Report+By+Sky+and+KOBE

Report on H&F MP3 Users Satisfaction and Market Recognition

1. Introduction 1.1 Background It has been three years since our H&F MP3 entered the local market. In light of the decline in market share during the past year, from almost one quarter to only 13%, compared to the most powerful competitor iGADGET who has a very stable market share of about 50-60%, it seems necessary to examine the reasons behind it. 1.2 Purpose This report aims at discovering the difference of customers’ views towards H&F MP3s and iGADGET MP3s in three aspects, which are product design, functions, and headphone quality. By understanding the customers’ preferences, possible improvements could be made to make our MP3s more favorable, and hence enlarge our market share.

2. Procedure The findings for this report are based upon market research carried out with customers by M&D Market Research Company by means of questionnaire. A total of 200 H&F MP3 users and 200 iGADGET MP3 users were involved and asked to evaluate the two brands MP3s in six aspects, namely design, functions, sound quality, battery life, headphone quality, and overall satisfaction.

3. Findings It is clearly shown in the questionnaire result that customers have a lower satisfaction level towards H&F MP3 players than iGADGET MP3 players, mainly in four aspects. (in 3 aspects and market share) 3.1 Design Less than half of the customers are contented with H&F MP3 product design, as opposed to iGADGET, which has won the majority of the respondents’ satisfaction. A possible explanation for this is that the most designers in our company are transferred from the U.S headquart ers, who do not have the advantage in capturing the local market’s fashion taste. However, iGADGET’s designers are more familiar with the local market. 3.2 Functions More than 60% of the respondents expressed dissatisfaction with function of H&F MP3 players, while only around one third of users were disgruntled with that of iGADGET MP3s. This is probably because of the tedious process of transferring files from computers to H&F MP3 players, where additional software has to be installed in computers. By contrast, iGADGET’s MP3 players just use drag-and-drop, which is much easier for users. A further explanation could be the fierce competition from other products, such as iPhone4, which are equipped with MP3 function. The implication is that consumers tend to favor products with multi-functions and easy use steps. 3.3 Headphone quality Over two thirds of the users indicated their discontent with H&F MP3 players, compared to just over half of iGADGET MP3 players. This may be attributed to the production location selection. Malaysia has lower labor cost, but also lower expected quality, compared to Korea, where iGADGET MP3 players are manufactured. Lower headphone quality could have very negative influence upon consumers about our brand. 3.4 Declining sales The sales of H&F MP3 players have been declining steadily for the past few months. It seems that the promotion celebrity does not appeal to the young generation. As a result, H&F MP3 players are losing the young market segment steadily.

4. Conclusion The findings clearly indicate the main sources of dissatisfaction for H&F MP3 player users are design, functions, headphone quality, and old-fashioned celebrity. In order to boost market share, immediate measures should be taken in the four aspects mentioned above.

5. Recommendations 5.1 Design Given that the major cause of low satisfaction with design is unfamiliarity of the designers, it is recommended that the company hires more local designers and provides more training to existing designers on local fashion tastes. (more detail. what are local tastes?) 5.2 Functions Our findings have suggested that the tedious function of MP3 players has a bad effect on customer satisfaction. In view of this, it is suggested that the technical team should develop an advanced system which enables users to transfer music files in one step. Furthermore, other functions could be added to MP3 players, such as quick recording and photographing. 5.3 Headphone quality In the light of the low satisfaction level with headphone quality, it is proposed that a revised quality control system should be built in the manufacturing plant. With a stricter quality standard and checking system, better quality could be expected. 5.4 Declining sales Since the celebrity seems a little old-fashioned for the young, it would be better if we can have a younger spokesperson, who appeals to the young more, in the coming promotion. This will probably help capture a larger market share among the young people. (which spokesman?)

Overall good.

Some more detail needed with recommendations