Marketing Essay

Article Applying to Marketing
The article I am writing the essay on ?Is The Tech Out Of Steam?, it can be
found on pages 30 – 32 in the March 15, 1999 issue of Business Week. The article
was about how the demand and profits for the computer industry might be
slipping. This opinion began being felt on Feb. 16th when Hewlett-Packard Co.

and Dell Computer Corp. announced quarterly results were down. That
disappointed Wall Street and their stock prices were punished. Many research
continues to point out that this industry might be on its way down, in terms of
financial gain. The industry will always be alive and kicking, but as prices continue
to drop, profits will drop as well. That is a good thing for consumers, but a bad
thing for businesses. Although the research continues to point out the decline,
nobody is predicting this to be a long-term slowdown or a significant fall in
demand for high tech gear. Corporate demand for PC’s is dwindling, therefore in
order for companies to sell, they must lower their prices. The price for a top of the
line PC continues to drop. Every time Intel produces a new processor, they freeze
the market. When Intel introduced its new Pentium III, they advertised it cheaper
than their previous Pentium II. Consumers seeing that won’t pay top dollar for
PC’s anymore. That is one of the main reasons the industry is at a lull. The only
companies that seem to be prospering are those whose main focus is the Internet.
Those companies will continue to prosper as the Internet becomes (already is) the
main focus of communication.

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This article can relate to class many different ways. Not only in different
ways, but also areas. The fact that the computer industry profit margin is at a low,
is supported by a lot of research. This research is quantitative in that, it is given in
percentages and statistics. For example, A survey for top corporations by market
research firm Forrester Research Inc, shows they plan to raise information
technology spending by just 1% this year, down from 4% in 1998. This
quantitative research that is shown throughout the entire article is also primary
data. Unlike the law of diminishing demand which relates to most of the business
world, the demand for computers is falling, as is the price. The graph on the first
page on the article clearly shows that the first-quarter PC sales is down half
compared to 1996. Then in the article it says the pricing pressure is spreading
where sub $1000 PC’s are ruling. Pentium also shows an example of a product
line. Their Pentium II and Pentium III processors are only a few in a line of 10 or
so. Finally, the last thing that relates to class is how Intel acts as a reference group
and/or group leader to the entire market. It says in the article that when Intel
releases a new processor, the entire market freezes. That just shows that many
companies basically stop and watch the Intel product through the market in its
early stages.

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