ECON325 Microeconomics Portfolio Project 1
ECON325 Portfolio Template (please remove this statement when turning in your project milestones)
Insert Your Name Here
Bryant & Stratton College
ECON325 – Microeconomics
Insert Instructor’s Name Here
Insert Date Here
Table of Contents
Week 2: Product
Market Research
Week 3: Pricing
Determinants of Supply and Demand
Week 4: Economic Costs
Week 5: Explicit/Implicit Costs
Week 6:Economic Profits
Week 7: Overall Assessment
References
Week 2: Product and Market Research
Due by the end of Week 2 at 11:59 pm, ET.
This week, you will provide an overview of the product you have selected to present to the marketing team. You will also explain how you will conduct the market research for each of the six topics listed.
Identify and describe the product you plan to conduct market research on. Justify your selection by explaining what the current product market looks like.
Explain how you plan to conduct the market research for each of the following:
Measure consumer demand
Identify Trends
Analyze buyer behavior
Analyze competitor behavior
Identify target markets
Determine sales potential
Type your response below; you may leave all directions intact:
Identification of the selected product and its key specifications
The product I have selected to present to the marketing team is the new iPad 10th generation. Compared to previous generations of iPad, iPad 10th generation provides the users with an outstanding experience in the sense that it incorporates several new features such as:
A larger, 10.9-inch display while maintaining slim bezels and flat edges. Thus, the new iPad 10th generation is ideal for applications in which the user wants to use images on the go. For instance, the user may use the new iPad to watch a movie at a similar resolution than he would achieve on a computer but with the advantages of fitting in any purse and having a far less weight than a computer.
The A14 bionic chip, which allows the user to work with several programs at a time
A landscape-positioned FaceTime camera, thus being easier than ever to make high resolution selfies
5G support on cellular models and WiFi 6 in all models, so that the user can navigate the Internet faster than with any other device and in any place
A new, two-piece magic keyboard accessory, so that the user can rapidly type the text into the iPad
Consumer demand
As tablets became more performant in the latest years, their demand has increased and is expected to continue to increase in the near future. In this sense, while they were initially used only under very specific circumstances due to their low storage capacity and low performance, tablets have become a highly competitive alternative considering that new models such as the iPad 10th generation come with a capacity and performance similar to that of a computer but with a much lower weight and ease of use than a computer. These advantages have caused the tablet market worldwide industry to increase its annual revenue from $48.69 billion in 2018 to $57.28 billion in 2022 (statista.com, 2023a) accounting for a demand of around 163 million units (statista.com, 2023b).
Trends
As outlined previously, iPad 10th generation presents several advanced features compared to the previous generations of iPad. In this sense, its screen is bigger, enabling users to see movies with a higher resolution. Besides, the camera has been improved compared to previous generations, such that the photographs and videos recorded have a higher resolution than in previous models. The bionic A14 chip also enables the user to work with more programs at a time, nearly reaching the performance of a computer while maintaining the portability of a tablet. Lastly, 5G and Wi-Fi 6 connectivities enable the user to navigate the Internet faster than with any other previous tablet.
Buyer behavior
Most users are interested in buying an iPad as iPad 10th generation instead of other electronic devices seeking for the higher portability of the iPad, while maintaining the ability to communicate for both professional and personal reasons. In this sense, the iPad 10th generation can be used to work, communicate with others, take photographs, record videos, and watch any media of choice.
Competitor behavior
As occurred in other electronic devices industries, Apple is undoubtedly the leader in the tablet industry. In this sense, competitors struggle to keep the pace of the advanced features of the newest iPad generations. Thus, tablets from key competitors as Amazon, Google, or Lenovo are not as performant regarding the speed of its processors and the resolution of its camera. As a result, while users that do not demand such a high performant device could perfectly fit with tablets from the competitors, highly demanding users such as architects will move towards the high performance of iPad considering it enables them to use a higher amount of sophisticated and resource demanding programs as AutoCAD.
Target market
Nearly all users are interested in tablets, including professionals, tourists, and children. In this sense, iPad 10th generation is likely to appeal to professionals that need to work on several files while on the go, tourists that wish to have a high-resolution camera to make their photos while having a wide screen in which to see videos during their journey, or students that carry the iPad to school to read the ebooks.
Sales potential
From the above, it is possible to expect that iPad 10th generation has an outstanding sales potential. In this sense, it provides the user with the top-most performance compared to any other tablet, including iPad’s previous generations while maintaining a competitive price.
ECON325 Portfolio Project Grading Rubric Week 2 Product and Market Research
Criteria
100 points
80 points
50 points
0 points
Product & Market Research
Fully described and justified product and market research. Thoroughly supported the plan for the six defined segments. No mechanical errors.
Described product and market research. Mentioned the plan for 4-5 defined segments. 3-5 mechanical errors.
Selected product and/or mentioned market research. Mentioned the plan for 1-3 defined segments. 5+ mechanical errors.
No product selected or mentioned market research. Did not address the plan for any defined segments. Mechanical errors made submission unreadable.
Week 3: Pricing
Due by the end of Week 3 at 11:59 pm, ET.
The idea behind this week’s assignment is to research where your product fits in the current market and how your price point will affect that market. Using the chart below, to create a broad list of determinates for supply and demand. An example of each (determinates of supply/demand) have been provided to get you started. Next, explain your strategy for pricing your product. Include how the price of your product compares to that of similar products on the market, and why you believe your product will be more successful than the competition. For instance, if the price of a new recently-launched candy bar is lower than a competitor candy bar, will demand or quantity demanded change? Explain and use research to back up your choices.
HELPFUL HINT: As you work through the remaining weeks of the project, you will want to keep a close eye on each of the determinates that affect your products’ supply and demand.
In the chart below list the determinants that will affect your product. Remember determinates of demand are any factor that creates fluctuations in demand for your product and determinates of supply are any factors that causes your supply to shift. You will find an example of each to start you off:
Determinates of Supply
Determinates of Demand
1
Taxes
1
Expectation
2
2
3
3
4
4
5
5
Next, explain your strategy for pricing your product in the area below. Include how the price of your product compares to that of similar products on the market, and why you believe your product will be more successful than the competition. For instance, if the price of a new recently-launched candy bar is lower than a competitor candy bar, will demand or quantity demanded change? Explain and use research to back up your choices.
Type your strategy below; you may leave all directions intact:
The completed table considering the different factors that may affect the supply and demand include:
Determinates of Supply
Determinates of Demand
1
Taxes
1
Expectation
2
Technology
2
Preferences
3
Government regulations
3
Substitutes
4
Cost of raw materials
4
Complements
5
Market competition
5
Income
The pricing strategy developed needs to consider for all the above determinants. In this sense, an appropriate pricing strategy needs to account for all the possible costs and most specially, for the volatility of these costs in the market as is the case of the semiconductors used to build the microchip of the tablet. From this point of view, it would be necessary to perform a cost analysis and set a minimum price that ensures the company that the production of the new tablet will be profitable.
The pricing strategy will also need to account for the customer preferences and what is the most they would be willing to pay for the new tablet. In the case of a new tablet, the pricing strategy should focus on the key specifications of the new tablet compared not only to other tablets (substitutes) but also to alternative electronic devices such as smartphones or computers, as a user is likely to evaluate their purchase instead of that of the tablet. It is also necessary to consider the existence of potential complements to the tablet, such as compatible keyboards or pencils, as these devices will increase the attractiveness of the tablet to the final consumer.
Lastly, the pricing strategy would need to account for any applicable taxes and governemntal regulations, as they may impact not only the tablet itself, but also the production costs considering that some raw materials such as the semiconductors and chips are imported from Asiatic countries.
From the above, if I were to set the price of a new tablet like iPad 10th generation that clearly outperforms its key competitors regarding its features and performance, I would base the pricing strategy on a value-based pricing strategy (Apple Inc, n.d.). In this sense, it would be possible to charge a slightly higher price than that of alternative tablets since most users are likely to wish to pay this higher price in exchange of the better performance of the new tablet. Thus, a price in the range of $500-$750 depending on the specific capacity and connectivity of the tablet seems to be a reasonable price considering that alternative tablets are slightly below $500.
ECON325 Portfolio Project Grading Rubric Week 3 Pricing
Criteria
100 points
80 points
50 points
0 points
Pricing
Fully described and justified product pricing. Presented strong price comparison and supply and demand affect. Research used as required. No mechanical errors.
Described product pricing. Discussed price comparison and/or supply and demand affect. No research used as required. 3-5 mechanical errors.
Product price given, but no description or justification. Price comparison and/or supply and demand affect missing. No research used as required. 5+ mechanical errors.
No price, description, or justification provided. Did not address the supply and demand affect. Mechanical errors made submission unreadable.
Week 4: Explicit/Implicit Costs
Due by the end of Week 4 at 11:59 pm, ET.
As you learned, explicit cost is known as the company’s out-of-pocket costs (i.e. wages, rent, etc.) and are payments that are actually made. Implicit costs are commonly known as costs that are belonging to the owner of the company (i.e. capital and inventory) and are resources and could already be put toward some other use.
For this week’s entry, define your product’s explicit and implicit costs. Identify if there are any hurdles that jump out at you. How might you prepare to mitigate these obstacles? Explain and use research to back up your choices.
Type your strategy below; you may leave all directions intact:
My company is Apple Inc. It focuses on the manufacture and commercialization of electronic devices such as smartphones (iPhone), computers (Mac and iMac), smartwatches (Apple Watch), and tablets (iPad), among others. It is currently the leading company in the industry of electronic devices, with the iPhones, Mac, Apple Watch and iPad setting the trend that any other company in the industry wishes to imitate to the point that Apple Inc is considered to have an Oligopoly and Monopolistic competition market structure. Apple Inc has reached this enviable leading position through extensive investment in R&D and marketing research, which accounted for 26,251 million dollars in 2022 (Apple Inc, 2022).
Some examples of the company’s explicit costs include the wages of the 164,000 employees working in the manufacturing of these products, their marketing, and their sales. Besides, the company outsources part of its customers relationships to third party companies operating in the different countries in which Apple currently commercializes its products such as Spain, Germany, or Turkey. These explicit costs accounted for about $51,345 million dollars in the past year (Apple Inc, 2022).
On the other hand, examples of the company’s implicit costs of Apple Inc include any possible forgone investment opportunities, the research of products that were never commercialized, and the time and effort of key employees and executives who could potentially contribute to alternative projects in Apple Inc if they had not been involved in their current roles. While it is true that implicit costs of the company represent a significantly lower amount than explicit costs, they may still increase considerably the operating cost of the company when it focuses its research on a product that is either never commercialized or rapidly removed from the sale as occurred with iPod (Thorbecke, 2022).
The most hamrful hardle that a company like Apple Inc can go through involves manufacturing and selling a product that does not have a good acceptance among the customers. The company could potentially manage this hurdle by conducting market research prior to manufacturing the product in which it analyzes what the potential demand for such a product may be like. Besides, the company can address this hardle by attracting and retaining talented workers that could potentially identify more appealing products so that the company focuses on their manufacture and sale.
ECON325 Portfolio Project Grading Rubric Week 4 Explicit/Implicit Costs
Criteria
100 points
80 points
50 points
0 points
Explicit/ Implicit Costs
Fully identified and defined both explicit and implicit costs. Hurdles identified and correct mitigation opportunities provided. Research used as required. No mechanical errors.
Identified and defined either explicit or implicit costs. Hurdles identified but no mitigation opportunities provided. No research used as required. 3-5 mechanical errors.
Either explicit or implicit costs given, but no description or justification. No hurdles or mitigation opportunities provided. No research used as required. 5+ mechanical errors.
Neither costs provided. Did not address the hurdles. Mechanical errors made submission unreadable.
Week 5: Economic Profits
Due by the end of Week 5 at 11:59 pm, ET.
Last week, you established your explicit and implicit costs. You will use these costs to establish your economic profits for this week. Remember, your economic profit is the difference between the total opportunity cost of production and the total revenue received by a company. As you work through your product, you will be building a case why your product should be produced.
This is important to your project because when the market is at a state of equilibrium then the price and quantity is balanced. Remember to remain realistic; at a higher price point the quantity demanded will be higher, thus supply will be higher. A table and chart are provided to help you visualize how price, quantity supplied, and quantity demand affects each other. The chart is set up so you can record your answers directly within it. Remember that this is only to aid in arriving at your answer, you must submit only this Word Document Portfolio Project Template. Return to Lecture 1 for more information on market equilibrium. You can find examples of a demand and supply scheduling chart on the attached chart and in Lecture 1.
We covered how an economic profit or product loss is the revenue seen from the sale of a product and the cost of all input/opportunity costs. The following formula is used:
Total Revenues – (Explicit Costs + Implicit Costs) = Economic profit
Calculate your product’s expected economic profit. For total revenues (what you anticipate your product will bring in) use what you anticipate revenue to be for the year 20XX. Use your explicit and implicit calculations from Week 4 to further solve the formula. Finally, explain why this is a solid product that your senior leadership team should select to move forward producing.
Type your strategy below; you may leave all directions intact:
ECON325 Portfolio Project Grading Rubric Week 5 Economic Profits
Criteria
100 points
80 points
50 points
0 points
Economic Profits
Fully and correctly calculated expected economic profit. Strong, fact-based explanation provided for senior leadership team. No mechanical errors.
Expected economic profit calculated but did not fully integrate all aspects required. Explanation provided for senior leadership team but needs work. 3-5 mechanical errors.
Economic profit not calculated correctly and/or explanation not provided. 5+ mechanical errors.
Neither economic profit was calculated, nor explanation provided. Mechanical errors made submission unreadable.
Week 6: Overall Assessment
Due by the end of Week 6 at 11:59 pm, ET.
This week, you will present your final assessment of your research over the past several weeks. In essay form below, reflect on previous weeks and review what your results were. Explain the strategies you will use during your meeting with senior leadership to ensure you product will be selected for production. Be specific and tell us how you will persuade the team! Make sure to focus on research and the concepts of supply, demand, and price.
Type your response below; you may leave all directions intact:
References
This section is for external references used throughout the paper. Must adhere to APA formatting.
Apple inc. Market Structure. (n.d.). prezi.com. https://prezi.com/wcpvdmi8k5b9/apple-inc-market-structure/
Apple Annual Report 2022 – StockLight. (n.d.). https://annualreport.stocklight.com/nasdaq/aapl/221338448.pdf
Global tablet shipments 2023 | Statista. (2023). Statista. https://www.statista.com/statistics/272070/global-tablet-shipments-by-quarter/
Global: tablets market revenue 2018-2028 | Statista. (2023). Statista. https://www.statista.com/forecasts/1181766/revenue-tablets-worldwide
Thorbecke, C. (2022, May 10). Apple is discontinuing its last iPod Model | CNN Business. CNN. https://edition.cnn.com/2022/05/10/tech/apple-ipod-end-of-an-era/index.html
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