Contents Introduction Orientation Marketing Product life Cycle Price Place Promotion Macro and Micro Environment SWAT Analysis PEST Analysis Marketing Mix Market Research Segmentation Conclusion References
Apple Inc Company, started by Steven Jobs, Steve Wozinak and Roynald Wayne is 30 years old now; Steven Jobs is the man behind this successful company. Apple has expanded from computers to consumer electronics over these years and lot of changes has occurred during these periods, which is inevitable happens in any creative industry. In the month of January 2007 the name was changed from Apple Computer Inc to Apple Inc officially. Some of the products of Apple over a decade are power Mac g4 cube, I pod, Mac book pro, I phone and the latest one is the IPad.
Apple as a company is product orientated and customer orientated. Apple is constantly developing new products with better features such as Siri. Siri is similar to Samsung’s Alexa but it was released first. Since Apple is such a well-developed company, they do not feel the need to flood the market with promotions they instead focus on the product. They feel, as they are the dominant product on the market of phones, their products will sell without a problem. Apple as a company feel they know the best for the market, they demonstrate this through the Genius Bar that they have in all stores, if the consumer has a problem with any of the products, customers must go and see them first before anything can be done. This demonstrates the superiority complex the brand has. Since Apple only sells, the products that they make it shows that they feel the other products are inferior and makes customers need to buy all the products from their store as other devices often are incompatible with their device, such as Spotify music, which means the customer must buy Apple music. Apple releases a new model of phone every year, or sometimes sooner with extra features such as the facial recognition, which the newer models have. Even though the older models still do the features that they were given when they were released, customers are often more likely upgrade to get the latest model. Samsung is in a like for like battle with Apple often when Apple releases a new model Samsung will to with similar features.
In marketing, Apple feel that customers will always want their latest technology even if the price is out of their price bracket. They will often throw in a bundle such as free Apple music for a month knowing that people are more likely to keep it instead of cancelling it after the free trial. This also mean more data so more cost for the phone. The need for Apple products also help other companies, for example, in Union Square Aberdeen outside the Apple store there is a phone casing company. After spending money on an expensive phone the customers are more than likely going to pay more to protect it from damage, some customers will be willing to pay for the protection meaning both companies benefit even though they are not working together. Apple may also get more custom as after the screen is protected, customers may come back into the store and get a cover to complete the protection. Overall Apples marketing strategy is to aim at the customers, this is shown in the way the store is laid out. In the store, they have a good amount of staff ready to help the customer with any problem. They also have the genius bar and classes on how to use the devices for people of all ages, this will put customers at ease and feel included, meaning they send more in the store. In their marking strategies they will often give away free items such as free Apple music for 6 months and headphones that are more compatible with the products they sell.
Product life Cycle
The product is the physical item that Apple is selling to the customer and what it does to meet the customer’s needs, for example, Apple’s items and to meet the need to communicate with other people wherever the customer may be. They must anticipate any new needs that many occur and making sure that the new products they release can meet the needs such as introducing Apple music for people who want the other products that are available on other phones like Spotify. The product can be identified by the features it has, materials they use and how they satisfy the customers’ needs. The product can consist of mainly the branding and packaging as Apple has such a distinct and recognizable logo everyone knows that consumers have an Apple phone just by looking at it. Apple is very good at maintaining their products after purchase, they do this in many ways one of the main ones is the genius bar at the Apple stores. There are 3 levels of a product. The core product: Which is physical and it is actually to satisfy the needs of the customer. Such as the Apps available like WhatsApp and Snapchat being available for use in the product. Actual Product: The product is defined by such things like color, style, branding and fashion and how people are purchasing it. The style of the products can vary due to preference in Apple customers have a large choice of colors such as gold, rose gold and slate grey. They also have different sizes in the same phone they can choose from a large version with a large screen that has the same functions of the smaller device which does the exact same things only in a smaller size. Often men choose the larger size as they have larger hands and pockets compared to women as the sizing of the clothing differs in women’s clothing designs and the larger phones will not fit. Augmented product: All the services offered after buying the product like warranties, guarantees, customer services and installation services. Apple do this by having the genius bar that customers can book an appointment to solve any problems or to help customers learn how to do different functions with the product. They also do classes for different generation to learn how to use the device with no discrimination on age or technical ability. This helps them extend their demographic easily and cheaply. Often companies will advertise that they need the certain product for important things in their life such as work or communication. Apple use FaceTime to promote this by showing how customers can use this to promote the easier running of their business, so customer’s will stay loyal to the brand. To start with there was a boom in the market for MP3 players Apple jumped onto this need and released a variety of MP3s with different capacities of storage and designs. They also made it so that the product only worked with ITunes meaning customers could only buy their music form there increasing their profit margin exponentially. The release of this item expanded their growth quickly and developed their market so when they released their other items such as IPad. IPhone, and the Mac laptop they were already known to the technical market.
Apple is a premium priced company, which means cause there products are in high demand and have little competition they can price skim, as their nearest competition is Samsung or Microsoft they still are the dominant in the market. As their products are high priced, they also are high quality. When Apple first entered the market they had low priced items that were high quality, they did this so they could penetrate the market. Once they had penetrated the market, they slowly put the price up knowing customers were willing to pay. Now that they are in the market, they will put on economy deals for people who have less money to spend, with these deals customers will get less deals such as less data which could cost customers more in the long run when they run out of data. To make deals more tempting they will through in bonuses such as the free Apple music or headphones so customers feel they are getting a better deal. This is why when customers go into the store the staff are so willing to help as they can convince customers that they would be better getting the phone on a contract deal so that customers can get a newer model and just pay in the instalments. Once the contract is in place, customers soon realise that the contract costs them more than the free stuff and the phone would have cost them outright. This is known as physiological pricing. The is also known as bundling as by getting the free stuff customers feel they will be getting a bundle deal making it more appealing.
Apple make all their products which means the product will come straight from the production, by doing this they can make sure the products go straight to the Apple store meaning they have a constant supply of stock for people to buy. Many customers do prefer to buy the products online. This means it will come straight from the production, which adds a larger profit to the product as there are less steps in between. Apple also supply there products to other retailers such as phone stores like EE or Carphone Warehouse. If customers go to their stores it is often higher as they will add their own commission and have more steps to get the product to their store that they will have to pay for. By buying it at the retailers, there is a higher chance that they may not have it in stock, whereas if customers buy it online since it comes from the place of production it is highly likely they will have it in stock. This makes the customer happier as they do not have to wait longer meaning they are more likely to buy the product from there again. Apple falls under a couple types of intermediary. They are a retailer and distributer with the Apple store, and an agent with EE and Carphone Warehouse. In retail, they deal directly with the customer like in the Apple store, they are a multiple retailer as they have many stores but they are owned by the same company. They are also in department stores such as EE where they sell the phones at their own price scale and can also add extras and do contracts to pay for the products. By doing these two methods Apple will continue growth in franchising, increase in international retailing within Europe and increase the technology in retailing. By using retail it is more convenient for the customer as they can go in and try out the product in the stores. Once they have purchased the model they like they will be able to get support after in the Apple stores genius bar even if it was purchased in an EE store instead. Apple as a business work through direct channels meaning when a customer buys online they go straight from producer to customer. This way of practicing is increasing in popularity due to the simplicity of ordering and the price reduction by doing so. It is also a specialist type of distributer by going from producer to agent to customer also known as indirect channels as there are intermediaries between producer and consumer. This happens when the customer buys directly from the Apple store or from EE, by doing it this way prices are often higher due to the extra steps in-between producer and customer and added commission. However, by buying it this way the agents do not often have it in stock meaning a longer wait for the customer. By using the short distribution channels Apple has more control over the marketing of the product and they have greater proportion of the profits especially when working from producer straight to customer. As Apple products are fragile and technical by having a short channels it is easier to make sure product are safe through transit and also easier to deal with any technical issues that may occur, as if they buy straight from Apple they can go straight back there to be fixed.
Promotions are used by many companies to sell their products, many people think it is just advertising but there are many more aspects to it. Promotion is an element in the marketing mix and is in general a communication technique which is used to inform, influence and persuade customers to buy your product. Apple uses promotions constantly to communicate with the customer. They do this to ensure customers are still aware that they are there and that they know they have new products available. They also use promotions to persuade the customer that they are better than their rivals such as Samsung and Blackberry. They do this by advertising the new features their phones have and the extras customers will get with them. A business will use a specific mix of methods to obtain their marketing objectives. Apple uses Advertising online and offline advertising is used the most in PR when a new product is launched, there are posters throughout towns, they also have adverts on the tv and internet constantly which reaches all different types of the market. Some of the advantages are wide coverage, control of message, reputation meaning the message will be communicated effectively and can be used to build brand loyalty. Some of the disadvantages are it often expensive, impersonal, one-way communication, lacks flexibility and limited ability to close a sale. They will do sales promotions and free merchandise such as free Apple music for a month, which most customers will keep on after the free trail. They will also do personal selling in their stores as when customers go to the Apple store there are always multiple sales staff available to talk customers through the products. Some of the benefits are high customer attention, message is customised, interactivity, persuasive impact, potential for development of relationships, adaptable and opportunity to close the sale. Some disadvantages are high cost, labour intensive, expensive and can only reach a limited number of customers. Apple also sponsors FC Bayern Munich this is a great form of publicity as every time the team plays the supporters will see the logos and are more likely to buy their products in support of the team. Overall, sponsorship promotes a good image for the company and a specialised for of customer relations. Some sales promotions that Apple do are demonstrations and teaching classes in the stores on how to use the products, free gifts such as Apple headphones customers can also trade in their old phones for money off new ones. Some of the advantages are effective at achieving a quick boost to sales and encourages customers to trial product or switch brands. Some of the disadvantages are sales effect may only be short term, customers may come to expect or anticipate further promotions and may damage brand image. Some of the direct marketing that Apple use are emails and texts from Apple letting customers know that they can upgrade their product early or get discount on new ones because they are an existing member. Some of the advantages of this are that companies can focus limited resources on targeted promotion, can personalise the marketing message, relatively easy to measure response and success, easy to test different marketing messages and cost-effective if customer database is well managed. Some disadvantages are response rates vary enormously, negative image of junk mail and email spam and databases expensive to maintain and keep accurate. Before doing all these types of marketing the company must make sure it is a cohesive and consistent form of marketing they do this through their marketing teams. They must assess what information the customer need before they buy a product, what promotions and traditional methods are working in the market, what the rivals are doing such as Samsung, how much the advertising will cost, the other elements in the mix and what ways are appropriate to reach the market. The way to check if the marketing is working is to check if they achieved their objectives, such as if they wanted to sell more headphones had headphone sales rose, was the cost of the promotion cost effective did the company make a substantial amount more than they spent on the promotions.
Macro and Micro Environment
Macro marketing is always large in scope. Unlike micro marketing, macro marketing focuses on the relationship between production process and the purchase patterns of the consumers. Rather than examining a process based on individual basis or a small customer base, it examines the marketing process. Micromarketing is a marketing strategy in which advertising efforts are focused on a small group of highly-targeted consumers. Micromarketing requires a company to narrowly define an audience by a characteristic, such as post code or job title, and tailor campaigns for that segment. The difference between micro and microenvironments is simple. Macroenvironments is the study of environment at an individual, group or company level. Microenvironments, on the other hand, is the study of a national economy. Microenvironments focuses on issues that affect individuals and companies. I have included a diagram of how macro and Micro works within the company. For the Macro environment Apple is interested in the technological aspect the most, they focus on making sure that their technology is at the forefront and ahead of the competition. They do this by releasing new models with new features regularly. Apple has a wide demographic appealing to people of all ages, they have introduced classes for all ages to expand their demographic taking more control of the market by selling to wider demographic. Apple recently came under some trouble with the EU recently. Ireland was allowing Apple to pay less tax on the profits that were recorded there, and Ireland had delayed extracting 13 billion euros in tax. This gave Apple and illegal advantage, the EU is currently taking the Irish government to court for failing to recoup the money. By doing this, Apple have gained an economical advantage in the Macro Environment but it is still illegal and also effects them politically and legally. In the Cultural environment, it is mostly about the customer’s behaviour such as trends and behaviours. Apple tends to target a younger generation the most, but they have adapted for all generation by adding items such as apps for the young and the old; even taking into account making there models in a various amount of colours to appeal to a larger amount of people. In the Micro Environment Apple as a company is a customer based company, the company works as a whole to discover what the customer’s needs are and find a way to fill these needs. An example of this was that when Spotify was released customers could not use it on an Apple device. Apple then released Apple music which customers are unable to use on a product that is not Apple. For suppliers, Apple as a company makes all their own products and supplies them directly to the stores and other suppliers. This saves in cost of production and distribution. Apple has many Intermediates throughout the company, the most effective I would say are the ones in the stores themselves. When customers go into the Apple store they are greeted and asked what they are looking for in a product, they will then tell customers the promotions and point them towards the product that is best suited for them. Customers are the main aspect of the Microenvironments every aspect of the company is aimed at attracting new customers who will be loyal and keep giving the company business. Customers could include consumer markets, business markets, government markets, or international markets. Competition is a constant in any company for Apple their main competitor is Samsung, this is a good thing for the customer as the customer will get a greater choice of products also the companies will have to develop better products to stay on top. Companies often have different parts of the company to deal with competition, this can depend on the size of the company. The Publics in the company have the main role of keeping an eye on the company’s ability to operate, they are often divided into:
- Financial publics
- Media publics
- Government publics
- Citizen-action publics
- Local publics
- General public
- Internal publics
There is also a term known as SWAT Analysis, SWAT Analysis stands for Strengths, Weakness, Opportunities and Threats. Strengths and weaknesses are the parts which the company has control over as they can work on these factors to improve the company, Opportunities and Threats on the other hand cannot be controlled as they are external and the company cannot control the external factors. This is a very important part of the analysis of how the company is going, the analysis will be able to help the company to see any problems that are happening in and out with the company and show the best ways to fix them to push the company forward towards success. As this is a constant analysis that the company is doing Apple then becomes able to predict the future trend that are approaching for example Apples new phones have a new app that allows people to become their favorite emoji, as that is one of the latest trend currently, so by using this setup this helps the company to make decision easier. The four factors are broken down as such. Strengths are the best parts of how the company operates, and how they use them to improve the companies feature success and to continue their current success. The success of a company can be Tangible or Intangible; this is what the company has expertise in, for example, Apple has expertise in technology and as a collective has expertise in great customer service, which they are consistent in. A company’s strengths can be in many different fields such as human competencies, process capabilities, financial resources, product and services which Apple excel in they also excel in customer good will and brand loyalty as you will see if one customer has one Apple product they are more likely to invest in more products on the same brand. Weaknesses are equally important for the company to work on as they stop the company from reaching the high potential that they could, it will also hinder the company’s ability to grow and penetrate the market the way that they plan bring lack of success, Apple has struggled with the ability to put more memory on their IPods this has been one of their weaknesses. When the company is weak it can lead to a low standard of product coming out as they have not researched correctly or put the correct amount of effort or funding into the product causing faulty products, this can lead to loss of customers and a bad reputation for the company. Opportunities is an external factor that cannot be controlled by the company itself, opportunities may occur when a new need for a certain product arises. If the company is quick enough they can take advantage of the need and make a profit off of it. For example Apple saw a gap in the Market for Apple users being unable to get Spotify on their phones as it is android. When Apple saw this they brought out Apple music which is cheaper and only available on Apple products. This lead to them bringing in new customers and keeping the loyalty of their current customers. As this opportunity occurred due to competition, they were able to take customers from other competitors which expands their hold on the market. Threats can arise from many different areas and jeopardize the business, they are an external threat that companies cannot control but can fight against. A company can become less profitable due to threats, one of the main threats to Apple is Samsung, every time Apple releases a new phone it is quickly followed by Samsung. They have to make sure that their product is better or has an extra feature that the customers are looking for such as a better camera. To make sure that the company does not become weak due to the threat they must make sure the company remains stable and correct any problems that may happen. The advantages of SWAT are that by using this information to make a tactical plan which will also build the strengths within the company. They will be able to spot and work on the weaknesses in the company whilst optimizing opportunities that may occur. Apple can use it to make sure threats from other companies are kept to a minimum whilst learning their core capabilities to improve service and products. The company will be able to look back at past products and reviews to help them plan a new product making sure they have met all needs customers have asked for, whilst planning feature plans for the company. As with everything there are downsides and limitations to SWAT Analysis, unfortunately even though the study of these four areas give a lot of information it does not teach the company how to look out for these problems for themselves. Some problems that may occur that Apple cannot control could be price increase this can be caused by the price of the raw materials or costs for the economic environment being damaged by waist, since Apple make their own products they can have a better control over the cost of raw material. They have no control over government legislation for example tax that they must pay, even though recently tried to pay less tax in Ireland, this has led to a court case and them having to pay Ireland back. When developing a new product they may come across insufficient research and development facilities, faulty products due to poor quality control, poor industrial relations and lack of skilled and efficient labour this will severely slow down production.
PEST stands for Political, Economic, Social and technological. It is used to analyse external factors that will affect the business. These factors will affect Apple greatly, if there is a development in technology that is more advanced than Apples current technology then it will greatly effect there overall sales. Currently Apple is having problem politically after not paying the correct amount of tax in Ireland, which has greatly given them a greater economic advantage over other competitors. Overall PEST is there to see how your business will be effected in the long term by these external factors. Political Factors are when the Government legal factors are put in place that will affect the business environment and also the trade in the main market. This is done by implementing tax guidelines, trade regulation that may include not trading in certain countries, safety regulations such as in the factories when building the products, and finally employment law. Economic Factors this is when the company must take in factors such as economic growth, the unemployment rate, interest and inflation rates. This also includes the different business cycles and polices. Since these factors in the economy cause extreme changes then it can affect every business discussion. Still to finish
To get marketing right for your company companies must consider the 7ps Product, Price, Place, Promotion, People, Process and Physical evidence these are all key parts of getting to your target market. They should be assessed as 1 overall unit all working together to support each other achieve their goal. If they do not do this, then the marketing strategy will become confused and be unable to co-ordinate. I have included a diagram of the marketing mix to demonstrate this. In the marketing mix strategy there is a product strategy. In the product strategy it represents the item that is offered to the customer meaning that all the features and design must be analysed first. They must analyse the demographic the product is aimed at. For example, in Apple the features have to base on the target market that Apple are going for, since Apple has a wide demographic they have a variety of features. For the younger demographic they currently are adding more emoji apps that sites such as Snapchat have. For the older demographic they have added travel assistant. They will then analyse what the customer will expect of the product. As they are releasing new product the customer will expect a higher spec of technology with a lot more functions. They must check that the product that they are releasing has a unique selling point, for example, Apple has a new emoji camera that can turn you into your favourite emoji – this is something that nobody else in the market has. Finally, they must plan how the new product will be positioned into the market. Apple would like to make sure that phone is the latest must have gadget but would not like to take a loss in other models that they have released. By Apple answering such questions, they will able to help the company to design things such as packaging that will boost the price of the product. Since Apple has such a defined brand with the image of the bitten Apple, which is said to be linked to the Apple Eve bit in the Garden of Eden, once that is on the packaging it boosts the value of the item. Price strategy is equally important in the marketing mix, it is important as if companies get the price of the product wrong the product will not sell. Apple had this problem recently this year as they released two iPhones around the same time the IPhone 8 and the iPhone X one after the other within a month. Both phones were high in price and customers felt were ripped off as they thought they were getting the most up-to-date phone when there was a newer model ready for release. When pricing a product the company must make sure that the price covers the production of the product and leave the company with profit, the only time this is not done is when the company is doing a promotion or trying penetrate the market with a new product. Overall an item is only worth what the customer will pay for it, the company can think it is worth £100 but if the customer (Target Market) will only pay £50 they that is all its worth. Apple would have to consider their main competitors pricing, their main competition is Samsung, and they tend to release a phone that is very similar to the product that they just realised. So Apple must analyse how much they can afford to price the phone at to cover the costs but still leave them with a profit whilst still outpricing the competition. Companies then have the Place strategy. This is where companies will place their product to be marketed, made and where it will be stored and transferred to the customer. Since Apple produces their own products they have a few different options for placement, Apple can ether ship the production straight from there warehouse meaning less cost for the disrupter and the customer. They also have their own dedicated stores where they have a high range and quantity of stock meaning customers can buy the product and get it the same day saving on delays. This is very convenient for the customer and the business as the cost of transport is slashed so greater profit for the company and savings to the customer. Since Apple is such a big brand customers are able to get to their stopes almost in every city in the world or customers have the option of using their website for quickness and the convenience of not leaving the house. Finally, there is Promotion Strategy. Without a good promotional campaign, it does not matter how good your product is because nobody will know about it or be interested in it. The company must make sure that there promotion reaches their target market. Apple does this by advertising on and offline, posters, sponsorship deals and personal sales. There promotions campaign must have a purpose, for example, to show the new emoji features of the new IPhone shown in the TV adverts. But this can be expensive advertising on TV can be expensive so the company must be careful to budget for the campaign. There are also legal issues that companies must adhere too, for example, companies cannot advertise using copyright data or offensive terminology. Irn Bru is currently in trouble for this with their new campaign, the logo says, “Don’t be a Cant be a Can” people are offended by this, as they believe that the “Cant” sounds like a derogatory term. As I have stated above they must also make sure that the promotion is aimed at the correct target market, for example, not trying to attract children for expensive IPhones. There are another three mixes that are separate from the 4PS Service Marketing Mix, E-Marketing Mix and Environmental Marketing Mix. The service marketing mix is when a company provides a service to the customer Apple does this with their genius bar, offering technical support and lessons. To do this the staff at the bar are well trained in all aspect of how Apple works and the models available. E-marketing mix is the sale of the products online, recently there has been a surge of shopping online, at Christmas more shopping was done online that in store. Apple has their own online website to buy phones and other Apple products, they also have ITunes. ITunes is a store where customers can buy anything from music to films and download them straight to their phone; individuals can either do this as a gift or buy it for themselves. Finally, there is the Environmental Marketing Mix, this is the increase in the want for product that have less of a carbon footprint and is better for the planet. Apple does not really do planet friendly phones, they do recycle your old product for parts or sell them as fully restored product which does offset there carbon footprint. People in the marketing mix are important as at Apple they provide extra services that are beyond repairs and other ordinary extras. They provide the transfer or recovery of data, information on a good upgrade that is suitable for your needs. They will also set up your phone immediately so customers are ready to go. When customers buy a product from Apple their item comes with a 90 day warranty as standard this can be extended to a one year warranty. By doing this, customers will receive AppleCare protection plan and customers will get service from the experts that work at Apple also known as the genius bar. The AppleCare customers are provided with gives them video technical support and telephone advice 12 hours a day for 7 days a week. The process Apple uses is to convert people into loyal Apple customer they do this by having great customer service such as greeting customers at the door and helping them through each stage of finding the product that is right for them. They will also use advertising to aim the products at their target market, their market is teens to late twenties, and they attract them with modern art and contemporary design. They also released their new Mac book at the MacWorld Expo for high advertisement potential. Over recent years Apple has expanded to sell at such stores as Walmart in America bringing them a higher sales rate as products are readily available. Finally, there is the Physical evidence, for Apple the store layout plays a key role in the marketing mix, and Apples layout of the store has a good flow to it. They have the different types of product in different areas of the store so people know what section of the store to go too. They also have the accessories placed near the tills to be used as push products to boost extra sales. The ambiance of the stores is very friendly, there is a good amount of staff members ready to help customers at any point and they are all friendly as they help. They do not push customers to buy a product and if customers ask them to leave them to it, they will so customers do not feel pressured.
Market research is the way that the company gathers and processes about customers of the Apple products and the competition such as Samsung within the companies target market of young adults. By doing this it helps the company make dictions on how they will market the item and it will help them to reduce the risk in doing so as they will know how to target the market better. By doing it they can find out what the customer want and needs in the latest product and how much they would be willing to spend on the item. If the company prices it too high, the item will not sell and will lead to losses in the company profit. Sometimes when they get the feedback that the item will be too expensive they will add promotions to boost sales. This will balance the cost. There are different ways to find out the date, the first is primary research. Methods of this are questionnaires handed out to the public, focus groups to discuss the needs and how people feel about the product and observations on how the sales of product are. The benefits of this form of research are that they are directly relevant to the business, up-to-date data obtained and competitors do not have access to the findings. Some drawbacks are as follows: time consuming, often expensive, and results may be misleading if the sample size is too small and questions are unclear or there is interviewer bias. There is also secondary research this is when the company will call on secondary data resources such as market research reports, Trade journals, Government statistics and Sales and customer records. The benefits of this are often quick and easy to collect and a wide range of secondary data is available, especially on the internet. Some of the drawbacks are data may not be reliable or up-to-date, may not be totally relevant and may not be in a form that is easily interpreted and analysed. There is quantitative market research, this is mostly based on numerical data and is normally collected in large samples that are easier to analyse and are mostly collected from online questionnaires. Apple use online questionnaires to collect this data they may do this after purchases to see how customers feel the service was at the stores. Whereas qualitative research is more about opinions, feelings and attitudes, this is normally more useful that quantitative data but it is more difficult to collect and analyse. The information is often collected via focus groups and in-depths interviews with customers. Apple will often do focus groups this allows them to get more information from the customers feel about the products and how they could be improved. This can also boost the amount of loyal customers to Apple as they feel there their opinions are heard. There is also sampling. Sampling is a method of choosing a smaller representative a bit like a focus group (a small sample of people that provide information). This will often save the company money as it will not cost as much to carry out the research. If sampling is done carefully the company is able to produce reliable data from the population. There are six different sapling methods, random sampling which is when the whole population is just chosen at random giving everyone an equal chance to be part of the sampling. Quota sampling; this when people are chosen specifically to show the different groups of the population, for example, 80% over 60s and 20% under 60s when studying those who may need help with hearing aids. Systematic sampling, this is when they target a specific area of the market, an example of this for Apple, would be targeting technically savvy younger customers for the latest IPhone. There is cluster sampling. This is when they collect data from a random cluster of people this can be tourists or people from a certain area. Convenience sampling is when companies get volunteers to do the surveys. This is not as efficient as the other methods as it can lead to bias. Systematic sampling is when, for example, companies take the third person out of every group. This is good to get wide spread statistics, but it can be costly to do research this way. The most reliable way to do sampling is to increase the sample size this will often mean that the results are correct 19 times out of 20. The downside of doing the sampling this way is it will have a high cost to the company. Apple for a while denied that they used market research in anyway; they stated that instead of doing market research they chose to focus on the quality of their products. Unfortunately, it was revealed that Apple kept the records sealed to stop other companies learning form their surveys. Recently though they have admitted that they give surveys out every month to IPhone customers to get feedback on the product. They also run specialised focus groups for technically savvy IPhone users to test the usability of the new iPhone which helps them to work out any bugs in the system before release.
Market segmentation is when companies have a group of customers who share certain characteristics or things in common. The company will split the market into groups of people. This will be done discreetly focusing on the common attributes of the customers. Any of the subgroups can be chosen at any time for the company to focus on to make sure that the recent changes to the marketing mix has met the needs of the targeted segmented group. It is important to find out this segment as it helps the company to learn how to meet the needs of the customers. Three main question is taken into account when segmenting the customers. The first is who is buying, for example, the age group and sex of the customer. What do they buy for example in Apples case iPad, iPhone or mac computers, and why do they buy them is it for business or pleasure. Some of the broader ways that the market can be segmented are in terms of geographic; which is the area customers are from, for example, if customers live in a big city such as London or a small town like Mintlaw. The demographic that companies are aiming for like the characteristics of the customer for example if they are tech savvy or can only do the basics. It is important to focus on a demographic, there are many different factors in focussing on the way companies segment the demographic, for example, family size, family life cycle, occupation, social class, race, religion and education. Psychographic is when the people that are put together are of the same psychological factors such as personality and lifestyle. Finally, behavioural, for example, is grouping people together who purchase the latest from the same company showing loyalty and reediness of purchase. This can include the customers who will buy the latest phones even though their contracts may not be up for renewal, causing a greater cost to the customer. The criteria that companies must use for a successful segmentation are very important firstly, companies must make sure the group is very similar with similar tastes, for example, people who prefer to use the IPads to people who use Macs. Companies must also be able to see which group which is easily so making them identifiable is the simplest way of doing this. Companies must be able to contact them regularly, if they live in the middle of nowhere with bad contact capability then the study will not work as smoothly. If they are out of contact, then companies will not be able to put new actions into place quickly. The groups must be big enough to be able to measure the response and to be profitable to the company. Most importantly it must be stable if companies are not getting sufficient data back then the group will be a failure and a waste of time and resources. Why do companies do segmentation? They do it for many different reasons. For instance, for a way to find out and understand the customer needs for example businesses wanting the new IPads to be able to be used as card readers like in the Apple store itself. It can enhance profits, growth and retention of customers, with Apple once individuals have bought the first Apple product individuals are more likely to stay with Apple than have to transfer to Android as many changes of data would have to be made. The company can focus on needs that have been reported by the focus groups that will give the competitive advantage over other competitor’s focus groups. They may also be able to find or create a niche market that the competitors may not have found and be able to allocate more funds to them. By doing the segmentation, companies can get targeted communication with your customers, which will help the company to tailor the marketing mix and adjust pricing so that there is no discrimination against people who may be unable to afford the newer products. Segmentation can stimulate new innovation within the company as they try to adapt to meet the focus group’s needs, which can open up new opportunities in the workplace. Some segmentation strategies are to undifferentiated which means that the company will completely ignore certain segments; the single marketing mix is used for all of this. They may concentrate or focussed which means the specifically focus on one particular segment. Finally, they may Differentiated this is when the company will use a different marketing mix for each Segment, this can only be done by large firms such as Apple who have many staff. This is an example of segmentation strategies as listed above:
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