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Product/Service Analysis for Iphone Essay

Brief description of market

I selected iPhone for this individual assignment. The iPhone falls under smartphone category and Apple manufactures iPhone. A smartphone is a high-end mobile phone that offers multiple innovative and convenient features than a traditional phone. Apart from making calls, consumers want to access internet, watch video, take pictures, listen to music and want PDA features in one device and smartphone is the right product for those users.

Differentiated marketing strategy is a market-coverage strategy in which a firm decides to target several market segments, and design separate offer for each. Apple uses a differentiated marketing strategy by offering 16 GB and 32 GB iPhones to target different segments based on usage. Some of the iPhone direct competitors are Motorola Droid, Samsung F700, HTC EVO, Samsung Galaxy, Nokia N8 and Blackberry Bold.

Segmentation Approach

It’s not possible for companies to satisfy everyone in the market. Since they cannot connect with all the customers, companies divide the market into segments with distinct needs and wants by examining demographic, geographic, psychographic and behavioral difference among buyers. Then, they identify which market segments it can serve effectively. Market segmentation helps organization optimize how it defines, identifies and appeals to important customer groups. After careful analysis, the following segments are identified for smartphone market as a whole in the following segmentation category.

Enterprise segment

Corporate users:Medium and large enterprises, who buys smartphones for their employees. Consumers don’t have any say in the segment. IT department from the companies decides based on ease of integration with corporate emails, maintenance, security and safety

Targeted Segments

Marketing can be simply defined as “meeting needs profitably”. Apple, after identifying smartphone market segments, needed to identify which market segments it could serve effectively and profitably. So, they combined several variables in an effort to identify smaller, better-defined target groups which presents the greatest opportunity to sell iPhone successfully.

Based on five key criteria, Measurable, Substantial, Accessible, Differentiable and Actionable, Apple eliminated the following segments from targeting: low-medium income, teens and ages above 55, developing countries, rural, rugged looking phones, messaging service (youth prefer slider keyboard for SMS and MMS (since emails can be used for sharing pictures), price conscious users, Hard-core loyal to other brands, QWERTY slider key board preference users, overwhelmed users and enterprise users.

To successfully gain market share and become market leaders in the smartphone, Apple targeted the following segments: High and Medium-high income segments, ages between 18-24, 25-34, 35-54, students, professionals, developed countries, urban areas, fashion segment, sleek phone seekers, entertainment segment, app store segment, PDA users, casual users, users who want a faster smart phone with quality, split loyal and switchers from loyalty to brand perspective.

The smartphone segment is the fastest growing segments in mobile devices. Smartphone segment is growing at the rate of 35% every year now. So, it means that first time users or unserved users are entering in to the market at a faster rate. Because of the first time user segment attractiveness, profitability, Apple also targeted first time market entrant segments to sell their iPhone to keep gaining the market share.

Positioning Strategy

1. Has the brand achieved Points-of-Parity? If so, how and with whom? Yes, iPhone has achieved the Points-of-Parity. Points-of-Parity are associations that are not necessarily unique to the brand but may in fact be shared with other brands. These types of associations come in two basic forms category and competitive. Category Points-of-Parity has been achieved with BlackBerry. BlackBerry represents necessary conditions for a smart phone with the functionalities like instant email notification, web browsing, accessing social media websites but it is not sufficient conditions for brand choice. Apple’s iPhone, apart from the above mentioned features, offers integrated music, video, camera and PDA features in one device with new touch screen interface and made operating extremely intuitive.

Competitive Points-of-Parity has been achieved with Motorola Droid, Samsung F700, HTC EVO phones with Android OS. The Android App Store has more free apps but it is an open system and easy target for malware attacks, virus attacks and other exploits. Android malware attacks have been increased by 400% in the past 6 months. On the other hand, iPhone App Store is a completely closed system controlled by Apple and it will reject any application which can cause these malware attacks. So, this competitive points-of-parity negate competitor’s points-of-difference that Android OS phones have more free apps.

2. What are the points of difference?

Points of difference are attributes or benefits consumers strongly associate with a brand and believe that they could not find to the same extent with a competitive brand. Points of difference for iPhone are as follows:

Design:Intriguing design that have redefined the look of a smart phone Synchronization with iTunes: Content is synced between your iPhone and computer running iTunes to reflect new, updated, or deleted content. Built in battery: Superior battery life and is easy to recharge than the competitors.

Ease of Use:Has multiple innovative features, but very user friendly

4. What do you see as their positioning strategy for you personally? I like listening to lots of music and belong to Professional segment. I see “Stay in touch, communicate, access to critical data, access to calendar, record information and listen to music on the go” as their positioning strategy for me personally. The iPhone features which ties the benefits I seek are email, internet access, calendar, instant messaging, iPod and, app store to listen songs through Pandora app.


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