This is the second major factor for me and Apple. For this part I have provided some economic data in ‘Source A’ which is enclosed with this evaluation. It explains my further decision about the timescale involved in my promotion, and also when I’m going to launch my promotion and why.
Firstly, due to some external influences such as given economic recession in the UK, I would postpone the launch of the new Apple noise-cancelling headphones promotional campaign until the end of 2010, when the economy will partially recover from the effects of the current recession. Considering all current factors, it would be too risky to launch this promotional campaign this year, because there have been significant increases in the rate of unemployment in the UK, which according to the source A was 2 million people in 2008, and is predicted to rise up to 3 million in 2010. This, therefore, means there’s very likely to be a decrease in people’s disposable income and they will be less likely to spend their money on such luxury goods as new technology. There might also be less people who will be able to afford to buy the new Apple noise-cancelling headphones, because there will simply be less people employed. Therefore, with the given risk, it would be better for Apple to carry on with promoting or slightly cut promoting of already established products, rather than launching a new promotional campaign to introduce new Apple noise-cancelling headphones, because it will lead to high costs, and will take a long time to payback in terms of the time scale involved given the current economic recession. Therefore, it is more likely that extra market research might be need to be undertaken in the future if I was to create awareness and introduce the new promotional strategy in 2010, because the demand for this product as well as the cost and effectiveness of using air transport to promote Apple noise-cancelling headphones is likely to change over such a long period of time.
In addition to this, from the Source A it is evident that interest rates have recently decreased from 5.25% in January 2007 down to 0.5% in February 2009. Those people who will be on the airplanes and who will be involved in my promotional activity, are most likely to have a mortgage for house or a bank account. Generally, as the interest rate decreases, mortgage rate will also decrease, so the mortgages will be cheaper and people will have more disposable income, which should increase their propensity to consume and demand for goods and services including luxuries such as new Apple noise-cancelling headphones. In addition to this, people will be also encouraged to buy more goods and services, because due to a lower interest rate in the banks, so that they will be able to save less money in the bank and be more encouraged to spend it due to an inflation rate higher than the interest rate, because otherwise they would be keeping money in the bank and loosing it at the same time. Therefore, the demand for the new Apple noise-cancelling headphones might actually increase, and my promotion, in this case, will be useful and effective. Also, the fact that those people who use air transport would prior be able to afford to buy tickets which are relatively expensive, which suggests that if they were able to buy the tickets, even if there’s an economic recession and lower demand for luxury products, there’s still a chance that they might buy Apple noise-cancelling headphones, as it will be a much smaller percentage of the price of the ticket, in which case the effectiveness of my promotional strategy will not be affected to such a great extent. However, it can be arguably said, that people might not necessarily spend their disposable income on such products and the extent to which their demand for goods and services and luxuries such as new Apple headphones, will also depend upon consumers’ confidence, which might actually decrease due to an economic recession and instability. In this case, there will be a lower demand for such products as new Apple headphones due to a relatively high price charged for such products, and the effectiveness of my promotional strategy will also be very limited, because although the demand for air transport is a derived demand because some people simply have to travel a certain distance by an airplane to get to work or meetings, the demand can still decrease, which means there might be less passengers on the airplane, less airplanes used, which will overall decrease the demand for the new Apple noise-cancelling headphones and the effectiveness of both methods of my promotion.
From the information provided above, it can therefore be evaluated, that it would actually make it less risky, if I would postpone introducing my promotional strategy until the end of 2010, when the economic situation might be less vulnerable, and my promotional method will have more chances to succeed and effectively encourage more people to buy Apple noise-cancelling headphones, and create more awareness of the Apple brand and their new products. In addition to this, it is important to mention, that introducing my actual promotional strategy isn’t going to take a long time, as it has already been set up and it will only take from 1 to three months to negotiate the terms and conditions of my promotion and the way it’s carried out with the airlines.
However, if we are talking about the year 2010, if I was to introduce my promotional strategy then, I would introduce it from November just before the Christmas period, and also use my promotional method heavily during the Christmas period in December, because many people would be looking to buy some presents for their friends, children or relatives, and it my promotion could actually provide a good idea for some people about what to buy. If I was to introduce it in November, it means I would also start negotiating with the airlines earlier in August or September, to make sure the promotion will be definitely ready for November and Christmas period. Some people, for instance, could buy the new Apple noise-cancelling headphones for their friends who may be frequent flyers and might find this product quite useful, or buy it for themselves, or even use their air miles, to buy it as a Christmas present for someone. Taken into consideration various factors and provided that I have undertaken some research on the demand for summer holidays and found out the peak times, I would also use my promotional method more widely or on a larger scale, because there would be many people going for a holiday, and most of them could be traveling a relatively long distance to get there, and as they spend longer sitting in the airplane, they would be more encouraged to read an in-flight magazine, watch a movie or listen to the music, and, therefore be more likely to use or buy noise-cancelling headphones by Apple during their flight. This also suggests, that in this case it would be a good idea to introduce my promotional strategy on a wider range of airlines, and particularly the ones that are popular for long-haul flights and holidays, such as ‘Air One’, ‘Emirates’ or ‘Singapore Airlines’ for instance, who normally use big airplanes with a larger passenger capacity.
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