BBA 3201 Unit IV Essay
Columbia Southern University
Apple, Inc. is a great example of a firm that uses both business-to-consumer and business-to-business marketing, and does it very successfully. For this essay, I will discuss the business-to-consumer aspect of Apple’s target marketing. Apple Inc. was incorporated in January of 1977 and today the company designs, manufactures, and markets not only personal computers, but also mobile communications devices and software, an array of media devices, digital music players, and a whole host of other products such as smart home products and even offers music and media streaming services. Additionally, Apple markets a wide range of associated software, services, accessories, networking solutions, third party applications and digital content (“Profile: Apple Inc (AAPL.O),” n.d.). Apple is considered to be the first successful personal computer company and is credited with popularizing the graphical user interface. Apple Inc.’s garage beginnings were a part of the dream of Stephen Wozniak; a then Hewlett-Packard engineering intern, to build his own personal computer. When Hewlett-Packard turned down Wozniaks plans for building the new computer, he and former high school friend Steve Jobs moved operations into the Jobs family garage where the legendary company was born. With very humble beginnings, the two gained working capital for the start up company with Jobs selling his Volkswagen minibus and Wozniak selling his super cool programmable calculator (Levy, n.d.). Today, Apple is a global giant with products and stores all over the world. The company’s segments include all of the Americas (North and South) and Europe; which encompasses all European countries, India, the Middle East, and the continent of Africa. Apples Greater China segment contains China, Hong Kong, and Taiwan and the rest of the Asian Pacific segment includes Japan, Australia, and other Asian countries not included in other operating segments (“Profile: Apple Inc (AAPL.O),” n.d.).
Product and Service Offerings
Most people, customers or not, are very familiar with the company’s very popular product offerings such as the iPhone, iPad, and Mac computers as well as a host of other products making Apple one of the largest, most popular, and profitable companies in the world (“Profile: Apple Inc (AAPL.O),” n.d.). Other popular product and services offerings by Apple are “Apple Watch, Apple TV, a portfolio of consumer and professional software applications, iPhone OS (iOS), OS X and watchOS operating systems, iCloud, Apple Pay and a range of accessory, service and support offerings” (“Profile: Apple Inc (AAPL.O,” n.d., n.p.). The company utilizes various means to sell and deliver its products and services to customers. Apple delivers digital content and other applications through the use of their iTunes store, App Store, Mac App Store, Apple TV App Store, iBook Store, and Apple Music. Apple also utilizes various means of selling it physical products including Apple retail stores, online stores, and direct sales via third party cellular networks, wholesalers, retailers, and value added resellers. While largely selling to consumers, Apple also sells to small and mid sized businesses, educational institutions and educators, as well as enterprise and government customers (“Profile: Apple Inc (AAPL.O),” n.d.).
Four Bases for Segmenting Consumer Markets
Consumer market segmentation is a crucial aspect in implementing a successful marketing plan in that it allows an organization to tailor its message and focus marketing efforts on individual customer segments so that they may better cater to the needs and wants of their customers. According to Tow (2019, n.p.), consumer market segmentation “is the process brands use to divide their target market into smaller segments of people that share common characteristics to optimize their marketing, advertising and sales efforts.” Though there are many different ways in which a company can approach market segmentation, the four main types of market segmentation are geographic, demographic, psychographic, and behavioral (Tow, 2019).
Geographic market segmentation is used to target customers based on predefined geographic locations. As culture, interests, values and preferences will undoubtedly differ throughout various cities, states, and countries, marketers must know and understand these differences and market products accordingly (Tow, 2019). An example could include certain clothing items such as tank tops and sweaters. While sweaters may be sold for a large portion of the year in colder climates such as more northern U.S. states, they would likely only be sold for a small portion of the year in specialty stores in warmer southern states. On the other hand, tank tops may be sold year round in warmer states and only during summer months in colder states.
Demographic segmentation uses methods of dividing markets based on specific factors such as age, gender, level of education, family, occupation, and income among many others. This is a very commonly used method of segmentation due to the fact that specific products will cater to the needs of individuals based on at least one demographic element (Tow, 2019). According to Tow (2019), age is one incredibly important demographic for marketers due to the fact that preferences will change as individuals get older and enter different stages of life.
Psychographic segmentation concentrates on the intrinsic traits of customers. This traits obviously vary from person to person and can include things such as personal values, personalities, interests, attitudes, conscious and subconscious motivators, lifestyle, and opinions. Marketers use tools such as surveys, focus groups, interviews, and case studies as a means understanding customers on this level. In order for marketers to be successful, they must know and understand the different needs of individuals based on their lifestyles and attitudes. Someone who lives in a small, relaxed beach town will have a drastically different lifestyle than someone who lives in a large, busy city (Tow, 2019).
Finally, behavioral segmentation, though similar to psychographic segmentation, “focuses on specific reactions and the way customers go through their decision making and buying processes” (Tow, 2019, n.p.). Examples of behavioral segmentation can include customers attitudes towards a particular brand, the way these customers use the products, and customers knowledge base of the particular product. Brand loyalty is one great example that represents behavioral segmentation. Brand loyalty produces a repetitive buying pattern, which is classified as a behavioral trait. Knowing this, marketers may work a little harder on this aspect in order to persuade consumers to love their product and to stay loyal to their brand (Tow, 2019).
Apples Market Segmentation
At the core of Apple’s marketing efforts are the companies segmentation, targeting and positioning strategies. Apple has positioned itself as a first class brand with product and service offerings that carry advanced functions and capabilities at a premium cost. While there are less costly, similar items available within the market, Apple’s target customer segment consists of individuals who are able and willing to pay a bit extra for tech products and services that offer advanced design, function, and capability. Apple truly utilizes all four bases for consumer segmentation within their marketing efforts. Geographically, Apple targets nearly all of its products both within the U.S. and internationally with a high concentration on urban areas; as these areas are better suited to provided the additional services offered by Apple. In terms of demographic segmentation, the company focuses on age, gender, life-style stage, income, and occupation with each product carrying a different set of criteria within each category. Demographic segmentation places a high emphasis on individuals who are professionals and managers between 20 and 30 years old, both male and female and who may be considered high earners. Apples behavioral segmentation strategy is broken down into degree of loyalty, benefits sought from products, personality traits, and user status. Apple targets individuals who are both hard-core loyalist to the brand as well as individuals looking to switch and who may be looking for speed of service and efficiency in terms of benefits. Finally, Apple’s psychographic segmentation model breaks target consumers down into social class and lifestyle with a heavy emphasis on middle to upper class individuals (Dudovskiy, 2019). Having such an enormous customer base means that Apple must be creative in its promotional strategies in order to be cost effective. Apple uses a few key strategies to get the word out to its widespread customers and loyalists. Having a great reputation for developing quality products allows Apple to keep it simple. The company is not forced to come up with complex marketing campaigns in order to let people know about their products. Another great strategy that Apple uses is product placement. While TV ads are great, they can be expensive, so to supplement this, Apple marketers place products with social media or other influencers that can “unbox” and review products for customers to see. A third strategy that the company uses is to place an emphasis on value, rather than price; as most people know Apple devices are not cheap. The company sets their prices and sticks to them. They are able to do this by flaunting their unique value position that competitors have failed to reproduce, which is creating very good looking products that work straight out of the box (Kulkarni, 2016).
Apples expert use of consumer segmentation techniques has proven invaluable to the organization over the years. The company truly knows how to reach current and potential customers in a way that not other company has been able to emulate. While the company may not always be introducing the newest technologies in their products, they always seem to be able to twist it so that it works just a little bit differently and a little bit better within their products. Apples use of segmentation and targeting continues to be a driving force behind the companies continued unprecedented growth and sales revenues around the world. Apple should stand as a shining example to other organizations that wish to share the same success.
Dudovskiy, J. (2019, April 20). Apple Segmentation, Targeting and Positioning. Retrieved from https://research-methodology.net/apple-segmentation-targeting-and-positioning/
Kulkarni, C. (2016, September 8). 10 Things You Need to Learn From Apple’s Marketing. Retrieved from https://www.entrepreneur.com/article/280692
Levy, S. (n.d.). Apple Inc. Retrieved from https://www.britannica.com/topic/Apple-Inc
Profile: Apple Inc (AAPL.O). (n.d.). Retrieved from https://www.reuters.com/finance/stocks/company-profile/AAPL.O
Tow, H. (2019, March 15). The 4 Main Types of Market Segmentation (+How to Implement It in Your Marketing Strategy). Retrieved from https://learn.g2.com/market-segmentation