Threat of Substitutes Product

Topics: Apple Inc., Price, Marketing Pages: 2 (498 words) Published: March 27, 2013
3.1 Switching costs
Switching cost is a negative cost that consumers get regarding to the changing suppliers, brands, or products (Investopedia 2012). There are four different methods of switching costs that involve when substituting to another product. The four different methods are learning cost, opportunity cost, implementation cost, and conversion cost. Each method has own different values, however these cost does not involved to the electronic industry (Lash 2010). For people that willing to substitute to another brand usually they spend more time looking for the product that they like. For example, shopping in physical store and shopping in online store, both of it need a lot of time to looking for the item that they want and sometimes people waste their leisure time just in order to browsing around searching for substituting product. It also involved money on it, for substituting product we need to compare price between one and another product. 3.2 Buyer loyalty

Buyer or consumer loyalty is about how to attract consumers and potential consumer in order to making them buy, buy often, buy in higher amount and also bring consumers to us, such as their relatives or friends (CostumerLoyalty 2011). Building a consumer loyalty should be the main focus in order to having a mutual relationship with consumers in a long term. There is many way to building the consumer loyalty such as, keep in touch with email marketing, care and remembering what the consumers like and don’t like, and give them reward. In the electronic industry, consumer loyalty is the most important role. It is important because when the brand is already proofed, tested as a high technology, good quality, materials and already well known, they will always come back and shop for the same brand because they know they fit, believe, and know that brand. For example, in Australia, an iPad sales has hit more than 250,000 (Colley 2010), it happen because...
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