Brief description of market
I selected iPhone for this individual assignment. The iPhone falls under smartphone category and Apple manufactures iPhone. A smartphone is a high-end mobile phone that offers multiple innovative and convenient features than a traditional phone. Apart from making calls, consumers want to access internet, watch video, take pictures, listen to music and want PDA features in one device and smartphone is the right product for those users.
Differentiated marketing strategy is a market-coverage strategy in which a firm decides to target several market segments, and design separate offer for each. Apple uses a differentiated marketing strategy by offering 16 GB and 32 GB iPhones to target different segments based on usage. Some of the iPhone direct competitors are Motorola Droid, Samsung F700, HTC EVO, Samsung Galaxy, Nokia N8 and Blackberry Bold.
It’s not possible for companies to satisfy everyone in the market. Since they cannot connect with all the customers, companies divide the market into segments with distinct needs and wants by examining demographic, geographic, psychographic and behavioral difference among buyers. Then, they identify which market segments it can serve effectively. Market segmentation helps organization optimize how it defines, identifies and appeals to important customer groups. After careful analysis, the following segments are identified for smartphone market as a whole in the following segmentation category. Demographic:
Income: High, Medium-high, low-medium
Age: Teens, 18-24, 25-34, 35-54, 55+
Occupation: Students, Professionals and technical
Economically:Developed countries (USA, UK, Germany, France, Canada, Australia etc.), Developing countries (Brazil, India, China etc.) Density: Urban, rural
Fashion Segment: Users who want to get coolest, trendiest, newest smart phone Aesthetic: Sleek Phones (Stylish), Rugged Phones (rough usage and durable) Behavioral:
Entertainment: Music and Video
App Store:Consumers who decides primarily on whose app store is the best and which apps are the best. (Games, Navigation, Search, Sports, Weather etc) PDA user segmentUsers prefer palm computer
Messaging service: Texting (SMS), MMS
Casual user segment: Use it for convenience like web browsing, accessing email and social media web sites, capturing pictures using cameras Benefit: Economy (price conscious), speed (how fast users can access what they want and quality (reliability) Loyalty to Brand: Hard-core loyal, Split loyal, (Switchers (No loyalty), Keyboard Preference: Touch screen, QWERTY slider key board
Overwhelmed Users:User who find purchasing smart phones confusing because of so many products with so many features
Corporate users:Medium and large enterprises, who buys smartphones for their employees. Consumers don’t have any say in the segment. IT department from the companies decides based on ease of integration with corporate emails, maintenance, security and safety
Marketing can be simply defined as “meeting needs profitably”. Apple, after identifying smartphone market segments, needed to identify which market segments it could serve effectively and profitably. So, they combined several variables in an effort to identify smaller, better-defined target groups which presents the greatest opportunity to sell iPhone successfully.
Based on five key criteria, Measurable, Substantial, Accessible, Differentiable and Actionable, Apple eliminated the following segments from targeting: low-medium income, teens and ages above 55, developing countries, rural, rugged looking phones, messaging service (youth prefer slider keyboard for SMS and MMS (since emails can be used for sharing pictures), price conscious users,...