Professional Documents
Culture Documents
EXECUTIVE SUMMARY
The smartphone has ushered in a new generation of mobile Internet devices. A small smartphone that
is only four inches long enables the sharing of real-time information and knowledge, and it can
transform lifestyles. People use smartphones to obtain, share and exchange information whenever
they desire. The speed of information processing is accelerating, and real-time communication is
becoming universal and is no longer constrained by time and space. Through its ripple effects, the
smartphone makes it possible for people to realize a genuinely ubiquitous life in a variety of areas,
such as business, education, social interaction, and leisure.
OBJECTIVE
To study Apples iPhone as a premium product in smartphone industry in India by analysing its
growth, market share, competitors, customers behaviour, opportunities/threats, status in the
companys brand portfolio and strategies for future growth.
INTRODUCTION
The continuous progress and expansion of applications allow people to obtain the particular
information they want. Users can acquire almost any type of information, such as information on the
weather, locations, food, attraction, transportation, medicine, education, games, fashion, sports, and
scientific research, without constraints of time and place. Users can also create a new form of social
community, influence public opinion, and significantly improve the infrastructure and speed of social
communication. Everything through smartphones which are categorised under the technology
industry. Smartphones are powerful new computing devices offering traditional wireless voice service
as well as native software applications and, perhaps most importantly, the ability to connect to and
run a myriad of Internet-based services including email, geo-location, streaming video, and social
networking, while providing a good user experience. The business opportunities presented by this new
category have attracted many of the major global information and communications technology (ICT)
firms, including firms from the mobile telephony, personal computer, Internet, and personal digital
assistant (PDA) industries, into a complex new landscape of competition.
This industry provides foundation for activities such as, chip production, information and
communication systems, and computer systems. The companies belonging to this industry serves as
developers and manufacturers of the products which increase efficiency and production of cell
phones, computers, televisions, and other communication and information systems. It is a huge
industry with a high growth potential. India remains one of the fastest growing major markets and
continues to offer significant opportunities for growth given its current low smartphone rates. Because
this mobile generation has strong access to information and networking capabilities, the producer-
driven consumption pattern is rapidly being replaced by a consumer-based consumption pattern.
Smartphones are powerful new computing devices offering traditional wireless voice service as well
as native software applications and, perhaps most importantly, the ability to connect to and run a
myriad of Internet-based services including email, geo-location, streaming video, and social
networking, while providing a good user experience. The business opportunities presented by this new
category have attracted many of the major global information and communications technology (ICT)
firms, including firms from the mobile telephony, personal computer, Internet, and personal digital
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assistant (PDA) industries, into a complex new landscape of competition. For many of these firms,
capturing a portion of the total value created by the smartphone industry is believed to be a key to
future growth and profits. (Kenney, 2011)
6. SMARTPHONE INDUSTRY
The global smartphone market has been experiencing explosive growth for the last several years.
Competition has remained fierce all throughout, but the numbers don't lie.The major smartphone
platform war continues to play out between Apple and Google, while Microsoft still aims to grow its
small slice of total shipments. On the vendor side, Samsung has tried to fend off pressure from low-
cost vendors out of China while also succumbing to pressure from Apple on the high-end of the
market. Low-cost smartphones are proliferating across emerging markets, driving the feature phone
closer to obsolescence.
Key Highlights
The smartphone market in the second quarter of 2015 has grown at its slowest rate since 2013
up just 13.5% over the same period in 2014.
China, seen as one of the most crucial markets for companies like Apple, saw sales fall by 4%
according to the latest figures from research company Gartner. Its phone market is essentially
driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment,
the appeal of premium smartphones will be a key for vendors to attract upgrades and to
maintain or grow their market share in China.
Feature phones now account for just 25% of total mobile phone shipments
worldwide. Shipments in the Indian market will grow roughly 31% per year on average
through 2020, compared to 8% average annual growth in China.
The global platform wars are still playing out, with Apple able to push back against Android
dominance on the backs of new device launches. After the release of the iPhone 6 line, Apple
was able to grow market share in the fourth quarter 8 percentage points from a year earlier.
The smartphone companies of China are well represented among the biggest manufacturers in
the world with Huawei, Lenovo and Xiaomi listed in the top five vendors.
Huawei was the most impressive performer, seeing sales increase 46% year-on-year, helping
it increase market share from 6.1% to 7.8% and establish it as one of major players in the
global smartphone industry. Huawei's growth was based on strong overseas sales and
increased sales of 4G-enabled phones in China.
Lenovo, which last year bought the Motorola smartphone business from Google, remains in
the fourth position despite seeing sales drop over 14% and its market share tumble from 6.6%
in 2014 to 5% as of the end of June 2015.
Xiaomi, the internet company which sells its smartphones in only a handful of countries
compared to the likes of Apple and Samsung, continues to impress, growing sales by over
28% to see it nipping at Lenovo's heels with 4.9% of the global smartphone market.
Samsung remains the world's biggest smartphone maker with a 21.9% market share, however
the company's recent poor sales continue, as it has lost almost 5% of its market share since the
same period in 2014 with unit sales down over 4 million year-on-year.
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While the growth of the global smartphone market continues to be driven by these four key trends, in
some local markets growth is not so strong. For example, in Central Europe where the
macroeconomic situation in Russia has had a negative impact on sales, both units and value are
forecast to decline. However, globally, the news remains positive for smartphone manufacturers and
retailers.
OS Bifurcation
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Smartphone adoption in India is the fastest in Asia-Pacific region. With the number of vendors offering wide
variety of smartphone devices, consumers are spoilt for choices with diverse features at different price.
Consumers in India backed by comfortable disposable income at hand are quickly swapping their feature phones
with the latest smartphones. The falling prices of smartphones are further accelerating the adoption trend. While
foreign companies have realized the opportunity in India for Smartphone devices and have brought it a number
of India specific devices, domestic handset companies are targeting to capture larger market in the country with
budget smartphones. New age consumers with improved disposable income and varied needs are quick to adopt
smartphone, creating substantial opportunities for smartphone manufacturers.The growth in smartphone
popularity in India reflects the overall digitization of the country.
India will cross 100 million mark as the sales of smartphone devices in the country is
estimated to reach 118 million, accounting for about 8% of global smartphone market 2015.
Unlike US and China India will see a constant growth in the upcoming years. The year-over-
year growth will slow down tough; the country will still remain the most favorite market for
all smartphone manufacturers for a very long time. By 2017, the contribution of India to
global smartphone sales will also reach in double-digit, estimates analysts at Strategy
Analytics.
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The growth and sales forecast figures dont surprise much as stagnation smartphone market in
the US will hit the wall soon. Consequently, almost every major smartphone manufacturer has
either ventured or is gearing up to make India debut. By 2017, the contribution of India to
global smartphone sales will also reach in double-digit, estimates analysts at Strategy
Analytics.
The smartphone sales growth in India is driven by the low smartphone penetration, growing
demand of entry-level smartphones, increasing buying power of middle-class and aggressive
promotions rom local smartphone brands like Micromax, lava, etc.
The Indian government is committed to setting up a robust digital infrastructure and to
promote adoption of mobile Internet and related products and services. In 2014-15, the
Government budgeted INR 500 crore for building infrastructure as per the National Rural
Internet and Technology Mission with an additional INR 100 crore budgeted for improving e-
governance.
India has the third largest Internet user base in the world out of which more than 50 per cent
are mobile-only internet users. However, the Internet penetration in India at 19 per cent is
quite low compared to other developed and developing economies.
Expansion of 3G network and rollout of 4G networks is expected to boost the sales in the
country.
Increased internet enabled device penetration, decreasing handset prices and data plans tariffs
are helping create a suitable environment for a rapid growth of mobile internet in India, with
rural India set to take the lead.
The smartphone market also received a huge fillip from the huge uptake of the ecommerce
platform. Since then, many other handset makers have followed that model, launching
handsets exclusively through online marketplaces like Snapdeal and Amazon and later
introducing the device in the offline market.
India has become the market with the most potential upside. India offers both a growing
customer base and favorable conditions for manufacturing thanks to financial benefits derived
from localized manufacturing.
STRENGTH WEAKNESS
OPPORTUNITY THREATS
Rural market is very less penetrated so great The telecom service providers have to incur a
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6.4COMPETITOR ANALYSIS
With the saturation of European markets, smartphone manufacturers are turning their attention to
India, which has a population of over 1.2 billion. Presently, India is the fastest growing smartphone
market; hence, it isn't surprising that smartphone manufacturers are racing to get a piece of the pie.
Samsung manages to acquire the largest market share in smartphones largely because it offers
phones in different segments i.e. from high to low price segment, with different product line
that attracts many consumers. Low pricing and good features make it affordable by many and
therefore it has gained such popularity.
In the Indian smartphone market, Apple maintained its position as the number two-
smartphone brand by value in the first quarter this year, after Samsung. By volume, Apple is a
much smaller player compared with market leader Samsung. Its market share is relatively
growing in India as it has been able to penetrate largely the youth which looks out for a good
international brand name, features, design, quality. Since the time apple iPhones have been
offered on EMIs there has been a relative increase in the sales of iPhones as now many can
afford it.
Intex took the third position, capturing slightly fewer than 10 percent of the smartphone
market, riding on the demand of sub-$100 smartphones.
Lenovo and Lava grabbed the fourth and fifth spots, respectively. Lenovo was also the second
largest LTE smartphone vendor during the quarter.
While Xiaomi smartphone shipments increased sequentially during the quarter, Apple's
iPhone shipments remained strong during the quarter as vendor expanded its distribution
reach through both online and offline channel by adding more partners.
Microsoft also found its place among top five overall mobile phone brands during the quarter
but Lumia shipments declined sequentially.
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16; 16%
27; 27%
2; 2%
5; 5%
Samsung Micromax Intex Nokia Motorola Lava Karbonn Xiaomi Apple O
8; 8%
6; 6%
17; 17%
5; 5%
5; 5%
9; 9%
Rise in smartphone popularity with the advent of local Indian smartphone companies like
Micromax, which have created affordable mobile devices that have all the bells and whistles
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of their more expensive, foreign counterparts, but a much less intimidating and more
attractive price tag.
Competitor Segmentation
High- above 40,000, Moderate- above 15,000; below 40,000,Low- below 15,000
Apple is a well-known company for all of its technological advances. It leads the industry with new technology
that consumers are looking for. In order to continue to provide cutting edge technology there are
things that every company needs to be successful. Apple has been capable of staying ahead of the
competition due to its ability to produce cutting edge designs by using a creative design process.
The launch of the iPhone was, by industry consensus, a disruptive innovation. Eager consumers lined
up to buy the high-priced device. It took just 74 days for Apple to sell one million iPhones and less
than two years to sell 21 million worldwide. The iPhone was introduced on a proprietary platform,
controlled by Apple. In 2008, Apple opened an App Store, creating a platform for independent
applications, each approved by Apple and subject to a fee equal to 30% of revenues.
Apples wireless foray yields benefits directly related to the structure of its platform. By using its
proprietary mobile operating system, a modified version of its desktop OS, it offers a desirable
product for iPhone users. It also enables this wireless applications entrant (i.e., Apple) to appropriate
the gains from competitive superiority in product design. By filtering applications through the Apple
App Store, it both protects its brand and delivers a customer experience that increases demand. And
by coordinating the interface both technically and financially, it helps independent developers market
and bill for their products while extracting its share of value. Despite or perhaps because of the
vertical control imposed by the platform owners, software firms reacted enthusiastically.Apple Inc.
still has plenty of challenges ahead. Some of those stem simply from the nature of the fast-paced,
hyper-competitive consumer technology business the company currently competes in
Company profile
Apple Inc. (Apple), incorporated on January 3, 1977, designs, manufactures and markets mobile
communication and media devices, personal computers and portable digital music players and sells a
variety of related software, services, peripherals, networking solutions and third-party digital content
and applications. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a
portfolio of consumer and professional software applications, the iOS and OS X operating systems,
iCloud and a variety of accessory, service and support offerings. The Company offers a range of
mobile communication and media devices, personal computing products and portable digital music
players, as well as a variety of related software, services, peripherals, networking solutions and third-
party hardware and software products. In addition, the Company offers its own software products,
including iOS, the Company's mobile operating system; OS X, the Company's Mac operating system;
and server and application software. The Company's primary products include iPhone, iPad, Mac,
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iPod, iTunes, Mac App Store, iCloud, Operating System Software, Application Software and Other
Application Software.The company also has a chain of retail stores known as Apple Stores.
Apple Inc. was founded on April 1, 1976 in a garage by Steve Jobs and Steve Wozniak. The young
entrepreneurs brought different strength to their fledgling company: Jobs had a flair for
conceptualizing products, while Wozniak had the technical know-how to make them happen
(Washington Post Economy, 2012).
Apple vision
Apple is committed to bringing the best personal computing experience to students, educators,
creative professionals and consumers around the world through its innovative hardware, software and
Internet offerings.
Timeline
Apple I was the first product that Apple Inc. produced. It was a personal computer (PC). In
1977, Apple introduced Apple II which became a very successful device. After that the
company began to produce Apple II series. The Apple II was followed by Apple II plus, Apple
IIe, Apple IIc, Apple IIGS, Apple IIc Plus and Apple IIe Card.
Apple introduced Macintosh in 1984 that became a very successful computer. It was a first
computer featuring a graphical interface and a mouse for navigation. The new computer sold
very well, pushing apple's fiscal 1984 sales to an unprecedented 1.5$ billion. (Chapman &
Haskisson)
By 1985, however Jobs and Scully began to disagree over the direction they wanted the
company to take. After Jobs' attempt to remove Scully failed, Jobs left Apple in May to start
his own new business, NeXT Computers. (Chapman & Haskisson)
In December 1996, Apple acquired NeXT, with the plan of using its technology as the basis
for a new operating system. After being gone for more than a decade, Jobs returned to the
company he had originally cofounded with Wozniak. (Chapman & Haskisson).
In 1998 Apple introduced the new generation of PowerMacs, PowerBooks, and the highly
anticipated iMac and iBook, which were less expensive computers aimed at the how-end
computer market. After an entire year without showing a profit, the first quarter of 1998
began three years of profitable quarters for Apple. (Chapman & Haskisson)
Apple ventured into the market of legal downloads with the introduction of its iTunes Music
Store in 2001. iTunes offers downloads at a specified price without requiring subscription or
monthly fees. iTunes offers its users a selection of more than 6 million songs, with new songs
continually added. (Chapman & Haskisson).
With the introduction of the successful iPod music player in 2001 and iTunes Music Store in
2003, Apple established itself as a leader in the consumer electronics and media sales
industries, leading it to drop "Computer" from the company's name in 2007
As of 2012, Apple is the largest publicly traded corporation in the world by market
capitalization, with an estimated value of US$626 billion as of September 2012. Apple Inc.s
market cap is larger than that of Google and Microsoft combined. Apple's worldwide annual
revenue in 2010 totaled US$65 billion, growing to US$127.8 billion in 2011 and $156 billion
in 2012.
The iPhone is a unstoppable with unit sales up 25% in 2014, representing close to 70% of
Apple's operating income. Many market observers are wondering if Apple is approaching a
limit to iPhone sales growth.
With the iPhone 6 and 6 Plus representing possible inflection points in the phone market, the
ingredients are in place for Apple to sell 300 million iPhone units annually within three years,
which would represent 50% growth from the 193 million iPhones sold in 2014.
The significant increase in iPhone upgrading in 2014 was driven by the iPhone 6 and 6 Plus
and that trend will continue in 2015. As the iPhone user base expands, it is not hard to fathom
that close to 250 million iPhone users will be upgrading their iPhones on any given year by
2017. Apple would likely position the screen, battery, and camera as some of the more
marketable upgrades each year, as well as upgraded components including the fingerprint
sensor, speakers, headphone jack (or lack thereof). In addition, Apple will continue to update
the iPhone's form factor, including cosmetic chances, as well as altering width and weight.
Apple also stepped up its efforts by offering its latest model, the iPhone 6, on an installment plan in a
partnership with Vodafone Group PLC. The plan locks customers in for two years, but they get a brand
new iPhone 6 and full-fledged plan for 3,599 rupees a month with no down payment.
Foxconn manufacturers smartphones and tablets for mobile device players like Apple, (Samsung and
Xiaomi. Recently, it announced its intention to invest $5 billion over the next five years in India to set
up factories and R&D (research and development) centers. The main reason why it has gone ahead
with the decision is Indias rapidly growing smartphone market. India has the fastest growing
smartphone market. It could overtake the US smartphone market by 2017, according to a report from
Strategy Analytics. Another possible reason why its keen to invest in India is that it wants to lessen its
dependency on China. It faces higher costs due to rising labor wages.
Apple is aiming for the sales of two million iPhones in India in this (October-September) fiscal year
after notching up one million last year. In the seven months ended April 30, the company sold a
million iPhones in India. Another executive said Apple India had been under pressure since Samsung
has become more aggressive and wants to ensure that volume sales grow at twice the existing pace.
Apple's distributors are now reaching out to even local consumer electronic dealers and mobile phone
stores for stocking iPhones and setting up dedicated space in such stores.
By value, Apple is the number two brand in the overall Indian smart phone market after Samsung.
MarketingProcess
Apple really stands out in its marketing. The company simply seems to understand what will get
people excited about its products and services, then only it executes on its vision. They dont talk
about features or technology, but about how the computers will make your life better.
Apple Inc. Company uses all forms of advertising strategies, marketing knowledge, market
commitment, commitment decision and current activities to call the attention of customers through
Television, Newspapers, Billboard, Internet and Movies. The best advancement and ways in all Apple
Inc. stores customers are freely to touch and see the products. The sales teams are well trained in a
good and responsible ways to give awareness, rather than giving a sales pitch.
Price
Skimming price
Apple uses a skimming pricing strategy. Selling the iPhone 6 at a high price attracts premium
customers where they seek to be unique by purchasing products with the highest price and
therefore gaining a status symbol. Apple selling their iPhone 6 at a high initial price attracts
first those who are willing to pay at a high price (innovators group). Once the first set of
customers are satisfied, the price is gradually lowered in order to making it more affordable
and thus catering to a larger consumer base. The disadvantages of the skimming pricing
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strategy, that if price were lowered abruptly, the innovators group will feel ripped off and
therefore generate negative publicity hovering around Apples skimming pricing strategy; it
may spark a pricing discrimination. The objective of lowering prices of their iPhones after
the first round purchases usually from the innovator groups may be seen as price
discriminating.
With a premium target, and with the product and promotions to support the targeting.
However, Apple customers are not budging and they are very much loyal to the Apple brand
and to Iphone.
No discounts
Another interesting thing to observe in IPhone pricing policy is that it does not offer any
discounts. However, discounts might be given in the form of sales promotions or by exchange
offers. But otherwise there is no discount given in IPhone. A standard price is maintained
across the market.
Place
Present across the globe with a fantastic service backup Iphone is present across many
countries and nations and is known to provide an excellent service backup in all these
countries. The target of Apple Iphone is premium customers, hence it is found in A grade
cities only.
I-stores are found in premium places and malls Iphone has named its retail counter as
Istore keeping in line with the complete product line of Apple which starts with I resulting in
an immediate personal connect with the customer. These I stores of Apple are found in malls
and premium areas in premium cities across the complete country wide network.
Distribution happens through CNF >> Modern retail or Distributor >> Retails All
modern retail outlets are distributed the Iphone through a carrying and forwarding agent. On
the other hand, individual retailers are given the product through distributors. Finally, I stores
which are the exclusive showrooms, are given the product directly from the company at best
discounts.
Corporate tie up Apple also has a corporate sales department for the Iphone which does
corporate tie ups for the company. When Blackberry announced its exit from the handset
market, Apple Iphone soon came into the picture and did many corporate tie ups to replace
itself as the handset with all top CEOs and managers who were previously using Blackberry.
Thus, it could take over a major market share left over by Blackberry.
Promotions
Promotions and advertisement for the majority of Apples products, including each generation of the
iPhone tend to follow a similar pattern that focuses on endorsing the latest Apple product as being
ahead of the game, at the fore front of any brand new technology and the most streamlined, efficient
and modern product on the current market place. Apples leading objective in regards to promotion
and advertising of the latest Apple product, such as the iPhone 6 and 6 Plus, is set it apart from
other Smartphones, tablets or personal computers on the market by suggesting its superiority over
competitive brands and products.
Above the line (ATL) Promotions of IPhone are known to be fantastic and might range
from a full front page ad on the launch of the product, promotions in the radio, the television
and what not. Whenever a new phone is being launched, be sure to see IPhone everywhere, on
each and every ATL platform. Because they are targeting a premium segment, the presence of
Apple IPhone is higher in the ATL segment than in the BTL segment. The interesting thing
here is the taglines in newspaper ads because many of the IPhone ads are known to come up
with the most interesting taglines for the new phone.
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Below the line (BTL) For BTL marketing, IPhone uses out of home advertising with
hoardings and point of sale advertising in major retail outlets. It also uses various forms of
sales promotions and exchange offers to lure in the customer via BTL marketing.
Product
The Iphone marketing mix is one of the strongest marketing mix because the key factor
Product, is very strong
The iPhone offers consistency and innovation in its features which focuses on entertainment
and accessibility, but what makes it differ from other smart phones is its exclusive IOS
operating system and apps only accessible on the iPhone (iTunes and apple store). The high
quality processing speed also lend a hand towards the popularity of the product.
The iPhone 6 basically would be classified as a consumer specialty product, it also provides
simplicity and customization used to reflect the particular individual which makes it cater to
all ages, ethnicities and occupations. The quality has improved tremendously, from previous
iPhones being created from plastics and infusing metal and glass, apple has deviated from
that and shifted to a design that is pure of metal, (anodised aluminum and stainless steel),
providing that smooth and premium feel.
Currently the iPhone life cycle has fallen between the growth stage and maturity stage. In
terms of its growth stage, the demand of the iPhone series is growing significantly therefore
producing greater profits
Apple STP
Segment The market is divided into sub groups, known as market segments, in order to create
product differentiation strategies and to exploit these segments to the firm's own use. There
are several segmentation techniques that can be used, like:
Demographic segmentation: It is when the market is segmented on the basis of age,
gender, education, income, occupation, etc.
Geographic segmentation: It is when the market is segmented on the basis of city,
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Competitive responses are triggered by Apples profitability. In any event, rival platforms using
diverse models are providing alternative content choices. Rivals are adopting filtering policies of their
own, guiding usage towards approved content and imposing certain restrictions, default software
applications, and fees. The presence of competitive rivals, the relative success of Apple, and the
widespread adoption of their basic business model by entrants suggest that iPhone innovation is pro-
competitive.
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Brand Value
Sometimes a person may buy a smartphone just to satiate his desire to be brand conscious. So
it is important for brands to strengthen their image.
Comparative Benefits
Consumers often compare the relative benefits provided by mobile devices that lie in the
same price segment. The winner is always the one with highest featurecost score.
CULTURAL FACTORS
Cultural trends:
Cultural trends are defined as trends widely followed by people and which are amplified by their mere
popularity and by conformity or compliance with social pressure. The more people follow a trend, the
more others will want to follow it. They affect behaviour and shopping habits of consumers and may
be related to the release of new products or become a source of innovation for brands. By social
pressure, desire to conformity or belonging to a group, desire to follow fashion trends or simply due
to the high visibility provided by media, consumers will be influenced, consciously or unconsciously,
by these trends.
Apple has created a culture trend of its products because of its huge fan following and also because of
the brand loyalty base which it has created among its customers.
SOCIAL FACTORS
Social factors are among the factors influencing consumer behaviour significantly. They fall into three
categories: reference groups, family and social roles and status.
PERSONAL FACTORS
Lifestyle:
The lifestyle of an individual includes all of its activities, interests, values and opinions. The lifestyle
of a consumer will influence on his behaviour and purchasing decisions.
Apple delivers exceptional customer experience through superb user interfaces. With its touch screen
"gestures", iCloud, iTunes, and the Apps, Apple matches the modern lifestyle of the people which
largely affects the consumer buying behaviour.
Apple cultivates an image of innovation, creativity, boldness and singularity which is able to attract
consumers who identify to these values and who feel valued in their self-concept by buying a
product from Apple. Because consumers do not just buy products based on their needs or for their
intrinsic features but they are also looking for products that are consistent and reinforce the image
they have of themselves or they would like to have. Apple conveys a positive and favourable self-
image to the consumer, hence it is appreciated and regularly purchased.
Apple has a branding strategy that focuses on the emotions. The starting point is how an Apple
product experience makes you feel. The Apple brand personality is about lifestyle, imagination,
liberty regained, innovation, passion and power-to-the-people through technology. The Apple brand
personality is also about simplicity and the removal of complexity from people's lives, people-driven
product design and about being a really humanistic company with a heartfelt connection with its
customers.
PSYCHOLOGICAL FACTORS
Among the factors influencing consumer behaviour, psychological factors can be divided into 4
categories: motivation, perception, learning as well as beliefs and attitudes.
Motivation:
Motivation is what will drive consumers to develop a purchasing behaviour. It is the expression of a
need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working
at a subconscious level and is often difficult to measure. Motivation is directly related to the need and
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is expressed in the same type of classification as defined in the stages of the consumer buying
decision process.
Smartphones in todays world are not only a luxury but they have become more of a need. Apple not
only differentiated itself but also it became the need of Customers which is evident from the count of
model of phone people own. This need is reinforced in the consumers mind which then becomes a
purchase motivation.
Perception:
Perception is the process through which an individual selects, organizes and interprets the information
he receives in order to do something that makes sense. The perception of a situation at a given time
may decide if and how the person will act. Depending to his experiences, beliefs and personal
characteristics, an individual will have a different perception from another.
Consumers remember the benefits of a brand and forget the drawbacks or competing products
advantages. Sample analysis show that most of the people are satisfied with the product quality,
service and usage. Due to Selective Attention, Selective Retention and Selective distortion people tend
to perceive Apple products of premium quality due to the above mentioned advantages.
If its not an iPhone, its not an iPhone campaign makes consumers perceive iPhone as an exclusive
product as they have differentiated their product from rest of the market in terms of superiority.
Learning:
Learning is through action. When we act, we learn. It implies a change in the behaviour resulting from
the experience. The learning changes the behaviour of an individual as he acquires information and
experience. If one had a good experience with the product, he will have much more desire to buy it
again next time.
Because of product quality, brand reputation and being user friendly, Apples iPhone provides the user
with a good experience which in turn motivates the user to buy a newer version again next time.
Hence, by learning from a good past experience, the customer will have a much more desire to buy
the product again. As Apple has an expertise in providing good experience to most of its customers,
learning very well plays an important role in buying behaviour of consumers for iPhone.
Apple fans see the company's products in much the same way as religious people perceive their sacred
icons. Apple fandom has become like a religious belief. Apple has found out a way to harness, or
exploit, the brain areas that have evolved to process religion.
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8. METHODOLOGY
Primary data
The first hand obtained data for any issues or specific information collected directly through thorough
observation and research (Kotler, Armstrong, Ang, Leong, Tan, Tse, (2005)
Survey research is the most widely used method to collect primary data; this approach is best
suited for gathering detailed information.
We select target groups for asking questions about their knowledge, attitudes, preferences and
behaviour In order to gather information regarding the marketing strategy of branding in
Apple. Survey questionnaire will be used to collect data due to its flexible property of
providing different kinds of data and uses this data in order to draw conclusions.
Secondary data
The second hand data obtained by the use of secondary sources such as articles, books, journals,
internet, etc. (Kotler, Armstrong, Ang, Leong, Tan, Tse, (2005)
The secondary data is collected via the use of internet (websites, articles and journals) and
books mainly online websites, published articles or journals the data was collected from.
The secondary data is readily available nature and it helps to support primary data, making it
more specific as it helps a great deal to get a clearer view of Apple's segmentation, targeting,
positioning and marketing strategies, along with SWOT analysis model
Pricing analysis:
The above graphs depict that Apples iPhone has a higher premium price as compared to the
competitors. This is evident from the findings as 81.7% of sample size, responded in favour of higher
premium price. Approximately half of the sample size is moderately satisfied with its premium price
and the other half is not. Even according to the Likert scale, iPhone is rated moderately in terms of its
pricing. This price shows that Apple have made their entire product range exclusive. Apples vision
was always to create a premier product and charge a premium price. Apples cheapest products are
usually priced in the mid-range but they ensure a high-quality user experience with their features. The
hardware and user interface are designed to provide a lot of value for the price.
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The above graph tells us that the customers pay for the higher premium price of the product majorly
because of its high-quality, product feature, corporate reputation and design innovation.
The above graph depicts that most preferred mode of payment is cash. This is evident from the
findings as 36.9% of sample size responded, stating that they prefer paying in cash. For about 23.3%
of people prefer payment through debit cards whereas 16.5% pay using credit cards. Similarly, 21.4%
of the people use EMI mode of payment as it lets them to pay in instalments. Only 1.9% of people pay
through loans while purchasing an iPhone.
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Communication:
It shows that information about the iPhone travels to audiences through various transmission methods.
Out of all the methods used, Internet proves to be the most dominant transmission method which
comprises 41.7% of the sample size. Word of Mouth has been recognised as one of the effective forms
of promotion for Apple iPhone because of its honesty and this is evident from the sample size as 33%
heard about the product from their relatives and friends .
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Demographic variables:
The graph depicts that maximum respondents have iPhone 5S. There are almost same number of
respondents who own an iPhone 5 or iPhone 5C or iPhone 4S. There are relatively higher number of
respondents who own iPhone 6 than those who own iPhone 4S or iPhone 5C or iPhone 5. There are
the least number of respondents who own an iPhone 6 plus.
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This shows that people prefer iPhone more than android phones though the margin is not very huge.
The responses show that the Apple products are more popular than competitors mainly because of the
quality and design of the product and corporate reputation. Hence, these factors motivate the
customers to buy Apple products rather than the products of their competitors. The brand name of
Apple is an important attraction for its customers.
10.2 RECOMMENTATIONS
In order to succeed in the mission Apple just as others has resources that they must rely on. To
continue to be creative. Following recommendations has been put forward by the group.
10.3 LIMITATIONS
A sample of 150 respondents was used due to time restrictions a large sample should have been taken
in order to minimize response errors.
In the web based form of questionnaire, there may be a chance error due to lack of
understanding of few respondents thereby resulting in few guessed answers may have
resulted due to lack of personal contact with the respondents.
Forms were distributed but fewer responses were generated due to many not filling it.
Some respondents may not have used Apple's products/services but may have filled up the
survey just for the sake of filling it.
Due to time constraints, simple random, convenience and judgment sampling methods were
used for the survey.
Uneven gender distribution due to more convenience of men available and willing to answer
the questionnaire.
11. REFERENCES
Chapman, R., & Haskisson, R. e. (n.d.). Case 14: Apple computer Inc.
Kenney, M. (2011). Structuring the Smartphone Industry: Is the Mobile Internet OS Platform the Key ?
Shupel Tsai, (2008) "Corporate marketing management and corporateidentity building", Marketing
Intelligence & Planning, Vol. 26 Iss: 6, pp.621 - 633
http://seekingalpha.com/article/1140311-global-smartphone-trends-leave-little-room-for-
rim
The Innovative Success that is Apple, Inc. Katherine Johnson, Yang Li Hang, Phan Jason
Singer, Hoang Trinh
Automatic Effects of Brand Exposure on Motivated Behavior: How Apple Makes You Think
Different grainne m. Fitzsimons Tanya l. Chartrand Gavan j. Fitzsimons
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Apple's iPhone Launch: A Case Study in Effective Marketing Kyle Mickalowski, Augustana
College Mark Mickelson, Augustana College Jaciel Keltgen, Augustana College
https://www.scribd.com/doc/56666238/Consumer-Behaviour-towards-Apple
http://www.slideshare.net/ShivamShah3/apple-company-market-research-project-mkt305
http://www.ibtimes.com/once-tough-market-apple-inc-indians-show-growing-taste-
iphones-1796326
http://www.idc.com/prodserv/smartphone-os-market-share.jsp
http://www.aboveavalon.com/notes/2015/2/11/apples-strategy-for-growing-iphone-sales-
by-50-in-three-years
http://marketrealist.com/2014/02/apples-premium-pricing-strategy-product-
differentiation/
http://www.business2community.com/marketing/apples-iphone-marketing-strategy-
exposed-0661613
http://marketingmixx.com/marketing-plan-2/203-marketing-plan-of-apple.html
http://www.forbes.com/sites/gordonkelly/2014/07/25/iphone-6-sapphire-display-
everything-you-need-to-know/
http://www.forbes.com/sites/jaysondemers/2014/07/08/heres-the-simple-secret-to-apples-
marketing-success/
12. ANNEXURE
12.1 QUESTIONNAIRE
Design
The questionnaire mainly consisted of all close ended questions to find the responses suiting the
respondents from the given choices in order to find the exact information required and to minimize
the time required to fill in the survey, with two rating scale question with rating ranging from (1 to
5), in order to collect quantitative data associated with the research along with qualitative, also
rating scales helps to find the respondents perceptions related to the questions asked.
o Male
o Female
o Others
o 12 -25
o 25-39
o 40-55
o 56 and Above
o Student
o Business
o Home maker
o Service
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o Professional
o High school
o Graduate
o Post graduate
o Professional
Which of the following brands do you own?
o Apple
o Samsung
o Nokia
o Micromax
o HTC
o Lenovo
o Xiaomi
o Sony
o LG
o Motorola
o Other
o Android
o iPhone
o Once in 6 months
o Once in a 1 year
o Between 1 -2 years
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o After 2 years
o Yes
o No
What are the factors that motivates you to purchase a smartphone ( Choose multiple options)?
o Brand
o Price
o Performance
o Quality
o Design
o Operating Platform/ System
o Value
o Reputation
o Services
o Yes
o No
o iphone 4
o iphone 4S
o iphone 5
o iphone 5S
o iphone6
o iphone 6Plus
o iphone 5c
o iphone 3gs
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o None
How would you rate the iphone in terms of product quality? (1 being the lowest, 5 being the
highest)
o 1
o 2
o 3
o 4
o 5
Are you satisfied with the pricing of iPhone? (1 being the lowest, 5 being the highest)
o 1
o 2
o 3
o 4
o 5
o Product feature
o Design innovation
o Corporate reputation
o High-quality
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o After-sales support
o EMI
o Credit card
o Debit card
o Cash
o Loan
How does the price of Apples products compare with others in the industry?
o Yes
o No
o Internet
o Magazine or Newspaper
o Advertisement on TV
o Apple store
o User-friendly
o Product quality
o Product integration
o After-sales service
o Brand reputation
Why do you think Apple's products are more popular than competitors?
o High security
o After-sales service
o Corporate reputation
o Yes
o No
o Maybe
o Yes
o No
Apple's annual report, which is mostly targeted at investors and regulators, contains a number of other
details about the company's operations. The report also provides an analysis of current product lines
and addresses topics like executive compensation, investments, taxes, and more.
The iTunes Store generated a total of $10.2 billion in net sales during 2014, up from $9.3
billion in 2013. Apple credits the growth to an increase in revenue from app sales, but
acknowledged that digital music sales were in decline and partially offset the growth.
Apple noted that it now has 92,600 full-time equivalent employees, up from 80,300 at the end
of fiscal 2013. The majority of that growth was outside of the company's retail division,
which grew by 3,400 to 46,200 full-time equivalent employees.
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Apple's store count increased by 21 during fiscal 2014, with average revenue per store
increasing slightly to $50.6 million from $50.2 million in 2013. As noted during its earnings
conference call last week, Apple expects to open 25 new retail stores in fiscal 2015 with most
of those stores being outside of the United States. Apple is also planning to remodel five of its
existing stores.
Apple spent a total of $6.0 billion on research and development in fiscal 2014, up
significantly from the $4.5 billion spent last year. That amount contributed towards the
company's efforts to develop new technologies to enhance existing products and to expand the
range of its product offerings. Apple's $6.0 billion investment is the highest level relative to
revenues since 2007, which is the year that the iPhone was released.
Real estate holdings increased slightly, with Apple now owning or leasing 19.7 million square
feet of building space, up from 19.1 million square feet at the end of 2013. Apple says that
most of the building space is in the United States, and is expanding its existing office space
and customer support call center in Austin, Texas. Work also continues on the company's new
campus in Cupertino, which is once again said to contain an estimated 3.6 million square feet
of space.
Apple is expecting its capital expenditures to rise to $13.0 billion in 2015, up from the $11.0
billion spent in 2014. $600 million of that amount will be allocated towards retail store
facilities, while $12.4 billion will be used for other expenditures including manufacturing
process equipment,data,centers.