Market Segmentation

Market segmentation is the process of dividing a

broad consumer or business market, normally
consisting of existing and potential customers, into
sub-groups of consumers (known as segments)
based on some type of shared characteristics.
segmentation is based on variables such as
behavior, demographics (e.g., gender, age,
education, and income), geography, and
psychographic characteristics, or those based on
lifestyle and personality
 Apple’s Segmentation Strategies
• 1) The first segment :
• customers with high loyalty to Apple
people who has strong loyalty to this brand,
they are the big fans of the products of Apple
company, not only iPhone but also products in
other series such as iPod, iPad and iTouch. They
know well about the features and the benefits
of the products and they are willing to pay for
the extra money to get these features.
• 2) The second segment : Technical oriented
• This segment contains people who are
attracted by the novel design and functions of
the product. These people are adults in the
middle class, who are curious about new high
tech products.
• 3) The third segment : social acceptance
oriented
• This segment has people who chase after
social status. Social acceptance and fashion
are the main reason of their purchase. They
are capable to pay for iPhone 4S as their daily
supplement, they still need to use external
material to differentiate with others and make
them feel confident.
 Apple’s Target Market
• Apple does things differently. it develops the product
first, and then seeking out the market for it.
• Apple is marketing to people who have a few
characteristics:
• Middle/Upper income people who are willing to pay a
bit more for a better user experience.
• People who like to have fun with technology. This
includes people who like to shoot a lot of digital photos
or video.
• Music enthusiasts and fans ages 12-35.
• Professionals in media and design.
 Positioning of Apple
• Apple is all about the experience, it goes after the
emotional branding something which is felt in the
heart and the mind of the customer.
• Apple brand is reflected through their core
beliefs about innovation, design, and imagination.
• All these 3 beliefs are strongly reflected and
promoted through their products, advertisements
and customer experiences.
• Apple is positioned as a luxury brand that carries a
huge emotional connection and loyalty among its
customers.
Apple’s Marketing Mix
 PRODUCT
• Apple products are innovative because they are
designed after thorough customer research. Apple likes
to think it knows what customers want and for the
most part, they do.
• Iphone: iPhone is the Company’s line of smartphones
that combines a phone, music player, and internet
device in one product, and is based on Apple’s iOS
Multi-Touch™ operating system.
• Ipad: iPad and iPad mini™ are the Company’s line of
multi-purpose tablets based on Apple’s iOS Multi-
Touch operating system. In October 2013, the Company
announced iPad Air™, its fifth generation iPad, and iPad
mini with Retina display.
• Ipod: The Company’s iPod line of portable
digital music and media players includes iPod
touch, iPod nano, iPod shuffle and iPod classic.

• Mac: Mac is the Company’s line of desktop

and portable personal computers. Macs
feature Intel microprocessors, the OS X
operating system and include Mail, Safari web
browser, Messages, Calendars, Reminders,
Contacts and the iLife suite of software apps.
The Company’s desktop computers include
iMac, Mac Pro and Mac mini.
 Levels of Product
• Core benefits –
• iPhone just used for tele-communication
• Generic product –
• iPhone with at least features of a smart phone
• Expected product –
• iPhone with camera, music and video playback, small application to help
perform daily tasks
• Augmented product –
• iPhone with 3G facility, comfortable touch screen, motion gaming, open
platform to develop softwares for iPhone and also covers all expected
product list
• Potential Product –
• All of the above mentioned and better strong body, break-free screen,
updated technology, cheaper, no cellular provider lock and many more.
 PRICE
• Premuim Pricing: Apple uses a premium
pricing strategy.
• .This pricing strategy helps maintain the high-
end image of the company and its products.
Another effect of this pricing strategy is that
Apple products attract people from the middle
and upper classes.
• The company maintains profitability because
premium prices entail higher profit margins.
• Geographical pricing:
• The use of geographical pricing strategy by
Apple Inc. involves setting different prices for
products in different parts of the world. The
need for geographical pricing for the global IT
company is justified due to differences in
exchange rates between local currencies and
USD.
 PLACE
• The following places are included in Apple’s
distribution strategy:
• Apple Store locations
• Company-owned website and online stores for
desktop and mobile
• Authorized sellers
• Telecommunications companies
 PROMOTION
• The following communications tactics are in
Apple’s promotional mix:
• Advertising
• Personal Selling
• Sales Promotion
• Public Relations
 Marketing Budget
• According to its annual filing, Apple spent
$933 million on advertising last year, $691
million in 2010, and $501 million in 2009. Its
total sales those years were $108.249 billion,
$65.225 billion and $42.905 billion.
• Apple spent less than 1% of sales last year on
advertising. And its sales growth has been far
outpacing its advertising budget.
Graphs