External and Internal Influences Paper 1

External and Internal Influences Paper University of Phoenix Online January 26, 2009

External and Internal Influences Paper External and internal influences can affect the purchasing process and how a person reacts through the purchase decision. The number of external and internal influences determines the behavior of the consumer during the process. However, marketers are susceptible to the many external and internal influences and will adjust accordingly. The marketers will be able to position the product or service and take advantage of the different influences so the consumer will be satisfied during the purchase. The internal and external influences are important and impact the marketing strategy. External Influences and their Impact on Marketing Strategy The first step in developing marketing strategies is conducting a SWOT analysis. This means identifying the strengths, weaknesses, opportunities and threats of a company or product. The iPhones opportunity is the amount of mobile phone consumption. CTIA April 2008 survey demonstrates that 84% of Americans have wireless phone service. From 2006 to 2007 mobile phone users increased 2%. Two percent may not seem like a big increase, but when the percentages are in the millions, 2% is significant. Choosing the most beneficial internal and external influences on consumer behavior and marketing strategies is critical to developing the most effective marketing strategies. Due to iPhones tense competition, the three external influences with significant impact are age, income, and occupation. Age Age has always been a significant influence on consumer behavior. Marketers have followed the baby boomers lifestyle for this reason. Baby boomers have the most significance in the total population. Baby boomer echo are the next significant percentage in the total population. Apple should first observe where the biggest population lies in accordance to age and then determine if such group would be user of the mobile phones. Currently, the average age of first cell phone holder in the United States is 12, and the highest mobile phone use is between the ages of 19-24 (Derbyshire, D., 2005).

External and Internal Influences Paper 2 The next highest mobile consumers are 14-18. The 19-24 year olds are the baby boom echo generation. The influence to the age influence on consumer behavior is that parents like to stay connected to their children. As shown from SMSZone statistical market research is that the mobile phone usage drops from 43% to 18% at the age when young adults graduate from college and more than likely start paying for their own mobile phone. Income Income is also a critical influencer on consumer behavior. Even though 84% of the American total population is assumed to be mobile users (Derbyshire, D., 2005), this does not mean the total 84% can afford a $199 phone. A households income level combined with its accumulated wealth determines its purchasing power (Hawkins, 2007). Now more than ever with current economic uncertainties marketing the iPhone a challenge. However, income only provides a direction. An individual may earn $100k a year, but their psychographics may be the real determinant of their mobile phone purchase. Occupation Occupation is increasingly important to iPhone marketing strategies. Occupation can almost be interchangeable with education. Occupation defines ones personality. Once groups are segmented by occupation research can delve further into specific occupation psychographics. A lawyer and electrician may earn the same amount of money but preference in product and service may differ significantly. Lawyers have a higher education and known to enjoy the more professional status. Whereas an electrician may earn just as much as a lawyer but is more laid back and does not enjoy the newly developed high tech products. Some occupations such as sales prefer the many features of the iPhone while other occupations such as labors do not require a mobile phone for any use. Internal Influences and their Impact on Marketing Strategy As previously stated organizations use the SWOT analysis as the initial step in developing marketing strategies for their products and/ or services. Strengths, weaknesses, opportunities, and threats are the parts of the SWOT. This analysis shows the company directly where the need is to gain profitability for their product. In the case of Apple the IPhone has been a profitable and popular item for the company. Since the launch of the IPhone in June 2007 and the launch of the IPhone 3g in 2008 the cell phone world was hit by a storm. With many phone companies trying to compete with Apple by making the so called IPhone killers, which are phones that are supposed to bring down the iPhone. The most recent

External and Internal Influences Paper 3 being the Palm Pre, these other phones have not been able to kill the iPhone only mimic some of its qualities. Three internal influences are brand awareness, ease of use, and the IPod. Brand Awareness Apple is recognized for its innovative gadgets and technological advancements like the original Macintosh. Even though Apple is not a big name in the business world, initially Apple marketed to schools with computers. Now the iPhone will help to change this perception. The business world is being offered the best operating system, which will allow professionals access to superior web browsing. The business professional will be able to check email, instant messaging, checking corporate documents, and use of Mac OS X. The Mac OS X is compatible with various software, and they can do this all by touching the large 3.5 inch screen. The iPhone will make business professionals interested in what it has to offer in portable computing. The Ease of Use The touch screen on the iPhone makes it easy for the user to adjust and adapt quickly. The iPhone can handle multiple finger touches making multiple program choices and the device is able to recognize what each finger gesture is choosing to accomplish. The user of the iPhone can use normal hand and finger movements while using this phone; this is a problem with other PDA devices. The Mac operating system is easier than windows to use, the format is simple. The iPhone users will have a seamless user-friendly device with easy programs at their fingertips. The iPhone screen is very scratch resistant and compared to other PDAs this is a major advantage since those devices have had problems with their screens scratching easily. Compared to the original iPhone the 3G is lighter and sleeker and comes in black and white. Viruses beware the software included with the iPhone is very resistant. With any new product the user will have some adjustment, but it should be relatively smooth. The iPod The iPod is the most popular digital player in the world. The format is used from music to lectures using the everpopular Pod cast format. The iPhone works with iTunes and all compatible Apple products such as Apple TV, which is a form of wireless television. Since the iPhone contains Mac OS software it can constantly upgrade to the latest versions of the software. When the phone is connected to iTunes it is automatically upgraded and backed up each time the iPhone is

External and Internal Influences Paper 4 connected. The iPhone has the potential to revolutionalize how people connect on a daily basis. The iPhone will also change the stout business professionals to conform from their blackberries to a more universal device. Environmental Factors Influence on Consumer Perception of the Marketing Message Several environmental factors need to be considered in marketing the iPhone. This plan will discuss two environmental factors Apple will need to consider. One of these environmental factors is very literally the environment. Environment Cell phones can be very damaging to the environment. For instance, cadmium which is present in a cell phone (cellular) is significant enough to cause damage in small doses. It is the seventh most harmful known chemical, and is capable of causing cancer (Sedycias, 2007 para 4). Many consumers do not realize the implications of old cell phones entering landfills. In the US, an estimated 130 million units of cell phones go out of use annually and most will end up as part of the 70,000 tons of cell phone garbage dumped into our landfills and dumpsites. Only a small percentage, about 8%, is recycled (Pace Butler, 2008 para 1). While consumers seem currently unaware of the dangers of cell phones in landfills, with todays increasing move to green living certain consumers will become more aware of this issue. Apple will also need to consider that many consumers are aware of the potential damage cell phone waste can have. Apple must consider these consumers, as they are part of the target markets for the iPhone. Mediamark research and intelligence released a study which revealed the most environmentally conscious of its six consumer segments are also the ones who believe most strongly in the power of technology to affect their lives (Earth911, 2008 para 1). When marketing the iPhone the business is targeting both new customers and trying to urge customers to upgrade to the iPhone, creating more cell phone waste. It may be a benefit for Apple to begin to team up with a cell phone recycler to make it easier for customers to recycle old cell phones when purchasing an iPhone. Government Actions Another environmental factor to consider is government actions. This could also relate back to the previous talk of the environment. Apple must consider with the nations 44th president there may certainly be some government action taken with regard to cell phone waste. This president has promised to make his country a greener more environmentally friendly nation. Other government actions that Apple will need to consider the potential taxes on cell phones. Although Apple is not a service provider as a cell phone producer it is important that Apple be aware of things that may impact their

External and Internal Influences Paper 5 partner AT&T and iPhone potential sales. Testifying in favor of the legislation, Scott Mackey, an economist and partner with Kimbell, Sherman and Ellis in Vermont, told members of the subcommittee that according to a 1999 study published by the Committee on State Taxation (COST), Consumers of telecommunications services paid effective state and local tax rates that were more than twice than those imposed on taxable goods sold by general business (13.74 percent v. 6 percent). And if federal taxes are included, he said the tax burden was nearly three times higher than general business (Jones, 2008 para 5). Certainly if taxation of cell phones becomes too high iPhones target market may be affected. Conclusion Many factors, both internal and external play an important role and function for the management team within an organization. Regardless of size, age, income, product, or service, being prepared such as planning will be one of the most important things that a management team can do for the organization. Apple and iPhone are not excluded from this planning process. The iPhone has been recognized around the United States and is popular and is one of the best selling cell phones through AT&T. The three external influences with significant impact are age, income, and occupation. The managers can use the different factors to manage an effective marketing team to promote the iPhone around the world.