Critically Evaluate The Segmentation Utilised By Apple I Phone Marketing Essayeting Essay

Executive Summary:

The aim of this paper is to examine and then critical evaluation of Apple iphone segmentation strategies as compared to its competitors in mobile phone market. The target of this assignment is to answer following factors of Apple iphone:

A critical evaluation of the Segmentation utilised by Apple I-Phone and examination of different approaches used by Blackberry and Nokia.

Examination of brand elements that support the Positioning for iphone 4 and product offered with current iphone 4.

Segmentation:

A large, heterogeneous market is comprised of smaller group with homogeneous preferences. Market segmentation is the practice of dividing a large heterogeneous market into smaller subgroups with shared characteristics in order to deliver the marketing offering that satisfies unmet needs as closely as possible. There are many ways of segmenting consumer markets that is geographic, demographic, gender, income, psychographic segmentation and etc. Segmentation of consumer market give road map to marketers to develop the marketing strategies as consumer with in a segment have similar characteristics and they respond the marketing strategy in almost similar ways.

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Companies need to segment their market for different reasons. Before marketing products or services, there is need to understand the customer’s requirements, and find ways and means to satisfy their wants. This is very important to stay ahead of the competition and build the brand. This could be done through extensive marketing research. Although it is difficult to satisfy needs on individual level and even to understand all of them but defined market segmentation strategy will help to create a market to cater to groups of individuals that will make economic sense to mass produce and distribute. The idea of target market segmentation strategy is come from the market segmentation, so that marketer can recognize and understands the diversity of customers and provides them with products and services according to their specific requirements (McDaniels & Kolari, 2008). A successful market strategy can be done by identifying and understand different segments and its different needs.

A critical evaluation of Segmentation utilised by Apple iphone:

A Market segmentation strategy means dividing the market into groups, on the basis of similar needs and wants of individuals for services and products. Segmentation can also be on the basis of peoples’ behaviour, culture and economic status. In other words it could be further defined as, “Process of defining and sub-dividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics” (Meadows, 2008).

Apple Inc., led by Steve Jobs virtually rewrote the book of strategy as well as the history of consumer electronics, with its pioneering “i products”: the iPod and iphone (Peckham, 2010). Apple produced differentiated products with features that multiple niche market segments and pay for but Apple also makes products in the form of competitive cost so that greater pool of customer can also buy its products and services. So Apple products offered so many different features that help them to attract different customer segments and on the other hand competitive cost strategy also help them to segment the consumer markets. Following are the apples segmentation strategy that they are utilizing for iphone:

According to Jobber (2004), there are three broad groups of customer segmentation criteria that are Behavioural, Psychographic and Profile.

1.1. Behavioural Segmentation: Kotler (2007), discuss about behavioural segmentation that is dividing a market into groups based on consumer knowledge, attitude, use or response to a product. Apple uses this segment technique very smartly by the innovations that lead to brand switching.

Firstly, Apple introduced its iphone 3 by considering consumer’s behaviour, their attitudes towards new technological changes. What consumer aspects from the one smart-phone that provides multifunction facilities. Innovations of new features can appeal and influence in the behaviour of customers. Iphone with its new technological features combines three products into one small and lightweight handheld device. Iphone 3 is a mobile phone with a widescreen iPod, and the availability of Internet in your pocket with best-ever applications on a mobile phone for email, web browsing and maps. iphone users in an era of software power and sophistication never before seen in a mobile device, which completely redefines what users can do on their mobile phones hence it get fit in innovations category.

Secondly, by influencing with the differentiated product or by behavioural segmentation, Apple has grabbed 17.3 % ( Canalys) of the smart-phone market, placing it second in the world with growth of 523 percent from third-quarter 2007 to third-quarter 2008. RIM capture 15.2 % of the smart-phone market. Nokia share shrunk 3.4 %. Also adding an easy way for iphone users to access Microsoft Exchange e-mail made the iphone more attractive to customers looking to integrate the device into their work life. About 40% users replaced smart-phone (Rubicon consulting, Inc.2008). This shows strong brand switching capability enforced by iphone in smart-phone market.

Thirdly, by influencing behavioural attitude with their innovative product like iphone 3 Apple made its perceptions in consumers’ mind and is regarded as an innovative company. It has a vast customer loyalty base. Customers trust Apple for its technology and security. It is the result of this loyalty that 52% of iPod users bought iphone according to a research from Solutions Research Group.

1.2. Psychographic Segmentation: According to Kotler (2007), psychographic segmentation is dividing a market on the basis of social class, life style, and personality characteristics etc.

Apple very carefully investigates psychology of consumer’s trends and their life styles. The lifestyle of a person is linked to his or her preferences. Lifestyle is reflected in activities, interests and opinions. Now different people have different lifestyles. Apple identified this and provided different features for different people in one phone like touch screen, iPod for a trendsetter youngster, or calendar and fast web browsing for a sophisticated businessman.

1.3. Demographic Segmentation: Kotler (2007) describe that the division of market into the group on the basis of demographic variables such as age, gender, family size, family life cycle, income, education, religion and nationality.

Apple iphone 3 segmentation is based on gender and age variables. Around 2/3 of the 2.3 million US iphone users are men (Nielsen). A recent research done by Solutions Research Group has showed that Apple was successful to attract youngsters as 63% of its customers were under 34 years and average age of its customers is 31 years. The typical iphone user is a young, wealthy, male tech geek type. Why youngsters are more interested towards apple iphone 3 because it provides a features that are more attracted to youngsters like i-tunes, video player, net browsing, gaming, and more disk space for downloading. Basically, apples product iphone 3 features are designed which are more demanded by the youngsters.

Apples target market segmentation is basically undifferentiated because in this strategy of market coverage where firms ignore the specific market segment and go after the different market segments with one offer. This is because iphone 3 offers so many different features that help them to segment its market on the basis of psychographic, demographic and behavioural segmentation. Further iphone 3 cost is competitive with the brands of same category in smart-phones provide Apple opportunity to serve large pool of consumers of different segments.

Different Approaches of segmentation used by Nokia & Blackberry:

Nokia is offering a lot of different products range that helps Nokia to segmentation of market that serves each segment of market. Nokia approach is to launch different products with different features and with different prices. They are using all the basic segmentation variables like demography, psychographic and behavioural. When consumers visit Nokia store they can easily grab by product offering because of different customer needs and Nokia product range fulfil their needs on the basis of product features and its price. For example for youngsters like iphone 3 they recently launch Nokia N8 that is touch screen smart-phone with competitive prices. If we consider income class segmentation Nokia offers different price mobile phones for different income classes. Behavioural segmentation that depends upon customer use, response and knowledge also provide opportunity because they are continuously launching their products by careful reading of consumer needs and demands. They are basically using differentiated market coverage strategy because they are offering several products to serve different market segments.

Blackberry initially came into market to serve business class consumers and famous for use for business application. Blackberry offers different application that helps business people to conduct their business on the way or travelling. Blackberry that is why successful to take attention of this class and very successfully earn good sales from the business class. Their target market segmentation strategy was basically concentrated or niche. This is the market coverage strategy in which firm goes after a large share of one or few segments. Recently blackberry from Rim took a turn to serve more segments other than business executive class. By offering features those appeals to other segment and by advertisement for different segments. Now a day’s Blackberry is also a handset that is vastly used by youngsters due to its web related features and cost competitiveness as well. So segmentation approaches currently used by Blackberry to increase its customer base by introducing blackberry a handset for all that was initially perceived for business executives. That is why now blackberry is been used by youngsters along with business class.

Examination of brand elements that support the Positioning for iphone 4 and product offered with current iphone 4.

Conclusion:

A Market segmentation strategy means dividing the market into groups, on the basis of similar needs and wants of individuals for services and products. Segmentation can also be on the basis of peoples’ behaviour, culture and economic status. In other words it could be further defined as, “Process of defining and sub-dividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics.

Apples target market segmentation is basically undifferentiated because in this strategy of market coverage where firms ignore the specific market segment and go after the different market segments with one offer. This is because iphone 3 offers so many different features that help them to segment its market on the basis of psychographic, demographic and behavioural segmentation. Further iphone 3 cost is competitive with the brands of same category in smart-phones provide Apple opportunity to serve large pool of consumers of different segments.

Nokia is offering a lot of different products range that helps Nokia to segmentation of market that serves each segment of market. Nokia is basically using differentiated market coverage strategy because they are offering several products to serve different market segments. Blackberry initially came into market to serve business class consumers and famous for use for business application. Recently blackberry from Rim took a turn to serve more segments other than business executive class. By offering features those appeals to other segment and by advertisement for different segments.