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MKTG101 Marketing Fundamentals Assignments Solution
Last year marked the end of the first decade of the post iPhone era. An ea ushered in by Steve Jobs with his landmark keynote of 2007 that gave an explosive birth to the current market of smartphones. To commemorate this occasion the company has released the iPhone X which has become a target for both criticism and praise. As its new bezel-less aesthetic appeal is being applauded by a large section of its consumer behaviour base the new lip on the top of the screen to accommodate cameras and other sensors has been baffling for even its ardent admirers. With all things considered, the company's new flagship device has received a considerably warm welcome and as per the second quarter reports of the company iPhone x an increasing amount of sales compared to the 1st quarter. Contradicting the predictions of analysts the iPhone X has become the highest selling smartphone in the U.S. in the first quarter of 2018 (Strauss and Frost, 2016). Over 16 million units of the device has been shipped in the first 3 months. Priced at 999 dollars for the basic model vendors were worried that wooing buyers with the latest smartphone would a severe issue but they were surprised to see the sales figures had rose by 2.9 % in the second quarter.
Marketing concepts and principles
The segmentation, targeting and position approach of apple represents its core marketing efforts.
Segmentation is the division of the population into certain groups on the basis of a number of parameters and targeting refers to the process of choosing a set of groups which have been identified through segmentation to position and sell the product (Ryan, 2016). The segment of Apple’s current target customers include certain character traits. They include the appreciation of designing, performance and overall quality over the price of the product. The term positioning is identifying a marketing mix that will be most appealing to the target segment.
For the Iphone X apple has decided to use the mono segment type of positioning thus making a positive effect on on single customer segment. Apple like all its other products have positioned the iPhone X as a premium flagship offering, valuing quality and overall customer satisfaction over price. The product like its predecessors offers the latest advancements in smartphone technology for additional costs (Humphrey, et al. 2018). Their target consumer segment comprises of individuals who are well off and are willing to pay extra for a product that comes with the most advanced design, functions and technological capabilities in the market.
Apple’s strategy of market segmentation for the iPhone X involves dividing their base of customers into 3 different sets. The first segment include customers with high loyalty for the brand. This group of Apple enthusiasts are further divided into two sub groups. The first one consists of people who have a strong sense of loyalty towards the brand and act as the primary buyer of every flagship device that is released by the company(Bianchi, and Andrews, 2015). They are not only customers of the iPhone but are also consumers of the other series of apple products. This segment includes individuals who use more than one device or service that is offered by the brand. They are well aware of the features provided by the device and know how they will benefit from the product and thus they are willing to pay the extra amount of money to acquire these features. The second subgroup consists of individuals from the upper middle and upper class individuals who may not be ardent Apple enthusiasts but understand the premium value of the the brand name and are able and willing to pay extra for the product. They are the main group of customers for whom Apple is able to maintain their higher pricing levels (Kim, et al. 2016). They mostly belong to the age group of 20-45 years and understands the brand value of a premium flagship device like the iPhone.
The second segment consist of people who will be attracted to the novelty and design of the product. This group contains people from every income group who have the ability to pay the lump sum amount for the device. They may not have the loyalty of the first group but Apple aims to bring them in with the exclusivity of features offered by the iPhone X. They belong to every possible age group and are already using a smartphone and Apple aims at providing a better option to simplify their needs.
The third segment includes a group of people who feel like buying the iPhone would enhance their social status due the premium brand value of Apple (Lovelock and Patterson, 2015.). Though they may already own a previous version of the iPhone, they are still willing to scour for the latest. They mostly belong to age group of 18-25 years and cannot be considered to show any kind of loyalty towards the brand though they help increase the brand value of Apple with their fascination and peer to peer promotion.
Apple has Shipped over 16 million units over a period of three months, or the first quarter of the year. This has led to the iPhone X being the best selling handset in available in the current market contradicting the prediction of market analysts. Overall, since its release in November 2017 the company has shipped over 50 million units worldwide. The 16 million units of the iPhone X shipped in US in the first quarter has led to a 16% YoY increase with OEM showing that Apple is successfully taking Samsung's market share at a continuous rate in the premium segment of the market (Estrada, Smith and Wehner, 2018). The super premium segment of Apple, in which the iPhone belongs accounts for 20% of total sales in the US in the first quarter with Samsung trailing behind at 8%. The overall +$800 price segment increased by 28% with an additional share of 3% over what was reported in the last quarter of 2017.
Marketing mix considerations
Though the iPhone X has show promising figures loyalists of the brand have argued that the face recognition system though extremely and can be used in complete darkness, actually hampers the magical user experience previous iPhones that they were used to. Users critiqued that the new iPhone takes more steps and more additional gestures for navigation through the new user interface (Xie, and Ding, 2016). They added that this was a huge step backward and is a cause for frustrations among many loyal iPhone enthusiasts. Though the bezel less is its main attraction and provides a brilliant experience the thickness of the screen automatically means that there is no room for the signature home button of the predecessors of the new model. The components required for the facial recognition are all compressed into the top of the screen in an extended part that is being referred to as the notch (Estrada, Smith and Wehner, 2018). This notch has also become a topic of argument as though it is being used by other brands on their models it mostly harms the user experience during the playing of videos. Some softwares also have not been updated to accommodate the notch.
Apple has large chain of sales and distribution channel. It divides its distribution into geographical segments and manages its business by dividing the market. It is currently selling the iPhone X through its exclusive retailers and authorised resellers who are directly selling the products to the customers. There's no official third party involved in the chain of distribution of the product in the United States (Yun, et al. 2018). Though Apple sells its product directly, third party cell phone carriers are used for the network. The device will be available throughout the states with little to no delay in after sales services.
Apple has priced the basic model of the iPhone X at a steep 999 dollars. In this highly competitive market of the smartphone industry most brands use a varied strategy to keep their product prices low in order to win the competition, grow sales and expand their market. On the contrary Apple has always stuck to its premium pricing approach. All their products have a hefty price tag and can be purchased by individuals who come from the high income group of society and can appreciate the flamboyant functionality of a flagship device like the iPhone X. it maintains its image of selling premium products in a highly competitive market despite being challenged heavily by its competitors (Kingsnorth, 2016). Apple believes that the unique experience that their devices provide are enough to justify the price tag and maintain this loyal base of customers. This has been proved as Apple has released its quarterly report of sales figures and they show that despite pessimism regarding the device Apple has actually increased their market share..
Social responsibilities and ethical issues
As Apple celebrates the growing sales figures of its flagship device it faces a dilemma with two ethical as well as social issues that seem to have no apparent relations with each other.
Of all its technological marvels, the 3-D facial recognition technology of the iPhone X has created the most buzz (Fan, Lau, and Zhao, 2015). The credit goes to its innovative cameras and sensors that enable the user to unlock the device by pointing the phone at their face.Though it has exceeded all its competitors in this field new legal and ethical issues have surfaced as privacy advocates and technologists worry that ramifications will be terrible if the faceprint data falls in the hands of cyber predators (Yang, Sun, and Lee, 2016). Though officials have assured the users on behalf of Apple that the data will only be stored in the device itself and nowhere else some question remain in the minds of users as facial recognition technology takes a new leap with Apple as its innovator.
Another issue that haunts the Apple user are recent reports by the media on the abhorrent conditions of workers at the Apple’s manufacturing factories. These reported rumours have left Americans who are socially conscious with the dilemma of whether to use the iPhone or not.
Americans who support socially responsible manufacturing practices have become intimately accustomed to their iPhones and iPads. But they are now questioning themselves on whether to ignore the strong pieces of evidence that have surfaced and abandon their beloved iPhones. With he release of the iPhone X, Apple needs to respond strongly and handle these allegations responsibly before there customers choose to act and abandon the brand (Nagle, and Müller, 2017). Though Apple enjoys a strong loyalty from its customers ethical hacking and moral issues as grave as these is bound to have serious effects on the brand value of the company.
Information communication technologies
Apple uses its own exclusive promotional strategies at mirror their unique line of products and compliment them perfectly. The procedure of marketing begins from the product itself and the company utilises its brand value to the fullest. (Zhang, Liang, and Wang, 2016). Apart from all of this the brand also uses a mix of both online and offline campaigns for promotion of every product that they launch. Apple has a massive following on all the social media platforms present in today's market. And it has used these tools to vehemently market the iPhone X. release various videos of the various features provided by the device. A number of videos comparing the camera of the new Iphone with a professional camera can be found on internet. These vdes prove the superiority of the device. Apart from their own websites various other online marketing and promotional channels were used for publicity. E retail chains like Amazon who are selling the product are also promoting the brand. The huge buzz around the innovativeness of the product has also helped with the campaign.
Apple has conveniently used the various information and communication technology channels for marketing the iPhone X. Videos of the product on Youtube help users to familiarize with the product and act as an engaging promotional experience. The iPhone X promotional video known as the “meet the iPhone X” has already received more than 10 million hits thus proving that iPhone has gathered all the necessary attention on social media. Different product review channels and websites have also covered the product extensively (Ismail, et al. 2017). Apple has always used a multi pronged marketing strategy for their products and the results of these efforts are visible in the form of higher sales numbers and increased revenue for the company.
For the iPhone X the marketing plan needs to be precise and to the point. The strongest factor of every new new iPhone as mentioned earlier is it’s differentiation from the competition. For example every new iPhone comes with a brand new tagline. For the iPhone it was “the only thing that has changed is everything” iPhone X it was “say hello to the future” . a position like this itself promote the brand (De Mooij, 2018). Apple chooses not to compete with its competition but instead points out how the world changes with the arrival of every new iPhone. The launch events are expected to be dramatic and every new feature of the iPhone X is thoroughly highlighted. The new wireless charging feature and other such innovations are awestrikng for the audience. Social media platforms like twitter, instagram and facebook are highly utilised by the brand to discuss and promote the uniqueness of such features. Spec comparisons by tech savvy individuals and second hand sales offers are also efficient contributing factors. The apple store cme with their own brand of exclusivity with sales staff who are highly knowledgeable and extremely friendly. The genius bar located inside the Apple store are one of the elements contributing to Apples one of a kind brand value. It is a tech support station that provides concierge style assistance to the customers. The are highly efficient and can answer almost any queries regarding the devices (MBA Skool-Study.Learn.Share., 2018). If all these factors contribute efficiently for the marketing of the iPhone X , it will have no problem maintaining its lead as the highest selling smartphone in the current market.
Apple is a flagship brand in the field of technology and has no need for introductions. The company had made an explosive return in the market n recent years and this growth is strongly based on the sales of their flagship devices, the iPhones. The company's latest release, the iPhone X has received a warm welcome and the results from its quarterly sales reports have clearly indicated that the brand is nowhere close to losing its market value and business momentum (Lieb, 2017). The device provides its users with a submersive experience and intuitively responds to the needs of its user. Apple has surpassed its own standards in designing the device. The bezel less display promises to elevate the user experience to a whole new level, creating a higher amount of user satisfaction for its loyal enthusiasts. This device, like any other Apple product has received extensive media coverage and has become the highest selling smartphone in the current market.
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