Added value is what can make or break an organization. It is the value added to the product from the cost it was to produce it to the price the market puts on it. A more successful business is one that can add a higher price tag to their product. Firms can do this in many ways. A more common way to do this is to increase brand awareness. Branding the process by which both a brand and brand identity are developed. A more popular product is a more profitable product. Consumers are more likely to purchase a product or service from a more reliable source, and if the brand is known to be quality then the demand is there. Also, a product which brand is more widely popular has a higher likeliness to sell well. For instance, a more Sony TV is more popular than an unknown brand, if the average consumer could choose it would be the Sony brand which has a larger presence in the market share.
Market share refers to a brand’s share of the total sales of all products within the product category in which the brand competes. Market share is determined by dividing a brand’s sales volume by the total category sales volume. Obviously, the higher this is the better. Some effective ways of increasing this without having to increase brand awareness is by creating a better product for the consumer. Having a USP and filling a niche market with an innovative product is more likely to capture the customer’s attention. Not only will this make competitors less threatening to the firm’s market share but continuing to innovate with increasing technology means the company reputation will enhance as being the leaders in their market. For example, a company like Panasonic makes a large amount of products. One of these is digital cameras, and in order for them to keep up with the competition like Canon they must release digital cameras with higher resolution and more features to draw the consumer in.
To gain higher profits through added value firms not only need to add to their products value, but they also maximise profits. Profit maximisation is the principle of adjusting price and/or output volume in such a way as to earn the largest possible profits. Sales maximization on the other hand, is the notion that business firms are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business. Firms can also maximise profits by again keeping up with technology. Keeping costs down in the manufacturing of products can drastically affect the profit a firm makes.
The objective of this report is to see how mobile phone manufacturers add value to their products as other companies do to theirs. To do this is will be using primary research data and secondary research data. Mobile phones are a large market that has grown in the past few decades. Different organisations have succeeded by adding value to their products through using innovations in technology (e.g. colour phone) while others use marketing campaigns such as celebrity endorsement, and I will continue to see how mobile phone manufacturers are so successful at adding value to their products in the rest of this report.
To have a more accurate understanding of how the mobile manufacturers add value to their products I will research their techniques and selling tactics. I will use a varied amount of secondary and primary research. The primary data is that which is collected by me which can be an interview with a mobile phones retailer for instance. One way in which I will carry out a form of primary research is by handing out a large quantity of questionnaires to random selected people. This will give me a large and varied set of data resulting in a broader at how mobile phone manufacturers and value to their products.
A questionnaire would give me the chance to gain a very simple set of results that I will be able to tally for example and see which reasons outweigh others, but to gain a deeper understanding of how the average consumer spends their disposable income on mobile phones I plan to interview a person who has seen first hand at what sells and this is a employee at a local mobile phone retailer. This will give me a chance to give open ended questions and gain further insight in what the industry thinks sells, and why it works. While both these forms of primary research have their advantages they also come with disadvantages.
For example, trying to arrange an interview with a busy store manager or even store employee will be a difficult feat as they have nothing to gain by helping me. This again will be a difficult task to do with the questionnaire. The chore of writing and printing the questionnaire is nothing compared to having to get them filled out by strangers. To carry out this research may be time consuming, but it will however give me a reliable source of information, and tell me how the major mobile manufacturers add value and which is the most successful.
When doing a questionnaire I hope to use a range of different questions to gain a useful insight into the consumer’s perception on the mobile phone manufacturers of today. To do this I will use a variation of questions, ranging from simple yes or no answers to a few lines to be filled with thoughts or comments unique to the interviewee. While open ended questions may be harder to categorise than normal ‘tick boxes’ questions, they will be fewer in number and give more details on the consumers view. However, the questions may not be informative enough in order to save time and effort. I must make sure questions are varied and cover the necessary topics.
Another method in which to gain research data is by secondary research. Although it is not as reliable as primary research gathering information already tallied and put into numbers can save a vast amount of time which could be used on thoroughly analysing the data. I will do my secondary research by surfing the net, looking through mobile phone brochures, books, government statistics and market research organizations I will use credible sources such as magazines, reputable websites and market research organizations. The problem with this however is that although data may appear credible, even the most professional of sources may bend statistics or have errors. Also, finding information directly relevant to my aim will be a difficult task as there is much information on this particular subject and I ma suffer from information overload.