Marketing Research Implementation Plan: a Research on the Effects of Price Dropping on Apple’s Existing Products Essay

Market Research Implementation Plan: A Research Study on the Effects of Price Dropping on Apple’s existing Products 1. Letter of transmittal: Dear Dr. Mulyanto, This report has been compiled and written for the purpose of understanding the underlying effects of pricing surrounding Apple Inc. The goal of this report was to research and obtain substantial evidence that supports the notion that lowering the prices of Apple’s products will open up new and worthwhile markets that are necessary for Apple’s future as a leader in the electronic and mobile phone industry.

This project was assigned November 5th of 2012. It’s title is, “ A Research Study on the Effects of Price Dropping on Apple’s existing Products”. The report shows the results of all the questionnaires that were made by our team in order to compile primary research into various age groups regarding our thesis. This report explains and interprets those results, provides conclusions and recommendations as to what can be done to improve Apple’s pricing strategy and help them reach a younger demographic.

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Our results are limited by the fact that our primary source of a Likert scale and questionnaire we designed were only given to a total of 25 people in the case of the questionnaire and 16 in the case of the Likert scale. Our results have not been gathered over a long period of time and were not focused towards any particular age group or demographic. These and other unforeseen factors will be the causes of error in our primary results.

We believe after completing our research that Apple Incorporated, though being extremely successful both presently and historically, will achieve an even greater potential in the future by appealing to a lower demographic with lower prices. We recommend that Apple focus their efforts on income of their consumers and be sensitive of the buyers budget in order to effectively price their products. We also recommend that Apple drops the price of the iPhone to $99 for the latest model.

We lastly recommend that Apple lower the price of their Applications, also known as “Apps”, and make more Apps free in order to boost sales of the iPhone. Sincerely, Viken Ayvazian Jeremy Avriette Yu Gao 2. Table of contents * List of Tables, * List of graphs * Executive Summary * 3. List of tables 4. List of graphs 5. Executive summary a. Major findings: A sample of 25 people, with different age and gender background, were given surveys to further explore their pricing preferences of existing Apple products.

Young males and women ranging between the ages of 20-29 preferred pricing of $99 for the iPhone 5, which is lower than what is currently being offered by Apple. There was resounding agreement between the respondents when it came to agreeing that they would buy apple products if the app prices were cheaper. b. Conclusions: Our survey analysis and secondary sources backed our implementation plan to lower prices for existing apple products, through our questionnaire we were able to find that 95% of the respondents in our target market would be more inclined to purchase Apple products if the price was 99$.

The upgrade frequency data showed that our female subjects heavily favor upgrades monthly, whereas men were overall fine with yearly upgrades, which we could use in our implementation and tailoring of our Apple products. We would ultimately try and upgrade less to keep research and development costs down as well as fixed costs, which would allow us to lower costs to broaden our market and bring back the heavy users to the ages of 20-29(the trendsetters and brand loyalty users). Through the sampling data we received, we found he age demographics between 20-29 would be highly responsive to price droppings of existing apple products, and the amount of upgrades that are initiated should be on more regular intervals. Incomes and classifications of Apple’s target market is very much a factor of whether or not they choose to buy new and old Apple products. c. Recommendations: We recommend that Apple focus their efforts on income of their consumers and be sensitive of the buyers budget in order to effectively price their products. We also recommend that Apple drops the price of the iPhone to $99 for the latest model.

We lastly recommend that Apple lower the price of their Applications, also known as “Apps”, and make more Apps free in order to boost sales of the iPhone. 6. Problem definition a. Background to the problem: On June 29, 2007, Apple published its first generation iPhone. By the end of third quarter, only 0. 27 million units were sold. However, today, 26 million iPhones are sold in this year’s third quarter. It’s as 100 times as 5 year ago. Also, let’s look at the market share. According to Los Angeles Times, the first Apple stock was $6. 56 per share, and after 9 year later, it increase to $604 per share.

It also increases about 100 times. Using iPhone has already become one culture to people. However, each coin has two sides. Although most of news we heard or we seen are positive parts of iPhone, we don’t really do some survey by ourselves to test whether Apple uses really enjoy what Apple products bring to them. Is Apple products very perfect? Are there any disadvantages such as price exist in the market? So based on these questions, we start to take this survey to explore apple products’ satisfaction, find out if there are some bias of Apple products and some improvements that Apple can make their products much more wonderful. . Statement of the problem: Price is the most useful method to motivate consumers’ perception and it is the most obvious signal to attract consumers’ attentions. So in this study, we are going to ask some questions about price effects to help us to understand what people  think about Apple products deeply. 7. Approach to the problem * Chosen respondents. Before approaching this survey, first we think about those who might be willing to help us to take our survey. This is a way to avoid nonresponse bias. Also, we decide to use face to face survey method instead of online survey.

It will help us get results immediately. * Chosen right time. As the Thanksgiving holiday is coming, people are very busy with accumulate shopping information. Therefore, choosing the right time to ask them to help us to finish survey is very important because we don’t want to make them angry. So we decide to use the time when we hang out with them to take this survey. This is a win-win strategy. * Explaining the aim of this survey before they take it. In order to keep quality of data, we give a clear explanation of what we want to do in this survey. * Lastly, launching the survey. . Research design a. Type of research design: We decided to use a Likert scale and questionnaire for our research. The Likert scale we designed asked six pointed questions and was not gender, age, or class descriptive. The Questionnaire asked three specific questions and three non-specific questions regarding general information about the respondents such as gender, age, and class. b. Information needs: Satisfying the data analysis of 25 respondents, ranging from the ages of 13-54. We also need to have a mixed gender study to see the different nuances from different sexes.

We will need to collect different price preferences with different income brackets. We will include two different data collection tools, which will be a questionnaire and likert scale. Finally, to back up our claims, our research group will inquire secondary sources to support our implementation plan, and counter-support our primary sources. c. Data collection from secondary sources: Apple is seen as an innovator with an upward trend to the 18 to 34 demographics for many years, but according to the company’s Brandindex, since mid July, Apple’s biggest supporters are consumers are 35+.

Meanwhile, the younger age of 18 to 34–once the demographic most smitten with Apple– has seen a spiraling downward trend. d. Data collection from primary sources: All of our primary data was collected from the two surveys we conducted over a 3 day period. Our primary data, once collected and organized was formed into four bar graphs, three of e. Scaling techniques: * Forced rating scale. As 25 sample size is a little bit small, it will be hard for us to evaluate the result if someone checks “no opinion”. So in the survey, we don’t provide midpoint of this survey. * Balanced Scale.

We order the number of favorable and unfavorable categories or scale points. Even though two third of us are apple users, we keep using balanced scale technique because we don’t want to put any personal opinions in this survey. * Likert scale. We put four choices – strongly disagree, disagree, agree, strongly agree in the survey questions. f. Questionnaire development and pretesting: We attempted to make questions in the development of our questionnaire similar to our Likert scale, however the questions are geared completely towards the iPhone alone. No pretesting of either scale was done.

The questionnaire was formed rather quickly to complement the major findings of the Likert scale that held the major data we hoped to find through the 25 respondent samples. g. Sampling techniques: In an attempt to not skew our results, we will use randomized survey recipients, which is one of the less biased ways to use surveys. We will allocate people at random so the probability of bias is lowered; each member of the population has an equal chance of being selected. h. Fieldwork: We split the surveys between the three of us. All of us printed the surveys n our own and we dispersed them among our family and friends on our own time over a three day Thanksgiving holiday of 2012. After completing our surveys,  we compiled results individually and pasted them to a google document. We then dropped our findings into graphs using Microsoft Excel, labeling each question and classifications according to our surveys. 9. Data analysis a. Methodology : 25 respondents were interviewed with the questionnaire and 16 respondents were interviewed for the Likert scale, both of which we designed. Respondents were approached in many differents ways and asked to complete the survey at their convenience.

Respondents consists mostly of family members and friends of the group. The surveys were not dispersed age discriminately. b. Plan of data analysis: We will use graphical analysis to represent the frequency and the preferences of our respondents. Primary and secondary data findings will be compared with each other with hopes to justify our original thesis. 10. Results * Of the 25 recipients, 1 man, 20 and under, would prefer quarterly upgrades of the iPhone. 5 men, 20-29, would want yearly updates, 2 would prefer prefer quarterly, and 1 monthly. Men 30-39: 2 would want quarterly upgrades.

Men 40-54: 2 would want quarterly and 1 yearly. Women under 20: 1 would prefer yearly upgrades. Women 20-29: 4 would want quarterly upgrades and 3 would want yearly upgrades. Women 40-54: 1 would want quarterly upgrades and 2 would want yearly upgrades. * Men under 20: 1 would pay 99$ for the latest iPhone. Men 20-29: 8 would pay 99$ for the latest iPhone. Men 30-39: 2 would pay 99$ for latest iPhone. Men 40-54: 1 would pay 99$ and 2 would pay 199$. Women under 20: 1 would pay 99$. Women 20-29: 6 would pay 99$ and 1 would pay 199$. Women 40-45: 1 would pay 99$, 1 would pay 199$, and 1 would pay 299$. 11.

Limitations and caveats * Even though sample size is 25, which meets the minimum requirement of statistic, it’s hard to present a population as a whole through that small of survey analysis. * Only one sample of 25 was taken. The survey was not given to multiple samples over a long period of time, meaning the results may vary as opposed to one survey given at one point in time. * Most of respondents are our friends or relatives so they may not really take this survey very serious, and may give us the answers we want to hear. * Our group may have found conclusions based on our own biases, which may lead to inaccurate findings. Not enough time or resources to further investigate the validity of the implementation plan. * Our surveys and questionnaires may not accurately and coherently represent the problem we wanted to identify. 13. Exhibits a. Questionnaires and forms Likert Scale (As presented to our respondents): | Strongly disagree| Disagree| Agree| Strongly| The Apple iPhone is currently priced reasonably. | | | | | Apple’s products are reasonably priced for college students ages 18-25. | | | | | Apple is correct to release new versions of their products annually. | | | | | By dropping their prices, Apple products will reach a younger target market. | | | | Apple’s iPhone series is the fairest priced smart phone on the market. | | | | | Would you buy an iPhone if the app prices were cheaper. | | | | | Questionnaire (As presented to our respondents): Please take a few moments to complete this Apple Inc. short questionnaire. Gender: Female Male Age Under 20  20 – 29   30 – 39   40 – 54   55 – 0ver Yearly income (circle one) Under $25,000   $25,000 – $49,999  $50,000 – $75,999 $76,000 – $100,000 Over $100,000 Which of the following products have you purchased in the last 6 months? Please circle all that apply. iPhone 4S   iPad   iPod

How often would you prefer upgrades for the iPhone? (circle one) Monthly  Quarter  Yearly How much would you pay for the latest Apple iPhone? (circle one) $99  $199  $299 Viken’s data: Questionnaire 1. surveyed * 5 men * 4 women 2. Age (men first, women second) * 3 (20-29), 1 (under 20), 1 (40-54) * 2 (20-29), 2 (40-54) 3. Yearly income (men first, women second) * 3 (under $25000), 1($25,000-$49,999), 1 (over $100,000) * 3 (under $25,000), 1 (over $100,000) 4. Question 1: products recently purchased * 3 men, age 20-29 said they bought 1 iPhone 4S,  1i Pod, and none at all * 1 man, age under 20 said he bought 1 iPhone 4S 1 man, age 40-54 said he bought 1 iPhone 4S and  1 iPad * 2 women, 20-29: 1 bought an iPod and the other an iPhone 4S * 2 women, 40-54: 1 bought both an iPhone and iPad, the other bought neither      5. Question 2: Preference on upgrades * 1 man, age 40-54 said yearly * 1 man, age under 20 said quarterly * 3 men, age 20 -29: 2 said yearly and one said quarterly * 2 women, 20-29: 1 said yearly and the other quarterly * 2 women, 40-54: 1 said yearly and the other quarterly 6. Question 3: price of latest iPhone * 1 man, 40-54 said $99 * 1 man, under 20 said $99 * 3 men, 20 -29 all said $99 2 women, 20-29 both said $99 * 2 women, 40-54: 1 said $99 and 1 said $299 Yu’s data: Questionnaire 1. surveyed * 4 men * 4 women 2. Age (men first, women second) * 2 men (20-29) * 1 man (30-39) * 1 man (40-54) * 1 women under 20 * 2 women (20-29) * 1 women (40-54) 3. Yearly income (men first, women second) * 2 men, under $25,000 * 2 men, $50,000- $75,000 * 3 women, under $25,000 * 1 women, $50,000-$75,000 4. Question 1: products recently purchased * 1 man, age 20-29, iPhone 4S + iPad * 1 man, age 30-39, iPhone 4s + iPad * 1 man, age 20-29, iPhone 4s + iPad + iPod * 1 man, age 40-54, iPad 1 women, age 20-29, iPhone 4s * 2 women, age 20-29, iPhone 4s + iPad * 1 women, age under 20, iPad 5. Question 2: Preference on upgrades * 1 man, monthly * 1 man, quarterly * 2 men, quarterly * 2 women, yearly * 2 women, quarterly 6. Question 3: price of latest iPhone * 2 men, $99 * 2 men, $199 * 3 women, $99 * 1 woman, $199 http://pogue. blogs. nytimes. com/2007/09/06/the-iphone-price-drop/ http://bits. blogs. nytimes. com/2012/06/07/apple-buddies-up-with-cheaper-wireless-partners-for-iphone/ http://www. nytimes. com/2011/10/24/technology/apples-lower-prices-are-all-part-of-the-plan. html? pagewanted=all

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