Reflection Paper Sample
This study presents a simulation of marketing scenario of smart phones. Cesim brand is employed in the analyses of the market scenario of smart phones. The study presents the main scenarios as those that will result to growth in sales volume. It also presents many of the scenarios as those that will result to increase in demand of smart phones in the market. The study indicates that while Asian market is growing at a faster rate, the European market is more politically and legally stable and technological acceptance of the product is high in this market. The analyses indicate that the team has been very successful in simulating the market performance of smart phone market using SimBrand.
Apple Inc. is involved in the designing as well as manufacturing of personal computers, media devices and mobile communication equipments and applications. The company is engaged in the production/manufacture of iPods, iPads, personal computers and portable digital music players. It also delivers digital content to its consumers under the digital content distribution program. The organization mainly serves small as well as medium-sized businesses. The organization has a market capitalization of 643.55 billion and in the recent past year, it recorded a total of $ 182.80 billion in sales. Apple Inc. came into inception in 1976 and was pioneered by Steve Jobs in Curpetino, California. The company logo is as indicated in the diagram below;
Logos plays a significant role in differentiating the identity of an organization from those of its competing firms. Customers, as well as potential clients, are in a position to identify with the company through mere viewing of the logo. The company has a strong brand, and it is well known around the world. This has facilitated the development of a global culture referred to as the apple culture. This culture involves many of those consumers who are techie savvy associating with the technological advancements and innovations associated with the organization’s products.
The year 2014 saw the emergence of new Smartphone emanating from diverse companies. Chinese firms have increased their production as leading companies such as Samsung reports a decline in performance. Worldwide, the Smartphone market grew by 27.2% in the second quarter of 2014 financial year. 2014, thus promises to end with a total of nearly 1.3 billion in shipment, with the android taking the highest share of the Smartphone industry. This growth in demand of androids has primarily been driven by growth in a number of value-driven customers.
The percentage market share for brands that are leading in market for Smartphone is shown below in a table format;
Source: IDC, 2014
In the period above, Apple company took advantage mainly of its new and highly awaited brand, iPhone 6 plus and phone n6. Because of this anticipation from the customers, the company made the thirds quarter largest volume. Apple is ranked second largest company in the manufacture of Smartphone and has the second largest market share too.
In the industry for Smartphone, there is a stiff competition. There are several well developed companies competing like Apple, LG., and Samsung among many more. Because of this stiff competition, Apple’s market share has always remained low. Many of the competing firms such as Samsung have already started developing more affordable smart phones. This has constrained the ability of Apple Inc. to enter the low-cost market for Smartphone (Weitz, & Wensley, 1983). There are several disadvantages associated with competition to the affected firm. It results to increase in price wars in the region or industry. As a result, organizations in such industries are forced to push prices down. As a result of the reduction in prices, the overall level of gross margin in the organization declines. This reduces their profitability. Competition also results to rivalry in pursuit of raw materials. This significantly increases the cost of raw materials as well as cost of production.
The macro-environment in which Apple Inc operates in Europe is comprised of various factors and can be analyzed through the use of PESTLE analyzes approach. The environment is characterized with increasing strength of the economy in Europe. This came in the aftermath of 2008 financial crises when Europe experienced sweeping GDP decline. The euro economy has now improved. Nevertheless, the growth of this market can not be compared with first growing economies in Asia. Increased GDP also increases the citizen’s purchasing power in the nation. This raises the people’s ability to purchase goods available in the market. Politically, Europe and Asia are politically stable places to invest in although, in countries such as China, trade laws are a bit restrictive. In terms of technical progress, it is evident that consumers in Europe are more techie savvy as compared to those in Asia. This means that the company’s technologically improved products shall be more customers appealing in Europe compared to customers in Asia. When it comes to the acceptance of the products by the immediate society, many European consumers will most likely accept the product (Apple culture) compared to Asian customers who seems to have less exposure to the culture. On the issue of environmental concerns, a few or no concern is likely to be raised in Asia as opposed to Europe. This implies that the organization will experience less regulatory measures in Asia in terms of environmental conservation in Asia as compared to Europe. Legal environment shows that in Europe, contracts are much enforceable than in the Asian market. Hence, the operating environment in Asia is more predictable (Smith, Berry, & Pulford, 2002).
Key Issues, Objectives, and generic strategies
In terms of strengths, the company has a wide financial base. This will enable it to finance the opportunities that it may be pursuing. At the same time, such organizations may end up using such resources in enhancing marketing communication for their products. This will increase significantly the opportunities for success of its operations in the market. The organization equally has a strong brand. Consumers around the world have a high level of awareness of the existence of the brand as well as its products. The organization will thus incur little in its marketing communication. Apple Company, in marketing of its Smartphone, is experiencing internal problems when it comes to raw material handling. The mineral used in the development of Smartphone and flat-screen computers and televisions is rare. Dominance of China in export of the minerals has reduced access from other sources constraining production. Internally, the organization thus needs to source for other suppliers (Weitz, & Wesley, 1983).
In Europe, there are a number of opportunities that faces players in the industry. There is increasing recovery of the economy from the 2008 financial crises which pushed the overall performance of organizations down. As a result of improvement of the performance of the organization, the economy has increased the economic performance of individuals in the market. Another opportunity that the organization could exploit is the growing use of Smartphone in diverse ways. There is a growing use of this phone for learning purposes, business as well as music in European settings. This has increased the demand of the product in the market. At the same time, the organization is faced by a number of threats. The degree of competition has increased significantly in the market. This has the potential of constraining the overall level of market share attained by players in this industry. The organization is equally facing increasing cost of Smartphone in the market. As a result of this, it is losing out on a larger market in Europe. The organization is forced to focus on the high-end segment of the market. The new entrant’s threat in the market is also high. This is because there has been an increase in new companies participating in the production of Smartphone in the market.
This marketing plan focuses on a number of goals in terms of the organization’s sales volume and market share. The main objective the company is to amaze a total of Profit, k €1418.5 in sales volume. High level of income increases the ability of the organization to sustain its competitive edge in the market. Through attainment of marketing objectives, those in the marketing department in such organizations are in a position to ensure that they are contributing to the well-being of the organization. The organization’s marketing department ensures that the goals that they set for the organization are specific, measurable, attainable, and realistic and time bound. This ensures that such goals as setout by the marketing team in the organization are feasible.
In the European market. It is anticipated that the company will be in a position to sell this product at Profit, € 300 in the European market. In the Asian market, the organization expects to sell the product at the same price. In the Asian market, the organization expects to realize 80% of the sales volume generated in the European market. In terms of market share, the organization expects to have a total of 30% of the European market and 40% of the Smartphone market in Asia. With the first growth in the Asia econo0my and little penetration of Smartphone, it is evident that the company will be able to receive from this market high level of market share if its marketing program will be effective (IDC, 2014).
To meet the above objectives, the organization will assume a number of strategies. For instance, the organization focuses at investing in an integrated marketing communication. The organization will employ televised communication and the social media in its marketing communication. Through televised commercials in Europe, the organization will develop adverts that showcase the use of the product by people from diverse walks of life. It will showcase super models using the smart phones, football stars, staunch businessmen, and students. This will significantly boost the attractiveness of the product in these two markets. This indicates that the product will be bearing multiple associations. These adverts will be broadcasted just before news, during international sports channels as well a during business news presentation in leading television channels in Europe and Asia. This will give the organization-wide coverage. At the same time, the organization will employ the use of the social media. Social media platform of communication has a number of merits. Customers can have first-hand testimonies from clients who have already bought the product. This increases their confident in purchasing the product. At the same time, social media facilitate sharing of information among consumers. To realize this strategy, it is equally evident that the organization must put its investments in distribution channels. The organization will open five more delivery centers in Europe as well as 15 distribution centers in the Asia region. This indicates that once clients purchase the products online; they will be able to access such products from convenient points. In terms of generic strategy, the organization will focus on differentiation in marketing of its product.
Part 2: Sim brand reflections
From the initial round, it is evident that things did not go as projected. Under round 1, the expected performance was a total profit of, k € 66272 while the selling prices was expected to be around 300. This projection has changed to realized week 2, k € 85322. This indicates an over performance as compared to the initial projection. This could be associated to a number of factors. It might have been because of the rise in the product demand in the Asian market. This was because of the increased growth in the consumers, purchasing power in the economy. It should be noted that, the improved performance is due to the increased product awareness in this market. This indicates a need for adjustments in simulation of the overall level of sales revenue that the company’s venture would generate from the market. The company must also consider the percentage growth in sales if such sales are to be projected accurately for the subsequent years.
As indicated, sales will increase from k € 66272 in the first year to k € 85322. This is based on the second round decision transition from the first round choice. This is as a result of a number of factors. It is projected that the demand for Smartphone in the market is accelerating in many areas in the market. The rise in demand of a product increases chances of making high sales in the market. At the same time, growth in demand increases the ability of the organization to sell their products at high prices. This is on the basis of the prevailing supply and demand laws in the market. For instance, as the demand level for the product rises, the price level of the same product goes up in the market. This increases the ability of the organization to sell the product at high prices.
The increase in sales beyond what was expected is based on the high level of price elasticity. When demand for phones decline sellers who are not willing to maintain the dead stock often dispose of the stock. This indicates that prices movement has influenced the changes in sales volume in the market. The increase in demand for Smartphone has been increased by the growing level of features that have been embedded on such Smartphone. Smartphone are now being used for diverse purposes. They are being used by students in enhancing their learning process. They are accessing books and lectures through smart phones. This has led to increasing acceptance of smart phones among students in learning institutions. Moreover, the applications in such smart phones are being used for downloading music and videos. This has increased the attractiveness of the product in the market. At the same time, Smartphone are also embedded with tools enabling business people to carry out business. This has improved the product attractiveness in this market, and enhanced the volume of sales recorded by the organization.
The performances and decisions made by the company will be under evaluation in this part. Performance in the final round is influenced by the increasing demand of Smartphone in the market. There is equally an increasing demand for these high-end products by the high-end consumers. This has increased profit margin of Smartphone in the market. As a result of these developments, revenues went up to 102121. This was a significant increase in sales from the previous sessions. The increase in sales in the organization has a number of merits to the organization. It increases the level of profits to such an organization. This increases sustainability of the organization. At the same time, increase in sales revenues in the organization is attributed to increased marketing communication. It is expected that the above-indicated strategy of marketing communication significantly increased market awareness on Smartphone developed by Apple Company. Marketing communication has also increased the persuasion of consumers to purchase the product. As a result, sales volume has gone up in the organization (Cravens, & Piercy, 2012).
In the final simulation, it is evident that the team was successful in simulation. The outcome of the simulation process indicates that the most likely scenario is that sales volume in the organization would go up. This is on the basis of several assumptions in all four rounds. Each of the simulation scenarios indicates a potential chance of growth in the organization’s sales volume. This is evident from the consistent rise in sales from Apple in the past three-quarters, as indicated by its financial reports. The recommended scenario is thus in line with the actual outcome. Nevertheless, the simulation though done correctly, fails to capture accurate result. In reality as indicated in the graph in section A performance of the entity in terms of market share? This is attributed to growth in competition in the market share in the Smartphone market. In simulation, individuals identify the potential eventualities in the marketing process. They identify the scenarios that may arise in the marketing process. Throughout the team, members have identified situations that are likely to result in growth of revenues as well as those that will shrink revenues within the organization (Beall, 2010).
From the above simulation, it is evident that the simulation process is faced with a number processes. It is evident that simulation is an important tool in strategic marketing. It indicates the overall level of potential occurrences that organizations may encounter in their marketing process. Through simulation, potential scenarios are identified through which organization prepares for any scenario. Through this, organizations are not caught off guard. In this case, the prepared scenarios indicate that the chances remain high that the organization will operate successfully in the market. Nevertheless, even if the organization’s sales and market share does not reach high levels as targeted, the organization has already identified such risk and marketing strategies that will be adopted in maintaining performance on board.