This case study is focused on Apple consumer behavior in relation to iPhones. It also studies the target market, buying behavior, and decision-making process in Apple’s customers.
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Apple Consumer Behavior Case Study: Introduction
The electronics industry is one of the most diverse economic sectors. Companies produce various electronic products for different purposes. Each product has many substitutes on the market. The study of consumer behavior has helped many firms in the industry to develop products that meet the specific needs of customers. Apple Inc. is a multinational company located in the United States. It designs, manufactures, and distributes computers, smartphones, tablets, and software products across the world.
The company’s popular hardware products are Mac computers, iPad tablet, iPod, and iPhone. It’s software products are iTunes for online music distribution, Mac OS, and iOS for iPhone and related mobile devices. To reach its target consumers across the world, the firm had established more than 350 retail outlets in ten countries by 2011. It also has a well-established online store where hardware and software products are sold. The mobile phone market is one of the most competitive sectors in the electronics industry. However, Apple inc. has been realizing improved profits obtained from sales of iPhone products since its inception in 2007.
Situation Analysis of the Company and Product
Innovation and creativity have been the key factors in marketing smartphones. Many firms produce mobile devices with similar features and functionality. Others sell their products at a reduced price to attract as many customers as possible. However, every brand tries to stay on top of others in this market segment. Maintaining a competitive edge on the market requires an effective marketing strategy. Apple Inc. does not use pricing as a tool to influence consumers into purchasing their products (Stafford, Turan, &Raisinghani, 2004). Instead, they create outstanding and high-quality products. Rather than selling iPhones to everyone on the market and target as many customers as possible, the firm deals with high-income consumers who buy luxury products. It has effectively identified its market segments in various countries across the world. The innovative nature of Apple has influenced the creation of its cell phones to create a new experience with modern technology.
Apple Inc. has been using a unique marketing strategy to advertise its mobile phones. The company invests in research and innovation to understand and meet the specific needs of consumers before manufacturing its products. The key factor that influences consumers’ behavior is the ability of Apple’s products to meet their specific needs and expectations (Schiffman & Kanuk, 2000). Apple’s campaign strategy urges customers to think differently in terms of technology and new experiences with the iPhone. It tries to create a feeling of uniqueness among the potential costumers.
The introduction of an iOS operating system for iPhone and multi-touch features caused a great impact on the mobile market. The product was the first of its kind, which reflected the true concept of a smartphone. Having gained the advantage in the market, Apple’s iPhone has remained the strongest brand. According to Ware (2008), the main factor that attracts consumers to the product is the brand equity. Apple Inc. is one of the most popular firms in the world’s electronics industry. The company’s reputation goes back to days of Macintosh computers. Consumers identify the brand as the one that delivers its promises. As a result, the majority of them have been exhibiting their loyalty to their products. Apple has been using the tag of innovation and creativity effectively. It is responsible for several technology revolutions in the industry (Apple Inc., 2014). Therefore, customers believe in their products and services.
Consumer loyalty is one of the tools that expands and maintains Apple’s market share. Because of brand loyalty, the existing consumers influence their families and friends to buy an iPhone (Green, 2011). They promote the products on behalf of the company. IOS is undisputedly the best operating system for mobile devices because of its processing speed and flexibility. It has a modern user interface with fantastic features that would motivate any customer to buy the product. Through the company’s only community, existing customers appreciate the iPhone features and recommend it to others (Apple Inc., 2014). The product’s design consistency and similar appearance not having been changed over the years improve trust among the consumers. Also, inbuilt features have remained reliable. As a result, consumers of Apple iPhone value excellent features and stability of the operating system over low prices.
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However, the high price of the smartphone can also exhibit weakness in the market. As such, the company is bound to sell its products to consumers who prefer luxury products. The iPhone costs more than its key rivals’ cell phones manufactured by LG, HTC, and Samsung. The situation can change consumer buying behavior if the substitutes have the same features (Pielot, Poppinga, & Boll, 2010). Apple devices have some crucial restrictions such as the inability to increase memory, non-removable battery, and closed file system. Because of these restrictions, customers might feel they do not get the desired value for the money spent.
One of the factors that influence consumer purchasing behavior is the presence of variety. The design of the iPhone is consistent and does not provide buyers with an alternative. Consumers need to experience a change in products. This is the reason why many manufacturers release various devices with different specifications, appearances, and prices which provide customers with the possibility to choose. Lack of choice creates boredom and consumers are likely to switch to other products. For instance, Samsung produces a variety of brands with features similar to those of the iPhone. On the other hand, many customers of Apple were ardent fans of Steve Jobs (Apple Inc., 2014). His absence made many customers lose the passion they had about the Apple products.
The potential of smartphones and tablets market is expanding throughout the world. Mobile devices have become part of billions of people across the world. Apart from communication, mobile devices provide users with other features such as Internet access, social media apps, music, and games (Pielot et al., 2010). Everybody tried their best to acquire smartphones. The growing market is an opportunity for Apple to expand its iPhone market share. Continued development in technology favors the company and its products, and Apple has been delivering advanced products each year. Therefore, consumers expect more from the company in the future (Apple Inc., 2014). Continuous production of technologically advanced products can make the company remain at the top.
Since its introduction to the market, the iPhone only has been sold in urban areas. Also, the company sells the majority of its mobile phones in developed countries such as the United States, Canada, Europe, and parts of Asia (Khan, Alam, & Alam, 2015). Several promising markets in developing countries and rural areas have emerged because people have become more dependent on technology. Overdependence on apps makes cell phones a part of just about every human being in developed countries. Therefore, expanding the market of the mobile phone industry is inevitable. Accessories also play a major role in the ever-increasing market size. Available accessories in the company’s retail outlets and online stores increase their profit margins.
The iPhone faces threats from its key competitors such as HTC and Samsung brands. Android is the biggest threat to the iPhone because of its flexibility. The operating system works with a variety of brands. It is also popular with new consumers who know nothing about the historical success of Apple. On the other hand, Samsung produces a variety of mobile phones with the same features as the iPhone. Also, Samsung sells its products at lower prices than Apple does. Apart from other factors, the price has the highest influence on consumers’ buying behavior. Apple did not introduce a new product in the market for the past few years (Green, 2011). The situation gives its competitors an advantage and makes customers shift to other brands.
The Selected Target Market
Like other modern smartphones, iPhone’s target audience consists of several social groups. The first target audience is the teenage group whose lifestyle depends on the incorporation into the digital world. As stated earlier, smartphones are not meant just for making calls and sending messages. People use them to access the Internet and social media, listen to music, download apps, and play games. Teenagers and young people are fond of socializing via popular social media platforms (Khan et al., 2015). Through Facebook and Twitter apps, they can easily share information and converse with other people across the world using the iPhone.
Businesspeople need iPhones to enhance the smooth running of their operations. Communication is the key element that ensures success in any business organization. Through iPhone devices, a business can utilize apps to update workers, assign duties, and access the organizational data. It is possible to satisfy customers’ needs by using mobile apps for better interoperation. Many firms are using mobile apps to improve customer services. The main advantage is the flexibility and portability of the products. It is possible to improve communication in a business organization using iPhone and related products. A businessperson can take photos of their brands and share them on social media as a way of marketing (Olson & Olson, 2003). As businesses continue to embrace mobile technology, the iPhone becomes their target product. Adults constitute another target market for Apple’s iPhone. They can use the iPhone to locate direction when in an unfamiliar place. Photography is also an important feature for every family. A family member takes photos regularly for remembrance (Apple Inc., 2014). And it goes without saying, that adults often require Internet access, socializing through popular networks, games, etc.
Description of Target Market Decision-Making Process
The decision making-making process starts when a consumer recognizes the need for a product. After recognizing the need to have the product, a consumer tends to research to gather information. In the mobile industry, consumers have a variety of smartphones from which to choose. A brand reputation will give a product an added advantage. The iPhone benefits from Apple’s brand name and customer loyalty in the market. A consumer is more likely to buy it than they do for competitors’ products. It has a history of technological advancement and the production of high-quality goods and services (Schiffman & Kanuk, 2000). However, a consumer can also choose other popular brands based on factors such as availability, pricing, and specific features.
After evaluating all factors, the consumer is now ready to purchase the product. The decision made depends on the information gathered about the product and the preferred brand. The quality of shopping experience can also influence the consumer’s choice of a product. For instance, some smartphones do not have an established online store. Instead, they depend on their retail outlets. A customer who is fond of buying electronic devices online may not choose a product offered in shops. The Apple Store is one of the best-established online stores in the world (Apple Inc., 20014). Also, it has retail outlets for consumers who like physical shopping. Therefore, it can attract both offline and online customers.
The decision-making process to buy a mobile device does not end at the final purchase. The consumer’s post-purchase behavior is important for the chosen brand. During consumption, the consumer will evaluate the product’s reliability (Pielot et al., 2010). The features that made the person purchase the product must live up to their promises. That way, the customer will remain loyal to the brand for a long period. Apple has been using brand loyalty has a tool to attract and retain customers. Their iPhone products have outstanding quality and give promised features. Other firms use attractive advertising language but fail to provide what they promised.
Personal and Social Influences on Buying Behavior
Several factors influence consumers’ decision to purchase a product. They are personal, social, and psychological factors. For instance, occupation is a personal factor that determines the buying behavior. People’s occupations determine their purchasing power (Pielot et al., 2010). An individual with low income may not have the financial ability to buy an iPhone. However, people from the middle and upper class of society can easily purchase the product because they earn a substantial sum of money annually. Another factor is age. Sixty-five years old people and older might not require a smartphone because of their deteriorating health conditions. On the other hand, young people who embrace digital communication may easily acquire an iPhone.
Culture is a social factor that influences the buying behavior of a person. It determines the dominant practices and beliefs in an environment (Susskind, 2004). For instance, young people promote the culture of digital communication through social media. They need smartphones to connect and communicate with others across the world. Therefore, they may find it necessary to buy smartphones for socialization purposes. Friends determine the buying behavior of a person. When a friend has acquired a smartphone, a person will want to buy a similar device because of the close relationship.
Psychological Influence on Buying Behavior
One of the psychological aspects that influence consumer buying behavior is motivation. Internal motivation based on many factors causes a desire to purchase a new product (Pielot et al., 2010). When one has an old analog phone, advertisements, technology development or some sociological factors may evoke the need to have a smartphone. Also, the lack of a mobile phone urges a person to acquire one. A phone can also break and get lost without the owner’s knowledge. It is difficult to stay without a communication device in the modern world. A contemporary environment instigates a person to buy a new cell phone and keep pace with technological advancement.
The functional need such as learning and business activities is another factor that impacts the purchasing decision. It refers to a person’s need for specific features and functionality. Companies make mobile phones with diverse features to target different groups of people with various demands and tastes. For instance, a person who needs a phone for calls and sending messaging will not buy a smartphone. However, those who use social media and play games will acquire one. In the current world, many people embrace socialization and integration via Internet social media (Ware, 2008). Billions of people use their phones to visit social network websites, Internet shops, and other online platforms. Also, people love changes and new experiences. Therefore, a person who has an old-fashioned phone would want to buy an iPhone or similar cell phone made, for instance, by Samsung.
A personal attitude towards a product has psychological effects on buying behavior. When everyone else is doing something via their tablets and smartphones, one may feel awkward without such a device. Therefore, s/he will develop a positive attitude towards the product and purchase it. The need to connect with others across the world can motivate a person to buy an iPhone (Apple Inc., 2014). People feel good when they are part of a dominant culture. Old people may have a negative attitude toward modern technology. Therefore, they might not want to be associated with products such as smartphones, and, probably, many of them will not.
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Recommended Marketing Strategy
Apple Inc. has been depending on the brand loyalty and implementation of innovative technologies for a long time. Although the marketing strategy is important, the company should adopt new ideas when marketing its iPhone. It should build a strong brand identity in emerging markets of Asia, the North American region, and parts of Africa. The rapid growth of the economy in those regions increases people’s need for advanced technology (Dutton, 2014). It will be easier for Apple Inc. to create a strong customer base for sales of iPhone and related products in those regions. The move could increase their world market share.
Apple should consider an introduction of a different pricing technique into the marketing mix as a way of increasing its market presence. They should adopt the 4Ps approach (meaning product, people place, and price). People in different geographical regions have different income and product preferences (Schiffman & Kanuk, 2000). These four factors must be put into play when establishing prices of different Apple devices. The move would help them to penetrate potential markets across the world. On the other hand, Apple has a good brand position in its current market. Undoubtedly, it should establish the brand in the upcoming markets, and this decision would help it to compete for market share and increase sales in those regions.
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