Meeting Customer Needs - Case Study Example

Meeting Needs Table of Contents Table of Contents 2 Introduction 3 Identification of the Problems 3 Apple’s Defense 4 What the Wants? 4 Conclusion 9 Reference list 10 Appendix 12 Introduction Apple Inc. founded in 1976 jointly by Steve Jobs and Steve Wozniak, now resides at the epitome of technological innovations. The company is best known for its computers and electronic gadgets like iPhone, iPad, etc. With a market valuation of $479,069 million, it stands at the fifth position in the Fortune 500 list (Fortune 500, 2014). Apple is headquartered in Cupertino, California. It operates worldwide with over 425 retail stores, with 98,000 employees and earning revenue of $ 170.9 billion (Apple, 2014). The former CEO and co-founder of the company, Steve Jobs declared that his vision is to make products which they are proud of and that will enrich lives of billions across the world. Even though, Apple has managed to win strong brand loyalty of its target market, it has often faced several storms of criticism, regarding its pricing. This study is an attempt to find out what customers want from Apple, and how the company can satisfy the mass market. This also includes a survey based on primary data to find out customer’s response on how Apple can cater to the mass market. Identification of the Problems Recently, Apple has been strongly criticized over the bending issue of iPhone 6 plus. This has taken social media by storm. Customers claimed that the iPhone 6 plus bends, when kept in trouser pockets for a long time. This issue has been addressed in the social media like Twitter and Facebook under the hash tag ‘#bendgate’. A closer look at the issue reveals that the iPhone 6 plus indeed bends when significant pressure is applied in the middle of the phone holding the sides. Several gadget reviewers also confirmed that this allegation is authentic. One of the famous reviewers, named Marques Brownlee, explained that the bending is caused by the lack of structural integrity of the phone. There are other larger phones made of metal, like the HTC One M8, or the Moto X 2nd generation, that does not bend even under high pressure (YouTube, 2014). The reason why iPhone 6 plus bends is that, unlike few other phones it does not have a magnesium chassis that is supposed to hold the frame of the phone in its place. More over the phone is quite thin, only 6.9 mm, which makes it even more vulnerable to pressure (YouTube, 2014). Customer’s Involvement IPhone 6 plus is not the only phone that bends; there are other phones as well, like Samsung Galaxy S4 or Sony Xperia Z1 that bends. The reason why iPhone 6 plus has gained so much attention is that people will naturally keep high expectations from a $749 (Apple, 2014) base model phone, which is quite highly priced compared to other flagships. Moreover, when a company like Apple produces a product which is apparently faulty, customers usually tend to hyperventilate the issue, in order to make the problem look bigger. After the bending issue was published, the internet got flooded by loose videos where people tried several ways to bend the iPhone on purpose. This was done may be because they wanted to draw more attention to the issue. Eventually, customers started making jokes about this issue, on the social media. Clearly, this is a humiliation for a big brand like Apple, who is best known for its product quality. However, Apple immediately stood up in its defense. Apple’s Defense Apple has defended the recent issue of the iPhone 6 plus by stating that it is an extremely rare occurrence and through normal use the phone should not bend as alleged. Ever since the phone has gone on sale, only nine official complains have been received. The company also said that each phone model goes through rigorous testing before its launch, and the phone is made from anodized aluminum for added strength and durability. Apple also stated that the phone bends when people sat with it in their back pocket. Avoiding this situation should solve the problem (Wakabayashi, 2014). Another issue has surfaced when Apple released the iOS 8.0.1 update across all its iOS 8 devices. After the installation of the update, it would crash the operating system and would make the interface completely unresponsive (France-Presse, 2014). The company apologized and responded quickly to this issue and released another update 8.0.2 to fix the system crash. Cause of the Problem The current “bendgate” issue that is the bending of the iPhone 6 plus, is caused due to a design flaw in the product. The company wanted to make the new iPhones look aesthetically pleasing and in order to do that, they made the phone slimmer. As a result, the slim structure became less durable to pressure. What the Customer Wants? Customers’ Expectation from Apple regarding the Bending issue. The customers would want the company to come up with a solution which involves change in the product design so that the incidents like this do not repeat. In order to get a clear view of the customer’s reaction at a questionnaire based survey was conducted in the UWE campus among the students. One hundred respondents were chosen from the campus. The study reflects the following information of what customer wants from Apple. The survey was conducted ethically without any forgery in the data. The respondents were informed on a prior basis and the data were collected with their full consent. The collected data shows the following: As far as customer penetration is concerned, Android has actually surpassed Apple in the smart phone business. Figure 1: Usage of Smartphone (Source: Author’s creation) Apple enjoys a high brand loyalty from the customers. Due to which most of the customers come back to Apple for ‘repeat purchase’ and also spread positive word of mouth. Figure 2: Apples Brand Loyalty (Source: Author’s creation) It is observed that the majority of the people i.e., the mass market will be satisfied if Apple reduces the price of their products. If the price of the iPhones drops, it will come within reach of many. Figure 3: Price Reduction by Apple (Source: Author’s creation) The survey also says that, if the price is dropped by the company, it will severely hamper the brand value of Apple. Figure 4: Effect of price on brand valuation (Source: Author’s creation) A majority of people also thinks that, if Apple follows the market trend it will appeal to the mass market. Figure 5: Apple following the Market Trend (Source: Author’s creation) The recent bending issue of iPhone 6 plus has made quite a stir in the social media, but that is not changing the buying decision of most of the people. Figure 6: iPhone 6 plus bending (Source: Author’s creation) The massive size of the iPhone 6 plus has also been criticized. Customers have pointed out that the 5.5 inches screen size of the iPhone 6 plus can be an inconvenience in daily use, because it is not easy to hold. Figure 7: Inconvenience of iPhone 6 plus (Source: Author’s creation) Analysis of the Survey indicates that in order to cater to a mass market, Apple should increase its product line to introduce lower priced versions of their products, just like iPhone 5c. Although, offering a price cut will appeal to a lot of people, but it is not recommended, as it will hamper the brand value of the products. The recent bending issue may seem to create a negative impact on the product’s image, but it is not changing purchase decision of the consumers. This is the result of high aspiration value and high brand loyalty towards the Apple brand. As far as the form factor of the phone is concerned, Apple should design its future phones which can be used without any inconvenience. The current large slim design with metal body and rounded edges makes the phone slippery in hand, and difficult to hold (YouTube, 2014). These issues should be avoided in their next product design. Eventually, when Tim Cook took over as CEO after Jobs’ death, he decided to broaden the target market (Thompson, 2013). The company started to increase their product line by introducing different versions and variations of a particular product. The iPad mini was launched, followed by the iPhone 5c; both of them were targeted at the mass market. The iPad mini was designed keeping in mind that not all customers liked the 9.7 inch screen size, so a smaller version with 7.9 inches was introduced and of course at a lower price (Atkinson, 2012). It has been observed that, though Apple maintained its uniqueness in product design, but has started keeping a close look at the current market trend. Its recent launch of bigger iPhones, i.e., iPhone 6 and 6 plus, indicates that Apple has realized the growing fascination of the consumers towards bigger screen sizes. So, in order to satisfy the mass market, the company must increase its product line to cater to a broader range of potential customers. Result of the Bending Issue The iPhone 6 plus bending issue has not only upset the customers but also the investors. Apple shares have gone down by around 4% at $97.87 just within few days after its address (Johnson, 2014). This caused a wipe out of almost $23 billion of market valuation, which is definitely not a favorable condition from the point of view of the reputation of the company. Conclusion Apple can satisfy the mass market by following the market trend to some extent while following its own unique product design. The iPhone 6 Plus design should be avoided in the future iPhones, and it should be made structurally stronger, so that they don’t bend. The company needs to make sure that these kinds of incidents do not occur in the near future. This is very important from the point of view of brand valuation. Even if Apple has a high brand loyalty, they cannot be complacent about it. Apart from that the introduction of lower priced version of their products will definitely appeal to the mass market. Reference list Apple, 2010. Apple Present iPhone 4. [online] Available at:< https://www.apple.com/pr/library/2010/06/07Apple-Presents-iPhone-4.html> [Accessed 7 October 2014] Apple, 2014. iPhone 6. [online] Available at:< http://store.apple.com/us/buy-iphone/iphone6 > [Accessed 7 October 2014] Atkinson, M., 2012. Would Steve Jobs have allowed Apple to launch the iPad mini? [online] Available at: [Accessed 7 October 2014] Ciotti, G., 2013. Why Steve Jobs Didnt Listen to His Customers. [online] Available at: < http://www.helpscout.net/blog/why-steve-jobs-never-listened-to-his-customers/ > [Accessed 7 October 2014] DeCarlo, M., 2010. Apple offers free cases to fix iPhone 4 death grip issue. [online] Available at < http://www.techspot.com/news/39681-apple-offers-free-cases-to-fix-iphone-4-death-grip-issue.html > [Accessed on 7 October 2014] Fortune 500, 2014. Apple. [online] Available at :< http://fortune.com/fortune500/apple-inc-5/ > [Accessed on 7 October 2014] France-Presse, A., 2014. Apple Apologises for iOS 8.0.1 Bugs, Releases iOS 8.0.2 Update [online] Available at < http://gadgets.ndtv.com/mobiles/news/apple-apologises-for-ios-801-bugs-release-ios-802-update-598155 > [Accessed 7 October 2014] Thompson, C., 2013. How Apple has changed since Steve Jobs. [online] Available at: < http://www.usatoday.com/story/tech/2013/10/05/apple-steve-jobs/2924065/ > [Accessed 7 October 2014] Wakabayashi, D, 2014. Apple Rebuts Complaints of Bending iPhones. [online] Available at: < http://online.wsj.com/articles/apple-defends-against-complaints-of-bending-iphones-1411668618> YouTube. 2008. Steve Jobs: We dont ship junk. [online] Available at: < http://www.youtube.com/watch?v=Yu0qeb_rJYU > [Accessed 7 October 2014] YouTube. 2014. iPhone 6 Plus #BendGate: Explained! [online] Available at: < www.youtube.com/watch?v=s3QcOSyD38M > [Accessed 7 October 2014] Johnson, C., 2014. Apple claims bending of iPhones is a rare issue. [online] Available at: Appendix Questionnaire 1) Age: Below 15 15- 25 26-35 35-45 45 and above 2) Income: £10000- £15000 £15000- £20000 £25000- £30000 £30000- £35000 £35000 and above 3) Which smart phone do you use? iPhone Android phones Windows phones Others 4) How loyal you are to Apple? lowest 1, 2, 3, 4, 5 highest 5) Apple can appeal to the mass market by Reducing the Price. Strongly disagree 1, 2, 3, 4, 5 Strongly agree 6) Apple can appeal to the mass market by introducing more product range at lower prices. Strongly disagree 1, 2, 3, 4, 5 Strongly agree 7) How strongly will you consider the bending issue of iPhone 6 plus before buying it? lowest 1, 2, 3, 4, 5 highest 8) Following the market trend will help Apple gain mass market attention. Strongly disagree 1, 2, 3, 4, 5 Strongly agree 9) Reducing the price will reduce the brand valuation of Apple Strongly disagree 1, 2, 3, 4, 5 Strongly agree 10) iPhone 6 plus is too big to use conveniently Strongly disagree 1, 2, 3, 4, 5 Strongly agree Read More