may continue to stay faithful to Nokia and are hence less resistant to change. Also, the perceived level of product

The behavior in which a consumer keeps buying a product time and again instead of buying products from other competitive companies is called Brand Loyalty. Brand loyalty can often be termed as Customer Loyalty, Brand Commitment, Product Loyalty etc. Brand Loyalty is seen among consumers when they realize that the product is better than the other products that are available in the market. This affinity of a consumer towards a particular product is considered to be brand loyalty. Although, this consumer behavior is not limited to a simple repetition of a purchase, there is also a psychological reasoning behind the consumers’ affinity towards behavior.