Porter (2004) established the concept of the value chain, the model broadly addresses the question as to where value is added to a product or service through both primary activities which physically add value to a product or service and secondary activities which support the primary activities as shown in the popular visualisation below: The objective of this portfolio is to identify were value from both the product and customer perspective and then consider how these identified values have an impact on the value chain activities for the company and product in question. Conducting the research the portfolio will use a mixture of both primary and secondary research to establish the relevant information. Whilst the results of the research may be found in the relevant areas of the Pro-forma’s the detailed research methods may be found in the appendix at the end of the portfolio.
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2.1 Name of company: Apple is the manufacturer of the product in question, distribution ranges through a variety of third party retailers from high street electrical stores such as Curry’s through to online sales channels such as Amazon. 2.2 Name and description of product/service: The product being considered for the purpose of this research is the Apple I-Pod. The I-Pod is a portable music playing devise and replaces older models of similar devise such as the Walkman and portable CD players. The fundamental difference between the I-Pod and pervious models of portable music player is that the I-Pod is digitally based relying on Apple’s I-Tunes system of music downloads rather than conventional formats such as a CD or Cassette (Lynch 2008 p 795-798). 2.3 Value of the product/service to the customer: Value for the customer may be seen as falling into two key areas namely that of the physical features and benefits of the product and the intangible benefits associated with such marketing considerations as image. Both of these areas would appear to be supported both in the literature (Brassington and Pettitt 2007, Kottler et al 2009) as well as the results of the primary research. Specifically research revealed that the key value of the I-Pod as a physical product was generated from firstly the user friendly nature of the product in comparison to other electronic “gadgets” this would be a pattern which is highlighted in the literature as one of Apple’s key success factors in the industry as a whole (Visionary Marketing 2008). Respondents also highlighted that the quality of the musical experience was also a key value especially when compared with previous non-digital versions. Durability was a repeated factor in interviewing with respondents raising the issue of poor experience with portable CD players due to scratches which the I-Pod has managed to eliminate.
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