Marketing Principles Task B 24 – 11 – 11 By Ayesh Goburdhun A. Define your product The product chosen for this assignment will be a laptop, the Macbook Pro by Apple. The product is a personal computer that can be used for communicating with people or whoever, working on different kinds of software, listening to music and mostly to go on the Internet with the rising of the social networking websites. Apple Computers Inc. s an American multinational corporation, who was established in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Steve Jobs, the Chairman and CEO of Apple is one of the world’s most successful businessmen today, his management style and his charisma brought the firm from a starting company to a global force to be reckoned with. Apple Computers Inc. designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad.
To describe further the product, we have to answer to the question: What is the consumer really buying ? The Macbook pro is based on superior quality materials that will allow faster actions and will permit the entertainment of its users over time without being bored and can be classified as a premium category of products that are not easily affordable. The Macbook Pro is based on the newest technologies on the market; it offers the best design of any kind of computers or portable engine that are actually called “innovative” on the market.
So, we can say that the Macbook Pro offers great satisfactions to its customers and further, it is composed of usefull softwares that are already integrated and very powerful. The Macintosh comes with the latest brand of Operating System that the company developped in the past decades to improve the pleasure of the users, so that they woudn’t be outdated. Moreover, the Laptop is compatible with all devices at home, based on a new technology called “plug n play”, no complicated installations are required and the system works with any kind of operating system already install, even competitors.
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When people think about Apple and Mac they automatically think and talk about a problem-solving product, indeed, the Laptop offers a level of security that haven’t been hacked yet whereas its major competitor: Windows, the first provider of personal computers on the market. It is, of course, implied that the Macbook is running on the tardiest best performing computers’ components. Because the company builds both the computer and the software that comes with it, reliability is the first purpose, this means that a Macbook rarely freezes or crashes.
Occasionally an application might quit, but it won’t affect the rest of the system. And the operating system resists mostly to anything, so everyone can do anything without worrying about losing everything. Apple Computer Inc. distributing the product proposes a variety of sizes and styling; the Macintosh Laptop is totally customizable and is forming part of the high standing computers on the actual market. For example, ladies could easily tend to buy pink Macbooks contrary to gentlemen who will choose the white or gray one.
In addition, when people decide to buy a laptop they are principally attracted to the brand name, in this case, Apple that represents a very fashionish and stylish brand with a various types of stunning adverts and commercials. The packaging of the Apple brand is also one of the best in the market; it represents clearly the brand and adds an extra “something” to ensure the pleasure and delightfullness of the buyers opening the product bought.
It is considered that Apple’s after sales service is one of the best, worlwidely speaking, indeed, the warranty applicable for each Apple products can be extended as much as the consumer wants or needs to. Further, when an Apple product is broken the after sales service comes and replaces or repairs the item immediately if it is available in the stock. This is the principal reason why Apple is so good in the after sales services contrary to other competitors in the same sector.
To classify the laptop, we can say that it forms part of a durable and tangible product, it can be used over and over with a great warranty period, and marketers would classify the Macbook Pro as a consumer product used for personal consumption. B. Provide and critically analyze definitions and components of segmentation Market segmentation can be define as the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix.
Market segments should be formed in that way that differences between buyers within each segment are as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix. Market segmentation is also an adaptive strategy, it consists of the partition of the market with the purpose of selecting one or more market segments which the organization can target through the development of specific marketing mixes that adapt to particular market needs.
According to Kotler, P (1999), market segmentation means "the act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes. " According to William J. Stanton, ‘Market segmentation is the process of dividing the total heterogeneous market for a good or service into several segments. Each of which tends to be homogeneous in all significant aspects. ’ In brief, market segmentation is important not only for creating consumers but also for satisfying them.
Market segmentation helps matching the market opportunities to the resources of the corporations and enables them to face market competition effectively. For example, for the personal computers market there are two segments, desktop computers and laptops. As for the desktop ones, they are mostly used by bureaucratic administration because they are less expensive for the same characteristics. Moreover, gamers also use desktop computers due to their fully customizable and upgradable components, whereas the laptops, which are considered as more mobile and practical, used principally by businessmen and tudents. In the segmentation of laptop, they are multipurpose laptops, multimedia laptops and laptops based on performance. In general, multimedia laptops are used to satisfy lower demands of customers who do not want to invest a huge amount of money because the demand is just for multimedia using like listenning to music, organizing pictures and web surfing. The components of this kind of laptop will be creating directly by the enterprise without subcontracting.
Furthermore, multipurpose laptops are viewed as the middle class computers; they are principally used with basic softwares, for web surfing and all the multimedia stuff. The companies who build multipurpose laptops, used by middle class peoples, tend to subcontract in order to offer better performances and quality. Finally, the premium laptops are answering the demand of engineers, designers and professional who are in the need of very powerful and qualified product either for their work or their personal use.
The characteritics of those laptops are generally a mix of components of the best-specialized industries on the market; this is why such laptops are very expensive. Niche markets are also present on the marketplace, answers to very high specific demands and tries to differentiate the company with its competitors. These markets are very small but the profit is real. In Mauritius, personal coaches are an example of niche marketing, concerning laptops; the Alienware brand is a niche market specialized to satisfy “hardcore” gamers.
Concerning the Apple brand, we can talk about a geographic segmentation. For the line of Macintosh products, it can be segmented into regions; the company will not try to sell expensive laptops in poor countries such as Somalia or Afghanistan where the demand of theses products is totally nil. They will focus on ways to sell the product in big capitals or cities like New York, Paris or London, where the demand is constantly growing up. Shops, called Apple Store or iShops, are going to represent Apple worldwidely and has to fit in big commercials centers, or big buildings with great standards.
All of these shops need to have the same organization, layouts, services and of course, same products. The client needs the impressions that they are communicating directly with Apple and not with a subcontracting agent. For example in Mauritius, Apple is franchised by Leal communications and informatics and the logo of the brand is not present in the Apple store shop based in Mauritius. The buyer must communicate directly with Apple and not with Leal (except for after sales issues).
The demographic segmentation is very important for the company, indeed, it will depends a lot on the age, gender, sexual orientation, family etc…We can assume that, as we saw before, persons that have a more feminine personnalities tend to buy Macbooks with pink colours. In addition, the age is a major factor, where students and young persons are more attracted to laptop such as the Macbook, whereas the elderlies who would prefer buying more expensive desktop towers, for example the iMac. It is clearly segmented in the way that Apple will try to sell Laptops, mp3s to the 18-30 and Tvs, iMac to elders +35.
The enterprise is also willing to target wealthy persons, undoubtedly the products provided by them are classified as quite expensive and premium due to its very powerful components and noble made materials. As we saw earlier, the Macbook Pro is categorized in a high-standard category so the income and the psychographic segmentations are also important where persons with extroverted personalites, fashion addicts and wealthy persons are targeted. People looking for the Macbook are persons willing for an advantages of buying it.
If the product does not propose any kinds of benefits comparing to its competitors it won’t convice these persons for buying the product. The laptop presents a load of benefits like fully customizable, virusless, plug n play system etc… Marketers assume that some customers are completely loyal to the brand that they like, they buy one brand all the time. Apple is one of the best example for these kind of buyers, indeed, the Apple fans are regardless of the functions or capacity of any kind of the Apple line of product, they are totally in confidence and are not affraid to pay whatever the price could be.
They are almost waiting weeks in front of an Apple Store in order to be the first one to obtain a new Apple made product. This loyality is very rare but can be understand by the fact that the company is very successful. In the recent years, Apple’s product are being seen by peolple as a brand of wealthiness and reliability. However, the segmentation is principally based on the demand of the customers and we can assume that this demand will grow in the coming years but if it is not there won’t be any kind of segmentations. Some market segments can disappear due to the evolution of the demand.
For example, in the mail delivery market, some segments like post letter delivery services are starting to disappear due to a very fast growth of electronical technologies such as mailing, chatting, messaging etc… Further, segmentation is impossible when : 1. The size of the market is too small. 2. A brand is a dominant brand in the market. 3. More number of people falls in the same category. 4. The advertisement of each kind of product is too expensive. 5. The informations accumulated are completely wrong. C. Provide definitions and state the importance of targeting and apply the concept to your product
Kotler, P (1999), stated that ‘target markets are a set of buyers sharing common needs or characteristics that the company decides to serve’. After a company has defined market segments, it can enter one or many segments of a given market. Kotler, P (1999), also says that ‘market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter a company should target segments in which it has a differential advantage over its competitors; where it can generate the greatest customer value and sustain it over time. A company with limited resources might decide to serve only one or a few special segments; this strategy limits sales, but can be very profitable. Kotler, P (2002) stated that, to provide for a good market targeting, the firm has to evaluate the various segments and decide which ones to target. A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer / sales team to customize their message to the targeted group of consumers in a more focused manner.
In order to perform a good targeting, we have to answer to the questions: Who are our customers? Who will buy our product? And how segmentations will help us doing it ? To target the consumers we can say that Apple Computers Inc. is a company present on the national and the international scope, its target are all over the world. It is considered that the customers of the Apple products will look for these goods in new commercial centers and big buildings with great standards, in the nearest cities where they will find Apple Stores and iShops that are specialized boutiques.
The target here will focus on persons living in cities and more urban regions where their concerns are more important. Apple is using a distribution channel based on self-providing, indeed, they do franchise their brand but, as we viewed earlier, they tend to limit the presence of the company that they are working with and so focus on themselves for easier targeting. For example: if companies are targeting young people, advertising should be done on specialized web sites or magazines for young people, The Times or The Independent aren’t good choices. Apple is marketing to people who have a few characteristics: Middle/Upper income persons that are willing to pay a bit more for a better user experience. Paying 1000 € or more for a computer is not a huge deal if they have a decent income. * People who like to have fun with technology. No other platform offers as many entry-level tools. This includes people who like to shoot a lot of digital photos or video. It's the whole digital hub concept. People are starting to buy into it. * Music enthusiasts and fans aged from 12-35. * Professionals in media and design and engineers. Shops are going to represent Apple worldwidely it has to be in big ommercials centers with great standards of quality and hygiene. All the shops need to have the same organization, layouts, services and product. The client need the impressions that they are communicating directly with apple and not with a subcontracting agent. They are targeting people that can afford buying products in those premium places. Promotions are proposed nationally and internationnally with the « apple standards » by the representants. Billboards, flyers, e-mails and quite stunning adverts are ways to target families, students or professional photographs.
However, there is a very controversial approach that could be discussed in the target market of the company chosen. Indeed, we can say that Apple do not target markets they target people. For example, Apple has never marketed Macs to enterprise customers, and only hired a very small sales crew to sell to such customers, but they have been advertising the Macbook and its business-related applications in The Wall Street Journal, Bloomberg BusinessWeek, and other business-friendly publications. Apple does not seem to target markets in the way other companies do. It targets people.
It focuses on users. And Apple lets them decide how and where they’ll use the products. This is how great companies are built: they focus on individuals and build exceptional products for them; they let these individuals determine how best is to make use of the new technology provided. D. Provide definitions and need for positionning and apply it to your product. After a company has decided which market segments to enter, they must decide what 'position' they want to occupy in those segments. A product's position is the place where the product occupies the consumers' minds.
If a product were perceived to be exactly like another product on the market, consumers would have no reason to buy it. Market positioning gives a product a clear, distinctive and desirable place in the minds of target consumers compared with competing products. Marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets. Market positioning is the manipulation of a brand or family of brands to create a positive perception in the eyes of the public.
If a product is well positioned, it will have strong sales, and it may become the go-to brand for people who need that particular product. Positioning is no doubt the single most important aspect of marketing in the globally competitive market place. With capitalism gaining popularity in most countries of the world, competition has increased greatly. A company not only needs to fight rivals in the local market. It also has to equip itself to compete against the world’s best companies. Companies are improving their products and offering them at competitive prices.
A good quality product is no longer a guarantee for success. Positioning has to be managed at every point where the customer comes in contact with the company, from personal sales to online communication to telephonic interaction. This is the only effective way of avoiding any confusion about the product in the mind of the customer. So what has Apple done in recent history to the Macintosh product line to demonstrate this premium positioning? It is widely recognized that Apple is a premium brand that demands and earns a price premium.
This price premium ps the entire Apple product lineup with the Macintosh, iPod, iPhone, software, and accessories. Apple's positioning is aligned with targeting a less price sensitive customer. As a result, Apple's culture and internal activities are structured to meet the needs of these customers, strategists call this needs-based positioning. Apple has thus created a culture and a set of activities to differentiate themselves from rivals in order to meet the needs of their target customers.
Apple has positioned itself to a certain type of customer, wealthy people, innovators, people with good jobs, good lifestyle, etc. If Apple targets the poor man type, the trendy guys will stop buying Apples, because everybody can and Apple is not the Porsche of the computers anymore, this would hurt more the brand than maybe the increasing sales because of lower prices, and in good times, where everybody has more money, Apple would have the problem that they cannot rise prices, because everybody expects a cheap Apple product.
If Apple were to attempt to compete for all customer segments, it would have to lower product prices. The danger with such an approach is that it would not only undermine and erode the company's premium brand image but it would also undermine the company's culture and internal activities. Each new Mac revision has either maintained or been subjected to modest price increase while Apple has simultaneously improved product features. A few examples include the introduction of the unibody MacBook and MacBook Pro, larger displays on the iMac, and the replacement of the 599€ Mac mini with a higher priced (999€) model.
Years| Sales in Million| | | 2006| 5,200,000. 00| 2007| 6,905,000. 00| 2008| 9,550,000. 00| 2009| 10,350,000. 00| 2010| 13,425,000. 00| 2011| 7,770,000. 00| 1. From 2006 to 2007 the Macbook Pro is in development process. 2. From 2007 to 2008, Apple introduces the product. 3. From 2008 to 2009, it is the growth of the laptop. 4. From 2009 to 2010, the Macintosh observes its maturity period. 5. And finally, from 2010 to 2011 the curve is starting to decline.
REFERENCING Kotler, P (et. Al. ), Principles of Marketing, Prentice Hall Europe, 1999 Kotler, P (et. Al. ), Marketing Management, Prentice Hall Europe, 2002 William J. Stanton, Fundamentals of marketing, New York, McGraw-Hill Book Company, 1964 Apple website viewed on the 18th November, http://www. apple. com Apple website viewed on the 19th November, http://www. apple. com/why-mac/ Google website viewed on the 20, 21 and the 22nd of November, www. google. com Elmer-DeWitt P, April 9, 2011 11:56 AM, How many Macs did Apple sell last quarter, viewed on the 20th November, http://tech. fortune. cnn. com/2011/04/09/how-many-macs-did-apple-sell-last-quarter/
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