Explain in detail considerations or outside influences that the customer may find in each of the buying steps in the process.
This deliverable will assess your ability to differentiate between goods and services as they apply to consumer and business-to-business markets.
Instructions
Using the repair service offered at Mobile Experts draw a map of the customer buying steps
Write 4-5 paragraphs in addition to visuals that provide rationale for your map, and detail the customer buying steps
Explain in detail considerations or outside influences that the customer may find in each of the buying steps in the process.
Keep in mind that the buying process used in the B2C Market
Requirements:
Mobile Experts LLC
Jillian McIntyre and Wyatt Sampson are purchasing Mobile Experts LLC, a business specializing in the sales and repair of refurbished mobile equipment, from their father Craig Sampson. Jillian and Wyatt learned the business from their father and look forward to taking over the company and running it as partners.
Mobile Experts History
In 1994, Craig Sampson opened a small computer repair shop, A-1 Computer Service that primarily served home computer users. Over the years, Craig developed a strong rapport with the community and considered options for growing his business. In 2006, Craig recognized the opportunity to expand into mobile technology through selling equipment and providing needed repairs. Craig opened this new mobile division as a separate business located about a mile away from A-1 Computer Service. Over the past seven years Mobile Experts has developed a solid reputation, but the business has never generated the revenue that Craig thought it would.
As new owners, Jillian and Wyatt have created an initial business plan. Their next step is to create a detailed marketing plan that will grow the business and associated revenue. As a first step to creating a marketing plan, Jillian and Wyatt have assembled information about their business, their customers, and the industry.
Mobile Experts LLC: Product and Customer Review
Refurbished mobile devices include both smartphones and tablets. Both products have enjoyed years of growth both in the U.S. and worldwide. However, while smartphones continue to grow in popularity, there are signs in the industry research that sales of tablets may have plateaued. Mobile Experts has not yet seen a dip in tablet product sales.
Tablet devices are often purchased by small business owners and families with children living at home. College students initially were a larger market, but in the past two years have been a smaller percentage of tablet buyers. Smartphones have wide appeal across the demographic spectrum, but Mobile Experts tends to attract the 50+ year old audience, as well as, the first-time smartphone buyer. Jillian and Wyatt estimate that females make up about 65% of the smartphone buyers at Mobile Experts and most buyers have no more than two smartphones in their household.
Accessories for mobile devices, such as cases and charging systems, are sold at higher profit margins than the devices themselves. Due to the large variety of devices sold, Mobile Experts has to carry a large inventory of accessories. Over 100 different cases are currently in the retail store with additional options available to be special ordered. Mobile Experts has strong relationships with the major suppliers as well as a selection of suppliers who specialized in unique accessories featuring bedazzled and jeweled cases that attract the 12-21 year old female audience and have the highest profit margin of all products sold in the store.
Mobile Experts customers on average purchase one accessory with each refurbished smartphone or tablet purchase. Protective cases are the most popular with charging systems being the second most often purchased.
Repairing mobile devices was a natural offshoot from the sister business, A-1 Computer Service, when Mobile Experts first opened. However, the fluctuation in sales of this product offering has been a challenge for the business. There could be time when the demand for repair services was great and then periods of time when little was required. Overall though, the revenue for repair kept the business profitable.
Many of the customers who bring their devices in for repair are not past customers of Mobile Experts. While data isn’t available, Jillian and Wyatt believe that offering the repair service accounts for some of the new device sales and even a larger percent of the accessories sold.
The repair services operated at a higher profit margin than the new product sales. However, many customers came in for repairs that were simple software updates or just explanation and assistance. In some cases, no charge was made for these efforts even though the average time spent per device was 15 minutes. Jillian had suggested that Mobile Experts develop a pricing strategy that would allow them to recover for their service time, however, Wyatt disagreed and countered that the service after the sale was part of what set them apart from its competitors.
Mobile Industry Overview
Mobile Device Repair
According to IBISWorld, the computer and mobile device repair industry has reported annual revenues of some $1 billion and an annual growth rate of 10.9% between 2007 and 2012.
Rising popularity of expensive, damage-prone smartphones caused industry bump.
Rapid tech changes, increases in disposable income, and falling phone prices will encourage replacement over repair.
Major segments: screen repair, water damage repair, battery replacement, cosmetic damage repair, other functional repair.
Internet-enabled phones are more expensive and more likely to be repaired
Since 2012, the number of cell phone repair shops has grown at an average rate of 5.8% per year to 2,609 locations nationally.
Higher profits are expected in tablet repair than cell phones by 2019
Large number of small companies in the segment, generally owned by small, independent operators.
$4 billion dollars in revenue (all segments)
Strong growth (approx. 4.9% average annual growth to 2014) in past decade.
Distribution: through mail or at retail stores where phones can be fixed on site.
Mobile Device Sales
Smartphones represent more than two thirds of all mobile device sales and half of mobile device users.
Shipments for tablets and 2 in 1 devices fell to 47.1 million in the first quarter of 2015. Showing a 5.9% decline from the same quarter in 2014.
Cellular enabled tablets are outgrowing the rest of the market.
Cellular tablets have higher usage than Wi-Fi only tablets.
Apple still leads overall market despite 5 consecutive quarter of negative growth (26.8).
Samsung in second place (19.1%), Lenovo (5.3%), Asus (3.8%), LG (3.1%).
Sources:
Top Five Tablet Vendors, Shipments, Market Share, and Growth, First Quarter 2015
(Preliminary Results, Shipments in millions)
Source: IDC Worldwide Quarterly Tablet Tracker, April 30, 2015
Source: Gartner (June 2014)
Mobile Industry Consumer Behavior
Consumer’s Mobile Device Usage and Awareness:
While marketers view tablets, smartphones, and e-readers all as mobile products, consumers identify smartphones first as a mobile product with the remaining items as afterthoughts when prompted.
Smartphones have significantly higher penetration than other mobile devices:
90% of American adults own a cell phone.
32% of American adults own an e-reader.
42% of American adults own a tablet computer.
Smartphone users average over 3 hours per day using their devices and consider the devices to be a central part of everyday life.
Tablets are used more for research with smartphones being used primarily for email and messaging.
Using tablets and smartphones simultaneously has been cited by respondents in consumer research and a seamless experience across all of the devices used is considered important by users.
Research shows that tablets and smartphones may be used for different reasons. Weather is more often viewed on smartphones while Twitter is more often viewed on tablets.
Mobile User Demographics:
Tablet owners earn higher incomes than the average household and are of prime earning age.
81% of users earning $75-$100K.
79% of users earning $100K+.
81% of consumers aged 35-44.
7% of U.S. adults who own a smartphone are “smartphone-dependent” or dependent on their service for internet access.
Particularly younger adults (15%), minorities (see below) and lower-income Americans (13%).
12% of African Americans and 13% of Latinos are smartphone-dependent, compared with 4% of whites.
Owning a smartphone can be a financial burden for some owners
23% of smartphone owners have canceled or suspended their cell phone service due to cost.
Most common for users with annual household income below $30,000, of which 44% have discontinued their service.
80% of users say their mobile device is worth the cost, yet 19% describe their phone as a financial burden.
Millennials are projected to reach $2.45 trillion in purchasing power by 2015 and mobile is their number one way to communicate and interact
Smartphone User Interests and Attitudes:
32% said they associate mobile with ease of use.
89% consider mobile as the best way to stay up to date with loved ones and social life.
9% of adults have texted a charitable donation from their mobile phone
With increased penetration of services like Apple Pay, consumers will be more willing to use their mobile devices to purchase low-value, daily items.
Sources:
http://mashable.com/2015/01/02/mobile-trends-2015/
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