Apple Co. Research Paper Essay Example

have made the survey less confusing which would have provided better results to test. Is the Price Paid for Apple Products Worth the Quality and Customer Service Received?

Introduction Apple, Inc. , founded in 1976 by Steve Wozenik and Steve Jobs, is a multinational corporation that designs, manufacturers, and markets personal computers, software, networking solutions and a line of portable digital music players and tablets. Today, it is the largest technology firm in the world, with annual revenues of more than $60 billion on average for the past five years (Market Watch, WSJ). Each year, Apple’s income statement shows an upward trend, and the revenue from this past year has exceeded $108. 6 billion (Market Watch, WSJ).

Apple’s core product line includes the Macintosh line of desktop and notebook computers, iPods, iPhones, iPads, Mac OS X operating system, iTunes Music Store and other products. Furthermore, the company’s well-known products are sold online, through third-party wholesalers and through it’s own chain of stores. Apple’s success stems from their goodwill and ability to continuously come up with futuristic ideas that are implemented so well with extreme precision. While Apple leads in popularity within its niche market, they are one of the most unique companies maintaining the latest and greatest products on the market.

This project was chosen to gain an in depth understanding of what makes Apple’s products and customer service so worthwhile. According to Peter Lippik, the President & CEO of Vocalabs, he recently wrote an article on GreenBook. com comparing Apple service and products to the top competitors in its market. Lippik, based his results on 1,859 completed telephone interviews conducted between May 2008 and December 2009. Sixty-four

percent of Apple customers surveyed during 2009 said they were “Very Satisfied” with the call level of customer service (citation).

Taking that into consideration, we would like to discover if the prices paid for Apple products are worth the quality of the products and customer service received. Most people are familiar with Apple’s iPod and iPhone and its’ ease of use, which is one of the reasons we picked this topic. Furthermore, there is often a lot of controversy around the release of each new Apple product, with most customer experiences having mere hedonic value that is commonly translated into being of utilitarian value. Apple products tend to be more expensive despite the computers being made with the same parts as a PC computer.

People often wonder why would one still pay the higher price for such products. Some people are convinced and others aren’t and still consider Apple consumers to be “sheeple”. Our research suggests reasons why Apple has remained one of the top companies of all time. Apple’s customer service, quality of products, software, design, security and overall branding makes them stand out to consumers. Methodology Brit- (you can choose to keep or take out) When conducting our field research we decided to focus on Apple’s product prices.

We wanted to figure out if the product quality and benefits such as customer service coincided with the prices offered. The framework of the survey all centered on finding questions that would best prove whether the product quality and services offered were of satisfactory. First, we decided to ask various questions like, “Do you use Apple products? ” to funnel out the participants that did not apply to

our research study. After funneling out the “bad apples” we then began to really indulge into the customer service and quality questions asking, “What is your perception of the quality of Apple products? and rank the “Overall satisfaction of your engagement with Apple customer service. ” The first step in conducting our experiment was to come up with questions for the survey that we were going to hand out. We met as a group and brainstormed different ideas for the questions. Being that everyday consumers such as college students use Apple products, we decided that we should come up with our own questions to really capture information that was important to us as consumers as well. We each came up with a list of about ten to fifteen questions.

After thoroughly reviewing the importance of every single question, we narrowed down our list and selected only those questions that would be beneficial to our research. After selecting the questions, we decided which order we would like those questions to appear on the survey. We believe that the prices paid for Apple are worth the quality and customer service received. The next step in conducting our survey was to hand out the surveys. After the surveys were printed, we all went our separate ways to obtain information for our research. – teacher’s wants us to take this out… Participants

After deciding what questions to create we needed information from a diverse group of people so we handed out surveys at school to our classmates and teachers, at work to our coworkers, and at home to our family and friends. When selecting participants to take part in taking our

survey, we took into consideration many factors. With this being such an important part in conducting our survey, our group wanted to make sure we chose people that had actually used or bought Apple products. Accomplishing that would produce reliable and useable data.

Of course there is always error when conducting an experiment, however it was important that we did not survey a large amount of people who had never come in contact with, nor bought any apple products. – teacher wants this to be removed .. Other factors we considered when selecting participants was background, age and sex. Apple consumers vary from male to female, young to old and have users of all different ethnicities. Diversity in our data collection was crucial because we wanted an unbiased result. This was the main thing we were striving for when we were going through our data.

We did not want the same kind of answers from the same groups of people. We made sure we got information back from college students, stay at home moms, businessmen and businesswomen, teachers, grandparents, etc. Procedures As we handed out our surveys, we gave our participants one very simple instruction: to be completely honest. All of our participants were very willing to help and complied with our request. The average completion time of the survey was about seven minutes. Our survey contains 30 questions that cover less than two pages. See appendix for the entire survey.

The order of our questions was designed specifically to guide our participants smoothly through our questionnaire. It began asking basic questions about whether they used Apple products, which ones, and how long. Then we went on to

ask them about how important some areas of the Apple Company and products were to them. We asked them to rank the following categories: quality, price, service, advertisement, appearance, family or friend recommendation, accessibility, and others, if necessary from one (most important) to seven (least important).

Subsequently, we asked about Apple purchases within the past five years. Our next portion of questions focused on customer service. We asked if they ever used it, their method, and asked them to rate a bunch of things: from the pricing of products to the quality of products. And finally, we asked them to suggest any changes Apple could make to improve their customer service. This was also a way in which we could gather information on our topic, given our participants different perspectives.

Hopefully, most of those written responses should center around the guidelines already presented to Apple employees on how to deal with customers. The steps are spelled out in an acronym of the word A. P. P. L. E. Not only was our design short, simple, and straight to the point, the questions chosen provided us with great information to help analyze our hypothesis. RESULTS Before analyzing our results, we speculated the results outcomes. From our daily observations we noticed that the use of Apple products is more common today than what they were in previous studies.

Based on previous research (TALK ABOUT AND CITE A SPECIFIC ARICLE OF PREVIOUS RESEARCH), we assumed that an average of about 75% of the people surveyed would be an Apple product user. Although we understand that not everyone is an Apple user, we felt as though many people would consider using the

products in the future especially because Apple is becoming the dominant market leader in portable electronics. From our data, we found that 43 participants were apple users while 17 were not. The calculated percentage of those surveyed who are Apple users is 71. 7% (43users / 60 total surveyed) with about 28% being non-users. Our expected number of Apple users was 45, creating a null hypothesis of the number of users = 45 (75% of 60 surveyed participants) and an alternative hypothesis of the number of users not equaling 45 people. Running a T-test produced results that our observed and expected values were not statistically different. As you can see in Table 1. 1, The T-value is -1. 549. The P-values for both significance levels of 1% and 5% are greater than the T-value, therefore accepting the null hypothesis and rejecting the alternative.

These results seem to be appropriate since 75% and 71. 66% are close proportions as are the numbers 43 and 45. Essentially the test supports the hypothesis and assumption that about 75% of those surveyed will be Apple users. Table 1. 1 One of our assumptions was that the most common Apple products used by consumers are the iPods and iPhones. We found that out of sixty two total surveys, twenty eight were iPod users and twenty eight were iPhone users, yielding a total of fifty six. About 90% of those surveyed were in fact iPod and iPhone users as one can see from Figure 1. 2 below(SEE GRAPH).

Figure 1. 2 This is probably due to the multi-functionality of these two products. iPods and iPhones are both internet accessible, support music downloading and

sharing, and are mobile and convenient. Since Apple has a very strong brand name and image, we speculated that the average length of time using Apple products would be being slightly more than five years. Out of the sample, 43 participants were Apple users. These users were asked how long they have been using Apple products. Based on previous research, the average amount of time a consumer has been using Apple is about 5. 5 years (CITE AND REFERENCE). From the data collected, the sample average number of years calculated is 4. 55. Figure 1. 3 shows a basic histogram for the number of years each individual has been using apple products, and the frequency of how many people have been using Apple products for the same length of time. Figure 1. 3 Given a population average of 5. 35, the null hypothesis is there is no difference in population and sample means while the alternative is that there is a significant difference in population and sample means for the number of years using an Apple product.

All else being held constant, from the two averages, a standard deviation was derived and calculated. To see the exact calculations please refer to excel sheet figure. (APPENDIX WITH EXCEL DATA). The sample deviation of 3. 476 means that an average, the actual results varied from the mean by 3. 476. Using these numbers, a Z-test was created and calculated yielding a result of about 1. 493. At a significance level of 5%, the P-value is 1. 682. Since the Z-test value is greater than the P-value, the null hypothesis would not be rejected. At a confidence interval of

1% with a critical value of 2. 185 the null hypothesis would again not be rejected. The test results found that there is no significant statistical difference in the population and sample mean. A T-test was run on the same data, yielding the same T-value and the Z-value of 1. 493. Our participants were asked to rank seven different factors on a scale of importance when it comes to buying an Apple product. It is interesting the way people rank the importance of the different features. We assumed that the rankings would be consistent. It was believed that price would be the most determining factor in choosing to use Apple products.

Quality and service were expected to be the next most important, followed by accessibility, appearance, advertisement, and family and friend recommendations. The results varied most likely because of the diversity of the use and benefits of the products. The participants were asked to rank these seven different factors on a scale of one through seven, with one being the most important factor in the buying decision. The null hypothesis is that price is most frequently ranked as the most important factor in the buying decision.

The alternative therefore would be that price is not the most important factor in the buying decision. A chi-square test was used to calculate the frequency of the number one being used as a ranking. For this test there were fifty three usable surveys with data that was collected properly and followed the ranking directions correctly. Since we assumed that price would be the most determining factor, we expected to see twelve people rank it as the most important factor. Quality

was assumed to be the close leader with an expected value of eleven people.

Each factor was put into an excel sheet where we recorded the total responses for the most important ranking (#1) per factor which can be seen in Table 1. 4 Table 1. 4 | Observed| Expected| O-E| (O-E)^2| ((O-E)^2/E)| Quality| 17| 11| 6| 36| 3. 272727273| Price| 7| 12| -5| 25| 2. 083333333| Service| 4| 9| -5| 25| 2. 777777778| Advertisement| 1| 3| -2| 4| 1. 333333333| Appearance| 9| 5| 4| 16| 3. 2| Family| 9| 2| 7| 49| 24. 5| Accessibility| 6| 7| -1| 1| 0. 142857143| | | | | CHI-SQUARE| 37. 31002886| | | | | P-Value . 05| 12. 59| | | | | P-Value . 01| 16. 81|

The observed and expected number of responses were compared and manipulated to calculate the chi-square number of 37. 31. At a significance level of 1%, the critical value found was 16. 81. The chi-square value is greater than the critical value, therefore rejecting the null hypothesis that price would be the most frequently ranked most important factor in the buying decision. The alternative hypothesis would be accepted, since the results of the test show that quality was in fact picked most frequently as the most important factor. The results were slightly perplexing to find that there was almost no weight in importance in advertisement.

This could be due to a number of factors such as geographic location, ethnicity, culture, family, etc. How a person was raised could have a very strong influence on what is most important at the individual level. For example, often there is provided incentive (usually a price

decrease) for a family to be on the same plan and use the same brand of phones. The results from this sample also show that the service has virtually no effects on the choice of Apple products. In this particular study, it appears that brand loyalty far surpasses the loyalty to a wireless provider.

This could also be due to the strong brand image and strong consumer loyalty Apple has created. Customer service is important for any company. Without the consumer being happy and receiving the help needed in a timely and professional matter, business will be lost to the competition. We thought that not many people may have actually contacted Apple’s customer service because many products are sold in third party retailers. But, for those customers who do contact customer service, we assumed that they would receive better quality experiences than not.

For the specific questions dealing with satisfaction within the stores and with overall engagement with Apple customer service, we believed that most people would be very satisfied with the technical expertise of the consultants because they are known as “geniuses”. Our analysis indicated that the overall customer satisfaction rankings corresponded with the calculated outcomes. Our survey contained sixteen questions referring to the satisfaction level of various aspects of customer service. Participants were asked questions such as “How satisfied were you with the customer service? ; “How satisfied were you with the overall knowledge of the customer service representative? ”, and “Were your questions addressed in a timely manner? ” These questions were on an interval scale of one through five. One being dissatisfied and five being very satisfied. Our null hypothesis states that the

rankings of four and five (satisfied and very satisfied) will be picked for at least half of the questions. Our alternative is that the rankings of four and five will not be picked for at least half of the questions. Using the interval scaled questions we separated the number of ranked responses per question as you can see in Table 1. . The results for each question were categorized by the number of times a rating was chosen. We found that portioned outcomes were the highest for the rankings of 4 and 5, which counted for . 375 and . 416. This equals to . 7918 of the total proportion surveyed. The results demonstrate that the level of customer service rankings were of satisfaction. Looking at the overall proportions for Satisfied and Very Satisfied the results yielded 79% for the sampled surveyed, meaning that roughly 79% of the Apple product users are satisfied with customer service received.

A chi-square test was run to determine if we could accept or reject the null hypothesis. There were 16 different questions, each with five possible responses, giving a possibility of 627 different answers. We believed that the rankings of satisfaction would differ. The rank of one would hardly be used and the rankings of 4 and 5 would be most heavily used, more specifically, 50% of the time. From the results we can see that a rating of “1” was chosen only three times, while a rating of four was chosen 232 times and the rating of five was chosen 270 times.

These numbers did differ from the expected numbers, which were derived based off how heavily we thought the

rankings should be weighted. For example, out of 627 responses, Very Satisfied would be chosen 292 times. Figure 1. 4 Rating| Observed| Expected| O-E| (O-E)^2| ((O-E)^2/E)| sqrtE| 1| 3| 10| -7| 49| 4. 9| 3. 16227766| 2| 21| 15| 6| 36| 2. 4| 3. 872983346| 3| 101| 90| 11| 121| 1. 344444444| 9. 486832981| 4| 232| 220| 12| 144| 0. 654545455| 14. 83239697| 5| 270| 292| -22| 484| 1. 657534247| 17. 08800749| | | | | CHI-SQUARE| 10. 5652415| | | | | | P-value . 05| 9. 49| | | | | | P-value . 01| 13. 28| | The chi-square value was found to be 10. 956. At a significance level of 5%, we would reject the null hypothesis. The ratings of Satisfied and Very Satisfied were chosen more than 50% of the time, therefore we accept the alternative. At the 1% significance level, we would accept the null hypothesis. For the questions relating to overall purchasing experience, we assumed that people would enjoy it because Apple is known for its simplicity of process and use.

Finally, for the questions relating to repeat buying and if the quality of Apple products was worth the price paid, we believed that people would be highly satisfied. References 1. Hanselman, Roseman. Apple’s Customer Service Secrets Revealed: A. P. P. L. E. http://thesocialcustomer. com/andyhanselman/38984/apple-s-customer-service-secrets-revealed. Updated June 16, 2011. Accessed October 24, 2011. 2. Lippik, Peter . "National Customer Service Survey: Mobile Phones 2010. " GreenBook. com. 2011. http://www. greenbook. org/marketing-research. fm/customer-service-computer-tech-support-2010-28601. 3. Market Watch. Wall Street Journal. Apple, Inc. Annual Financials for Apple, Inc. http://www. marketwatch. com/investing/stock/aapl/financials. Accessed December 5, 2011. 4. Elmer-DeWitt. Survey: iPhone Retention 94% vs.

Androad 47%. CNN Money. August 1, 2011. http://tech. fortune. cnn. com/2011/08/01/survey-iphone-retention-94-vs-android-47/. Acessed November 1, 2011. 5. Apple Store Survey Results. http://www. ifoapplestore. com/stores/store_survey_report. pdf