Article Applying to Marketing

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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.

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.

Word Count: 520