TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 TASK 1............................................................................................................................................1 Factors that help in determining price of tablet computers in UK..............................................1 Factors that determine price of tablet in free markets:................................................................7 CONCLUSION..............................................................................................................................11 REFERENCES..............................................................................................................................12
INTRODUCTION Technology is continuously developing in the economy. It has now become life blood in the growth of economy. The Highest advancement of technology can be seen in the industry of computers. From the past 10 years, every year the latest technology computers come in the market and become obsolete after few years, therefore change and development has both positive and negative impact on the economy. These impacts can be clearly seen in the economy of UK. More than two third of the population of UK is using and has become dependent on computers. The latest advancement in computer industry is tablets. These small tablet computers can perform almost every task that a large computer can perform and also have an advantage of small size that can be easily carried anywhere. The present report is based on the price of tablet computers in UK. Various factors that helps in determining the price of tablet computers in market and free market is focused discussion of this report. Further, market share of table occupied by different vendor has been graphically presented and also the reasons behind decline in the prices with increase in demand are described. TASK 1 Factors that help in determining price of tablet computers in UK Computers, tablets and phones are the devices of recent generation that have become necessity in today's era. Once was a time when these devices were considered as a desire and not a need. The main factor that has affected the necessity of theses devices is change and improvement in technology (Asai, 2016). Change in technology has impacted positive as well as negative demand and growth of these devices. In UK more than half of the population is using tablet. However, even then prices of tablet has been declined in past recent years. Before identifying the reasons for decline in the market share and prices of tablets in UK, it would be beneficial to know the factors that effect helpsin determiningthe pricesof tabletsand computersin UK. These factorsmay be summarised as below: 1
Industry Standards:All types of industry have their set standards in determining price of their product. A company cannot determine price of its product at its own basis, follow up of rules and policies is necessary. This also includes prices of other competitors in the market. However, advanced technology has made it easy to identify prices of products of other competitors. Competing products:In the industry of tablets and computer, buyers have numerous of choices and also there are number of substitutes. Therefore, while determining price of a product, prices of competitors is an important factor (Babai, Ali, Boylan and Syntetos, 2013). For setting the prices while taking in consideration prices of competitors, company can also use competitive pricing methodology. There are many competitors in the field of table and computers like Apple, Samsung, ASUS, Microsoft, etc. Pricing higher than the prices of competitors by providing same features will cause company loss of market share and customer rotation. Consumer Demand:Demand of customer changes with the change in technology. Prices must be accordance with the technology. More the latest technology product more will be the demand of customers, therefore prices of such products can be set at high profits. While tablets with obsolete technology will not attract high demand (Miyagawa and et.al., 1997).Keeping prices of such products high would negatively impact the market share and demand of the company products. It is generally assumed that, consumer will be willing to pay high for good quality products and latest technology products rather than paying for old and obsolete products. Product Positioning:prices of the products of the company are important factor that affects the view point of customers regarding the company and also about the quality of the product. Consumer assumes high quality if the prices of the products are high. It is general perception of consumers that low priced products have low quality (Chan-Olmsted and Shay, 2016). Therefore, in order to position a product in high market, prices plays an important role. High priced product companies set themselves as luxury and upscale brands. 2
Global Growth of tablet market (Source:Number of tablet users worldwide from 2013 to 2020 (in billions),2017) Market of tablet is increasing and market of traditional computers has been declining from the past few years. Main reason behind this is that the tablets are easy to handle anywhere while one cannot think of carrying a traditional computer with him on a trip. As per the new report, it is expected that global tablet shipments will increase at 9.1% CAGR at the end of 2026. Hence, considering the trend of tablet market it can be stated that global tablet market will nearly reach on US $ 600 by 2026 (Growth of Global Tablet Market,2017). Along with this, growth of tablet market can also be seen through the means of number of users. The above depicted graph 3
shows that in 2013, number of tablets users were .66 billion, whereas level of the same accounted for 1.23 billion at the end of 2017. Global growth of tablet market is highly influenced from the changing taste and preferences of customers. This is one of the main factors that have high level of impact on demand level. Tablet’s offer high level of convenience to the customers as compared to personal computer’s. Moreover, customers can carry tablets easily wherever they want. In addition to this, aftertherecessionarysessionpurchasingpowerofcustomersareincreasedsignificantly (Rosenfield, Jahan, Nunez and Chan, 2015). Further, overall economic development also gives indication in relation to market growth. Hence, considering the overall evaluation it can be stated that taste, preferences and attitude of customers towards specific product is high then demand level increases and vice versa. 4
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