Report+by+Lisa

Report on Performance of H&F MP3 Players

1. Introduction

This report was requested by Gary Connick, Marketing Officer of H&F Electronics on 30th November, 2010. The major concern of the report is the market share of H&F MP3 Play er s. The purposes of the report are to examine customer satisfaction in several aspects and to reveal in which areas improvements can be made. Firstly the procedure of investigation is described, followed by findings. Then a short conclusio n is drawn and recommendations are made.

2. Procedure

Both primary and secondary data are analysed in this report. The primary data about customer satisfaction were gathered by a questionnaire survey conducted in August 2010. The questionnaires were distributed to two hundred H&F MP3 users and the same number of iGADGET MP3 users. The secondary data regarding H&F and iGADGET market shares were from a recent market research by M&D Market Research Company.

3. Findings

Figure 1 in Attachment 2 shows the market shares of both H&F and iGADGET in the last twelve months. It can be found that the discrepancy between the two companies keeps increasing. Table 1 in Attachment 1 compares the satisfaction rates of MP3 plays of the two brands in six aspects. H&F performs worse than iGADGET in four out of the six areas. Some specific findings are to be discussed respectively.

3.1 Market Shares

In the first nine months of the past year, the market shares of the two companies fluctuated in with the same trend. However, the market share of iGADGET rebounded from June while the market share of H&F remained stable or even decreased in the same period. This may be a result of the labor dispute in H&F Malay factory which was released in late May. Although the dispute has been successfully resolved, the negative effect of the dispute cannot be eliminated immediately. This implicated means that our company should pay more attention to build a positive corporate image, which will in turn benefit the company's long-run survivial.

3.2 Headphone Quality

Both H&F and iGADGET have a relatively low customer satisfaction regarding the quality of headphone. H&F has a smaller percentage of respondents who are satisfied with the headphone quality, which is just under a third. One possible reason is that the headphones are outsourced to a Taiwan manufacturer and the production process is not closely supervised. The loosely-supervised outsource may result in inferior quality. As a consequence, H&F should be careful when choosing sub-contractors.

3.3 Functions

Only below two-fifths of interviewees are content with the function of H&F MP3 players, whereas nearly two-thirds are satisfied with that of iGADGET MP3 players. This may be because transfer of music files onto H&F MP3 players requires a software program that must be installed on the user's computer. Installing a program is less convenient than iGADGET's drag-and-drop method. A possible effect of this is that more and more customers will tend to use iGADGET MP3 players for convenience in the future.

3.4 Design

More than four-fifths of customers are satisfied with the design of iGADGET MP3, while fewer than half of customers are satisfied with that of H&F MP3. The low satisfaction rate may be attributed to the celebrity spokesperson--Felix Chan. The 49-year old TV star is no longer attractive to young people who are the major users of MP3. They may find our MP3 out of fashion because it reminds them of the old TV star.( i think this reason could be used for declining market share; for design, think about a limited range of colours.)

4. Conclusion

The findings clearly indicated that apart from the labor dispute in Malaysia factory, the declining market share can also be attributed to inferior headphone quality, inconvenient functions, and unattractive design. Those shortcomings are probably a result of improper understanding of customers' needs and inappropriate marketing and production strategies. It can be concluded that in order to boost the market share, H&F should take actions to regain customers' interest.

5. Recommendations

Based on the problems discussed in the findings section, several recommendations are provided. made

5.1 Given the negative effect of the labor dispute in Malaysia, the company is strongly advised to take actions to rebuild its public image. We can cooperate with TV station or news paper to show the improved situation in the Malay factory. In addition to that, we can donate one percent of our total sales to the children who have no access to education in China. This will make consumers feel a sense of social responsibility.

5.2 In view of the inferior headphone quality, it is recommended that we should send a group of inspectors to the Taiwan sub-contractor to investigate the causes of the quality problem. Perhaps we should also consider changing to a sub-contractor if the Taiwan producer refuses to improve headphone quality without a price increase. (the last part is unclear)

5.3 In the light of the inconvenient function of music transfer, it is proposed that an investment will be made to the research and develo pment department. Based on the current financial situation, we may borrow money from local banks. If the research and develop ment project can improve the current functions and innovate new functions successfully, then the investment is likely to be paid back in five years.

5.4 Regarding the celebrity spokesman of our company, we suggest repla cing Felix Chan when his contract comes to the end. Appealing young celebrities such as Jay Chow, Lady Gaga, and Angelababy can be chosen.

Overall good.