Marketing mix and segment PDF

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Marketing strategy assignment...

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Executive Summary The objective of this report is to explore and propose a marketing strategy for the Apple Watch Series 2, as analysed in assignments 2 and 3. This report will assess the 4Ps of the marketing mix to effectively express and implement a new and/or improved brand positioning. This report establishes that are multiple improvements that Apple can consider to the current marketing strategy in place, regarding the Apple Watch Series 2. The suggested improvements have been made under limitations of time and resources, depicting that the current marketing strategy is the best approach; however, the report highlights areas that can be approved upon in the recommendations page. This report demonstrates that the following changes could be made to the 4Ps of the Marketing Mix. Product: Apple has and needs to continue show how their product is superior and different to competitors, through effective brand positioning of communication and promotion. No recommendations, unless a new series is developed. Place: Apple’s distribution reach highly effective, the brand has placement around the world and accessible almost everywhere. No recommendations. Promotion: Apple campaigns are highly successful, could benefit from targeting their desired market further. The use of promoting products through a network operator or third party can reduce promotion costs for Apple. It also increases their reach to the target audience by using other big brands. Price: Prices could always decrease, to open up the target audience and increase sales further. Since the smartwatch industry is so small and competitive, making their product more affordable to a larger target audience could benefit sales. Introduction This report aims to analyse the brand, sub-‐ brand the current marketing strategy in place for the Apple Watch Series 2 and convey judgments and outcomes to improve the smartwatches’ current marketing mix and promotions. The research and findings of this report have been executed by an independent consultant and has been authorised by Apple’s Marketing Managers. No complications were met in the process of researching for this report, all information was made available by Apple and other independent researchers. This report includes data concerning the brand positioning through the brand an d sub-‐ brand, an assessment of the target segment, analysis of the 4Ps of the marketing mix and recommendations for the development and improvement. Section 1 – Target Segmentation The profiling elements and profile predictions of the Apple Watch Series 2 identify these segments viewed below, and are important in developing a new product/series and in brand awareness. The target segment ‘All-‐ day Assistance’ has been chosen, as the Apple Watch Series 2 is designed to assist and simplify communication tasks for consumers; as well as be used in partner with the iPhone. Additionally, consumers want an exclusive use for their product that is of higher quality and performance from the first Apple Watch release. It must also display distinct differences from competitors and remain the dominant in its product market. Apple underlines this through elevated marketing and emphasis on brand loyalty. Section 2 – Brand Positioning The Apple Watch Series 2 is a part of small and competitive market, to stay ahead of competitors Apple relies on the loyalty of their customers to achieve selling their product for a higher price. The Apple Watch Series 2 relies on the popularity and use of the iPhone, as the

watch is advertised as an extension of the product. For Apple this means maintaining a perfect brand image and performance in products, regular updates and features are exclusive to the partner products, as they remain dominant in their markets. Apple’s selling position entices consumers to purchase the whole collection. As the Apple Watch Series 2 is an accessory to the iPhone it promises new apps exclusive to the product, such as Apple’s partnership with Nike, intelligent assistance in the program Siri and iCloud enabling consumers to connect their devices and use voice control. Apple markets all their products as apart of consumer’s lifestyle, hence their huge success but as they also focus on the basics. As the smartwatch industry is a relatively new concept, there are different versions on the Apple Watch Series 2 coming from all major competitors as it is currently seen as ‘in fashion’. This has resulted in the smartwatch market not having an enormous amount of difference in structural attractive between different competitors varying models. Apple, while being the leading retailer of smart watches (Vanian, 2016), has stiff competition from its major competitors Samsung and LG. However, Apple’s position in the smart phone industry and partnership with other major brands such as Nike, benefit Apple as the exclusiveness associated with their brand ensure they are perceived as a higher quality product. Consumers may question the value for money and price Apple charges in comparison to their competitors. The Apple Watch Series 2 is a high-‐ involvement product and is designed to be used on a regular basis, meaning consumers are more decisive when comparing brands and their product’s features where Apple leads against competitors, many consumers are outweighing the cost. Apple offers Applecare+ warranty that provides hardware service and technical support. Difference Apple is distinctive from competitors with iOS software and stylish design. The product is not just a tool but an accessory. Features The Fitness Feature that are incorporated in the collaboration between Nike and Apple contribute to the performance of the Series 2 Watch. All-‐ day Assistant, the watchOS’ task manager for connectivity between the iPhone and smartwatch. Health Tools such as ‘Heart Rate App’ and ‘Breathe App’ creates comfort for consumers. Partnerships Apple partnership with Nike is unique and exclusive to the brand’s product. Apple Watch Series 2 Samsung Gear S3 Unreliable product Reliable Product Sony SmartWatch 3 Low market share Section 3 – The Marketing Mix – The 4Ps 3.1 PLC and the Diffusion of Innovation The smartwatch industry is still new and has yet to fully develop. Although the Apple Watch Series 2 is a popular and well-‐ known product, smartwatches are in the ‘early development stage’ as this is such a fresh market there may be a surge from a new and innovative brand who could overthrow the throne on which Apple sits. Apple is the dominant force in smartwatches, in July 2016 Apple Watch owned 33.5% of the U.S smartwatch market and across Europe’s biggest four markets – Germany, France, Italy and Great Britain – Apple’s smartwatch market share stood at 31.8% (Reisinger, 2016). However, the market Apple is dominating isn’t necessarily a big market. Studies by Kantar show only 4.7% of Americans and 3.2% of those living in Europe current own a smartwatch; and there are no signs of widespread adoption coming anytime soon (Reisinger, 2016). This report will largely be targeting high usage consumers, who recognise brand loyalty, value and position of a higher price. Targeted consumers will be aware of Apple’s exclusive features of the Apple Watch Series 2, and their partnership with Nike.

3.2 Type of Consumer Product The Apple Watch Series 2 is classified under the shopping category ‘specialty’ meaning consumer will search extensively for the particular item. As Apple is a luxury brand and a smartwatch is an infrequent purchase, the product requires research and trust in the brand from consumers. Apple products are easily accessible by their own high-‐end stores, online and most electronic retailers such JB Hi-‐ Fi, and commonly promoted through mass media, advertising and sponsorships of athletes for example. 3.3 Product The diagram displays the components of a smartwatch and those that have been developed by Apple between series. The brand positioning of the product is underlined and the high quality and features of the product combined show an efficient and reliable after sale service. 3.4 Place Apple uses selective retailers as well as their own individual stores and online to distribute products; the marketing mix involves a holistic approach, taking advantage of different distribution channels (Greenspan, 2015). Apple stories are the most visible places that sell the company’s products. The online and App Store are also highly visible (Greenspan, 2015). Other retailers used in Apple’s marketing mix include companies such as Target, JB Hi-‐Fi, Telstra, Optus, Big W, Harvey Norman and Kmart. In addition, Apple uses online services as third party sellers including eBay and Amazon. The extensive reach through multiple channel makes Apple’s marketing mix “comprehensive in exploiting different types of online and non-‐ online distribution channels” (Greenspan, 2015). Using authorised resellers of Apple to further distribute the Apple Watch Series 2 such as Target and Kmart positions the generally exclusive and expensive product, in a less intensive and selective environment where consumers may be more likely to make a less researched and unsought purchase. Stores like Target and Kmart and visited regularly by consumers for everyday products. Exhibiting a small display of Apple Watch Series 2 in the sportswear section, emphasises the health and sport features of the smartwatch as well as the product’s use as an accessory. This location differs from the smartwatches’ usual placement in the technology section of a store, which can be visited less than the sportswear section by consumers. 3.5 Promotion Apple’s extensive promotion activities are responsible for the brand’s success in sales. Apple emphasises their premium image and quality of their products using the following elements advertising, personal selling, sales promotion and public relations. First most Apple advertises through the company website and Apple stores, then branches out through secondary technology news sites and firms. Moreover, the company uses billboard, television and online ads through platforms like Instagram and Facebook. This leverages the brand across multiple mediums, making products seen and heard about almost everywhere. The use of public relations optimises the corporate image of Apple, events, press releases, exclusive interviews and sponsorships are implemented to maximise positive publicity (Greenspan, 2015). For instance, following the release of the Apple Watch Series 2 the brand collaborated with Nike sponsored athletes to publicise the sport and health features on the smartwatch. While Apple’s marketing campaigns are highly successful as proven in sales, consumers are always changing and so are the most influential platforms in media. To ensure Apple reaches

the right customers in an ever changing online world, all promotional activities must be clear and coordinate while making an online presence. Cross-‐ collaboration is an effective promotional tool when promoting an unsought product. Apple’s approach to identifying their products differ from competitors who see their products as “geeky and inexpensive” (Kaputa, 2012) but as the opposite: cool and upmarket. Their partnership with Nike benefits this image for Apple, but can be taken a step further by incorporating a platform to broadcast this message. Vogue Magazine has one of the biggest online presences across YouTube, Twitter, Instagram and Facebook. The elite and upper-‐ class magazine often reviews and sorts after the “it” products at that time. A cross-‐ collaboration with Vogue, Nike and Apple – three million dollar names – can situate the Apple Watch Series 2 as the most wanted product by the target customers. Another promotional tool Apple can adopt to reach their target customers is television commercials airing between programs at 7 – 9pm. More specifically on paid TV such as Foxtel, as consumers willing to spend money on paid TV are more likely to have a higher income. These adverts should feature a public figure or sports celebrity that consumers can identify with the product and embody the upmarket and use of the smartwatch. 3.6 Price The Apple Watch Series 2 is made to be a convenient and functional device in the consumer market, being high quality the brand has adopted a premium pricing policy for this product. The price is no doubt higher than close competitors but Apple’s relies on loyal customers and realisation that their products are both of quality and status symbol to maintain their high price (Bhasin, 2017). Due to the smartwatch industry being new Apple’s competitive price can be seen as extensive compared to competitors. The on-‐ going feud between Samsung and Apple is magnified due to both brands releasing new updates and products into the market at the same time. This impacts Apple greatly as the Series 2 smartwatch was released at a noticeably higher price as the Samsung Gear S3. Table 4.0: Price Comparison ($AUD) Brand & Model Price Apple Watch Series 2 $528 (Aluminium) $799 (Steel) Samsung Gear S3 $598.88 Sony SmartWatch 3 $189 Between Apple and Samsung and their expensive prices, a tactic taken by Apple to complete market dominance is the release of two separate retail prices. This benefits against the competition as Apple offers a lower cost than Samsung but as well as higher cost that maintains their luxury and upmarket image. Summary of Marketing Mix Table 5.0: Summary of the 4Ps Mix What are the Brand My and Sub-‐Brand Recommendations currently doing Product High quality product with a different design, core and purpose to competitors Place Apple Stores and online. Authorised resellers, stores and online. Promotion Price No recommendations, unless a new series is developed Apple’s distribution reach highly effective, the brand has placement around the world and accessible almost everywhere. No recommendations. Apple advertises Apple campaigns are through ads, highly successful, personal selling, could benefit from sales promotion and targeting their public relations desired market further. $528 (Aluminium) $799 (Steel) Prices could always decrease, to open up the target audience and increase sales further How will this effectively support the brand positioning Apple has and needs to continue show how their product is superior and different to competitors, through effective brand positioning of communication and promotion. Apple products are available in multiple retailers and online,

boosting customer loyalty and allowing their Applecare+ benefit to be used with ease if needed. The use of promoting products through a network operator or third party can reduce promotion costs for Apple. It also increases their reach to the target audience by using other big brands. Since the smartwatch industry is so small and competitive, making their product more affordable to a larger target audience could benefit sales. Section 4 – Conclusion, ethics and social responsibility By using the marketing mix, product, place, promotion and price it is demonstrated that Apple can improve on their brand positioning. Specifically, this report highlights the promotional factors Apple can put in place to assist and increase sales as well as reach a larger target audience. As a result of this report, it is found that Apple’s current marketing mix is highly successful and proves why the brand remains dominant across its markets and in the smartwatch industry. Unfortunately, Apple has a reactive CSR strategy and only bothers to act when there’s a complaint or protest against the company (Godelnik, 2012). Apple’s problems stem from lack of stakeholder engagement, lack of triple bottom line thinking meaning Apple only addresses environmental and social issues as long as they don’t make a significant impact on Apple’s income, no CSR leadership or team, low level of transparency and using a dated approach. (Godelnik, 2012). Improvements Apple have taken and should continue to, is endorsing their environmentally responsible company, by using eco-‐ friendly and recycled materials to build their products where they can. To maintain their clean brand image Apple takes further steps to donating profits from sales to charities and organisations that benefit others. This plan complies with the Apple’s Employee Health and Safety Inc., research conducted in Apple’s ergonomics department identifies any risks within the supply chain; the recommendations from this report for the Apple Watch Series 2 do not affect or impact employee health and safety in any way....