Group4

1) Ng Hui Xuan 2) Vicki Seoh 3) Seow Chuan Yuan 4) Jodi Lau 5) Ong Hui Fen 6) Yeang Li Jing
 * Group 4:**

**__ The first ipad in history __** The Wi-Fi version of the iPad went on sale in the United States on April 3, 2010. The Wi-Fi + 3G version was released on April 30 2010. **__Determination of the price ($$) of the iPad __** Firms uses product versioning and price discrimination strategies to maximize their profits. Aside from cost, the additional value-add and competitive pricing will dictate where the producers of ipad should price their new product. The iPhone does have competition from other smart phone providers such as Palm and Blackberry. Apple has always commanded a price premium for their products and the iPad is no different. However, why didn't Apple set a price of say a $1,000? The law of relativity prevented Apple from pricing it too high above of the competition. Apple is able to price their products just high enough above the competition that they yield maximum profits while still attracting a high number of customers. They are able to do this successfully because they support their higher priced products with features and aesthetics that provide their target customers with greater value than the competitor phones.
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 * ~  || **__ PROJECT A __**

The price that consumers would pay for a 16GB ipad model with Wi-Fi is USD 499 and is USD 629 for Wi-Fi with 3G. However, the actual production cost for a 16GB ipad model with Wi-Fi is USD 229.35 and is USD 257.65 for Wi-Fi and 3G Based on the information above, iPad cost higher if it has the extra feature of having a Wi-Fi and 3G variant, moreover, there would be extra cost incurred if the gadget is purchased with a AT&T connection. Therefore this proves that the apple product is not a onetime expense. However despite this, many consumers are still willing to cast a high dollar vote for this gadget,

We can split the cost of producing an iPad across two basic parallels: the first are the costs incurred, which remain the same, irrespective of which model of the iPad you use; and the second which consists of those features which are responsible for the differing costs for different models of the iPad. This is the actual cost price of the product. Hence by comparing the 2 tables, it can be seen that Apple earns close to 100% profits for each apple iPad. **__ Related/associated products for iPad __** 1. The **Samsung Galaxy Tab** This is an android-based compact tablet computer produced by Samsung that debuted on the 2nd of September at the 2010 IFA in Berlin. It features a 7-inch (180 mm) TFT-LCD touchscreen, Wi-Fi capability, unlike Apple, it is running the Android 2.2 (Froyo) operating system. It supports phone functionality, which Apple iPad does not. This product is closely related to ipad as it looks just like the smaller version of the iPad and function wise, both device can actually used to serve the same purpose. Hence, this product is in compeititive demand with the iPad and might thus affect the pricing of the iPad and profits that producers will be able to earn.

2. The **TouchPad** This is an upcoming mobile tablet computer from HP, announced on February 9, 2011. The device will have a 9.7-inch screen and run a tablet-optimized version of [|webOS] 3.0, and is powered by a dual-core Snapdragon processor. The device also supports a new HP Touchstone Touch-to-Share proximity-based sharing feature, which allows compatible devices to instantly exchange data, media, and information (via Bluetooth). The touch pad and iPad is incredibly similar in both size and weight. Hence, the touch pad is a very likely compeititor of the iPad as one seems like substitutes for the other and consumers get to choose which one to buy, usually based on the prices on the devices. This would consequently mean that producers would have to lower prices so as to have a competitive advantage over the other product and persuade consumers to buy their product. This would result in lower prices for the iPad and lower profits for the producers.

__ Online Videos __ 1. Apple iPad video: Review by http://www.gearlive.com Link: [] =2. Apple iPad Vs. Samsung Galaxy Tab: Review by http://technobuffalo.com/ = =Link: [] =
 * SOURCES: **

__ Website Information on Product __ HP TouchPad.(2011).TouchPad. Retrieved March 15, 2011, from []

__ Online News Article __ iPad keeps price advantage (2011, March 11). Retrieved March 15, 2011, from [] || Good point but why do you think "Apple has always commanded a price premium for their products"?

Umm.. Law of relativity?

What do you mean by "Apple able to price their products just high enough above the competition that they yield maximum profits..." and why is this so?

So what about it not being a one-time expense? How does this relate to consumers' willingness to cast a high dollar vote?

Relevant substitutes. =)

**Overall comments:** You need to be careful here. Many assertions and this will not reap you credit. You must be able to explain them clearly and why is that the case. ||

** Discuss how recent developments would affect your marketing and pricing decisions for the iPad. You would concentrate on four main factors, 2 from the consumer's point of view and 2 from the producer's point of view. Use economic tools to support your analysis. ** There are various factors affecting that should be taken into account when deciding on the marketing and pricing strategies for the iPad. We have decided to look into the prices of substitutes and taste factors from the consumer’s point of view as well as the changes in the number of sellers of tablets and price elasticity of demand for iPads from the producer’s point of view.
 * ~  || **__ Project B __**
 * ~  || **__ Project B __**

The price of substitutes affects the demand of iPad from the consumer’s point of view. The closest substitute for iPad would be Samsung’s Galaxy Tab, an Android 2.2 tablet. It is the only touch-screen tablet that is getting a lot of media attention as being iPad’s only true contender. Putting other factors such as size and features aside, the higher price point of Tab compared to the iPad only makes iPad a much better value for money than any of the competing devices out there. As such, the demand for iPad is higher than the other substitutes in the market due to its reasonable price for the quality you get in the product.

As the iPad and the Galaxy Tab are both close substitutes, there will be a greater change in demand for the iPad when there is a change in the price of Galaxy Tab. This is evident as the price of the Galaxy Tab is steeper than the iPad, the demand for iPad is likely to be very responsive to the change in price of Galaxy Tab. Hence there is an increase in demand for iPad.

The other factor is the taste preference of the consumers in the products. Apple has a good reputation for its sleek designs and user-friendliness of it products. Apple’s clever advertising strategies appeals to the masses, making iPad the ‘in’ product. Though iPad weighs more that the Tab, iPad has a larger display and higher resolution, thus having better viewing angle as well as sharper and crisper colours. Through the observation of other consumers and also experiences from consuming other goods produced by Apple, the product is much desired by many, meaning that more of it is demanded at each price.

Producers are always aiming to maximize profits through the sales of their products. To determine a suitable market strategy to sustain the sale of iPads in the market, there is a need to look into the changes in the number of sellers of other types of tablets. On a competition perspective, many companies have been rushing to launch their own brand of tablets. For example, the Samsung Galaxy Tab and the upcoming Google Tablet. Due to the increasing availability of other types of tablets (substitutes) in the market, over a period of time, consumers might prefer to buy other products instead (change in personal preference). Hence, there is a need for continuous innovation and upgrades to the iPad. A similar strategy that has been taken to market iPhones can be applied to the iPad as well. Be it reducing the size, adding more features or even increasing the memory capacity of the iPad, by constantly improving the product (in phases preferably), in the long run, the market for the iPad can be sustained.

In terms of pricing strategy, producers should look into the price elasticity of demand of the iPad. For most people, iPad is considered to be a normal and luxury good, and hence the demand for iPads has a high probability of being price elastic. However, it must be taken into account that Apple has a large base of supporters. Regardless in the change of prices in its products, Apple’s avid fans continue to support Apple products. Thus, to some extent, the demand for the iPad can be considered to be relatively price inelastic. Therefore, an increase in price would lead to a less than proportionate decrease in quantity demanded. As such, it is rational to sell the iPads at a higher price to reap maximum profits.

However, the pricing strategy mentioned above can only work in the short run. Over time, there will be increasing availability of other tablets in the market. Examples include the Asus tablet, and Google tablet. The availability of substitutes is a vital factor in determining the price elasticity of a product. In addition, consumer personal preferences may change over time. It might cause them to buy the other substitutes which can quite possibly provide more functions than the iPad, and are priced cheaper. Hence, the availability of substitutes and changes in personal preferences over time reinforce each other, making the demand for iPad price elastic in the long run. Therefore, as mentioned above, Apple tends to improve their product in phases, and release a newer version of their products to re-attract consumers.

** Sources: ** **__ Website Information on Product __** 1. Apple iPad.(2010).iPad. Retrieved March 16, 2011, from [] 2. iPad.(2010).Retrieved March 16, 2011, from [] **__ Online Articles __** = **1. Erica Ogg (2010, February 16) How to succeed at marketing the iPad. Retrieved March 16, 2011, from __http://news.cnet.com/8301-31021_3-10450333-260.html__ ** = 2. Alpeyev and Miller (2010, January 31)  Android Tablets Gain on Apple IPad in Fourth Quarter. Retrieved March 16, 2011, from __ http://www.bloomberg.com/news/2011-01-31/android-tablets-gain-on-ipad-in-fourth-quarter-researcher-says.html __ = **3. **[|Federico Viticci] (2011, February 9) iPad Vs. Other Tablets Comparison. Retrieved March 16, 2011, __http://www.macstories.net/news/ipad-vs-other-tablets-comparison/ __ = = **4. PC World (2010, September 2) **Samsung Galaxy Tab vs. the iPad: Compare For Yourself Retreived March 16, 2011, from __http://www.pcworld.com/article/204779/samsung_galaxy_tab_vs_the_ipad_compare_for_yourself.html __ = = **<span style="font-family: 'Calibri','sans-serif'; font-size: 12pt; font-weight: normal;">5. Redmond Pie (2010, September 3) **<span style="font-family: 'Calibri','sans-serif'; font-size: 12pt; font-weight: normal;">Apple iPad vs Samsung Galaxy Tab (iPad for Kids?) – Head to Head Comparison Retreived March 16, 2011, from __<span style="font-family: 'Calibri','sans-serif'; font-size: 12pt; font-weight: normal;">http://www.redmondpie.com/ipad-vs-galaxy-tab-comparison/ __ = = **<span style="font-family: 'Calibri','sans-serif'; font-size: 12pt; font-weight: normal;">6. Digital Trends (September 3, 2010) **<span style="font-family: 'Calibri','sans-serif'; font-size: 12pt; font-weight: normal;">Samsung Galaxy Tab vs. Apple iPad: Specs Compared Retreived March 16, 2011, from __http://www.digitaltrends.com/computing/samsung-galaxy-tab-vs-apple-ipad/__ = || Teacher's comment

Para 1: PED for producer's point of view?

Para 2: OK.

Para 3: " This is evident as the price of the Galaxy Tab is steeper than the iPad, the demand for iPad is likely to be very responsive to the change in price of Galaxy Tab. " Huh what do you mean here? Because the price of Tab is higher than that of iPad therefore Dd for iPad is very responsive to change in price of iPad? No no.. You're confused here. Think again.

Para 4: If you are looking at taste and preference, you are likely to be making reference to price inelastic dd right? Is that what you mean?

Para 5: Increase in availability of substitutes and changing preferences. How do these two factors affect Dd/Ss for iPads? How will innovation affect Dd/Ss for iPads? Many points jumbled in Para 5. Very unclear. I'm not sure what exactly you are trying to look at.

Para 6: You are looking at consumers' preference here again. And yes, consumers' preference do affect the PED. =)
 * Overall comments: ** Points are very jumbled and all over the place. I need your explanation to be clearer and be careful about making assertions! ||
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Videos for Presentation: 1. [|New iPad commercial] 2. [|Apple iPad Commercial (Parody)] 3. [|Hitler is informed and rants about the Apple iPad] ||  ||