Marketing report analysis summary on: Report writing help on Apple Iphone 4S
Executive summary
The report presents a customer analysis with respect to Apple iPhone 4S product launched in Australia and suggests possible marketing strategies that company can undertake. The study starts by understanding the product features with respect to its previous versions as well as with respect to its competitive products. The customer profiling is done by market segmentation using the variables such as geographies, demographic parameters, psychological factors as well as socio-cultural factors.
The market segmentation throws three potential segments- Technology freak customers, corporate houses and repeat buyers. With technology freak customers frequently switching their gadgets, they may not be the high potential customers. The phone does not provide any extra-ordinary utilities for corporate houses and hence the company should not allocate more resources in this segment. The third segment consists of repeat buyers of apple phones as well as first time buyers who are prospective to become repeat buyers in the future due to their behaviour and this has been chosen to be the best market segment.
The purchasing behaviours are also analysed by analysing the effect of reference groups on these target customers. The marketing strategies are proposed in form of ideal marketing mix for the chosen segment and more emphasis is given to aggressive promotion as well as right distribution channels to tap this target segment. The company can always leverage its brand image and innovation it has brought to its products over the years which people cherish.
Introduction
Apple Inc. is known for its breakthrough marketing strategies. The company has been a forerunner when it comes to introducing innovative products in the market. iPhone brand has been a revolution in the field of smartphones. iPhone was first released by Apple Inc. in 2007 and since then, Apple has upgraded its versions from time to time and captured the market share at a swift pace. The latest version of iPhone is iPhone 4S which comes with latest possible features available in the smartphones technology was launched in October, 2011 (Apple Australia, 2012).
Apple has been successful in following a premium pricing strategy and hence become a brand which is associated with its exclusiveness. The current business report studies the product features of iPhone 4S and suggests possible marketing strategies that company should follow to make it a huge success. The country chosen for the study is Australia which has been a market of technology enthusiastic customers. The recommendations are backed by market research study which helps in customer segmentation and profiling.
Scope of the report
The report focuses on the analysis of the product features in relation to the needs and expectations of the Australian market. There is a detailed analysis of consumer behaviour which logically translates into the market segmentation. Based on the mapping of the product features with customer profiles, a potential customer segment is chosen. The marketing mix defines the strategy the company can undertake to explore the potential customer segment. The report also covers the competitive analysis and strategies the company can take to counter the competition in the market.
Methodology
The market strategies are based on the customer profiling which is done with the help of demographic data available from agencies like Australian Bureau of Statistics and articles published in various journals and print media. The product features are mapped with the customer profiles and a best segment is chosen to focus upon. A well-defined marketing mix is determined to offer for different set of customers. Finally, a competitive analysis puts all marketing strategies in place and the recommendations are made to make iPhone 4S a market leader in smartphones segment.
Limitations
The report is based only on the Australian market and its consumer patterns. The data is only limited to the data available in the public domain and no primary research data is available.
Plan
The plan to arrive at the final marketing strategy mix consists of following steps:
- Introduction to the product and its features
As always, the Apple has bundled innovative features in one phone. Apart from the standard features of earlier versions of iPhone such as 3G and wireless technology; Location tracking features; sensitive touch with retina display, a 5 MP camera with full HD video recording; video support; document viewer; sensors etc.; there are new features such as a voice recognition system known as Siri and a cloud storage service named iCloud. The hardware is upgraded to be compatible with its add-ons. The new model is lighter than the previous one and has a state of an art looks and design features. With new applications being added in its app-store, the phone presents a package of utilities for business professionals to gaming enthusiasts and regular phone user.
- Understanding the consumer patterns
At this step, the data available in the public domain is utilized to understand the consumer behaviour and hence designing the marketing mix accordingly. This step will be detailed in further parts of the report.
- Market segmentation
At this step, the mapping of customers will be done according to socio-demographic factors as well as the changing needs and desires of the customers. The strongest segment will be chosen to further probe into it and designing the marketing mix accordingly. This step will be detailed in further parts of the report.
- Marketing mix
As per the market segmentation the positioning, distribution and promotion strategies will be determined. The pricing of iPhone is uniform and hence the pricing strategy may be designed by providing additional offers to the customers. This step will be detailed in further parts of the report. A competitor analysis will also be done to make the marketing mix stand out against the competition.
Based on above plan, the report will be concluded by giving suitable recommendations to the company for making the product a successful and a profitable bet.
Customer Analysis
Understanding the customer is pre-requisite for any successful product. Since the smartphone market is highly competitive, it is more crucial to provide the customers with a feeling of value for their money.
Consumer behaviour “Means-end theory”
Based on means-end theory, the consumers’ behaviour in relation to the product can be judged by considering three levels- product attributes, consequences of use and personal values. Hence the customers see a product as a means to their end needs and try to correlate them with the features provided by the product they purchase (Gengler, & Oglethorpe, 1999). Based on the above theory, following points attempt to understand the consumer behaviour for a product like iPhone 4S:
- 1. Customer characteristics and expectations from the products
Australian customers are influences by various factors. First and the foremost factor is the cultural factor. The culture in Australia is very open and with the increasing education levels, the curiosity of the individuals in technology and gadgets is increasing day by day. Hence, the earlier versions of iPhone and several other Apple products like iPad have been very openly accepted in the Australian market.
The next big factor is the influence of social groups. The rising income levels of the country have resulted in the high class social stigma attached with its people. Hence, a person is directly or indirectly influenced by his family, colleagues and friends and desires to be seen as an exclusive personality among them. Apple plays on this psychology very well. The features which are there in the iPhone 4S are packaged in such a way that it becomes an exclusive product in itself which is highly desired by its prospective customers. The snob effect of purchasing an iPhone even at premium price is very prevalent and most of the times the customers buy iPhone vis-à-vis other similar product to make them feel exclusive in their social groups.
So, in all what the customer expects from the iPhone is a utility in terms of all of its features mentioned above and a quality in each and every feature that gives him an experience of exclusivity.
- 2. Purchasing habits of customers
The purchasing patterns that have been seen in smartphone market are unique. There are high levels of brand switching in a short span. The customers are ready to shell out extra money and replace the older phones with the ones which have latest technology and features. The apps that come with the phone have risen at tremendous pace across all mobile operating systems such as iOS, windows and android (Vaughan, 2003). So, the compatibility of the phone with these apps can also be a big factor while customers purchase. By and large, Android has dominated the apps space and most of its apps come free of cost and hence are very popular as contradicted to ones of apple which is not free. But all the basic apps are available for free in Apple. In future, Apple may consider introducing more free apps to compete with Android and Windows phones.
- 3. Brand loyalty
In essence, there is very low brand loyalty in smartphones market but Apple has been an exception in this aspect. There are Apple product fans that buy only Apple products and just update their models as when they arrive in market. Within these set of people, there are people who always switch to latest version of iPhone as and when they are introduced and there are others who stick to their old Apple models but don’t switch to new models or competitors’ models. It is a well-known fact that purchasing behaviour is heavily influenced by promotions and word of mouth. Hence, Apple should keep in mind these factors.
Market segmentation
Based on the customer analysis, market segmentation can be done by factoring some more dimensions such as geographic variables, demographic factors, psychographic factors and behavioural patterns (Kotler & Kelly, 2008). Following are the distinct market segments that can be identified:
- 1. Technology freak customers
Geographically, these customers originate from urban parts of Australia (Australian Bureau of Statistics, 2012). They are mostly the college students and young professionals. Their education system is advanced and hence the culture is quite open. These people are more likely to be influenced by their social reference groups. These customers are the ones who love to spend majority of their time on internet and social networking websites (Uronen, 2008). The technology enthusiasts constantly hunt for the new technological gadgets in the market. They are more attracted by latest features than the brand and hence the company should not expect brand loyalty from them. However, if they are satisfied with the product features they are likely to spread word of mouth publicity. They may be fascinated about writing the product reviews.
- 2. Corporate houses
These set of customers include the business corporations who make bulk deals for smartphones for their employees. Again they flourish in urban regions and mostly big cities. Unlike technology enthusiasts, they are more concerned about the relevant features of the product rather than innovation. For specific designations ate senior level, they may frequently purchase premium products like iPhone 4S. In addition, they also expect good after sales service and may be attracted by features like extended warranty or insurance. They would not be price sensitive and would prefer long term association with the brand. Compared to other segments, they have somewhat low potential.
- 3. Repeat buyers
They can be safely classified as loyal customers of if they can be convinced about the suitability of the product in relation to their expectations. They include the existing loyal customers of iPhone as well as the first time buyers. They can be from urban or semi-urban regions (Australian Bureau of Statistics, 2012). They form a major chunk of the potential customers and must be the biggest market segment. The problem for Apple in this segment is that all of their loyalists may not be willing to frequently upgrade their gadgets. And hence they must be convinced enough to believe that new iPhone 4S is value for money proposition. For the first time buyers, the company can bank upon its brand image which it has built over the years. They are the ones who tend to compare the features and prices of different products available in the market. They are the ones who may eventually end up being loyal customers.
This kind of market segmentation helps to identify the heterogeneous groups and hence decide the marketing strategy. Going by the market potential, the third segment which is of repeat buyers is chosen to be the segment which must be targeted by the company. The further paragraphs will describe the strategies the company can adopt to promote iPhone for this segment.
Purchasing decision
The target customers chosen for the product are the repeat buyers which consist of loyal apple customers as well as first time buyers who eventually end up being Apple loyalists. As mentioned, these set of people tend to do a comparative analysis of the product with the competitive brands. The understanding purchasing decision thus plays a very important role in determining the potential of this segment and to propose a market strategy (Solomon, 2011). In order to understand this philosophy, two reference groups can be selected.
First of the reference groups will be the technology enthusiasts, which were chosen to be the first market segment. The technology enthusiasts review the product very closely and post their reviews. They can make or break the product in the minds of these customers. The online reviews posted by them are closely analysed by these customers and hence influence their purchasing decisions. The utility derived out of the features is highlighted by the technology enthusiasts and hence the customers make their decision to shell out the money for a premium product like iPhone 4S.
The second reference group chosen is the peer group of these customers which include the individuals from urban to semi-urban geographic regions between the age groups of 20-30 years and are the ones who are well educated with their good disposable money in hand. This reference group has its own opinion on different products. Assuming that they are not loyal to iPhone, they will provide their logic for their preferred brand and will also tend to convince the target customers based on their opinion (Lazer, 2003). There are similar products available in the market and hence opinions may vary. It may also be the case that some of them are apple fans and hence deviate the opinions in favour of iPhone 4S. Hence, the company should strategize its promotions to woo the target segment as well as these reference groups as mentioned.
Recommended marketing strategies
Based on the purchasing behaviour analysis of the target segment, the company should choose a proper marketing mix to meet the market potential. Following are the recommendations for the various elements of marketing mix:
Product mix
The product remains the same but the features that should be highlighted should be as per the needs of the target customer group (Smith, 1996). The customers in this segment want a new experience when they use the features which may be available in the other similar smartphones. The quality and the looks of the product, its hardware and software robustness should be highlighted by the company. The efficient apps should be displayed rather than a clutter of apps which may not be of good utility for the customers and hence they may feel that they are paying extra money for features they don’t need.
Price mix
As the product is assumed to be launched at same price across the country, there nothing much that can be done to change the pricing points. However, the company can provide complimentary offers and accessories to its customers.
Promotion mix
This is where the difference will be made relative to their competitors. As mentioned, the target customers are more likely to be influenced by the reference groups. The company should first target the reference groups and convince them about the proposition. The promotions should be done through various online social networks and discussion forums (Doyle, 2007). The company should appoint their own experts to start discussions on these forums and address the queries and clarifications asked by the audience. With the help of affiliates, the company can put up the video reviews and peer to peer comparison in order to promote the product. The trials for the first time buyers can also be initiated through various PR events at colleges and shopping malls. The central idea should be to make customers feel the value of experience of using an iPhone. The trials can also initiate word of mouth publicity for the product (Hooley, 2011). The print media can also be utilized owing to its mass reach. In fact an integrated promotional strategy should be adopted to have an effective promotion for the iPhone.
The promotion mix can also entail the sales promotion in the form of contests, complimentary offers, early bird offers etc. The buzzword should be created right from the launch and it must be sustained further till the company finds substantial buyers for the model.
Distribution mix
The target audiences for the iPhone 4S shop at various destinations. The traditional apple stores are the most reliable distribution counters as the personnel attending the customers know the product very well. These apple counters can give the personal attention to the customers and hence play an important role in the marketing of the phone. The customers can experience the phone and at the same time are fascinated by Apple’s brand image. These stores can also help in upselling and cross-selling of various apple products.
In the regions where apple stores are not there, the next best option is the shopping malls. However, there may not be exclusive apple products in these distribution counters and hence the iPhone will compete with other brands. The company has to ensure that iPhone gets most visibility and the salesperson should vouch for iPhone in relation to other products. At best the company can place its own sales team over there and tap maximum potential.
The final distribution points could be the retail shops which are mostly concentrated in semi-urban regions. The company should put its promotional pamphlets at Points of Sales and should also ensure that the retailer promotes the iPhone 4S diligently. If possible company should consider given additional incentives to the retailers based on their performance and hence tapping the semi-urban regions as well.
Hence based on above strategies, company can plan out the launch of the phone across various key geographies and decide upon the further launch plan for other regions as well. All the strategies should be integrated by a same objective i.e. to make iPhone 4S a market leader in the chosen customer segment.
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