Targeting, Segmentation, and Positioning
Targeting involves picking particular groups that were identified during segmentation to sell products to. Segmentation entails dividing a given population into groups according to various characteristics. Appreciation of the design, quality, and performance of technology services and products rather than their costs is among the most prevalent set of characteristics shared by Apple Inc.'s target consumer demographic. Positioning is a crucial concept in understanding the target market since it refers to the process of choosing the marketing mix that is most practical and appropriate for the target clientele group (Perreault, Cannon, & McCarthy, 2015). Below is an evaluation of the Apple market's segmentation based on demographic, geographic, psychographic, and behavioral factors.
Target Market
In regard to the geographic criteria of segmentation, the region targeted for various Apple products (i.e. iPhone, iPod, iMac, iTunes, and Apple watches and others) is the U.S. and the international market. The density of the target market is the urban area where most users are conversant with the latest technology. The demographic criteria of Apple market segmentation utilizes such aspects as the age (between 18-45 years), gender (males and females), of the clients, life-cycle stage (i.e. bachelor stage, newly married couples), income (high income earners), and occupation (students, managers, professionals, executives).
Furthermore, behavioral segmentation assesses loyalty level (either 'switchers' of 'hard core loyals'), benefits gained (young people are concerned with self-expression, advanced features and also the speed of services). The other aspect pertaining to the behavior of the target customers is the personality where most of the Apple clients and not only determined but also ambitious. Lastly in behavioral segmentation is the status of the user, where clients are either users, non-users or potential users. The final aspect of segmentation is psychographic criteria where Apple users are assessed by their lifestyle and social class. Most Apple products are sought by individuals in the middle and upper class, but it is evident that such products i.e. Apple TV, Apple Watch and such related accessories are purchased by upper-class clients. The identification of the target market is essential for Apple Inc as it enables the firm to develop and implement workable marketing communication strategies.
Apple SWOT Analysis
The SWOT (strengths, weaknesses, opportunities, and threats) of Apple Inc are discussed in this section.
Strengths
Unique potential to design and develop proprietary software (i.e. iOS, MacOS), hardware (i.e. iPhone, iPad), services (App Store) as well as applications. The ability enables the firm to introduce unique, easy-to-use and innovative products as well as solutions for its clients (Jurevicius, 2017).
Powerful brand with strong marketing/advertising abilities. According to Forbes and Interbrand, Apple is the world's most valuable (and recognizable) brand. The strong brand reputation and recognition are due to strong abilities in marketing and advertising.
Vertical integration. Apple is vertically integrated as it manages four different businesses (hardware, software, service-provider, and retailer) as one.
Positive financial performance with one of the strongest cash flows. Apple maintained a high-profit margin of 22.82% in the year 2015, an unusual occurrence for a company with a similar fast growth as Apple.
Weaknesses
Overdependence on the sale of iPhone. This is likely to weaken the company since changes in technology, consumer tastes or component prices could greatly reduce the firm's revenue.
Weak direct distribution channels in India. The company has not invested in retail and online stores (the direct distribution channels) in India, the 3rd largest smartphone market in the world at the moment.
Low investment in research and development. As compared to other companies such as Samsung, Apple fails to fully encourage research; hence there is the risk of fewer innovations as well as products that will be introduced to the market in the future.
Incompatibility with other OS. The proprietary operating systems iOS and OS X (Apple's) are different from OS of Windows and Android (their competitors). Users accustomed to other OS might find it hard to adapt to the completely different Apple OS (Jurevicius, 2017).
Opportunities
Prospects for the introduction of health-related wearable gadgets to the market. In April 2015, Apple released its first-ever smartwatch (Apple Watch) which could monitor heart rate and blood pressure, calorie intake and also hydration and sugar levels.
The expectation that the Internet of Things to grow over the next few years. Since there are forecasts that the number of devices connected to the Internet (currently at 20 billion) will grow by about 50% in 2020, Apple is set to take advantage of the growing IoT market through the use of its software platform meant for managing data from connected users (Jurevicius, 2017).
Apple Inc has the opportunity to expand the mobile payments market.
Threats
Competition. This is from rival companies such as Microsoft, Dell, HP, IBM in the PC sector as well as since the launch of iPad and iPhone.
Strong U.S. dollar with the exchange rates consequently affecting every multinational firm, Apple included.
Lawsuits about infringements of patent, hence tainting the reputation of the brand.
Lastly, there is the risk of data breaches since the firm requires businesses to gather, store and also use the personally identifiable information (PII) of every customer, worker, and business partner (Jurevicius, 2017). Therefore, in case of information theft, Apple will have a lot to lose.
References
Jurevicius, O. (2017). Apple SWOT analysis 2017. Retrieved April 11, 2017, from Strategic Management Insight: https://www.strategicmanagementinsight.com/products/apple-swot-analysis.html
Perreault, J. W., Cannon, J., & McCarthy, J. (2015). Essentials of Marketing: A marketing strategy planning approach (14th ed.). New York, NY: McGraw-Hill.
