Market Segmentation and Positioning of Apple Company - Case Study Example

Market Segmentation and Postioning of Apple Company Name: Course: Course code: Tutor: Date: Table of contents Introduction 3 References 9 Introduction The main aim of this paper is to analyze the сurrеnt mаrkеt sеgmеntаtiоn, targeting and роsitiоning strategy of Apple Company which comprises of products, the current strategic position, and its financial strength. Apple was introduced into the market into the market by Steve Jobs, Ronald Wayne and Steve Wozniak on April 1 1976. The first computers were hand-built and displayed publically at homebrew lab. The computer kits consisted of the motherboard with CPU, RAM, and other video clips. Since then Apple has been very successful in the market all over the world and has become one of the best companies in electronic product lines (Horngren, 2010). The current market position of Apple Company The company believes in continuous development and considers various sectors such as environment, product quality, process and services and safety management systems. Looking at the company’s aims and objectives, Apple has outlined its principles so as to achieve all the safety and health requirements and enhance energy efficiency. Innovation is one of the most valued things for the company with the goals of increasing the number of product sales in the education sector; provide user-friendly software for all the customers and offering high-quality products to the customers. With the current strategic position of the company, introduction of the new operating system, software application, hardware with a new design, Apple looks forward to meeting the customer needs like new products, ease of use and innovative product design. Currently, Apple is focusing on brand awareness and refining the product by investing much on marketing and advertisement. The company intends to implement cost leadership strategy so as so come up with the current competition and also intends to keep its reputation by implementing product differentiation strategy Looking at its financial position, Apple posted revenue of $7.9 billion and quarterly net profits of $1.9 billion. There has been an increase of 17% as compared to the previous years by selling over 3 million Mac computers. The сurrеnt mаrkеt sеgmеntаtiоn of Apple Company According to Rogers (2007.), the company’s market segmentation comprises of demographical bases, geographical bases, behavior bases and psychographic bases. Demographical bases (family size, age, occupation, life cycle) The company’s demographic segment has been successful since it has developed products based on age, life cycle and the occupation of the consumers. The company is distributing its products into the market, and the PCs are classified on age, family size, for instance, they would have more entertainment and games in PCs for the children and professional PCs with the new software Geographical segmentation (countries, states, regions) The company has utilized geographical segmentation by establishing businesses across the world i.e. US, Europe, South America and Australia. Lately, the company adopted vertical growth strategy and started expanding its retail stores. The company distributes its products through third-party dealers, or via the internet or the iTunes online stores Behavioral segmentation (product usage, knowledge, attitudes and responses) In this type of segment, the company has provided good product knowledge to its customers by advertising on search engines, television since it has a good brand image. Apple has received positive response rate since many customers are searching for new designs and innovative products which the company is successfully offering. Psychographic segmentation (values, lifestyle, personality) The company’s psychographic segmentation has been very successful since the company has developed innovative products that fit the lifestyle of the people i.e. Mac book for the younger people. The company has had a good brand image form the consumers. Therefore, it has added some value to the company’s products as they are different and innovative. As far as the personality sector (style) is concerned, the company has continuously provided products with various colors for those who enjoy fancy colors. Market position of Apple Company To understand the market position of the company, its marketing mix has to be put into consideration. Apple’s marketing mix comprises of the price, product, place, and promotion Price: Generally, the Apple has been positioned as the best product. The company’s products are relative priced higher than those of other competitors in the market. This position has assisted the company as it avoids price wars in the market. Rather than competing on pricing, the company can now compete with innovative products and distinctive, unique propositions. This is one of the competitive strategies that an organization can have. This market position of high-priced quality products was later adopted by IBM and Sony (Rogers, 2001). High pricing strategy aids an organization to make huge profits without tarnishing the brand. Apple brand is the company’s most valuable asset, more than even the technology they control. So as to strengthen its premium pricing, Apple does not offer any discount on its products Product: Apple intends to sell only the quality products in the class. There is no any compromise when it comes to quality or performance. The company’s positioning on quality has enabled it to build trust and confidence with the consumers in the market. Another point to note about the company’s product positioning is that there are few variations in every class of products: iPad is available in either black or white, 3G + Wi-Fi in three memory sizes i.e. 16GB, 32GB, and 64GB. 3GB is found on ATT&T or Verizon network. This reduces the number of choices that are available to the customer. Therefore, it makes easy for a customer to make a decision in buying the product. The company also has no substitute positioning since its products are unique and have no any other substitute. Place: In this era of internet sales, Apple Company made a bold decision to move away in the opposite direction and started high-class retail outlets, at the time when its competitors were closing down their retail outlets and moving into internet based sales. The company has been selective especially when choosing the retail partners and has designed ways in which their products must be placed and displayed in the stores. If in any case the company owned a retail outlet, it designed it as a boutique store with the aim of providing its customers with the best experience. Most of the Apple stores were located in prime places so as to enhance its exceptional image. Promotion: When it comes to advertising, Apple has been one of the leaders in the market, be it 1984 super bowl ad or the current iconic iPhone ads and its advertisements have been distinctive from those of other competitors. The company has been very cautious not to offer discounts as a way of promoting its products, rather it utilizes scarcity as a promotional strategy, saying there are only 50 pieces remaining and this consumer to buy the Apple’s products as fast as possible. Therefore, when the products become readily available, customers are willingly exchanging their money to acquire iPad/iMac/iPhone Targeting and Positioning Strategy In most case, Apple Company targets people and focus so much on the users by letting them decide on how and when to use the products. For instance, the company targets teenagers by offering iPods to them. The iPod offers them with the opportunity to listen to music, chat with friends go on to Facebook, Twitter, MSN etc. Apple also targets university and college students with such products such as iPads, MacBook’s, iPhones, etc. to record their notes easily. Business people form another target market for Apple products. All the devices i.e. iPhones, MacBook’s, iPads etc. have business quality that makes them finish their work efficiently and communicates with their customers (Chilcote, 2003). Apple has positioned itself in the market to be lifestyle product to rich people, consumers with good jobs and innovators. It has become a desired product though it is not easily affordable. On the other hand, exceptional positioning assists Apple in the long run. With increase in wages and affordability, more consumers will be able to buy the company’s products in future, therefore increasing sales by reaching out to those bigger audience with time and space, and by the time people can buy Apple products, they do not struggle with prices since price could be secondary as the image of the company’s products taking the precedence. Conclusion With the current market becoming very competitive now and then, Apple Company has been able to come up with competitive strategies so as to outdo the competition. It has positioned itself as a market leader and to be lifestyle product to rich people, consumers with good jobs and innovators. With the current strategic position of the company, introduction of the new operating system, software application, hardware with the new design, Apple looks forward to meeting the customer needs like new products, ease of use and innovative product design. Currently, Apple is focusing on brand awareness and refining the product by investing much on marketing and advertisement (D.Bhakkad, 2014). Marketing mix of the company has to be considered to understand the market position of the company. Its marketing mix comprises of the price, product, place, and promotion. It is worth noting that Apple has been a very strong position not only to sustain itself in the current market as a leader but also to establish and integrate itself into other markets that have never been saturated such as the mobile downloading market. . References Chilcote, R.H., 2003. Development in Theory and Practice: Latin American Perspectives. Rowman & Littlefield. Cullen, J.B., 2003. 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