The Success of the iPhone Marketing Strategy - Example

Consumer Buying: Student Name: Name of institution: Lecture; Date: 1.0 Introduction This report discusses the consumer buying process and important internal factors that influence shoppers of the iphone Smarphone from Apple. The report starts by introducing the consumer buying process and detailing the steps a consumer goes through in buying a product. The stages of the consumer buying process are identified as Problem/need recognition, information search, and evaluation of alternatives to meet this need, purchase decision and post-purchase behavior. The need recognition step is identified as the most important step in making a purchase decision. The post-purchase behavior is also important in determining whether a customer will become a regular and loyal consumer of a particular brand and product. The second section of the essay discusses the Apple iphone; one of the most popular Smartphones in the market. It discusses the segmentation, targeting and positioning strategies used to market the iphone in the global market. This section finds that Apple has succeeded in positioning the iphone as the best quality Smartphone in the market and targeting the young, technology conscious demographic segment. Thirdly, the report analyzes how Apple has been able to factor in the internal factors that influence the purchase of Smartphones in their iphone marketing strategy. 2.0 Consumer Buying Process Before a consumer can purchase a product and decide to use it he goes through the 5 stages of the Consumer Buying Process. Understanding of the consumer buying process is important in enhancing the marketing strategy of a marketing organization (Pride, 2008). Understanding of this process is key to discovering a ‘s needs, increasing sales and strengthening relationships with consumers. 2.1 The Consumer Buying Decision Process The five steps of the consumer buying process are: Problem/need recognition, information search, evaluation of alternatives to meet this need, purchase decision and post-purchase behavior. 2.1.1 Step 1: Need recognition / Problem recognition: The first in the five step process is the most important for marketers who seek to influence consumers buying behavior. Without a consumer need the eventual purchase of a product will not be made (Pride, 2008). A need exists where there is a gap between buyer’s actual situation and the ideal and desired one. However, not all gaps in consumer expectations lead to a purchase. Only very important lags lead to a consumer purchase. According to Evans, Jamal and Foxall (2009), the consumer’s perception of ease of acquisition, product price related to reaching this ideal situation are important in determining need recognition. For example, a consumer who has a garden and would like someone else to be taking care of the garden (ideal situation) because the consumer is annoyed by gardening (actual situation)has a need . However, the price of $700 a month is not judged as “acceptable” to reach this ideal situation as it is too high as Gardening is perceived as a relatively low importance need. Recognition of a need by a consumer can be influenced by the following different factors: Internal vs External Stimuli: These are the physiological needs of the individual such as thirst or hunger (Pride, 2008). In contrast, external stimuli can be created by advertisement, attractive display in shops and the smell of freshly baking bread as the consumer passes the bakery. 1. Types of needs (Pride, 2008): a. Functional need: This is a feature of function of products that addresses the functional need of a consumer. For example, a dish washer cleans the dishes for the consumer b. Social need: This need is concerned with recognition, belongingness and integration in the society and individual lives. Social needs are characterized by the need to look good in ones immediate society. c. Need for change: Many consumers have a deep desire for changes in their lives. Some consumers will want to have the most modern phone or the latest clothing fashion in the market. 2. The Maslow’s hierarchy of needs: This model by Abraham Maslow asserts that consumers pursue their needs guided by certain goals they want to achieve in their lives. According to Pride (2008), the psychologist needs can be classified in the following hierarchy: Physiological needs Safety needs Need of love and belonging Need of esteem (for oneself and from the others) Need of self-actualization 2.1.2 Step 2: Information search Once a consumer identifies he has a need, he starts to search for information about potential solutions for his need. Information search is based on the level of involvement of purchase decision and the complexity of purchase choices (Pride and Ferrell, 2014). After searching for information, the consumer will use his opinion to make the decision to purchase. The purchase decision is made with the following types of information: Internal information: This is information that is available from the consumer’s memory. Internal information is collected from the consumer previous interaction with the brand and opinion already formed about the brand (Pride and Ferrell, 2014). For low involvement purchases, internal information is enough for the purchase decision. Generally, purchases in Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are made based on internal information (Pride, 2008). On the other hand, major purchases like buying electronics or a car have higher levels of uncertainty and consumer involvement. These kinds of purchases require external information to be made effectively. External Information: External information comes from family, friends, consumer reviews and the press. The marketing organization communications such as advertising are also important sources of External information (Pride, 2008). Information obtained from friends, families and other consumers is given more favorable treatment as consumers perceive it as more objective. Information from the seller including brochures and advertising is viewed skeptically by consumers. 2.2. 3 Step 3: Alternative evaluation With information on potential solutions available the consumer can now evaluate which solution best suits his need. A successful evaluation is based upon evaluating two aspects of the attributes of the product (Pride, 2008). First, the objective elements such as functionality and features of the product and also subjective aspects such as perceived value of the brand by consumers or its reputation. The evaluation of alternatives leads to either an ‘evoked set’ or an ‘inept set’ (Pride and Ferrell, 2014). The evoked set consists of products with the possibility of being purchased by the consumers. On the other hand, the “inept set” has no probability of being purchased by the consumer. The “evoked set” is a result of good image and positive information about a product. In contrast, alternatives in the “inept set” either have a negative perception or the consumer has experienced a past negative buying experience with the product. For the third set of product “inert set” the consumer has no specific opinion of the brand or products. 2.2.4 Step 4: Purchase decision After evaluating the possible solutions and products available, the consumer needs to choose the most appropriate product or brand for his need. From there, the consumer can now purchase the actual product. The final purchase decision depends on information collected and selection based on product features and perceived value (Pride and Ferrell, 2014). Purchase decision are also influenced by shopping experience, quality of store, available promotions, conditions of sale such as credit and return policy and product guarantees. For example, consumers who want to buy a game console from Wii could change his decision if the staffs of the store are rude. A promotion for a chocolate brand could influence a consumer to purchase the particular brand ahead of four other brands in his “evoked set” (Pride, 2008). 2.2.5 Step 5: Post-purchase behavior Once the purchase is complete and use commences, the consumer will evaluate the ability of the product to fulfill his original need. He will seek to find out whether he has made the right choice in purchasing the particular product. Consumers either perceive products as satisfying or disappointing if they do not meet his/her expectations (Pride and Ferrell, 2014). Post-purchase behavior is important as it influences future purchase decision and buying behavior. Satisfied consumers will do away with the information search stages and alternative evaluation stages and purchases the same product again. This is the first step in gaining the loyalty of a consumer. If the consumer experience is disappointing he will repeat all the 5 steps of the consumer buying process but the dissatisfying product will be excluded from the evoked set (Pride and Ferrell, 2014). Post-purchase evaluation has far-reaching consequences for a brand. Satisfied customers soon become loyal and regular customers. This is especially true for low involvement purchases such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) (Pride, 2008). Loyalty is a major factor for the success of a brand as a combination of all purchases made by a loyal customer throughout the lifetime of a brand show. Consumer will also share their negative or positive experiences with a product with others. They will first inform their family and friends before telling the wider world. Consumers can also share their experiences with products with the public on product review websites and on social media. Nowadays, unhappy customers can use the internet to air grievances about offending brands. 3.0 Iphone marketing The Apple iphone is one of the Apple Company’s most iconic brands. The iphone is a Smartphone that has more that the mere ability to make and receive calls and text messages. The iphone is a mini-computer that can access the internet and share digital media such as music, videos and pictures. In addition, Smartphone can have hundreds of other functions through small computer programs called apps. According to Kotler and Armstrong (2010), the number of Smartphone users around the world is increasingly rapidly as the Smartphone become a must have item. The World’s most popular Smartphones are manufactured by Apple, HTC, Samsung, Nokia, LG and Sony (Kotler and Armstrong, 2010). The two dominant brands in the market are the Samsung galaxy and the Apple iphone. Purchasing an iphone is considered as high-involvement purchase decision as the electronic comes at a relatively high purchase price (Kotler and Armstrong, 2010). In addition Blackwell, Miniard and Engel (2007) argues that products that cause consumer high post purchase anxiety are considered high-involvement purchases. A consumer will be greatly concerned if he purchases a smart-phone and it does not perform as expected. The decision to buy a smartphone requires extensive decision making as they are many alternatives available in the market for the consumer to choose from. 3.1 Segmentation 3.1.1 Behavioral Segmentation According to Kotler and Armstrong (2010), behavioural segmentation is based on the attitudes, knowledge, use or response to a product offering. Behavioral segmentation is one of Apple’s segmentation strategies in marketing the Apple iphone. Apple iphone targets consumer’s attitudes towards changes in computing technology. Apple knows that consumers expect a high-technology device and thus they provide a phone with multiple functionalities. New features appeal and influence the behaviour of consumers towards technology. The iphone avails a music player with a widescreen for viewing while providing seamless internet connectivity to users for web browsing, email and maps. Apple also influences customers to believe and perceive it as an innovative company. Customer who demand innovative and products like the iphone thus become loyal Apple customers. Apple reliability and the trust it has earned with customers is also applied in the behavioural segmentation strategy. As a result, many iphone sales can be owed to the customer loyalty gained over the years and the success of the behavioural segmentation strategy. 3.1.2. Psychographic Segmentation: According to Kotler and Armstrong (2010), psychographic segmentation is dividing a market on the basis of social class, life style, and personality characteristics etc. Apple very carefully investigates psychology of consumer's trends and their life styles. The lifestyle of a person is linked to his or her preferences. Lifestyle is reflected in activities, interests and opinions. As different people have different lifestyles, Apple provides different functions for different groups of people in one phone. For youngsters there is the ipod, for bloggers their is fast web and browsing and apps for all people 3.1.3 Demographic Segmentation Demographic segmentation is based on such demographic variable as gender, age, family life cycle, family size, education, income, religion and nationality. The demographic segmentation strategy is one of the key strategies used in iphone marketing. Apple uses gender and age variables to develop its demographic segmentation. According to Evans, Jamal and Foxall (2009), two thirds of US iphone users are men. The iphone is also targeted at young adults most below the age of 40. According to over 63% of iphone sales were made to people under the age of 31 years and the average age of iphone customers is 31 years. Iphone users can be described as young, wealthy and technology conscious. Iphone’s targets the young generation by having such features as gaming, i-tunes, video players and huge disk space for downloading. Iphone features represent what a young person is looking for in a smartphone. Apple iphone segmentation is undifferentiated as each specific segment is offered the same product. 3.2 Positioning Strategy Iphone positioning strategy can be analyzed into the statement “more for more” (Kotler and Armstrong, 2010). Apple has focused on offering products at high prices in exchange for exceptional quality in the product. Like other Apple product, the iphone is positioned as the highest quality and most sophisticated Smartphone and thus it asking prices is higher than that of other Smartphones in the market (Kotler and Armstrong, 2010). Apple has thus focused on improving the product attributes of the iphone and offering it a premium price. 3.2.1 Positioning Map The iphone is located in the upper-right corner where products are of the highest quality and thus require premium prices. However, iphone fiercest competitor, Samsung Galaxy also has a smartphone which are positioned similarly as the iphone (Laugesen and Yuan, 2010). However, despite fierce competition in the global Smartphone market, the iPhone has remained a dominant player in the premium Smartphone segment and many consumers still describe the iphone as the best Smartphone in the market. 3.3 Targeting Strategy Apple applies a differentiated targeting strategy. Each version of the iphone is significantly different from the previous version in terms of applications, capabilities and interfaces (Laugesen and Yuan, 2010). This targeting strategy has the effect of making consumers believe the iphone version they have is old. Therefore, iphone enthusiasts return to the store to buy the new versions of the smart phone 4.0 Internal or psychological factors Motivation and perception are among internal factors that affect the buying behaviours of Smartphones. Motivation can generally be divided in biogenic and psychogenic needs. Biogenic needs are physiological in nature such as hunger and thirst (Lamb, Hair and McDaniel, 2015). There are differentiated from psychogenic needs which arise from psychological states of tension. Iphone purchase decision is informed mostly by psychogenic needs such as the needs for recognition and self-esteem. Motivation is defined as the drive or urge to gain something for individual satisfaction (Havaldar and Cavale, 2007). In the iphone consumer buying process, individuals are motivated to buy to gain satisfaction from the purchase. Apple positions the iphone as the smartphone that will make consumers feel the most satisfied. Motivation is detailed in the Abraham Maslow’s hierarchy of needs theory. Under the Abraham Maslow’s model individuals are first concerned with physiological needs such as hunger, thirst and shelter. Once these needs are met individuals move to safety needs such as regular income and job security. Social needs are third in the hierarchy and include need for love and belonging. Once social needs are met self-esteem needs arise and an individual needs certain products to satisfy his self-esteem. The Apple i-phone is positioned as a product that puts the user in a high social class and serves to improve their self-esteem. Having the most sophisticated and best Smartphone in the world means the self-esteem and social needs of the users are served. According to Evans, Jamal and Foxall (2009), the marketers of premium products like iphones and other luxury goods target individuals who are seeking to satisfy their self-esteem needs. 4.1 Perception and consumer imagery Perception is an internal process of the human brain that plays a significant role in the consumer buying process. According to Blackwell, Miniard and Engel (2007), each of the five basic senses of the human being are constantly feeding information to the brain. The brain selects the most important information and cuts out the other information as extraneous noise. The human brain gets used to making automatic decision as to what is relevant and that what is not. Humans remain unaware of many things that are happening close to them as they are filtered out by the brain (Havaldar and Cavale, 2007). Thus, information entering the brain is not enough to construct a complete view of the world. The individual needs imagination to construct a complete world-view. Therefore, the cognitive map is “construct of imagination” and not a photograph of the world. To influence the perception of the individual a marketer should take into consideration how cognitive mapping is affected: 4.2.1. Subjectivity: An individual has an existing world-view within and it is unique to that individual only. 4.2.2. Categorisation: Categorization means that event and products are pre-judged and chunked away in memory with pieces of related information. Apple seeks to influence this process by having the Apple iphone chunked away in memory as sophisticated and innovative piece of technology (Havaldar and Cavale, 2007). Every time a consumer thinks of a sophisticated and high-value Smartphone the Apple’s iphone comes to mind. 4.2.3. Selectivity: As seen earlier, the brain does not take-in every percept in the environment. Some individuals can concentrate intently and are more selective that others in the same environment (Havaldar and Cavale, 2007). Apple ensures that the iphone is highly differentiated from other Smartphone models and thus consumers can easily pick it from those of competitors. 4.2.4 Expectation: Expectation leads people to interpret information in a certain way. Apple marketing strategy relies on the common interpretation that products of high prices are of high-quality (Havaldar and Cavale, 2007). Apple also ensures that it products are of the high quality expected and the iphone does not disappoint consumers who purchase it expecting it to be of high-quality. 4.3 Influence of Personality Traits on consumer buying behaviour Personality traits have a significant impact on the buying of consumers. This is a factor that the Apple iphone marketing strategy takes into consideration. 4.3.1 Emotional instability Emotional insatiability or neuroticism is a personality trait where individuals tend to experience negative emotions such as vulnerability and sadness (Schiffman, 2008). According to McCrae and Costa (2008), neurotic individuals experience frequent emotional distress and insecurity. Shahjehan et al. (2011) argues that neurotic individuals are unlikely to be engaged in extensive decision making. Therefore, these individual with shorten the consumer buying process and iphone competitors may appeal to individuals of this personality trait to make purchases from them. Neurotic individuals are also more likely to affected by negative perception of a product such as claims that the iphone is expensively priced. 4.3.4 Agreeableness This personality trait is concerned with an individuals motivation to maintain positive relationships with others (McCrae and Costa,2008). Agreeable individuals are cooperative and compassionate towards others and will rarely be suspicious and antagonistic to other people. Agreeable individuals are likely to be loyal iphone customers as they agree with the widely held conception that Apple is the best Smartphone in the world. Agreeable individuals are also more likely to be guided by the opinion of others in making purchase decision. The marketers of the iphone thus need to ensure that word of mouth advertising is positive to influence agreeable consumers to buy iphones. 4.3.5 Personality trait  “extraversion” Extroversion is a personality trait linked with individuals who energetically approach the social world and material world. Extroverts are social, active and tend to experience positive emotions (McCrae and Costa, 2008). Extroverts thus come into contact with sales people, this combines with high risk-taking propensity and a disposition for uncertain preferences and exciting-seeking to make extroverts difficult customers for Apple (Chen, 2011). Extroverts are thus less likely to engage in extensive decision making and may not see the obvious advantages of the iphone over other Smartphone models. 4.3.6 Personality trait “conscientiousness” Conscientious individuals have a tendency to be hardworking, goal-directed, self-controlled and responsible to others (McCraeand Costa, 2008). People who score low on this personality trait are easily distracted from what they are doing and are less thoughtful of others. Donelly, Iyer, and Howell (2012) argue that conscientious individuals show a great concern with the pricing of products and plan in detail for future expenses. Therefore, people of this personality trait are unlikely to buy an iphone due to its product price attributes 4.3.7 Personality trait openness to experience People of this personality trait are imaginative, original and have broad interests (McCrae andCosta, 2008). People who have this personality trait are not rigid in their expectation of other and in their own views. According to Hirsh (2010), individuals of this personality are eager to try new products and experiences. This personality type consists of Apple’s most valuable customers. Apple is always producing a new version of its products with new features. People who are open to experience are likely to rush to Apple shops so they can explore the new iphone versions that have been released. Apple positions itself as an innovative company appealing to consumers who possess an “openness to experience” personality trait. 4.4 Concept and Self and Consumer buying According to Evans, Jamal and Foxall (2009) many consumers may purchase a product to enhance their self-concepts. According to brands and products are important shapers and reflectors of consumer identities. Apple is aware that consumers form an emotional connection with products that they perceive as reflecting an aspect of their self-concept. According to there are several categories of the self-concept: Actual self – This is an objective image of the consumer and is concerned with facts such as gender, age, occupation and income. Iphone marketing has used the actual-self concept to market successfully to wealth consumers. According to Evans, Jamal and Foxall (2009), successful marketing to the actual self has to show consumers that they understand where the consumer is/at. Marketing is based on facts of the consumer life and show the product fits the consumers’ profile. The iphone has projected itself as the choice Smartphone for music and video lovers. Apple successfully markets iphones based on the concept of self by answering the question of where do iphone consumers live? how much disposable income do potential iphone consumer have? Are iphone consumers concerned about their social status? Ideal self – the ideal self is a concept concerned with who the consumer would like to be. Ideal self is measured in reference to the actual self. According to Havaldar and Cavale, 2007), the gap between ideal and actual self is a great motivator for buying products to bring the consumer closer to the desired ideal self. To successfully market to the ideal self, companies have to offer products that help consumers to the realization of the actual self. Marketers have to offer products that make consumers feel wealthier, more attractive and young if this is what they desire. The iphone achieves this by making individual feel sophisticated and technology savvy. For older consumers, owning an iphone makes them feel younger and more connected with the younger generation. Apple has successfully marketed the iphone to create the need to join the exclusive club of iphone owners who have realized their “ideal” self by buying an iphone. 5.0 Conclusion The iphone is one of the most successful consumer products manufactured by the Apple company. The success of the iphone marketing strategy can be owed to the customers understanding of the consumer buying process. The iphone marketing strategy involves positioning the iphone as the highest quality smartphone and ensuring that consumer motivation, perception, self-concept and personality area aligned to maximize iphone sales. The apple iphone identifies the self-esteem need of wealthy consumers and provides a sophisticate phone that satisfies this need. Apple has also taken advantage of human internal perception process to ensure that the iphone is perceived as a high quality sophisticated product. Apple’s iphone is also an acceptable product among personality types which make most purchases. The iphone also appeals to those who feel they are of high social status and assists them achieve their concept of actual self. The iphone is also an appealing product for those who seek to realize their ideal self. The iphone is a device that makes a consumer feel sophisticated and technological savvy. 6.0 References Blackwell RD, Miniard PW, Engel JF (2007). Consumer Behaviour, 10th ed., Mason, Oh: Thomson South-Western. Donelly, G., Iyer, R., Howell, R.T. (2012). The big five personality traits, material values, and financial well-being of self-described money managers. J. Econ. Psychol. 33, 1129–1142. 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