The target group for laptops are business men and women and people on the go or students at a private school or at university/6th form. At a private school it is a necessity-you must have one! This could apply to people above the age of 13, men or women. The laptops can vary in price and the features may be different but a good decent laptop is around the £800 mark, which for some people may be a problem. There is no shortage of supply for the laptops so the market is in equilibrium.
To make movement along the curve the price for the laptops would have to be altered.
Some factors that may see a shift in demand curve for laptops is that if you get more or less product features on the laptop for your money, or what they are advertising now as ‘Double Memory’. Higher or lower individual income is not a factor, but if income levels rise generally, that can cause a shift in the demand. This is because if an individual had a low income then it is more likely that he will save his money, not to mention the fact that they may not be able to afford it. Whereas if an individual earns a higher income level then they will be expected to spend more as they will have a higher disposable income and will feel good about there purchase(s), they will also have a higher marginal propensity to consume (MPC). This theory states that for every £ of income will have a willingness, or inclination or propensity to spend much of it rather than to save. In the UK the MPC is over 70%, meaning for every £ of income we get, we spend 70p of it. Advertisement is also a factor. If there are advertisements on TV, radio, billboards or anywhere where the general public can see some people would become interested. But if people don’t advertise then they will not know about your business and what you sell and is shift factors or factor that is likely to cause a shift of demand. But they need to make the advertising campaign an effective one. Adverts that do not appeal to the public will have a much reduced effectiveness at increasing sales. Fashion is one of the biggest factors, like clothes people want the new improved technology or new feature for a laptop. People don’t want the older slower ones the want the newer more stylish ones because it brings attention to it, and it also makes you feel good that you have one of the newer more up-to-date, stylish laptops that can be bought.
The business/production I am focusing on is dell. The type of market structure is oligopolistic. The few large competitors are Acer and Packard Bell. If you include some smaller companies like Apple the market structure is monopolistic.
An oligopolistic market structure has very few competitors. The different firms all sell at roughly the same price but some of the larger companies can afford to sell at a lower price because of the economies of scale. In some industries there are very large economies of scale or cost savings to be gained from increasing production. If one large firm can produce and sell of a particular product required in the market at a lower average cost per product than a number of smaller firms put together then this large firm would be a natural monopoly. There are barriers to enter as you have to be a massive company before you can join the oligopolistic market. Generally, firms compete by using advertising and not by price. Dell’s main rivals are Acer and Packard Bell; all the other computer selling companies such as Apple don’t compete because perhaps Apple are not so big in the laptop market, but relatively big in the desktop PC’s.
Dell is a massive global production and their products can be consumed in most of Europe and the rest of the world. Dell is also on the internet where everyone can access it; they compete globally through the internet shops and the TV. Although there have produced an advert that says, “You wont find dell in the shops, so telephone us or go online”.
It promotes Dell’s products by advertising on the television. Also on the internet there are special offers and competitions which people feel more inclined to do because they have put a promotional price or a chance to win the Dell product.
Dell is always trying to get a USP (unique selling point) so that their firm has something better than the rest of their competitors. On their computers they now have free double memory when you purchase that particular computer which is a promotional offer trying to give you a good incentive to buy it so sales revenue will increase, and the prices are the best around for the quality you are receiving. The reason their prices are so low is because they want to be able to sell more to the general public than the rest of their competitors, which in the long run will help them become more successful, and will be a long term objective. The price at which the sell their product means that they have efficient production and efficient use of resources and benefits of economies of scale because of their large output. My company does benefit from economies of scale because it is such a big firm that it increases its volume of output.
Based on my above reasoning, my hypothesis is that it competes by having such a big global company that everyone realises and USP’s and promotional which attracts more customers. Also by the amount of advertising and promotion which is broadcasted around the whole of the world.
- What type of computer(s) do you have, either at home or work?
Dell?
Apple?
Hp?
Other (please state)
- What types of computers have you seen advertised and are broadcasted either on the television or the radio that you can remember?
- When you have gone abroad, have you noticed any of Dell’s adverts or promotional campaigns anywhere?
- Have you ever bought any of Dell’s products that were on special offers?
- Where did you hear about Dell?
- What shops do you know that sell Dell’s products?
- When talking about computers is Dell ever mentioned?
I have completed a survey at PC World, which sells all sorts of varieties of computers laptops and computer equipment in general. I then recorded many laptops of each make they had on show in their store.
Dell 28
Hp 21
Acer 16
Apple 7
So as you can see from this set of results. I then asked the manager of the store and he told me that the best selling laptop was Dell.
