Market Share and Marketing Strategies - Assignment Example

of the Number: Paper: Table of Contents Situation Analysis 3 Competitor profiling 3 Target Market Description 5 Target market decision making process 6 Social Influences on Buying Behaviour 7 Psychological Influences on Buying Behaviour 8 Marketing Recommendations 9 References 11 Situation Analysis The aim of the study is to design a consumer behaviour report for a company. This consumer behaviour report is done on Apple Inc. which is a renowned computer software and hardware company. The company is well known all over the world because of its efficient use of latest technology to develop advanced products and services that always made a mark on human civilization. Apple started its operations with humble steps that involved manufacturing of computers in 1976. The mastermind behind the establishment of the company was Steve Jobs and Steve Wozniak (OGrady, 2009). Apple’s main mission is to maintain high quality standards for its products and this helps them to serve its customers with an innovative and technologically advanced product line. Apple not only focuses on development of innovative products, but also protects consumer interest and values consumer welfare (OGrady, 2009). Apple is devoted to continuously develop innovative products so that their customers get to avail the latest technologies. The company’s vision is to provide exceptional technological experiences for their customers all over the world (OGrady, 2009). Competitor profiling The company operates in a highly competitive market. Some potential competitors of Apple Inc are Samsung Electronics Co., Lenovo Group Limited, Dell Inc. and Microsoft Corporation. The competitors of Apple provided similar products at a reasonable cost. Companies like Samsung and IBM started capturing Apple’s market share. The products of Apple could not be afforded by all sections of the population. In the market for technology, consumers enjoy a high substitution rate of products because of the availability of large number of alternatives in the market (Barney, 1995). The market share of Apple Inc. and its competitors can be explained by the figure below. Apple Inc. captures the prime market share i.e. the company captures 30% of the total market share. Nokia covers over 23% of the total market share and Samsung has an 11% market share of the total. Other companies capture the rest of the market (Source: Ferrell & Hartline, 2012). Figure 1: Worldwide Device Manufacturer share 2010 (Source: Ferrell & Hartline, 2012) Apple operates in a highly competitive market. Several companies have come up with products which are similar to Apple’s products. The rivals of the company follow a pricing strategy that enables them to offer alternatives to apple’s product at a relatively low price. There is a high substitution rate in the market as switching cost for the customers is quite low. The competitors also aggressively advertise their products through social media and print media. The low income group are more attracted to the products of the competitors because of their pricing structure (Source: Ferrell & Hartline, 2012). . Target Market Description Apple’s products are mainly targeted to satisfy the needs of upper middle income, rich and affluent customers if we define target market on the basis of the income level of the customers. The products of Apple are priced above the competitive market price and thus, the low income group does not prefer Apple products. The high income groups always prefer products which cater to their luxurious needs. They cannot compromise on the quality and thus, these target groups are always ready to pay a high price for the high product standards. The potential customers of the company thus, do not hesitate to pay a high price as the latest technology of the products satisfies their needs. Customers always try to keep themselves updated with the latest technological advancements and Apple can serve this purpose effectively (Sharma, Wingfield & Yuan, 2007). The target market can also be identified on the basis of the age group of the population. Generally, young students prefer products of Apple because of its trendy design and multiple features. Corporate professionals also have high inclination for such goods. Generally, the products have exceptional operating systems that cater to the needs of the IT professionals. The chic design of the products attracts the consumers who give more emphasis on the product outlook. The specifications of the products are designed to help in high quality research and development and thus, academic professional prefer the products of Apple (Johnson, Christensen & Kagermann, 2008). The target market can also be recognized on the basis of the regions of business operations. It can also be identified on the basis of geographical specifications. Apple’s products are widely used in developed countries. Europe and the United States are the major target markets. Apple’s products have not become equally popular in the emerging markets and the developing countries as the majority of the population in these parts falls under the low income group (Heracleous, 2013). Target market decision making process The target market of the company makes its decision based on various underlying assumptions that help them to understand their actual need and their satisfaction level. The steps are as follows: The first step in decision making process is to understand and identify the specific needs and requirements that have to be served through the product purchase of Apple. The target market must be aware of the problems associated with the purchase and the plans have to be made accordingly. The next step in the decision making process involves the appropriate search of available information about the products that has to be considered for purchase. The target market should make effective market research on the products of Apple before purchasing it. They should lay attention to product reviews while making a decision (Kacen & Lee, 2002). The decision making process must not only research and monitor on Apple’s product that has to be purchased, but also consider the evaluation of the alternative options that are available in the market. The alternative products may give equally efficient service at a lower cost. So, it is imperative to analyze the market before making purchasing decisions (Kacen & Lee, 2002). The next step involves the purchase of the product after going through all the decision making steps. The product is purchased after the consideration of various important steps and thus, this product purchase is meant to satisfy customer needs and satisfaction at least in the short run (Carrigan & Attalla, 2001). Although, the product is purchased after considering various decision making processes, there are chances that the product may suffer from various drawback and the customer’s requirement may not get fulfilled. The consumer may find that the price of the product is not justified with the specifications provided by the product (Carrigan & Attalla, 2001). The figure below gives a step wise illustration of the decision making process of the target market. Figure 2: Decision making process (Source: Carrigan & Attalla, 2001) Social Influences on Buying Behaviour The buying behaviour of Apple’s customer base is often socially influenced. The factors that affect socially are generally external factors. The consumers often go by the word of mouth (Grewal, Cline & Davies, 2003). They highly rely on the publicly available information about a particular product. Product reviews become imperative while making decisions regarding product purchase. The consumers also get influenced by the news and information available on the different social media where people often give their suggestions about a particular product. The social media also helps the consumer to understand the rating of the product and the latest trends in the market. The products of Apple are meant for elite classes. Thus, buying decisions of consumers are often influenced by the status symbol that the product offers them. In spite of high prices of the products, the customers prefer them because of the high brand value of the products. They are also influenced by the buying activities of their friends and families. For example, in the United States, the largest market share for smart phones is captures by Apple. Other companies who offer similar alternatives cannot match the high standards provided by Apple. So, the customers who want to go for outstanding technological experiences prefer Apple’s products. The buying behaviour of the customers also get socially influenced as the products of Apple are marketed in such a way that the customers can connect themselves with the latest trends, and this helps them to enrich their lives through exceptional cutting edge technology (Carrigan & Attalla, 2001). Psychological Influences on Buying Behaviour The buying behaviour of Apple’s target market is also psychologically influenced. The customer highly values the fulfilment of their psychological requirements and they ensure their desires for social recognition are valued through the purchase of the product. The buying behaviour of the target market varies with the personality of the consumers. Apple’s product may be preferred by a consumer because he might feel that the product is tailor- made for him. Some other customer may not prefer that product because the same product may not be compatible with their needs. A consumer’s purchasing decision is psychologically influenced when he can relate with the product and its specifications. Customer’s perception about a product often influences their purchasing decisions. They often rely on their own perception about a product while selecting it from the various other alternatives. Apple’s products suffice to customer needs by ensuring that the consumers’ esteem and social status is maintained through the product. It can be seen that in 90% of the cases, buyers make impulsive decisions while purchasing a product. They are often guided by their own presumptions about the product. In such cases, product quality and its price become insignificant. The decision is made only on the grounds of psychological factors. Products of Apple do not fall under necessary goods. They cater to the luxurious needs of a customer and hence, a buyer’s decision is not often justified through the traditional decision making process (Kacen & Lee, 2002). Marketing Recommendations Apple is widely recognized as a brand name all over the world. However, the company still has ample scope of expansion and this can be done by removing the various gaps that still remains in its marketing strategies. The following recommendations can help the company to experience a sustaining growth in the long run: Apple follows a premium pricing strategy. The company develops products that have high quality standards. Apple identifies its potential target market on the basis of various factors and it generally caters to the affluent class. It is strongly recommended that Apple should try to develop products of high quality and set a comparatively lower price. The company operates in a highly competitive market where product substitution rate is high as switching cost is low. The company should work on this area by developing products which would cost less but at the same time the product quality should be maintained. This low cost product should be marketed in emerging markets like India and China where people have an inclination towards phones and computers. The emerging markets provide ample opportunities and Apple should capitalize on the same by promoting hrough the web and other social media (Johnson, Christensen & Kagermann, 2008). The company should increase the number of Apple stores so that the consumers do not have to rely only on virtual product evaluation before the purchase of the product. The increase in number of stores will also aware the consumers about the latest products and they would able to physically judge its specifications (Sharpe & Arewa, 2006). The company should try to modify its existing products which have not become highly successful. These products should then be marketed by providing various additional schemes to the customers. For example, Apple can increase the sales of its smart phones by providing network connections at free of cost (Johnson, Christensen & Kagermann, 2008). Apple has an established brand name. The company does not intensively market some of its products. Thus, sometimes it fails to reach all its targeted consumers. The company’s advertisements do not specifically market a single product. The company rather focuses on promoting the brand. The consumers are thus often not aware of the product specifications and its details. The company should also try to market its product in such a way not only young people but all other age groups are equally attracted (Sharpe & Arewa, 2006). References Barney, J. B. (1995). Looking inside for competitive advantage. The Academy of Management Executive, 9(4), 49-61. Carrigan, M. & Attalla, A. (2001). The myth of the ethical consumer–do ethics matter in purchase behaviour?. Journal of consumer marketing, 18(7), 560-578. Ferrell, O. C. & Hartline, M. (2012). Marketing Strategy, Text and Cases. Connecticut: Cengage Learning. Grewal, R., Cline, T. W. & Davies, A. (2003). Early-entrant advantage, word-of-mouth communication, brand similarity, and the consumer decision-making process. Journal of Consumer Psychology, 13(3), 187-197. Heracleous, L. (2013). Quantum Strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99. Johnson, M. W., Christensen, C. M. & Kagermann, H. (2008). Reinventing your business model. Harvard business review, 86(12), 57-68. Kacen, J. J. & Lee, J. A. (2002). The influence of culture on consumer impulsive buying behavior. Journal of consumer psychology, 12(2), 163-176. OGrady, J. D. (2009). Apple Inc. California: ABC-CLIO. Sharma, A., Wingfield, N. & Yuan, L. (2007). How Steve Jobs played hardball in iPhone birth. The Wall Street Journal, 1-6. Sharpe, N. F. & Arewa, O. B. (2006). Is Apple Playing Fair-Navigating the iPod FairPlay DRM Controversy. Nw. J. Tech. & Intell. Prop., 5, 332. Read More