Sample Marketing Essay Paper on Segmentation, Targeting And Positioning Strategies; Apple Inc. Retail Outlets

Segmentation, Targeting, and Positioning Strategies; Apple Inc. Retail Outlets

Introduction

With the ongoing technological advancement in the business environment, the electronic devices industry has become significantly competitive (Elmancy, 2014). Consequently, companies have had to come up with novel strategies in their marketing policies. Being a market leader in such an industry, Apple Inc. for years had placed its emphasis on innovation. In this position, Apple had a significant advantage on its financial situation, data management, as well as brand name; nevertheless, the strategy was disadvantageous in a changing environment (O’Reilly, 2014; Viardot, 2004); Myslewski, 2013). In the external environment, a company’s customer base relies on differentiation. Subsequently, Apple has been efficiently using a segment, targeting, and positioning strategies a factor that will discuss in this research.

A Theoretical Literature Review of Segmentation, Targeting, and Positioning

In general, there are three approaches to marketing namely markets segmentation, targeting, and positioning. A centralized market is that treats all potential client the same; consequently having the same desire to own a product. With the current happenings in the current global markets, this kind of market structure is non-existent. The current status supports a differentiated market where all clients are unequal and would have differentiated wishes to own a product. Consequently, businesses have been forced to find the best possible marketing strategies that attract the best of their desired clients. As explained by the site the STP (Segmentation, Targeting and Positioning) strategy best highlight the new marketing models.

Market Segmentation

The market segmentation strategy is based on dividing the customer base into smaller sub-divisions that are characterized by their distinct needs or behaviors. To discover particular segments that are common, market research techniques must be employed to find patterns of similarity among customers in the market. Typically, a market is segmented by demographic (age, sex or location); nonetheless, a market can be segmented by behavioral similarities and benefits similarity (when advantages customers seek to achieve from buying a particular product) (Viardot, 2004). 

Through research, market segmentation is performed on an overall market, and once the market has been split into segments, each segnifies a ‘target market.’

Target Market

Target marketing is defined as the process of applying marketing strategies to a particular group of the market. Having decided the possible way to segment the markets, marketing experts are faced with a variety of questions on how many as well as which portion to approach. As explained by Viardot (2004), three factors should be considered when choosing a preferred part the first is the size and growth potential of each segment. The best segment to target is one that guarantees significant sales both in the present and future market conditions. Second, their structural attractiveness, this includes issues such as some competitors, potential entrants, the threat of substitutes, as well as consumer and supplier bargaining power. Lastly, the experts should consider the organization’s objectives as well as resources. The best possible market is one that resounds with the company’s goals.

Market Positioning

As stated by O’Reilly (2014), positioning is a process of arranging of a particular company product to appear distinctive as well as desirable relative to rival products in the minds of the target market. The best marketing positioning strategy presents brand superiority. This consequently reduces the amount of competition through consumer loyalty. Apple Inc. retail outlet STP (Segment, Targeting, and Position strategy).

Apple Inc. segmentation, targeting, and positioning strategies present the company’s important marketing efforts. Since the founding of Apple Inc. in 1976, the organization had centered its marketing on two principles on innovation and price. From 1976 to 1981 the company had developed three kinds of PC models each better than its predecessor. Such was Apple Inc. giving the public a better device that was worth the cost, until 2001. The current market is informative due to the internet and consumers know what they want from a product. Apple seems to have this idea before its competitors as it produces unit and subunits for all its products. For instance, the current iPhone 7 has two versions (Apple iPhone 7 and Apple iPhone 7 plus) this is a variation from the previous marketing strategy. This new strategy is based on marketing mix brought through using segmentation, targeting, and market position. Additionally, the company has made sure over the years to make their retail shop reflect their understanding of the market. Apple has the highest number of customer aid retail shops globally compared to its rivals. In Addition to this Apple has special help stations that are dedicated to particular clients all developed from their marketing mix strategy.     

Apple Target Segment  
Types of segmentationSegmentation criteriaDevices: iPhone, iPod, iPad, Mac.Services:  iTunes and the iTunes Store, Mac App Store, iCloud, Apple Pay.Operating system & software: iOS, OSX, iLife, workAccessories: Apple TV, Apple Watch, and related accessories
GeographicRegion     Density  US and international   UrbanUS and international   UrbanUS and international   UrbanUS and international   Urban
          Demographic  Age   Gender     Income   Occupation      20 – 45   Males & Females   High Earners   Professionals, managers, and executives  18 – 30   Males & Females     High Earners   Students Professionals, managers  20 – 35   Males & Females   High Earners   Professionals, managers, and executives  20 – 45   Males & Females     High Earners     Professionals, managers
                          BehavioralDegree of loyalty     Benefits sought                       User status‘Hardcore loyal.’ ‘Switchers’   Sense of achievement and belonging Self-expression   Speed of service, advanced features, and capabilities   Non-users, potential users‘Hardcore loyal.’ ‘Switchers’     Speed of service Efficiency                     Users Non-users, potential users‘Hardcore loyal.’ ‘Switchers’   Efficiency Speed of service                     Users Non-users, potential users‘Hardcore loyal.’ ‘Switchers’     Recreation Self-expression                     Non-users, potential users
      PsychographicSocial class     LifestyleMiddle and upper classes   Resigned Aspirer Succeeder ExplorerMiddle and upper classes   Aspirer Succeeder ExplorerMiddle and upper classes   Aspirer Succeeder ExplorerUpper class       Aspirer Explorer

Source; https://research-methodology.net/apple-segmentation-targeting-and-positioning/

The table above is a tabular representation of how Apple Inc. segments its market. Additionally, it shows whom the company targets (high-income earners, students, as well as professional experts) in the process of dispensing its customer care services other than producing products.

Apple Inc. as an organization targets customers through design, quality, and performance as well as services at an original price. From the table above it is evident that four market segments are targeted by the Apple organization namely Geographic, Demographic, Behavioral, and Psychographic. The Apple retail stores are adapted to serve all the above segments by first offering a variety of the company’s products to the specific clients. The first variable that the Apple is the demographic of age. There is evidence about Apple Inc. centering its efforts on the tech-savvy youth demographic in particular students (O’Reilly, 2014). Nonetheless, Apple devices are extensively designed to affluent business experts (Elmancy, 2014). Consequently, this can be reflected on service provided this is about the segments. As stated by DeMers (2014), the Apple genius bar is an example of Apple Inc. extending its differentiation strategies to the clients through service other than product. The Apple genius bar is a support station found in all but one of the Apple retail stores. Its purpose is to provide concierge or personalized style support for all clients. The genius bar serves a variety of age-based demographics. From the table above the services offered to go across a demographic that serves ages between 18 years and 45 years old. The Company’s former Vice President referred to the Apple genius bar as the ‘heart and soul’ of the organizations retail outlasts (Myslewski, 2013).

            Apple Inc. retail outlets are also target oriented to three types of segments that have shown high profitability. A visit to any Apple retail shop identifies a particular pattern, which is an extensive array of iPhone and iMac devices assistants (Borison, 2014). As indicated the company has a broad segment of potential clients; nevertheless, the iPhone and iMac remain the most frequently been updated device over the years. The company uses the demographic variable of income as well as behavioral factors of loyalty in targeting their clients. Customers expect topnotch services when they spend high amounts in acquiring devices, a principle Apple has seemed to master when offering its services (Anon, 2014). On the other hand, the company has also developed outlet service systems that improve consumer satisfaction. The company’s stores are well stocked and equipped to offer both quick service hardware and software solutions to the iPhone and iMac clients (Gmoser, 2014).

            Apple Inc. has gone through a metaphysis of brand position. Since the beginning of the new century, ‘Apple computers Inc.’ shifted to ‘Apple Inc.’ considering the introduction of the new line of smart devices. During this time, the company has identified its brand with high-end users who are willing a premium price to acquire the best of what technology can offer (Clifton, 2009). The company has also adopted a similar approach when it comes to its outlets as it offers a dissimilar ‘brand’ in serving its clients. The Apple shops are known to be service oriented more than any of the rivals. According to the research conducted by Bradshaw and Platt (2015), to date, Apple Inc. has the most number of outlets globally. The organization has set its new positioning strategy in personalized services to its clients. 

References

Anon. (2014). Apple Keeps Customers Happy – And Paying a Little More Each Year. The Guardian. Visited on 24th September [Online] Available at http://www.theguardian.com/technology/2014/sep/14/apple-customers-happy-paying-more-each-year-iphone-6

Borison, R. (2014). Meet the Apple Store Specialist who ‘Embodies the Best Characteristics of Apple.’ Business Insider. Visited on 24th September [Online] Available at: http://www.businessinsider.com/meet-the-apple-store-specialist-who-embodies-apple-2014-8?IR=T

Bradshaw, T., and Platt, E. (2015). Apple Reports Largest Profit in History. Financial Times. Visited on 24th September [Online] Available at: http://www.ft.com/cms/s/0/b3bb354a-a666-11e4-89e5-00144feab7de.html#axzz3ewDHDFjD

Clifton, R. (2009). Brands and Branding. Second Edition. Canada: Bloomberg Press.

DeMers, J. (2014). Here’s a Simple Secret to Apple’s Marketing Success. Forbes. Visited on 24th September [Online] Available at: http://www.forbes.com/sites/jaysondemers/2014/07/08/heres-the-simple-secret-to-apples-marketing-success

Elmancy, R. (2014). How Does Apple’s Design Process Work? Designate. Visited on 24th September [Online] Available at: http://www.designorate.com/how-does-apples-design-process-work

Gmoser, J. (2014). How Every Square Foot of an Apple Store is designed to make you Spend More Money. Business Insider UK. Visited on 24th September [Online] Available at: http://uk.businessinsider.com/apple-store-layout-makes-you-spend-2014-9

Myslewski, R. (2013). Two Years after Steve Job’s Death, How’s that New CEO Working Out? Visited on 24th September [Online] Available at: http://www.theregister.co.uk/2013/10/05/tim_cook_and_apple_two_years_after_steve_jobs_death

O’Reilly, L. (2014). The 20 Most Valuable Brands in the World. Business Insider UK. Visited on 24th September [Online] Available at: http://uk.businessinsider.com/apple-most-valuable-brand-on-interbrand-2014-rankings-2014-10

Viardot, E. (2004). Successful Marketing Strategy for High-Tech Firms. Third Edition. Norwood: Artech House.