Contents DETERMINANT OF DEMAND/SUPPLY 2 Product Type 2 Factors Affecting Demand 2 Price Elasticity of Demand 3 Nature of Demand of the Product 4 LAW OF DIMINISHING MARGINAL UTILITY 5 Diminishing Marginal Utility in case of Samsung smart phones: 5 Consumer Surplus 6 REVENUE MODEL OF SAMSUNG SMARTPHONES: 8 ANALYSIS OF MARKET TYPE AND NATURE OF COMPETITION 10 Competitive environment of smartphone market in India: 10 Top 3 strategies adapted by Samsung to answer the competition and gain market share: 10 Price Discrimination: 12 References: …show more content…
We applied the concept in smart phone business.
Diminishing Marginal Utility in case of Samsung smart phones:
A smart phone is a mobile phone built on a mobile operating system, with more advanced computing capability and connectivity than a feature phone. Popularity of smart phone has been growing with the fact that smart phones today comprises of features and applications which makes it comparable to what a personal computer can do. This has resulted into making smart phone segments the fastest growing segment in digital world.
Having said that, we must understand that, it is only 1 PC that an individual use at a time and not multiple PCs generally. This is because even one device is capable to perform the tasks that multiple devices can do. This is why it generally doesn’t makes sense to a rational consumer to go for a second smart phone as its marginal utility is almost zero. This validates the law of diminishing marginal utility in smart phone segments.
The above findings are valid with an assumption of other things being constant. Now as income of an individual increases, the consumer looks for a newer and more powerful version of the smart phone and now the utils derived from existing smart phone reduces drastically for the consumer and for a second smart phone increases. This is the pattern which has been observed over the years in the smart phone business. Also we have seen that as Samsung