Tag Archives: telecommunications

iPhone X – Premium Pricing

Apple introduced not just one, but two new models of the iPhone this fall: iPhone 8 and iPhone X (ten). Sure, companies often introduce multiple new products at the same time, but rarely do they introduce products that are so similar in scope and use. Why did Apple introduce two models at the same time? Easy – two different models are for two different market segments.

At a price of $999 (64 GB) and $1,149 (256 GB), the iPhone X is Apple’s first premium level iPhone model. And, since it has leading-edge features unavailable on any other smartphone, it seems to be targeting the early adopters and tech enthusiasts who are not price sensitive.

What does the iPhone X have?

  • 8 inch screen takes up the entire face of the device
  • OLED display for thinner, brighter, viewing
  • Face ID infrared facial scanning

The strategy seems to be working. After only a few days of pre-ordering iPhone X online, delivery times are easily two months away.

Are you planning on buying one?

Group Activities and Discussion Questions:

  1. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Show iPhone X: https://www.apple.com/iphone-x/
  4. Show CBS Video: https://youtu.be/haj5nV6Muhw
  5. For iPhone X product, divide students into groups and have each group work on any/all of the six steps.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  7. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source:  New York Times, CBS, other news sources

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Happy Birthday, iPhone!

While it might feel like smart phones have always been part of our lives, they are still relatively young in years. The Apple iPhone just turned 10 in June, and it’s interesting to look back and see how mobile devices have changed how people communicate and shop. What was once a high-tech oddity is now a permanent fixture in the average person’s life.

Consider how the iPhone and smart phones have changed the daily landscape.

According to Pew Research:

  • 77% of U.S. adults now own a smartphone
  • 51% of young adults’ homes contain 3+ smartphones
  • Smartphones are used for more than calling and texting
  • 51% of U.S. adults use smartphones to make online purchases
  • 20% of households below $30,000 income are smartphone-only Internet users.
  • 55% of smartphone owners get news alerts on their phones
  • 28% of owners do not use a screen lock to secure their phones
  • Ownership is climbing in developing countries, but there is a digital divide in ownership

How do you use your smartphone?

Group Activities and Discussion Questions:

  1. Poll students: What type of smart phone do they have? What age did they first get a smart phone? What was it like?
  2. Ask students to list 10 things that they use their phones for each day.
  3. Build a full list on the white board to review with the class.
  4. Show the research article from Pew: http://www.pewresearch.org/fact-tank/2017/06/28/10-facts-about-smartphones/?utm_source=Pew+Research+Center&utm_campaign=3a5800a955-EMAIL_CAMPAIGN_2017_06_22&utm_medium=email&utm_term=0_3e953b9b70-3a5800a955-399503221
  5. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  6. Divide students into teams. Have each team use laptops to do general research to answer the environmental factors above.
  7. What should smartphone companies do to adjust to these factors?

Source:  Pew Research

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Crisis Communication: Largest Smartphone Recall

galaxy

The true test of a company’s marketing strength often comes to the front when a company is faced with crisis communication regarding its products or services. And this month, it’s Samsung’s turn in the spotlight for problems with its high-end smartphone, the Galaxy Note 7. The issue is that some customers have reported that their phones have caught fire due to the lithium-ion batteries. According to the Consumer Product Safety Division, in the U.S. there have been 92 reports of batteries overheating, 26 reports of burns, and 55 reports of property damage.

Samsung reacted quickly to the issue, but it has been a far from smooth process so far. No wonder – there are more than 2.5 million units of the Galaxy Note 7 in circulation, making it the largest recall of smartphones. Statements from Samsung and the Consumer Product Safety Division have not been totally in sync either, causing confusion among the smartphone owners as to the correct process to use.

Airlines are making multiple warnings that caution owners not to turn on the phones while on airplane. (Note: I was one several planes last week and heard multiple announcements about not using the phones on the planes – thanks, airlines!) This issue will undoubtedly hurt Samsung sales and stocks, particularly in conjunction with the recent announcements of new iPhone models. Replacement phones are due to be available in the U.S. by the end of September.

Be safe.

Group Activities and Discussion Questions:

  1. Poll students: How many have a Galaxy Note 7? How does the recall impact the students’ perceptions of Samsung?
  2. Discuss crisis communications and the importance of companies having a plan in place BEFORE a crisis occurs.
  3. View Samsung’s statement: http://news.samsung.com/us/2016/09/09/samsung-confirms-engagement-with-cpsc-consumer-product-safety-commission-in-response-to-note7-battery-issue/
  4. Have students review the statement and recall instructions. They might also use laptops to research the various instructions.
  5. View the Consumer Product Safety Commission Web site information: http://www.cpsc.gov/
  6. What other products have safety issues? How will these impact a company’s sales and brand?
  7. Divide students into teams. Have each team put together a crisis communication plan for a company. (Examples: food recalls, automotive recalls, etc.) Include press release, news outlets, and recall/replacement process.

Source: New York Times, Wall Street Journal, CNN, other news sources

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