Apple iPhone: How it has gained popularity in the mass market.
This case study examines Apple Inc and aims to deconstruct how Apple has employed a variety of marketing techniques to understand its customers and deliver the iPhone to the global mass market. The iPhone has revolutionised the smartphone market through savvy customer driven product design and effective marketing. Bajarin (2011, p.1) suggests that with the global smartphone category projected to grow at 49.2% over the next five years, Apple faces the challenge of mitigating market share loss in an environment where competitors are now able to offer a comparable operating system in Android. Moreover with Android’s open system which allows it to partner with global device manufacturers such as Samsung and HTC, a greater volume of consumers in the mass market have access to the product and brand at a variety of price points thereby threatening to erode Apple’s smartphone market dominance. In analysing the techniques utilised by Apple to market the iPhone, this case study will assess the effectiveness of its segmentation, target market and positioning strategy which has evolved from a targeted approach to a mass market strategy. This paper will look at the implications of this to its selected target markets and how the iPhone is subsequently positioned to these consumers. Moreover the nexus between needs theory, social identity and brand positioning is explored to understand how the iPhone has built a loyal customer base and some of the challenges this might now present with the iPhone being targeted to the mass market. Finally this case study dissects how Apple recognises and capitalises on the behavior of its consumers throughout the buying decision process for the iPhone. In exploring this, the case study examines how Apple has leveraged sociological and psychological patterns in its consumers to build its brand personality and to penetrate the market. The marketing and commercial risks associated with this approach throughout the buying decision process are highlighted in light of current environmental trends. BACKGROUND
Apple is an American based multinational corporation that designs and manufactures consumer electronics and software products (Sohail 2010, p.1). It was founded in 1976 and was officially incorporated in 1977 under the name of Apple Computer Inc. In the last decade, Apple has expanded and specialized in more than just computers. In July 2007 Apple officially entered a new market in the mobile phone industry through launching the iPhone. The iPhone has been pitched as the ultimate integrated gadget which functions both as a phone and portable entertainment device (Maxwell 2011, p.1). It’s convergence of telephony and entertainment has redefined what is possible in the smartphone market. Brownlow (2011, p.1) comments that based on Gartner’s sales analysis for Q3 2011 (Nov), Android dominated market share with 52% of new smartphones purchases powered by the Android operating system. Notably Apple came in at 29% with the iPhone operating system. SEGMENTATION & TARGET MARKETING
Based on the global popularity of Apple’s iPhone, its market segmentation strategy has evolved from catering to a premium, luxury segmented target market to one which connects the iPhone to a mass market. As Kingsley-Hughes (2011, p.1) explains, Apple seized the opportunity when launching the iPhone 4Gs model in October 2011 to reposition rather than phase out the matured iPhone 3Gs SKU at a zero dollar upfront price point which now opens up the channels to the global mass market smartphone entry level consumer. This move was designed to curb market share decline, driven by the competitive threat of Android which had posted 194% growth year on year globally in 2011, as articulated by Ingraham (2011, p.1). Moreover Android provides a comparable operating system with availability to the mass market at various price points through various device...
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