Bandwagon Effect

Of iphone in
india

Compiled by:
Raghvendra naragund
DEFINITIONS

 A psychological phenomenon whereby people do something

primarily because other people are doing it, regardless of their
own beliefs, which they may ignore or override.
 The bandwagon effect: “the extent to which the demand for a
commodity is increased due to the fact that others are also
consuming the same commodity (Leibenstein, 1950).”
 The bandwagon effect is when people do or believe something
just because the majority of others are doing it. The
bandwagon effect is a great example of conformity and
groupthink. More and more people will join a group or belief
just because others are doing it.
 The bandwagon effect has wide implications, but is commonly
seen in politics and consumer behavior.
 This phenomenon can also be seen during bull markets and the
growth of asset bubbles.
 This tendency of people to align their beliefs and behaviors
with those of a group is also called "herd mentality.“
 In politics, the bandwagon effect might cause citizens to vote
for the person who appears to have more popular support
because they want to belong to the majority.
 Bandwagon Effect:
An example of the bandwagon effect is if
someone buys a new iphone just because
everyone else it. This person may not have any
need or use for the electronic, but it’s a popular
item and everyone else has one.
 Examples of Bandwagon
 iPhone

Apple can increase its prices by 30% and still see an

increase in demand of almost 200%!!
Apple Bandwagon
A statement suggesting that everyone is using a specific
product, so you should, too!
Join the “in crowd.”

One explanation for the bandwagon effect with Apple

products is due to the lure of conspicuous
consumption - to display one’s high status, hence
increasing the appeal of owning and displaying the
product.

In much of the same way a peacock displays its vast

array of colorful feathers to attract mates and ward
off enemies, Apple customers can display their ability
to pay high premium prices; thus, displaying to
people that they are successful, different, and
intelligent.
on Jul 23, 2015
Cook said that the sales of iPhones in India saw
a massive 93 percent year-on-year growth in the
third quarter of this year. While having a
comparatively smaller user base to China, the
growth in India is bigger than the 87 percent
growth witnessed in China, Hong Kong and
Taiwan
The formula for calculating price
elasticity of demand is:
Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price

Consider the following data related to the Apple iPhone 4 versus the Apple iPhone 5:
Price change Duration Demand %

iPhone 4: $499 Demand in first 3 days of release (iPhone 4): 1,700,000 30.1%
iPhone 5: $649 Demand in first 3 days of release (iPhone 5): 5,000,000 194.1%

(Data on prices and demand are from Wikipedia and other news releases )
  When we divided the change in quantity demanded by the
change in price demanded our price elasticity of demand =
6.46. The price elasticity of demand is therefore elastic (greater
than one) as the price has an effect on the quantity demanded.
By the way, revenue is maximized when price is set so that the
PED is exactly one (both % changes will be the same).

 With a 30% increase in price the demand for the new version of
the iPhone increased 194%. This is a direct correlation to the
bandwagon Effect and so the Apple iPhone would be
considered a bandwagon product.

Conclusion:
The bandwagon effect is positively affecting the sale of iphones in india.
Thank
you