Marketing Strategy of the Apple iPhone X

Executive Summary

The purpose of this report is to gain knowledge in the development of Apple iPhones and use market strategies into the Apple business. The choice of Apple phone for this report is the Apple iPhone X.

This report is broken down in 3 sections; The Marketplace, Recommendation for Additional Research and the Segmentations Framework. Marketplace gives consumers a background knowledge of the smartphone industry. It also gives the consumer the understanding of how the Apple iPhone and the Apple brand are faring in today’s economic status.

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Recommendation for additional research, provides future studies taken which help Apple keep track on the general public’s review of their products. Using focus groups to retrieve data helps Apple maintain relationships with consumers to gain the knowledge of what needs to be improved, also helping maintain customer satisfaction.  These researches are important to ensure Apple continues to better the technology of the iPhone.

Lastly, the last fragments market is the targeting purpose. This part shows importance of breaking down the iPhone X to consumers and attracting the right groups in which helps Apple expand their searches. Both young and old generations provide good segments for Apple to explore in future studies. It shows growth in understanding the functioning of these two segments, whist holding up the Apple business model.

Contents

Executive Summary

Introduction

SECTION 1: THE MARKETPLACE & INFLUENCING FACTORS

Industry Overview

Apple iPhone X in the Smartphone Industry

Recent trends for Smartphones.

Foxconn exploitation of workers

Key Competitors

Samsung

Google Pixel

Key Players Of Importance

General Public

Other Factors Influencing The Industry

Political

Culture

SECTION 2 RECOMMENDATION FOR ADDITIONAL RESEARCH

Methodology And Justification

Table 3: Focus Group Make-Up

SECTION 3: SEGMENTATION FRAMEWORK

Consumer characteristics

Segmentation Framework

Segment profiles

Table 6 provides an overview of each segment, their buying behaviour and brand preferences.

Segment Attractiveness Profiles

Conclusion

Bibliography

Introduction

This report investigates Apple’s marketing sector. Item in which is being discussed is the iPhone X. This report is broken up into three stages; The marketplace and influencing factor, recommendations for additional research and segmentation framework. These elements help Apple to maintain competitive advantage and continues to hold the Apple brand in high regard.

SECTION 1: THE MARKETPLACE & INFLUENCING FACTORS

Industry Overview

‘Mobile devices offer direct communication with consumers, anytime and anyplace’ (Scharl, et al., 2005). Mobile phones have become an everyday essential device to have. It keeps people connected to each other all over the world.  The popularity of mobile phones started to rise once Smartphones were introduced. “Smartphones are mobile phones with more advanced computing capabilities and connectivity than regular mobile phones. They came onto the consumer market in the late 90s, but only gained mainstream popularity with the introduction of Apple’s iPhone in 2007” (Holst, 2018).  The rise of the smartphone has had a large impact on the world. The top two major brands are iPhone and Samsung. “Apple is the second largest smartphones distributor worldwide. In 2016 alone, “Apple sold more than 210 million iPhones worldwide” (Holst, 2018). The Apple iPhone X is one of the most popular phones sold in the market, “Apple’s iPhone X was its best-selling phone in a time that other financial analysts were saying the phone was going to be killed” (Haselton, 2018).

Apple iPhone X in the Smartphone Industry

“Apple still remains the number one premium smartphone” (Wilde, 2019). The Apple company is very successful and hold a spot at the top of the list in 2019. The Apple iPhone X is one of most successful phones produced, it is generally in the top 3 mst used phones in most countries around the world. (Cook, et al., 2015) “It’s the most popular phone in some Asian country including South Korea and Singapore. The iPhone X is the most popular iOS device for 2019” (jkielty, 2019).  Below shows a diagram of the Apple iPhone X and top competitors in the smartphone industry.

Figure 1: Top Competitors in the Smartphone Industry

Recent trends for Smartphones

Foxconn exploitation of workers

Foxconn company creates all iPhone around the world. Foxconn have many factories, but China is the only factory that makes the iPhone. "We only had a rest day every 13 days," claimed one. "And there was no overtime premium for weekends. Working for 12 hours a day really made me exhausted" (The Guardian, 2011). These trends seem to be being shared in the media, hurting the image of Apple.

Key Competitors

Samsung

‘Samsung Electronics and Apple, Inc., two of the largest technology firms in today’s world, provides a new paradigm on how vertically integrated firms today operate’ (Vergara, 2012). Samsung is growing rapidly and early on have overtaken Apple as the number one selling phone in the world.

Its ever-growing app developers always keep up with the updates that Apple incorporate. Its camera features are always improving with every phone they release. “We have seen a smattering of camera/smartphone hybrids, such as Samsung's Galaxy Zoom, for the most part, true optical zoom above 5x isn't something you get on a smartphone” (Kidman, 2019). The pixels on the Samsung phone is one, that attracts consumers to purchasing a Samsung phone.

The public perception of Apple and Samsung varies. They are two of the most popular smartphone brands in which consumers choose from. Samsung have made changes to customers coming back and buying their phones, making sure they are the key competitors of the Apple brand.  

Google Pixel

‘Google is now the third most popular premium smartphone in the United States of America as of the end of 2018’ (Wilde, 2019). Google is creating a smartphone which is catching up to Apple. Its camera features are the best in the business and giant Google tech are making this phone popular by advertising the phone. “The Pixel is an expression of Google’s philosophy for how to best use Android, and its quality makes it relevant to the entire market” (Savov, 2019).

Public perception of the Google Pixel smartphone has increased in the years since its release. Google pixel phones are becoming popular making it a key competitor to the Apple organisation.

Key Players Of Importance

General Public

General public having a choice of choosing between the 3 major smartphone companies, as well as many others, it is essential Apple release phones with improved technology regularly. The impact the general public will have if Apple don’t release improving technology will be critical, as they will find a better, more advanced product.

Apple have released a number of smartphones, but with the growing industry, every competitor has been improving and the sales margin is closing every year. 

Reports state that recently Samsung have taken over Apple. ‘Today, however, Samsung is clearly leading the pack, with about a fifth of global shipments. Apple is the second largest distributor of smartphones worldwide’ (Holst, 2018).  Business will have to gain favour again, which is very important in order to keep Apple’s brand reputation, of being the best smartphone organisation.

Other Factors Influencing The Industry

Political

The relationship with China is vital to Apple. Foxconn is the company that makes all the iPhones. Foxconn is situated in different countries, but China’s Foxconn is the company which produces the most components of the iPhone.

If the relationship between China and the USA breaks down, it could affect most of the world’s imports of the iPhone. This would mean that iPhone sales would plummet, leaving consumers with no access to an updated iPhone device. This relationship is very important to Apple to keep the consumers receiving the latest iPhones.

Culture

The culture of different societies must be considered when choosing advertising platforms. Creating campaigns which are relevant and easy for the public to draw connections to, will increase product sales. To look at this Apple needs to study cultural norms and identify a target market. Not addressing the culture of society will result in decreased sales.

SECTION 2 RECOMMENDATION FOR ADDITIONAL RESEARCH

This section recognises additional information that would be beneficial to Apple

1. How can Apple improve knowledge on customer wants to improve the technology?
2. What type of methods are used to improve consumer satisfaction?
3. How can Apple improve supply chain transparency to increase ethical satisfaction from consumers?

 Once this information is collected, Apple can use this information to re-visit its brand positioning.

• If Apple has used cellar data to track customer reviews, to improve the product by gaining opinions of the consumer. This will keep consumers returning.
• If they don’t used data to use for consumer reviews, then the business must re-evaluate either its product or its marketing strategy.

Methodology And Justification

Question 2 is selected to elaborate on. ‘What type of methods are used to improve consumer satisfaction?’ The research method to be conducted is primary explanatory research. “This is typically achieved by specifying a target difference and calculating the corresponding sample size, which provides reassurance that the trial will have the required statistical power (at the planned statistical significance level) to identify whether a difference of a particular magnitude exists” (Cook, et al., 2015). This will provide with an understanding of what methods can be utilised to improve consumer satisfaction and brand placement.

The research should be conducted between 2 major cities in Australia. The research group will focused on the ages ranging between 18-27 years of ages. It gives us a generation that has a high knowledge of technology. Participants come from both outer city and inner city. It is recommended that a study of at least 200 people is undertaken, focusing on 10 per group, per city, which will give the total amount to 200 participants. Each group will run for 30 minutes each.

Participants are approached in the street and shops in the outer city and inner city of Melbourne. Participants can be selected though their knowledge of the Apple iPhone. Which will be made up in composition focus groups, set out in the table 3, which is below.

This research project is likely to be conducted for 10 weeks and will cost approximately eighty thousand dollars.

Table 3: Focus Group Make-Up

SECTION 3: SEGMENTATION FRAMEWORK

This section provides recommendation regarding Apple segment and their market, so they can have more targeted marketing.

Consumer characteristics

Three consumer characteristics movements are important in the smartphone category, these are outlined in Table 4

Segmentation Framework

These three key characteristics are one way that Apple could segment their market is outlined in Table 5 below into three segments:

Table 5 Proposed segmentation framework for Apple iPhone X

Segment profiles

Table 6 provides an overview of each segment, their buying behaviour and brand preferences.

Segment Attractiveness Profiles

The information in Table 7 balances the growth and structural awareness.

Table 7: Potential Segment Attractiveness:

Conclusion

It is proposed that Apple complete the exploratory research on consumers in order to further understand how to appropriately market their brand. The research will give them the information required to improve their technology to make it a viable option for more consumers. It is important for Apple to maintain its high demands for their products. To remain at the top of the smartphone industry it needs to produce high quality, ever improving technology.

Marketing Resources

BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their knowledge and gain a better understanding of different aspects of business. If you are looking for additional support and resources related to Marketing, please find more Marketing resources below:

• Marketing Guides
• Marketing Lectures
• Marketing Theories
• 4Ps of Marketing
• 7Ps of Marketing

Bibliography

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• Vergara, R. A. G., 2012. Samsung Electronics and Apple, Inc.: A Study in Contrast in Vertical Integration in. American International Journal of Contemporary Research , 2(9), p. 77.
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