Marketing Management
Executive Summary
The battle between gadget suppliers has now moved in the living room, for capturing the viewers on providing a new television experience, through customized products that integrate customized cable TV, online chat, playing video games, using computer, and other smartphone related applications, etc. This trend, initiated by Apple Inc. has rapidly evolve, with many other strong competitors entering this market, challenging Apple to continue to innovate, while also adjusting its segmentation, positioning, targeted population and its marketing mix to gain more market share and continue to dominate this market domain.
Vodafone entered the telecom market quite recently and it rapidly gained immense popularity and impressive market share, due to its business and marketing strategies. Through its marketing mix, the company became renowned due to its sponsorship actions directed towards the sport teams. Likewise, its segmentation strategy allowed the company to capture various groups of customers, targeting customers with low incomes or successful businessmen. The friendly and fresh attitude towards the customers positioned Vodafone as a different telecom provider, becoming the company of choice for lots of customers in Australia.
Marketing Management
Among the various acquisitions that my shopping list included in the last three months there were also an Apple TV and a renewal of Vodafone service. For the Apple TV I paid $99 and regarding the Vodafone service, I bought the $60 plan. Based on these acquisitions, I am preparing a report regarding the two organizations’ marketing strategies for dealing with the competition and I am also intending to propose a plan for Apple Inc. to increase its market share, especially on the TV segment.
Part 1
Market Segmentation
Market segmentation refers to the connection between marketing and customer relationship management, an alternative to product differentiation, which acknowledges the fact that a market is not homogenous, as it contains various segments, because customers are varied and their tastes and possibilities differ, hence being separated into customers or potential customers for a certain group or segments, depending on their needs and financial possibilities (McDonald, 2012, p. 9).
- Applying this definition for the purchased product, Apple TV, there is easily observable that the organization that produces this brand actually develops products for a homogenous market. Its customers and potential customers share similar interests and needs, with the top need of reflecting their status quo of elitist buyers through the products that they use and the lifestyle that this products offer them (Lohr, 2010). And Apple TV offers a lifestyle, as it incorporates other Apple products, such as iTunes or even iPhone software content, for delivering a unique television experience, allowing the viewers to customize their television programs (Saintvilus, 2012).
- On the other hand, for Vodafone segmentation is highly significant, as a tool for better knowing the customers’ needs, as grouped depending on their affinities and other features that determine a common behavior in using Vodafone services. According to a recent research, there are four types of segments among Vodafone customers:
- Customers with low number of voice calls (usually placed in the evening), high sms usage and low international calls;
- Customers with average voice calls (usually during the day), low or not at all sms usage;
- Customers with many voice calls, to different numbers on Vodafone;
- Customers with many voice calls (mostly during daytime), sending and receiving many sms, placing international calls, but with low number of contacts (Jansen, 2007, pp. 51 - 52).
Target Market
Lamb, Hair and McDaniel define the target market as “a group of people or organizations for which an organization designs, implements and maintains a marketing mix intended to meet the needs of a group, resulting in mutually satisfying exchanges”. (2012, p. 273).
- The Apple market allows little homogeneity because its products and services are destined to users that are disposed to pay more for their high tech experiences, who have medium or upper incomes and who are curious about everything that is new in technology and desire to be in trend, or even trendsetter for their friends or acquaintances, in terms of media devices. Therefore, this is the target of Apple Inc. With Apple TV the organization is pursuing the customers who require value for money, anticipating their need of desiring to bring their television experience in the 21st century, aligned with the other gadgets that they are using.
Positioning
The discussion about segmentation and target market rapidly leads the development of this report into further referring to market positioning. Positioning implies brand differentiation, which can be translated through the placement of a product or a brand in the mind of its targeted market so that to deliver a different message and the customer or potential customer to perceive the brand distinctive than other similar brands, valuing better than s/he values the competitors of that brand (Sengupta, 2005, p. 2).
- Apple differentiates from similar products, standing for the idea of innovator, trend – setter, as it proposes the first high end products and services that are next reproduced by its competitors. As such, there is the ongoing smartphone battle that started with the introduction of the iPhone 3 as the first smartphone that received the counter attack of Samsung through its Galaxy product or from HTC, Sony or Nokia (Cromar, 2010). Apple is situated in the mind of the customers, potential customers and even people outside the company’s targeted market throughout the world, as an original, qualitative and innovative name (Mendez et al., 2013).
- Vodafone is approaching a fresh but reliable strategy in terms of positioning, but also an innovative and straightforward, as it is a continuously growing and learning telecom provider, as it can be perceived in Australia, due to its merger with Hutchinson 3G Australia from 2009 (Sekiguchi, 2010, p. 16).
Marketing Mix
This section implies discussions about the mix of the 4Ps: product, price, promotion and placement in the marketing strategy of an organization (Bose, 2002, p. 439).
- Referring to the marketing mix strategies that Apple uses for differentiating from its competitors, this also talks about the brand being destined for the end – users with a high self – esteem and high interest for their status quo, aligned to the new technological trends.
- Apple Products
As such, in terms of product, the company delivers breakthrough products and services that are giving the tone in the industry (iPad, iPod, iMac, iPhone (Mendez, 2013) and now iTV); another distinctive characteristic of the Apple products is that they are elaborated for an Apple hub concept (Pachal, 2013), implying that they can only be integrated with other Apple products or services.
- Apple Price
The price component of the marketing mix reflects the sophistication of Apple products and the breakthrough technologies that it brings on the market, considering the fact that the prices are higher than their competitors. If an iPhone can be purchased from $199 (Apple store, n.d.), an Apple TV can be purchased for $99 (Apple store, n.d.”), which solely includes the TV accessory for a customized TV experience, as compared with a Sony Internet TV, which starts from $499,99, which includes however the actual TV device that is delivering the smart TV experience.
- Apple Promotion
Regarding its promotion, Apple mostly uses word of mouth for advertising the quality of its products and services, mostly achieved through customer reviews on dedicated blogs, forums or websites; it also makes use of classical media for advertisement purposes, and also, although limited, it incorporates social media in its promotional strategy (Mendez, 2013).
- Apple Placement
In terms of placement of the products, these can be bought online from apple store, on the phone, from the retail shops Apple owns or from resellers (Mendez, 2013).
This high – end proliferation of the company ensures the competitive advantage for Apple, achieved due to the fact that it is a trendsetter and that through its marketing mix, positioning, segmentation and targeting strategy it conveys people’s needs to be ahead of technology with benefiting of experiences that they did not even anticipate, delivered by Apple Inc.
- Vodafone Product
Vodafone’s marketing mix imply varied products and services, for the very different needs of its customers, allowing them to chat, send sms, exchange photos, play games, information about traveling, sports, and it also includes Vodafone modem for internet connection or Vodafone live etc. (Time 100, n.d.).
- Vodafone Price
Because of its segmentation strategy, this company’s products are available to everybody from low income to businessmen; there are available monthly plans as well as prepay options and an attractive strategy for the company is represented by its discounts (Chitty et al., 2012, p. 13);
- Vodafone Promotion
In the promotion strategy of Vodafone, besides the classical TV, radio or print (newspaper, magazines) commercials, billboards and other outdoor materials and internet promotion, a very important promotional too in Australia is represented by the high – profile sponsorships, such as the sports teams sponsorships (Chitty et al., 2012, p. 17) or Australia cricket team for rapidly creating awareness around mainstream consumers (Farooq, 2011, slide 17).
- Vodafone Placement
There are over 300 Vodafone stores in Australia, from where more than 6.8 million Vodafone customers (as many as they were at 30 June 2012) can purchase their products and/or services, but Vodafone services can be also purchased online (Vodafone Australia official website).
Vodafone uses a fresh and friendly approach for differentiating in the telecom market, to position like this as a young company, compared with its regular competitors that are adopting cold, distant and obsolete communication strategy (Vodafone Group Plc, 2012). Moreover, its marketing mix, which implies sponsorship actions directed towards the sport activities as promotional strategies, directly link the company with the idea of movement, fun and health, accompanied by friends and colleagues, which represents another competitive advantage of Vodafone. The segmentation also contributes to creating competitive advantage for the company, as based on the identified segments of clients, Vodafone has the opportunity to satisfy differently various types of clients, offering them exactly what they need, covering the telecom market from low to high users.
Part 2
Steve Jobs called Apple TV his hobby and when the product was launched it was quite a revolutionary hobby. No doubt about the fact that Apple Inc. is revolutionary and original with everything that it brings on the market, but with its entrance on the television segment, Apple dragged many other strong players in, such as Google, Microsoft, Sony, to name the strongest competitors, and while they continued to innovate, integrating their TV products with other popular products already on the market, Apple although it applied the same strategy, is losing market share in this segment (Blumberg et al, 2010, p. 14; Motley, 2013).
Whereas Microsoft is using Xbox 360 and Skype to offer an integrated cable TV, movies and chat, Sony continues to be the leader on the content side, collaborating with Viacom for streaming cable station through its platform, probably Playstation 3, which registered 77 million units sold, just as Microsoft did for Xbox 360 (Motley, 2013).
What the market expects from Apple is to continue to innovate and deliver to customers more than they need. Continuing to innovate and introduce revolutionary features is challenging, yet, this is an expectation that comes from years and years of receiving more than needed or required from Apple. Apple needs to use the technology it owns and walk on Steve Jobs’ steps, continuing his business philosophy and his visionary approach. Apple’s marketers need to closely look at what the competition is doing and come back with something big, to surprise, yet again, the competition and the customers, potential customers, and the entire world.
Likewise, in the context of the current discussion, regarding the competitive advantages, this report indicated that segmentation can deliver significant competitive advantage, mostly when it comes to market share. Just as Vodafone is competing on various market levels as it proposes packages for every segment of customers identified, Apple should examine this approach and use it, in order to enlarge its market share by capturing people that normally would not think of owning an Apple product, because of its high prices or because of the sophisticated technology. A step to enlarging the market share, let’s say on the TV market, would be to promote this product for various segments of customers, creating different products for satisfying various needs and possibilities.
This implies also a repositioning and a reconsideration of the target market. Currently Apple is known for being a revolutionary company, delivering products and services for high – end customers, people who can afford to pay more for their gadgets. For increasing its market share, Apple would need to position the product so that it would be more affordable for other groups of clients as well, offering features customized on each segment of customers identified (in terms of preferences or financial possibilities).
References
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