Determine their market share and their position in the marketplace (use a pie chart to do so).
Market share is defined as the percentage of a market accounted for by a specific entity; the portion of the market controlled by a particular company or product (Hayes, 2019). In recent years, the technological advancements witnessed in the electronics industry has created a boom of competition within certain companies, specifically Apple (and its main competitor Samsung and Microsoft). It has been through successful marketing activities and innovation over the last decade that has allowed Apple to be a market leader in the industry and the worldwide capital market, especially through its debut of the iPhone series in 2007.
It was with the decline of Nokia and Motorola in 2009, that allowed Apple, as well as Samsung, to grow market share. The iPhone has consistently been the world’s second most popular Smartphone since 2013, shipping 216 million iPhones in 2017, compared to 170 million units in 2014 (Stephenson, 2018), with Samsung shipping in excess of 317.
3 million units in 2017. During the fourth quarter of 2018, the iPhone’s market share hit 15.8% of the electronic market, however this was down from 17.9% market share in the fourth quarter of 2017 (Reisinger, 2019).
Since 2007, Apple continuously dominated the Smartphone market, until Samsung introduced the Galaxy series in 2013, which brought about increased competition in the industry. It was through Samsung’s massive advertising coupled with unique Android features that the Galaxy has overtaken the iPhone to become the most popular Smartphone brand in the world.
Positioning of a brand, or product, is a marketing effort and can only be done through promotion and advertising.
A company’s brand identity, its elements, its product and its communication all play an integral role in positioning a product (Codd, 2018). In other terms, positioning is simply the emotional value that customers have towards a brand. The iPhone series’ current positive positioning within the minds of its target market can be attributed to a decade of successful marketing activities and innovation that has developed a strong sense of brand loyalty within its customer base (Harlo, 2018). Apple has always been about the experience of the product, targeting emotional branding within its customer base, especially post 1998 with the introduction of the Mac (Rossignol, 2016), as most Apple customers are hard-core loyalists and will never deviate from Apple products, especially the iPhone. The Apple brand, and more importantly the iPhone product, is reflected through their core beliefs about innovation, design and imagination (of which are heavily reflected in particular advertising campaigns “Internet”, 1996, “Hello, the original iPhone commercial” and “Two kinds of people”). These factors are heavily witnesse and promoted through Apple’s products, advertisements and customer experiences.
The influences that have factored into the iPhone’s positive positioning within the market include brand identity, product design and quality, and Advertisements, with Apple adopting a “The less the Better” strategy to their marketing campaign. Brand identity incorporates all the intangible assets that are associated with the iPhone, including Apple’s brand values, culture, imagery, colours and employees, all of which contribute to creating a specific position in the minds of the customer. Product design and quality have always been the epitome of Apple products, especially the iPhone. Apple have continuously introduced new innovations to its product and improved designs, seen in the introduction of the multi-touch interface in the original iPhone (the first smartphone to do so), the creation of the Apple-design A4 CPU, which brought longer battery life in the iPhone 4, Siri personal assistant in the iPhone 4s, and now facial recognition in the iPhone X series. These innovative designs have led Apple to take a strong command in the electronics market, and eventually to ask premium prices for the product. Additionally, Apple have always taken a “The Less the Better” approach to advertising, which uses clear and concise message and usage of minimalistic colours. An example can be witnessed below.
Currently there are 2.7 billion smartphone users worldwide, with 1.56 billion smartphone sales annually around the world. An examination of the current technology market reveals the main competitors to be Apple’s iPhone series and Samsung’s Galaxy and Galaxy S series of smartphones, with other companies including Google and Nokia. With the introduction of the iPhone series in 2007, Apple quickly dominated the Smartphone market, effectively destroying companies like Motorola RiX, and continued to dominate the market until the Samsung’s debut of its Galaxy series of smartphones in 2013, which brought about increased competition. Recent statistics conclude that Samsung’s Galaxy phones sold more units in the US in April 2019, currently holding 30.99% of the Global market share, where the Apple iPhone now holds 22.94% in the same market. In terms of dollars, Q4 for 2018 saw Apple’s revenue at US$83.4 billion, with the iPhone (primarily the iPhone XR and XS MAX models) generating US$31.2 billion. In comparison, Samsung’s revenue for Q1 of 2019 showed a total profit of US$52.1 billion, with the Galaxy S series generated US$13.3 billion. This was down by 4% from Q4 of 2018, which would indicate the Apple is currently dominated the market by a narrow margin.
Identify their 3 key target markets and explain why customers purchase or aspire to purchase your chosen product using your understanding of Chapter 4 Consumer Behavior e.g., influences on their buyer behavior and Chapter 5 Markets: Segmentation, Targeting and Positioning e.g., value proposition, key attributes, benefit segmentation, demographics, psychographics, geographic and behavioral variables, VALS segmentation etc.
Consumer behaviour, or the behaviour of individuals and households in the purchase of goods and services, is guided by multiple influences including cultural, social and individual factors. The iPhone targets individuals based on personal influences in consumer and purchasing behaviour, specifically lifestyle, personality and self-concept and occupation. An examination of Maslow’s hierarchy of needs highlights that all individuals require a sense of esteem and self-actualisation, of which the iPhone attempts to appeal towards. Apple has utilised these influences and factors to effectively segment and target its consumers and potential consumers. Apple, as a brand, has always aspired to produce self-actualisation, individuals pay premium Apple charges for products because they believe that the products are well-engineered and effective and that there is a greater benefit to associating with that brand.
Apple is a company that has positioned itself as a premium, affluent brand offering products and services with advanced functions. Accordingly, Apple target customer segment comprising of medium to high income individuals who are willing to pay extra for technology products with advanced design, functions and capabilities (Dudovskiy, 2019). Apple have segmented their consumer market, in this regard, psychographically. This form of market segmentation is based on appealing to a particular lifestyle or personality. The branding strategy of the iPhone, and Apple’s brand personality, are focused on luxury lifestyles, imagination, innovation and technology, whilst maintaining simplicity and the removal of complexity from people’s lives. Prime psychological influences on consumer buying behaviour are perception, and perception of the self, and beliefs and attitudes. The psychographic segmentation of the iPhone product allows people to believe that by purchasing it they belong to a higher class of society, and thus view themselves as superior.
Furthermore, through further examination of market segmentation and targeting, Apple has also demographically segmented its iPhone consumer market. Currently, the iPhone is targeted towards Generation Z, with most Baby Boomers believing that the iPhone “is not targeted for them and is a confusing product” (Nichols, 2017), and individuals aged between 20-45, with more than half of iPhone customers being below the age of 34. Additionally, the iPhone is targeted to people of a particular life cycle stage, specifically the bachelor stage, newly married couples and young, high earners, with occupations as professionals, managers or executives (Dudovskiy, 2019). Apple targets it product towards this demographic for a variety of reasons, with an analysis of benefits sought and value propositions of the product. These individuals are seen as being “hard-core loyalists” that will rarely deviate from a product, and are currently seeking a sense of achievement and belonging in a professional setting, as many are now entering corporate workplaces for the first time.
Finally, to be more specific, the iPhone is heavily targeted towards College and University Students, especially with the introduction of itunes U and educational podcasts. Late teens and students are considered to be one of Apple and the iPhone’s prime target markets, with most using the product to socialise with friends, listen to music and use social media (Saini, 2017). These students seek the benefit of easy organisation of study notes and assignments, which can be easily done on the iPhone, and a light device which makes carrying the product to and from school much easier.
B: For your chosen product provide some examples of their advertising (print ads, sponsorships, billboards, screen shots of social media e.t.c) and link these advertisements to the benefits that their key target markets seek from the product.
In particular, identify the purpose of the advertisements e.g., remind, inform, persuade, entertain etc., and then critique whether or not you think it is a good advertisement of not on the basis of your analysis of customer benefits sought.
Since the debut of the iPhone series of smartphones in 2007, Apple has maintained a successful advertising campaign for its premier product. The companies marketing strategy was effective in that it let Apple divide the customers into a smaller segments, ultimately targeting the right consumer groups, “the obvious current target audiences for the Apple iPhone include young people between ages of 20 and 45, affluent teenagers, and “mobile” employees who work outside of the office” (Smith, 2009). Analysing customer behaviour and purchasing decisions, the Apple company allowed itself to understand its competitors, help them advertising more effectively, and enact effective marketing campaigns. The iPhone’s first major successful advertising campaign was the “Hello” iPhone ad, debuting at the 2007 Oscars, which utilised a number of celebrities from famous scenes, all saying “Hello” into a phone, including Humphrey Bogart, Steve McQueen, Charlton Heston and Cameron Diaz. Often companies look for celebrities who share qualities, values and ideas in order to create a potential synergy between the product and the celebrity (Farr, 2015). This celebrity endorsement allows Apple to persuade, and ultimately entertain it’s audience, into purchasing the iPhone, through the creation of this perceived benefit that by using this product, they too have a similar lifestyle to the world’s most famous celebrities.
Additionally, as stated above, Apple will often utilise minimalistic colour schemes and simplistic advertising in its marketing campaign. This can be witnessed in the companies recent billboard and social media advertisements showcasing the new iPhone X series of smartphones (including iPhone XR, iPhone X and XS), showcasing the Dalai lama to spread “App-iness”, and seen below. This marketing strategy has been successful as it appeals to various benefits sought from customers. These can be seen through an examination of Maslow’s hierarchy of needs reveals individuals needs to achieve self-actualisation and psychological needs, of which this advertisement helps achieve. The Dalai lama, and the religion of Buddhism, is synonymous with love, self-fulfillment and peace, and by incorporating Him into their iPhone ads, Apple have created a mental connection within its customers that by purchasing the product, they too will achieve self-fulfillment (Landler, 2018).
For the debut of the iPhone 7, Apple introduced the “Life is easier on iPhone” advertisements, which is arguably the companies most perfect marketing campaign since 2007 (McGinley, 2017), and have now applied it towards advertising for the iPhone X. Since the inception of smartphones into the market, they have always been about making customer’s lives easier, and for Apple users, the Iphone remains the most straightforward phone to use by far.
Develop 2 (two) advertisements for each product in the same format that you have critiqued and explain how your advertisements meet the customers benefits sought.
Firstly, the first advertisement highlights how far Apple have come in terms of development and innovation in the iPhone series of smartphones, from the original iPhone in 2007 to the new iPhone X from 2017. As outlined earlier, Apple customers seek out innovation and new product design, which is at the core of Apple’s philosophy, in all the goods they purchase, especially the iPhone. By comparing how the iPhone has aged and developed to that of life, customer’s develop a sense of achievement and belonging in themselves by creating a mental connection that, in the last 12 years, they themselves have grown and become a better version of themselves.
In this second advertisement, it is highlighted how the iPhone has shaped the current smartphone market, displaying all previous models of iPhone. Similarly to the previous advertisement, it showcases the innovations and product improvements that have been incorporated into the iPhone series, and will continue to create into the future.