Question

Question 1: Share your opinion. Is there any truth in the statement "geographical pricing will always be unfair to buyers who do not live within the target geography?" Why or why not? Not too long ago, residents of Chicago were charged an additional tax on soda. Needless to say many went across the state line to purchase beverages. Do you think that too often consumers have to pay additional costs based on location?

Question 2:

I recently received the following report regarding Apple. "While Apple doesn’t break down AirPod sales or revenue in its earnings reports, lumping them in with “Other Products” instead, anecdotal evidence, customer reviews as well as several statements from senior Apple executives point towards the AirPods being a hit with consumers. With the release of an improved, second generation of AirPods reportedly close, the wireless earpods could become an even bigger growth factor to Apple. According to Ming-Chi Kuo, one of the most accurate and renowned Apple analysts, the company could sell 50 to 55 million pairs of AirPods this year and double that figure by 2021. Assuming that the price remains unchanged at $159, that would equal to more than $15 billion in annual sales." How does a company's product diversification help to increase their annual sales.

Answer 1

This point is very much agreeable that more often than not, consumers pay additional costs based on location. The whole concept revolves round the fact that the value of your product perceived is fairly malleable. Since the Perception about the value of the product isn’t always the same thing as reality, even. The fact would have little or nothing to do with the product’s actual market price or price elsewhere and also depends on the product’s ability to satisfy his or her needs or requirements and the customer’s opinion of a product’s value to him or her. Perception about the product value would have something to do with the interactions with perceived risks, price plasticity, long term satisfaction and loyalty. As a matter of fact, the same product can mean different things to different people, and there is no such thing as objective product value, at least when it comes to actually selling products and there are objective costs associated with making the product, of course.
So agreeing to the argument that consumers pay additional costs based on location and the opportunity to influence how people feel – how they perceive our product’s value – as well as the opportunity to optimize the customer experience is in such a way that the customer is delighted and companies maximize the revenue.
Product diversification is actually an opportunity for a company to increase the annual sales manifold. Diversifying the new product lines creates fast growth in sales to existing consumers and sometimes enters new markets and thus increases their revenue. Many companies stick to what they know best and others choose to keep updating and diversifying in a rapidly changing environment during economic lag period. Most times, companies choose to diversify for survival. Many Small & medium scale businesses grow by taking opportunities to diversify, and get susceptible to different business the risks because of limited resources on all fronts. Diversification can be of many forms; New, related products or services to existing customers, new markets for existing products new products for new markets.
Diversification may pose some risks - such as costly delays and mistakes owing to a lack of knowledge or expertise in the new area. But it can also limit the impact of changes in the market. In simple terms, if the supply of one product or service falls out of favor, it leaves the company out of options. If two or more products or services and sales drop, at least there will be revenue coming into the business through the other.
Generally speaking, diversifying with similar products or services and selling them to a familiar customer base is less risky than creating a product for a completely new market.