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For example, by gathering a range of ‘typical’ consumers to taste test products and share their
thoughts about the different products. Since by launching a new product is very expensive, thus
some try outs of the new products are made. The research include three stages, which are
concept research, product attributes and volume assessment. These research allows the
consumer to determine whether the concept of the product is good, whether the product match
the concept and whether the individuals would buy the product if it does launch. Even though
this does not represent the views of the whole population, but it provides greater insights in “why
people think what they think”. ("Using market research to develop a product range - Coca-Cola
Great Britain | Coca-Cola Great Britain case studies and information | Business Case Studies",
2018) This research allows Coca Cola to determine which products the consumer might like and
will determine the direction of the marketing strategies.
Nowadays, we see a lot of advertisements from KFC and McDonalds promoting their products
and having sales for a limited time. For instance, McDonalds had the 3 for $3 sale, which
contained one cheeseburger, a small sized coke and fries. On the other hand, KFC quickly had
the deal of 9 for $9.95 on Tuesday to keep up with the competition and not let all the customers
get taken away. I was one of them who were influenced by the deal, firstly the 3 for $3, then
went to KFC to get the 9 for $9.95. Another impact from McDonald is the Happy Meal, which
attracted a lot of kids as they are aiming for the toys in the box and this would drag their parents
or families with them, which meant more customers.
3. PESTEL and how this affects the introduction of a new product or service.
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For Political factor, Apple’s main dependant manufacturing comes from Foxconn in China, as
the labor and material costs are low. However, the current President of America, Donald Trump
had vowed to “slap higher tariffs on China which could force brands like Apple to shift their
production base to US”. (Pratap, 2017) Due to the shift of the base, this would increase the cost
of production and manufacture, thus the product itself may also increase.
Economic stability creates opportunities for companies like Apple to expand their businesses in
most developing countries such as China. China is an opportunity for Apple to increase
revenues through sales, but this is also an opportunity for Apple’s competitors as they are also
targeting these high-growth economies. Therefore, IPhone X could increase sales in China.
For social factor, the increasing popularity of mobile asses and the rising use of social media
creates an opportunity for Apple. As it allows the company to continue to provide other devices
such as the Apple Watch and Macbook. The demand for digital devices like Apple products
resulted the release of iPhone X, a unique and different product to other types of iPhones.
Environmentally, Apple continually seek for new ways to improve the energy efficiency of Apple
products through using materials that emit less heat such as, batteries and processors. In 2015,
“93% of the energy used by Apple came from renewable sources” (Pratap, 2017) and overtime,
“Apple...focused on reducing toxins from its products”(Pratap, 2017) This allows the customers
to feel safe about their products and increase sales.
Governments are imposing more privacy regulations on business like Apple, as they realised
that “privacy issues [are] connected to digital technology use”.(Pratap, 2017) This factor is a
threat which results Apple to develop products that involve transmission of private information.
However, it also allows the company to improve their system that protects private informations.
In the iPhone X, it added the face scanning and it protects everything on phone.
Strength allows the company to see where they are better than their competitors and their
benefits. The biggest strength that Adidas has, is that they have 1557 stores worldwide in 2017,
thus their business is internationally recognised. Adidas also sell products in different channels
such as supermarket stores, onlines stores and company owned stores. Since Adidas is such a
big business, the quality of their products are safe and consumers are willing to pay for their
products.
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Weakness allows the company to inspect how and what they have to do to improve. A
weakness of Adidas include the price of some products may be too high, which limits the
customers and sales of the products due the production method. This may lead the company to
promote on the products and have limited edition of the product as this would influence the
customers to feel that they need the products. Another weakness is that they target limited
segments as their main targets are youth and young adults. This decreases the opportunity of
sales and therefore it may affect them to produce products that fit for older individuals.
Opportunities allow the company to see clearer what they could do to increase brand
awareness, sales and profits.Opportunities of Adidas include collaborating with sports
team/clubs internationally as this can boost Adidas’s brand presence. By realising the
opportunities they have, they could rise the price a little higher or expansion of market.
Threats are external factors that may affect the business to achieve its objective. It include
competitions such as Nike and Puma and also fake imitations of the products. Due to these
threats, the company may decide to improve more on the quality of their products so the fake
imitations are unable to copy. They could also decide to create new products to differentiate
from other brands as they all offer similar styles and varieties, such as sports equipments and
accessories.
For segmentation, the variables is almost limitless and “they fall into four broad categories:
geographic, demographic, psychographic and behavioural variables.” (Elliot, 2018, p.194)
Segmentation is an effective method to increase the focus of a firm on market segments and the
increase of the focus would also cause the competitiveness in the market segment to increase.
Thus segmentation could be used to take advantage of the collaboration trend as it increases
competitiveness, brand equity, brand recall and as well as the profitability of the firm. For
instance, Virgil Abloh uses the behavioural segmentation to target the youth through social
media such as instagram, as he knows that youth are heavily inspired by social media.
Targeting involves evaluating potential segments and selecting the target segments. “The
evaluation of potential market segments involves detailed and rigorous analysis of sales
potential, the competitive situation and cost structures.” (Elliot, 2018, p.205) By breaking the
customers to different segments and evaluating it, the business could prioritize which target
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market would be most valuable. This would allow the business to save time and costs or
otherwise if they targeted the wrong customer, they would have to do everything again.
“Positioning describes how target markets perceive the organisation’s offer relative to competing
offers.” (Elliot, 2018, p.209) Positioning allows the business to consider the benefits in
development and promotion for the customer. Also by differentiating the business’s product to
other business’ who have the same products creates value and brand loyalty among customers.
For example, the Off-White collaboration with AIr Jordan 1 has high quality and this is in the
mind of customers, which allows the customers to pay high price for the product.
External factors that may have impacted the success of the product is through the opportunity of
using media to generate awareness. Through social media, this announcement went wild and
the next morning,“7500 people in Tokyo, 2000 people in London and 1500 people is Sydney
lined up for a chance to buy pieces from the collection.” (Morency, 2017). Also Jones said “In
this world where everyone wants the new, new, new, it’s nice to be able to throw in something
that’s completely fresh.” (Leitch, 2017) Jones sees the opportunity to launch a product that is
new and fresh, thus catching the eyes of the consumers.
A failed product is the Samsung Galaxy Note 7 that was released in August 2016. Internal factor
include failing to test on the quality of the product, which resulted the battery to overheat, thus
the product exploded in its rush trying to release the product earlier than Apple. This problem
began just days after its launch and Samsung had to recall 2.5 million handsets in 10 markets.
They accelerated the production process as they were driven by fear from the Chinese cell
phone makers who are slowly catching up, for example, Huawei and Xiaomi.
The external factor include the threat that they have from their biggest competition, Apple. They
see the opportunity to release the Note 7 earlier than the iPhone 7 by rushing in the production
process, which resulted in a bad quality of product. Samsung sees that the quality and
sophiticatability are growing in products of Apple thus Samsung added new features, like iris-
scanning for added security and waterproofing. The most important thing is that they wanted to
prove that they weren’t copying the features of Apple.
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Reference
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Elliot,G. (2018). Marketing/Greg Elliott, Sharyn Rundle-Thiele, David Waller, Sandra Smith, Elizabeth
Eades, Ingo Bentrott
Gorsler, F. (2018). These 10 OFF-WHITE x Nike Sneakers Could Be Releasing Later in 2018. Retrieved
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